Like so much in Jared Kushner’s world these days, all is in flux at his onetime sure thing and real-estate crown jewel, 666 Fifth Avenue, in Midtown Manhattan.

The 41-floor skyscraper, between 52nd and 53rd Streets, has new owners, Brookfield Properties, the powerful, publicly traded Canadian real-estate company; a less Satanic new address (660 Fifth Avenue); and, in a few years, thanks to starchitects Kohn Pedersen Fox, it will have a new look, replete with a new façade, a sparkling lobby, and terraces overlooking Trump Tower. All things considered, it’s just as well. The building has always been a bit star-crossed by its former street address as well as by the unlucky 13 years that it was owned and operated by the Kushner family of New Jersey.

“The Kushners took it on the chin,” one Manhattan real-estate and private-equity mogul tells me about the family’s experience at 666 Fifth.

Moving on Up

You remember the Kushners, right? In 2007, less than six months after the now pardoned Charles Kushner exited prison and was in a halfway house in New Jersey, he and his oldest son, Jared, then 26, decided the family needed to make a big splash in Manhattan real estate after making a fortune owning garden apartments in New Jersey. “It’s the holy grail, Manhattan,” says one longtime Wall Street real-estate banker. And for Charles Kushner, it meant legitimacy. His parents, Joe and Rae, had fled the Nazis. As Andrea Bernstein, author of American Oligarchs, says, “The way they would be successful as a family, that they would get the last laugh, would be buying this building.”

It was a page taken from the father of Jared’s then girlfriend, Ivanka Trump. Decades earlier, Donald Trump had moved the Trump-family real-estate business to Manhattan, from Queens and Brooklyn. Not that the Kushners had not had success in New York City. There is the charming Puck Building, on the edge of SoHo. The Kushners also own the controversial Austin Nichols House, in Williamsburg, Brooklyn.

The cost of doing business: Charles Kushner in 2004, when he pleaded guilty to charges that he had hired a prostitute to try to silence a witness in a federal investigation.

But this was going to be the big one. And when it was said and done, they had dropped a then record sum for a Manhattan property—$1.8 billion (though only Jared could sign the papers, since his father’s status as an ex-con precluded his participation). No sooner had Jared signed, however, than the talk began. He had committed the twin sins of real estate: overpaying for a mediocre property at the height of the market. Investment bankers howled. As one told me, “It just wasn’t an A-plus location for an office, and it was outdated. If you were a major law firm or bank, 666 Fifth was not going to be a prestigious address for you.” The New York Times declared the deal a brazen example of over-leverage and “reckless underwriting,” where the rent payments covered no more than 65 percent of what was needed to make future interest and principal payments on the debt.

This was going to be the big one. And when it was said and done, they had dropped a then record sum for a Manhattan property—$1.8 billion.

No matter. At least to the Kushners. The whole idea was to use other people’s money anyway. And almost immediately, Jared started wheeling and dealing to try to pare the leverage. In April 2008, he sold a 49 percent stake in the building’s retail space to a partnership including the Carlyle Group, the big Washington-based private-equity firm, for $525 million, some of the proceeds then being used to pay down debt. It looked like he might get out of 666 alive.

Less than a year after he signed the Carlyle deal, however, the 2008 financial crisis crashed down, and the Kushners were forced to re-structure the building’s $1.2 billion debt. Rents had declined and 666 Fifth had a loss of $35 million, after debt payments. Anticipating a default, in 2010, the loan was transferred to a special servicing agent on the assumption that the Kushners would stop payments once the building’s reserve fund ran out.

“I remember it as the very short period where Jared was completely out of my hair for a little while, because they were freaking out about how to refinance it,” explains Elizabeth Spiers, who was the editor of The New York Observer for 18 months, starting in February 2011.

That’s when the Kushners caught another lucky break. Vornado Realty Trust, the secretive real-estate company run by Steven Roth, agreed to invest $80 million in exchange for a 49.5 percent equity stake in the office part of the building. The Kushners agreed to invest another $30 million, after cutting a deal with a nearby real-estate developer regarding air rights. The $110 million of new equity was used to pay broker fees, refurbish unleased space, and provide financial incentives to new tenants.

The whole idea was to use other people’s money anyway. And almost immediately, Jared started wheeling and dealing to try to pare the leverage.

The new equity also allowed for the bank loan to be re-structured. Instead of coming due in 2017, the maturity date was pushed out to 2019. Then it was turned into two new loans: one, a senior loan of $1.1 billion, equal to the value of the building—suggesting that the Devil had gotten his due to the extent of $700 million in three years—and a second, subordinated loan of $115 million, known as a “hope” note, since the prospect of its repayment was dim.

For a while the Vornado deal looked like a smart one—at least for Steve Roth. The building made money in 2012, after debt payments dropped. But then Citigroup, which leased a quarter of the office space and whose logo adorned the building, said it was leaving. Roth subsequently said that 666 Fifth would “be worth a lot more if it was just dirt.”

Leveraging Connections

By 2016, with interest rates on the debt rising, and Jared heading to Washington to be a player in the White House, the Kushners tried to leverage Jared’s new profile and deal the building. The losses were mounting: $14.5 million in 2016; roughly $24 million in 2017. Jared thought he might sell 666 Fifth to Anbang, a big Chinese insurance company that bought the Waldorf Astoria. Bloomberg reported that the Anbang deal would have netted the Kushners $400 million. But the deal collapsed, a casualty of public outcry over a perceived conflict of interest and China’s decision to crack down on overseas investments.

Middleman: Kushner with Ivanka Trump and White House chief economic adviser Gary Cohn.

A year later, in 2017, the Qatari finance minister met with Charles Kushner to discuss a potential deal. But nothing came of that meeting, either. Then renowned Iraqi architect Zaha Hadid was commissioned to draw up plans to take the building down to its inner steel core, and then to add 40 new floors, bringing it up to a structure 1,400-feet high. But the plans were dropped. Still, Jared remained optimistic. He was Jared, after all. “He’s the most born-on-third-base person I ever met,” says Spiers.

Finally, in February 2019, with the building once again heading toward foreclosure, Brookfield swooped to the rescue, buying a 99-year ground lease on 666 Fifth for $1.3 billion, roughly equal to the amount of debt on the building. Word on Wall Street is that Brookfield bailed out the Kushners in the nick of time.

By 2016, with interest rates on the debt rising, and Jared heading to Washington to be a player in the White House, the Kushners tried to leverage Jared’s new profile and deal the building. The losses were mounting.

“I’m not sure that they bailed them out whole,” says Stephen Siegel, the chairman of the global real-estate brokerage CBRE. “[The Kushners] didn’t lose a substantial amount of money. But whatever it was, they were bailed out completely or they lost less than they would have.... That building was going to get foreclosed on by somebody, whether it was a mezzanine holder, primary lenders, somebody was going to take that from them, and that would have been a total disaster.”

Brookfield financed its acquisition with a $750 million mortgage from ING Group and another $300 million in subordinated financing from Leon Black’s Apollo Global Management. According to the real-estate-news site Real Deal, Brookfield intends to invest between $300 million and $400 million of equity in the building to round out the purchase price and to help pay for the gutting of the tower for its redesign.

A spokeswoman for Brookfield declined to confirm the sources of Brookfield’s financing for the deal. But she did explain why Brookfield stepped up to bail out the Kushners. The newly renamed 660 Fifth Avenue “is an iconic building in an absolutely prime location that was known to be underperforming and financially strained. Brookfield saw the opportunity to acquire the building at an attractive price, completely redevelop it, and secure rents meaningfully higher than it was achieving.”

Funny Money?

Some people think money from the Qataris may have enabled Brookfield to save the Kushners, which raises all sorts of ethical and legal questions about whose bidding Jared was doing during his many trips to the Middle East as a White House adviser. (In fact, he just recently returned from Israel, where the Kushners have filed the documents required to raise $100 million in the Israeli bond market, of all places.)

On December 9, Democrats in Congress sent a document request to Brookfield seeking information about the Qataris’ role as investors in Brookfield and whether that role enabled Brookfield to bail out the Kushners at 666 Fifth. Brookfield’s chairman, Ric Clark, called the alleged involvement of the Qataris a “conspiracy theory” and denied that the country or its leaders had anything to do with Brookfield’s purchase of 666 Fifth.

This is a view shared by Wall Street bankers, too. “The Qataris have no influence on Brookfield’s decisions on this project,” says Siegel. But Senator Ron Wyden and Representative Joaquin Castro aren’t convinced. “While Brookfield has claimed that Qatari representatives had no involvement in the 666 Fifth Avenue transaction,” they wrote the Office of White House Counsel, “we remain troubled that Qatari funds ended up in a billion-dollar rescue for a company directly tied to Mr. Kushner.… Federal criminal conflicts of interest statutes for senior White House officials extend not only to matters affecting their own financial interests, but that of their direct relatives.”

“The Kushners took it on the chin,” one Manhattan real-estate and private-equity mogul tells me about the family’s experience at 666 Fifth.

It’s also not clear whether the Brookfield deal for 666 Fifth included any crumbs for the Kushners. Neither the Kushners, who did not respond to requests for comment, nor Brookfield are talking about how Brookfield’s $1.3 billion was split up among the remaining stakeholders at 666 Fifth. Siegel, at CBRE, thinks it’s possible the Kushners walked off with some “schmuck insurance,” which could give them an additional payout of some amount if Brookfield were to sell the building down the road for a big profit. That seems unlikely in the near term, given the circumstances faced by Midtown Manhattan office buildings in the wake of the coronavirus pandemic.

In American Oligarchs, Bernstein tells stories of the persecution the Kushner family suffered in Belarus at the hands of the Nazis during World War II. To escape, Rae Kushner, Jared’s grandmother, and her family dug tunnels underneath their ghetto, in Novogrudok, and put the dirt into the walls of their homes to try to hide their efforts. “Had it not been for those bags of dirt,” Bernstein writes, “Rae would never have made it out of the ghetto, to the forest, to the refugee camp, or to New York, where she had four children, including one named after her brother who had died during the escape. And whose own son, Jared Corey Kushner, was now one of the most powerful people in a new and uncertain world slinking again toward darkness.”

As part of the Brookfield deal to rescue the Kushners from the financial disaster that was 666 Fifth Avenue, the family got to keep the dirt under the building. Brookfield has an option to buy it after 20 years. Allowing the Kushners to keep the land is virtually meaningless, say real-estate experts, and is without even the symbolic value to the family that the dirt in the Novogrudok ghetto had for them once upon a time. The building has new owners now. Although the Kushners “will tell you they still own [666 Fifth] and that they’re still involved in the development of it,” one longtime Wall Street real-estate adviser tells me, “they have nothing to do with the decisions, nothing to do with the leasing, nothing to do with the day-to-day operation. It’s strictly Brookfield.” Elizabeth Spiers agrees. “That deal was so bad. It’ll kind of go down in history in the annals of bad deals. I just don’t think you can spin it, not credibly.”

William D. Cohan is a Writer at Large for AIR MAIL, and the author of numerous books, most recently Four Friends: Promising Lives Cut Short