A year after paying a record $1.8 billion for 666 Fifth Ave. in Midtown Manhattan, Kushner Cos. may sell a partial interest in the trophy tower\u2019s coveted retail space to The Carlyle Group in order to retire short-term debt from the transaction, according to local sources. Representatives of Kushner and Carlyle Group declined to comment on this morning\u2019s report by Jason Kelly, Jonathan Keehner and David Levitt of Bloomberg. But a local market source told CPN this morning that Carlyle was negotiating to buy a 49 percent stake in the tower\u2019s 85,000-square-foot ground-floor retail. Kushner would retain 100 ownership of the building\u2019s office space, the source said. Kushner paid Tishman Speyer Properties $1.8 billion for the tower (pictured) last year in a trade that set a U.S. record for a single asset. But the credit squeeze has since reduced options for investors like Kushner seeking to refinance short-term debt. The deal would enable Kushner to pay off the remaining short-term liabilities from its purchase of the tower. The amount of that debt could not be confirmed by deadline, but the New York Post and other media outlets have previously reported that Kushner has already paid $200 million in cash for short-term debt and that another $300 million is coming due this spring. According to Bloomberg, Carlyle may pay $525 million for a share of the retail space. The strategy also may involve buying out at least one retail tenant\u2019s lease and significantly raising the rent. Sources say that the owners want to buy out Brooks Brothers, which currently occupies the retail building\u2019s retail portion along with Hickey-Freeman and The NBA Store. Local market sources estimate that the space currently rents for between between $600 and $700 per square foot, but prime retail rents on Fifth Avenue frequently commands much higher prices. According to Cushman & Wakefield Inc.\u2019s first-quarter Manhattan market report, Tommy Hilfiger and Diesel recently leased retail space near 666 Fifth Ave. for $2,000 per square foot. \u201cIt is a spectacular retail site,\u201d Eric Anton, executive managing director for Eastern Consolidated, told CPN this morning. But because of the high price that Kushner and Carlyle would have to pay for to buy out Brooks Brothers\u2019 lease, the gambit also carries some risk. \u201cI guess the risk is that you have to buy out the tenant, and then you have to find the next tenant,\u201d Anton said. \u201cIt\u2019s a bold move, and some one say a risky one. If they\u2019ve got another tenant in their pocket, it\u2019s a no-brainer.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
A year after paying a record $1.8 billion for 666 Fifth Ave. in Midtown Manhattan, Kushner Cos. may sell a partial interest in the trophy tower\u2019s coveted retail space to The Carlyle Group in order to retire short-term debt from the transaction, according to local sources. Representatives of Kushner and Carlyle Group declined to comment…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003794671","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n