Remember the meeting with Shinzo Abe in Trump Tower, a couple of weeks after the election, when people were somewhat alarmed that Ivanka and Jared sat in? And remember the Mar a Lago national security meeting in February 2017?
Yesterday Caleb Melby of Bloomberg News reported that by some coincidenceÂ the government of Japan entered into a real estate deal with Jared Kushner & family shortly after the February meeting. On March 31 2017,Â Nippon Telegraph & Telephone Corp. closed on a stake in a building in Brooklyn,Â 175 Pearl Street, owned by the Kushner family. The government of Japan owns a controlling interest inÂ Nippon Telegraph & Telephone. In effect, the government of Japan and the Kushner family are co-owners of the building.
The Brooklyn transaction represented a premium of more than 60 percent on a price-per-square-foot basis over what Kushner Cos. and its partners paid four years earlier, according to data compiled by Bloomberg. The deal enabled the Kushner group to take larger ownership stakes in nearby buildings in Brooklynâ€™s chic Dumbo neighborhood that have signed tenants such as Etsy Inc. and WeWork Cos.
Kushner Cos. is now a co-owner with the NTT unit. The Japanese firm owns 23 percent of the building through limited liability companies plus more through a Normandy-controlled investment fund, a person familiar with the arrangement said. A day after the companies bought 175 Pearl St., the NTT companyÂ purchasedÂ a stake in Normandy itself. Kushner Cos. maintains a non-controlling share of less than five percent.
The sale was made through a New Jersey company called Normandy, and until yesterday it wasn’t publicly known that Japan was the real purchaser.Â This is what was reported in March 2017:
Normandy Real Estate Partners is set to close Friday on the $100 million purchase of a majority stake inÂ Â atÂ Dumbo Heights,Â The Real DealÂ has learned. The 204,000-square-foot property, which has remained vacant for over a year, is part of the complex being developed by Kushner Companies, RFR Realty and LIVWRK.
Normandy, a New Jersey-based real estate investment firm, will take the lead on redevelopment and leasing efforts at the eight-story property.Â Kushner Companies, LIVWRK and RFR will move into a â€œsingle-digitâ€ minority position, sources said.Â Invesco, which was an equity partner in the building, is being bought out, sources added.
It was not immediately clear if brokers were involved. Representatives for Kushner, RFR and Blackstone declined to comment, while Normandy andÂ LIVWRKÂ did not respond to requests for comment.
Wait, Blackstone? Blackstone CEOÂ Stephen Schwarzman is one Trump’s BFFs. There are allegations floating around that Trump owes Blackstone a ton of money, although I don’t know if that’s been verified. Blackstone has been doing a lot of business with Trump’s buddies, the Saudis, lately.
So I did a little more digging. The Pearl Street property is part of a complex of properties in BrooklynÂ (including the old Watchtower building) that the Kushners bought and have been developing into office towers. Blackstone was involved in the financing.Â This is from May 2017:
For Jared Kushner, last summer was a whirlwind of deal-making. On the campaign trail, in the weeks leading up to the Republican National Convention, the real estate scion was endeavoring to convince his father-in-law, Donald Trump, to install new advisers. At the same time, as CEO of his familyâ€™s namesake company, Kushner was helping negotiate one of the largest real estate deals ever completed in Brooklyn, the purchase of a famed commercial property overlooking the East River.
On both fronts, Kushner prevailed. The first week of August, along with two partner firms, he succeeded in acquiring Brooklynâ€™s Watchtower complex, owned for decades by the Jehovahâ€™s Witnesses, for $340 million. Two weeks later he secured the resignation ofÂ Trump campaign chairman Paul Manafort, paving the way for Kushner and his wife, Ivanka Trump, to take on senior White House roles.
Kushner stepped down from his role as CEO of Kushner Companies (now simply â€œKushnerâ€) in January, prior to Trumpâ€™s inauguration, and has agreed to divest himself of some assets. But he remains the beneficiary of more thanÂ 200 family-owned properties across the U.S., including 25-30 Columbia Heights. That arrangement puts the propertyâ€™s prospective tenants in an unusual situation. However indirectly, theyÂ will be paying rent to a man with an office in the West Wing. Not only that, but a man who has positioned himself as the behind-the-scenes connection point between business and the administration, responsible for overseeingÂ the presidentâ€™sÂ innovation officeÂ and brazenly at ease orchestratingÂ public-private deals.
I love all the name dropping. Here we get to it:
Kushner did not holdÂ back from mixing business and politics while traveling on Trumpâ€™sÂ first overseas trip last week, even as reports that he had attempted to establishÂ back-channel communications with RussiaÂ began to surface. For example, Stephen Schwarzman, cofounder and CEO of the Blackstone Groupâ€”which provided financingÂ for the Columbia Heights acquisitionâ€”joined Kushner in Riyadh, whileÂ riding high on the news that Saudi Arabia had agreed toÂ invest $20 billionÂ in a Blackstone infrastructure fund. (Schwarzman heads the White Houseâ€™s business-advisory council.)
Of course, Blackstone might not have been involved in the deal with Japan,but I thought it was interesting. Now, back to Bloomberg:
Trumpâ€™s victory was a source of acute concern in Japan. He ran a protectionist,Â Japan-bashing campaign,Â vowed to drop a Pacific trade deal, accused Tokyo of manipulating its currency, threatened to remove U.S. troops from the country and even suggested Japan might have to develop its own nuclear weapons. When Trump won, Prime Minister Shinzo Abe skipped a planned Peru visit and flew to New York to be the first head of state to personally congratulate the president-elect in a Trump Tower meeting that included Ivanka Trump and Jared Kushner, who was still running Kushner Cos. at the time.
Trump warmed to Abe and, after taking office, White House officials asked Finance Minister Taro Aso to join Abe on his next visit for trade talks with Vice President Mike Pence. The Japanese leaders extended their push in a February 2017 trip to the White House, where Aso and Pence talked aboutÂ economic cooperation. Afterward, Abe joined Kushner and other members of the Trump family aboard Air Force One for a flight to Mar-a-Lago, the Florida resort owned by the president.
NTT Urban Development and Normandy bought the Brooklyn property six weeks later from the Kushner group, which included Invesco Ltd. Atlanta-based Invesco had a majority stake in the property, which was operated by Kushner and Aby Rosenâ€™s RFR Holding LLC.
Now, a year later, the Pearl Street property still sits empty and undeveloped. And ugly, I might add.Â This is what it looks like:
Needs some work, I’d say. See also Rachel Maddow’s report on this last night.