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Kushner still chasing record breaking deals

By Holly Dutton

Seven years after first taking the reins of his father’s firm, Jared Kushner has built the company’s bottom line, and his own reputation as a shrewd investor.

At an Appraisal Institute luncheon May 4 at Club 101, the 34-year-old real estate scion spoke about his beginnings in the real estate industry and spending his summers as a teen working on apartment renovations on his family’s portfolio. “There were no summer camps,” he said.

Jared Kushner

He purchased his first buildings when he was just 19 and, after graduating New York University with an MBA from Stern and a J.D. from NYU Law, Kushner interned at the Manhattan District Attorney’s office with the ultimate intention of becoming a prosecutor.

Instead, he joined the family business full-time, and assumed the role of CEO in 2008 at the age of 27 following his father, Charles Kushner’s conviction for making illegal campaign contributions, tax evasion and witness tampering.

Kushner’s first big acquisition was 666 Fifth Avenue for $1.8 billion. “I didn’t realize we were breaking a record,” said Kushner. It wasn’t until the paperwork was being signed that Kushner realized the milestone, after being congratulated by Rob Speyer.

666 Fifth Avenue (Kusher's first major acquisition) courtesy of Vornado
666 Fifth Avenue (Kusher’s first major acquisition) courtesy of Vornado

“We really saw the value in street retail,” he said of the purchase. In 2012, the company was part of a group led by the Carlyle Group and Crown Acquisitions that sold off the retail portion of the Midtown building for $1 billion.

He said the company has a heavy focus on three segments of the market now — walk-ups, creative office space, and retail.

And especially for Kushner, a big focus has been on so-called millennials.
“We see micro trends,” said Kushner, who named off Soho, FiDi, Jersey City and Brooklyn as areas that have seen a big demand for creative office space and have attracted young people in droves in recent years.
“We try to look at demand and say, how do we find the right supply?”
In 2011, Kushner’s firm purchased 200 Lafayette Street for $50 million in a joint venture with Los Angeles-based private equity firm CIM, then sold it for $150 million two years later. In that case, Kushner saw a big demand for creative office space in Soho, and focused on renovating the building in a way that would attract tech companies.

“I thought Facebook, Twitter or Tumblr would come in, but instead J.C. Penney came in and rented all of it,” he said.

J.C. Penney signed a triple-net, 15-year lease in May 2012 for the building’s entire 127,559 s/f.
He said that J.C. Penney’s CEO at the time wanted to attract young new talent, and follow in the footsteps of young tech companies.

In Jersey City, Kushner sees the area growing rapidly as young people are increasingly looking for more affordable housing, after being priced out of Manhattan.

“I think Jersey City more and more is becoming attractive,” he said.
Currently in the midst of a housing boom, new buildings like Journal Squared, which will have a total of 1,840 units and 36,000 square feet of retail, and Kennedy Lofts, a converted office building, are adding to the stock.

In a joint venture with developer Kenneth Pasternak, Kushner is converting a building that previously housed the Jersey Journal newspaper into a mixed-use project that will include rental apartments.

And in DUMBO, there’s the hotly-anticipated Watchtower Portfolio that Kushner’s company teamed up with RFR and Invesco to buy for $375 million in the “Tech Triangle” hotbed of Brooklyn.

Shared office space giant WeWork has signed on for 90,000 s/f at 81 Prospect Street, one of the properties in the five-building complex, while online marketplace retailer Etsy took 200,000 s/f at 117 Adams Street to be the anchor tenant.

Kushner would not reveal any other tenants that have signed, but said the building’s office space is 60 percent leased, with the retail portion 50 percent leased.

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