Vornado Has ‘Handshake’ to Sell Stake in NYC Tower to Kushner

• April 06 2018
• David M Levitt

Vornado Realty Trust has a “handshake” deal to sell its interest in 666 Fifth Ave. to its partner in the midtown Manhattan office tower, which is Kushner Cos., the firm run by the family of presidential son-in-law Jared Kushner.

Vornado Realty Trust has a “handshake” deal to sell its interest in 666 Fifth Ave. to its partner in the midtown Manhattan office tower, which is Kushner Cos., the firm run by the family of presidential son-in-law Jared Kushner.

In his annual letter to investors, Steven Roth, Vornado’s chairman and chief executive officer, said, “I believe we now have a handshake to sell our interest to our partner at a price which will repay our investment plus a mezzanine-type return.” The letter was contained in a regulatory filing Friday.

The loan on the property will be repaid including a payment to Vornado of the portion of the debt that the company holds, Roth said in his letter.

In February, a spokeswoman for Kushner Cos. said it was negotiating to buy back the 49.5 percent stake in the tower that Vornado took on as part of a 2011 refinancing agreement. The refinancing was needed because Kushner had purchased the building for a record-setting $1.8 billion immediately before the financial crisis and found itself facing steep debt payments.

Earlier that month, Vornado recategorized how it accounts for the property, because “we do not intend to hold this asset on a long-term basis,” it said in an annual report. That language typically means the company plans to unload an asset within a year, a person familiar with Vornado’s thinking said at the time.

Vornado bought its share of the building for $80 million and the assumption of half the debt.

— With assistance by Caleb Melby