Thread by @jedshug

Qatar's bailout of Kushner's 666 5th Ave disaster.
Follow-up:
How do we know if the Brookfield $1.3 billion deal for a 99-year lease (but without taking title!) was a sweetheart bailout for Kushner?
The devil is in the 666 details. And they are secret. Analysis here 1/

https://twitter.com/jedshug/status/1095192240576696321

2/ I posted this long blog post on the deal's details and financing here. It's very detailed. Here are some bottom lines in this thread.
shugerblog.com/2018/12/18/mor…

3/ In 2007, the Kushners bought 666 5th Ave. for $1.8 billion - at the top of the real estate bubble just before the crash. It was never worth $1.8 B in the first place, as you can read in a ton of different articles.
vanityfair.com/news/2018/05/k…

4/ When the $1.8 B deal was announced n Dec 2006, the @nytimes explained, "The price is more than 3 times what a group [Tishman Speyer] paid for the building 6 years ago and the highest price ever paid for a single office building in the United States." nytimes.com/2006/12/07/nyr…

5/ So in 2000, a buyer pays $600 M. Just 6 years later at the top of a bubble, the Kushners paid triple. Why?
The father/real estate mogul, Charles Kushner, had been in prison for 2 years, fall 2004 to fall 2006.
They were desperate to get back in the game. Into Manhattan.

6/ But 666 5th was always a mess. It is not a particularly tall, large, or modern. This is the best detailed reporting: "the tower, with its low ceilings and outdated floor plan, [is] the Jenga puzzle piece that could set the [Kushner] empire teetering"
bloomberg.com/graphics/2017-…

7/ "Before Trump began his rise to the presidency, 666 5th Ave. struggled to attract serious offers. Meetings the Kushners requested were often rejected. After Trump’s nomination, billions of dollars in Asian and Middle Eastern money came under discussion..."

8/ "The family’s idea of how to salvage its investment requires razing the building to the ground and constructing an 80-story tower with greatly expanded retail areas and high-end condominiums. No short- or medium-term return can be expected from such an aggressive approach..."

9/ "Even a return over the long run [is] speculative. That narrows the pool to those interested in something other than profit. Experts say this almost certainly precludes U.S. companies. More likely: a foreign firm looking to get capital out of its country or seeking a trophy."

10/ Keep in mind that the Kushners had been frantically restructuring the 666 financing to avoid bankruptcy. They kept pushing off creditors, but a massive $1.2 billion balloon payment would have been due THIS MONTH.
The Kushners were desperate again.
thinkprogress.org/the-kushners-m…

11/ Brookfield's deal is $1.3 billion for a 99-yr lease, backed by Apollo.
And Qatar is the largest outside investor in Brookfield, and it is a major back of Apollo:
shugerblog.com/2018/12/18/mor…

12/ Brookfield has an option in the deal to take title of the actual property (to own the property, not just lease the building). But that option price is not disclosed. If the option price is high, then Brookfield has given a sweetheart gift to the Kushners: $1.3B just to lease?

13/ There are legitimate reasons to delay taking the property (avoid taxes). But the question is whether this is just a savvy delay, or whether it is a delayed extra bonus bailout (more quid for more quo?)
Brookfield has interests in nuclear power and favors from the feds.