U.S. News

Kushner Cos in talks to buy partner's stake in debt-laden Manhattan tower

(Reuters) - Kushner Cos, the real estate company once headed by President Donald Trump’s son-in-law, is in talks to buy the stake it doesn't already own in its flagship New York City property from Vornado Realty Trust VNO.N, a company spokeswoman confirmed.

Slideshow ( 2 images )

The property, a 41-story tower at 666 Fifth Avenue in Midtown Manhattan, has been at the heart of scrutiny over potential conflicts of interest involving Jared Kushner, who is married to Trump’s daughter and is a top aide to the president.

Christine Taylor, a spokeswoman for Kushner Cos, said the company was in talks to purchase the 49.5 percent stake in the office portion of the building held by Vornado, confirming an earlier report by the Wall Street Journal.

Taylor did not provide any further information.

Vornado, one of New York’s largest property owners, had indicated earlier this month that it planned to sell its stake.

Kushner sold his interests in Kushner Cos to a family trust last year as part of an effort to avoid conflicts of interest, but the building has continued to face scrutiny as a series of foreign investors, including a former Qatari prime minister, considered investing in its planned redevelopment.

In December, a group of Democratic lawmakers wrote to Kushner, asking whether in his talks with foreign officials he had ever discussed financing for the deeply indebted property, citing concern he was using his position for financial gain.

Kushner Cos acquired the building with a full block of prime Fifth Avenue retail frontage in 2006 for $1.8 billion, the most ever paid for a New York office tower at the time.

The 1.4-million-square-foot tower ran into difficulties during the recession and Kushner later refinanced $1.215 billion in debt, which comes due in February 2019. The debt has since ballooned to $1.448 billion.

Vornado acquired its minority stake in 2011, when it helped recapitalize the tower with $70 million. A year later, it bought retail space for $707.8 million.

Reporting by Nathan Layne in New York; Editing by Bernadette Baum