Vornado will sell its stake in Kushner Companies’ 666 Fifth Avenue
The company does not intend to keep its stake in the building for too much longer
Vornado Realty Trust is planning on parting ways with 666 Fifth Avenue, the Midtown skyscraper owned by Kushner Companies.
The Real Deal reports that an annual performance report filed with the U.S. Securities and Exchange Commission revealed Vornado’s plans to sell its 49.5 percent stake in the office building.
“We do not intend to hold this asset on a long-term basis,” Vornado stated in the report.
In October 2017, it was reported that Kushner Companies and Vornado were at odds over the building’s future, with the former wanting to replace the current building with a luxury condo tower and hotel while the latter desired to keep it as an office tower. The conflicting interests, paired with the fact that 666 Fifth has been losing money since the Kushners acquired it, led Vornado founder and CEO Steve Roth to a “sharp reversal” which included advising potential investors to back off.
Kushner Companies bought the building back in 2006 for a record-breaking $1.8 billion but has yet to begin repaying its half of the $1.2 billion mortgage. Attempts to secure investors, including Chinese firm Anbang, have not worked out well and it would take a $4 billion construction loan to transform the site into condos. In order for this to prove profitable, sales would have to go for the unlikely price of $9,000 per square foot.
Meanwhile, the full amount of Kushner Companies’ $1.2 billion mortgage is due by February 2019.
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