(Bloomberg)—The midtown Manhattan office tower owned by Kushner Cos. and Vornado Realty Trust is on track to lose $24 million this year, marking the worst performance for 666 Fifth Ave. since a 2011 refinancing.
The property had net operating income of $18.3 million for the six months ending in June, according to data filed by the property’s lenders. Debt payments were $30.4 million during the period. The tower’s cash flow is enough to cover only about half of the debt payments on the building, down from 66 percent last year. The ratio has been declining every year since Vornado became a partner in the skyscraper as a result of the refinancing.
The losses stem from a $1.2 billion mortgage that Kushner Cos. took on in 2007, when the tower was purchased at the peak of New York’s commercial-property market. While the refinancing temporarily lowered interest payments on the loan, rates have been climbing as a February 2019 repayment deadline approaches. The building is 30 percent vacant.
A spokesman for Kushner Cos. said the company wasn’t available to comment Thursday because of the Jewish holiday. A representative for Vornado didn’t immediately respond to a phone call.
Kushner Cos. is owned by the family of Jared Kushner, a senior adviser and son-in-law to President Donald Trump. Jared Kushner divested his stake in the building and other assets to family members to take the White House job.
The firm has searched around the globe for an investor to help raze the 41-story tower and build another twice as tall, with five floors of retail, a hotel and condominiums at record-breaking prices. No partners for the project have been announced. Laurent Morali, president of Kushner Cos., said in August that the firm was encouraged by the interest of several potential investors, but declined to name them.
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