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In a restructuring that took two years to complete, Jared Kushner has brought in Vornado Realty Trust as a 49.5 percent stakeholder in his 666 Fifth Ave. office trophy, and modified a large mortgage.
“We are thrilled with the outcome and excited to have a great capital stack (mortgage reorganization) with a first-rate partner with a long-term view for the asset,” said Kushner in an e-mail. “There will be joint decision making on everything.”
Vornado will use its staff to co-lease and co-manage the white tower that takes up the entire western blockfront between 52nd and 53rd streets and has 295,755 square feet vacant.
The restructuring takes the original $1.215 billion mortgage due February 2017 and extends it to February 2019. It also divides it into a $1.1 billion first mortgage while slicing off $115 million into a third note.
In return, Vornado is putting in $80 million and Kushner $30 million for a total equity pool of $110 million. This will pay for tenant improvements and provide working capital for the building while becoming a second note that will be paid back ahead of the third loan — a concession by the lenders.
Robert Verrone, of Iron Hound Management, represented Kushner in the restructuring deal with the special servicer, LNR. “The restructuring puts the building on solid footing and allows the owners to execute the business plan,” said Verrone.
Kushner and his father, Charles, bought the building in January 2007 for $1.8 billion, making it the largest single asset transaction at the time. An appraisal last June, however, valued the commercial offices at just $820 million.
The Kushners earlier separated the retail base into a condominium and sold a stake to Crown Acquisition and Carlyle Group.
