The Kushner Companies’ purchase in 2007 of 666 Fifth Avenue, an aluminum-clad office tower in Midtown Manhattan, for a record price of $1.8 billion is considered a classic example of reckless underwriting. The transaction was so highly leveraged that the cash flow from rents amounted to only 65 percent of the debt service.
New York, New York…… Vornado Realty Trust (NYSE: VNO) announced today that it has formed a joint venture with an affiliate of the Kushner Companies to recapitalize the office portion of 666 Fifth Avenue, a 39-story, 1.450 million square foot Class A office building located on the full block front of Fifth Avenue between 52nd and 53rd Street. Vornado has acquired a 49.5% interest in the property from the Kushner Companies, the current owner.
Owners of Dallas' landmark Cityplace tower have reworked the debt on the building. Barrow Street Capital and Ashkenazy & Agus Ventures bought the 42-story building on North Central Expressway in 2007. They have spent millions remodeling the building and leased a large block of vacant office space.
But with the credit crunch, the skyscraper east of downtown still faced problems.
Some developers and building owners opt to stop paying mortgages to get better loan terms
By David Jones
As the commercial market continues to struggle in New York, an increasing number of developers here are turning to so-called strategic defaults to force lenders and special servicers to enter into negotiations for loan restructurings.
All that you’re hearing about money raised and pent-up demand? Don’t believe it, says Iron Hound Management principal Robert Verrone. We joined a larger than usual crowd at the Friars Club yesterday, where National Realty Club members picked the brain of the former Wachovia real estate co-head.