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Kushner, Anbang Call Off Talks on New York Property Deal

By Zhang Yuanan, Zhuang Qiaoyi and Han Wei
Photo: Visual China
Photo: Visual China

(New York) – Anbang Insurance, one of China's most acquisitive overseas dealmakers, has ended talks on a property investment deal in New York City with the company owned by the family of President Donald Trump’s son-in-law Jared Kushner.

“Kushner Companies is no longer in discussions with Anbang about 666 Fifth Ave.'s potential redevelopment, and our firms have mutually agreed to end talks regarding the property,” said Kushner Companies spokesman James Yolles in an email to Caixin. “Kushner Companies remains in active, advanced negotiations around 666 Fifth Ave. with a number of potential investors.”

Anbang’s public relationship manager told Caixin that the insurer didn’t make any investment in the office building. Neither company’s spokesman elaborated on why the deal fell through.

As senior adviser to Trump, the 36-year-old Kushner acts as a point of contact for foreign governments. He owns Kushner Companies along with his father Charles and is married to President Trump's daughter, Ivanka. He stepped down as CEO of the company and sold stakes in several properties, including 666 Fifth Ave., after he joined the Trump White House.

Bloomberg reported earlier that Anbang would pay $400 million to the Kushner Companies as part of a $4 billion investment to renovate the Manhattan tower. The deal would value the 41-story property at $2.85 billion, making it the most expensive single building in Manhattan. The property is three blocks down Fifth Avenue from Trump Tower in the heart of Manhattan.

Documents released regarding the transaction showed that a redevelopment plan involved renovating part of the building into luxury apartments. After the investment and renovation, the building is expected to be valued at $7.2 billion.

The proposed partnership was also seeking additional participants through a U.S. program known as EB-5, which provides residency permits to major foreign investors, according to the documents. In 2014, 90% of EB-5 permits were obtained by Chinese citizens.

The transaction may contain terms that some real estate experts considered unusually favorable for the Kushners, Bloomberg reported.

The tower was built in 1957 and encloses 142,000 square meters, including offices and retail spaces. The Kushner Companies paid $1.8 billion for the property in January 2007. Vornado Realty Trust bought a 49.5% stake in the office section in 2011.

Beijing-based Anbang Insurance has been on an overseas property shopping spree in recent years. In 2014, it paid $1.95 billion to purchase New York’s landmark Waldorf Astoria hotel. Last year, the insurer made a $6.5 billion acquisition of U.S.-based Strategic Hotels & Resorts.

But the company has also encountered setbacks in its overseas push. Last March, it withdrew a $14 billion takeover offer for Starwood Hotels & Resorts Worldwide Inc., citing “various market considerations.”

Contact reporter Han Wei (weihan@caixin.com)

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