Kushner Cos. Times Square Retail Property Nears Foreclosure
Posted on 02/24/2021
A Times Square retail property owned by Kushner Cos. is a step closer to foreclosure. Wells Fargo & Co., the trustee on the debt, engaged legal counsel as foreclosure actions have been filed. Kushner Cos. (Kushner Companies) is the real estate family company of former presidential adviser Jared Kushner.
Built in 1913, the property is at 229 West 43rd Street, which used to house the New York Times until 2007. The property is roughly 50% occupied and it also counted Guitar Center and Bowlmor as tenants. The property was reappraised at US$ 92.5 million in 2020. The building was appraised at US$ 470 million in 2016. The former New York Times building was impacted by a lack of traffic in Times Square. However, in November 2019, the owners were falling short of interest payments on the debt back in November 2019. In March 2019, Kushner Cos. defaulted on their $85 million of mezzanine loans after missing several payments. In December 2019, the Michael Bloomberg 2020 presidential campaign leased the building’s eighth floor to serve as the campaign’s headquarters, relocating 300 staffers from the Upper East Side.
The New York Times Company sold the building in 2004 to Tishman Speyer for US$ 175 million. Tishman sold it to Lev Avnerovich Leviev’s Africa Israel Investments in 2007 for US$ 525 million. In 2011, The Blackstone Group purchased the building for US$ 160 million and spent another US$ 105 million on renovations that included leasing the 9th, 10th, 11th, 12th and 14th floors to Yahoo!. Blackstone subsequently sold the office space on floors five through 16 to Columbia Property Trust for US$ 516 million in July 2015. In 2015, Jared Kushner purchased the first six floors of the building for US$ 295 million from Africa Israel Investments and Five Mile Capital.
Deutsche Bank AG originated a US$ 285 million loan in 2016 to refinance six floors of retail space. The property also had US$ 85 million in mezzanine debt from SL Green Realty Corporation and Paramount Group Inc.