Kushner Cos. is in negotiations with LNR Partners LLC, the special servicer of the debt on the 666 Fifth Ave. building in Manhattan, N.Y., over a debt totaling more than $1.4 billion that is set to mature in February 2019, The Wall Street Journal reported, citing people familiar with the matter.
Kushner acquired the 39-story property for a record $1.8 billion in 2007, using mostly debt, and brought on Vornado Realty Trust as a 49.5% partner in 2011.
Also in 2011, LNR agreed to extend the debt maturity to February 2019 and cut the debt into a senior $1.1 billion piece and a junior $115 million piece, according to loan documents reviewed by the Journal. Kushner and Vornado have only paid debt service on the senior debt, while accrued interest on the junior debt has taken the total debt to $1.4 billion, the publication noted, citing loan documents and Vornado financial filings.
LNR and Kushner are now negotiating on how much, if any, of the junior debt needs to repaid, the people familiar with the matter told the Journal. Kushner maintains that only $1.1 billion of the total debt needs to be repaid, according to the people.
The New York Times recently reported, citing unnamed sources, that Kushner is advanced talks to bring in Brookfield Property Partners LP as a partner in the troubled office tower as Vornado exits its stake. But before such a deal can take pace, Kushner must reach an agreement with LNR over the debt, the Journal added.
