The EconomistJuly 22nd 2017 49For daily coverage of business, visit
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HEN the deal was struck justover a
decade ago, for $1.8bn, 666 Fifth Ave-
nue, a 41-storey Manhattan skyscraper, be-
came the most expensive office building
ever sold in America. Now it is in limbo,
awaiting billions of dollars of investment
to rebuild it and raise it almost twice as
high. Across the Hudson River, another
hunt for money is under way, to build a
property called One Journal Square in Jer-
sey City. In June a property-investing
start-up called Cadre attracted financial
backing from Silicon Valley luminaries in-
cluding Andreessen Horowitz, a venture-
capital company.
The thread linking these ventures is Ja-
red Kushner, Donald Trump’s senior advis-
er and son-in-law, whose family business,
like that of the president, is in property. Mr
Kushner helped conceive all three projects.
He has a “passive ownership interest” in
Cadre (meaning he is not actively involved
in its management). His family co-owns
666 Fifth Avenue and One Journal Square.
Unlike the president, Mr Kushner is not
exempt from federal conflict-of-interest
laws. He has taken steps to distance him-
self from his wide-ranging propertybusi-
ness. Kushner Companies, a complex en-
terprise that is made up of dozens of
limited-liabilitycompanies, orLLCs, has
more than 20,000 flats and 13m square feet
(1.2m square metres) of commercial space
across six states. Before joining the Trump
administration he stepped down as theand office rents fell with it. The company
went on to sell 666 Fifth’s prime retail
space to a Spanish firm, Inditex, owner of
Zara, and other investors. It also refinanced
its debt in a transaction in 2011 that gave a
49.5% stake to Vornado, a real-estate invest-
ment trust founded by Steven Roth, a long-
time partner of Mr Trump.
For a while the company’s appetite for
big acquisitions declined. But in 2011, with
666 Fifth refinanced, Mr Kushner began
buying again (see chart on nextpage), ac-
cording to Real Capital Analytics, a data
firm. His targets included modest residen-
tial buildings in lower Manhattan and in
Midwestern cities such as Toledo and Ak-
ron. He envisaged bigger developments,
too, including One Journal Square and an-
other in Brooklyn, now called Panorama,
for its views of the Manhattan skyline.
Now that Mr Kushner is in the White
House, two questions preoccupy observ-
ers. First, is his family business benefiting
financially from his role and from his prox-
imity to the president? Second, is he con-
flicted despite the steps he has taken to ad-
here to federal law?
Start with the question of financial
benefits. This is a pivotal moment for the
firm. It is seeking tenants for Panorama and
new loans for a residential building along
Jersey City’s waterfront (in both of which
Mr Kushner still has a stake). More impor-
tant, it is also looking for investors for 666
Fifth Avenue and One Journal Square (in
which Mr Kushner does not have a stake).
But the scrutiny that has accompanied Mr
Kushner’s White House role appears to be
hindering, not helping.
In January the New York Timesreported
that Kushner Companies was seeking equ-
ity capital for 666 Fifth from Anbang, one
of China’sbiggest insurers, which has ties
to Beijing’spolitical elite. Atthe moment
666 Fifth Avenue’s debt—of $1.4bn, accord-head of Kushner Companies and sold his
stake in several properties, including 666
Fifth Avenue and One Journal Square.
Yet Mr Kushner kept his stake in many
of the LLCs that make up the business. He
still has a passive ownership interest in
about 90% of his holdings in property,
worth up to $408m, according to his disclo-
sures. His father, Charles Kushner (photo-
graphed with his son, above), has a big role
at Kushner Companies. Jared Kushner’s
stakes in 666 Fifth Avenue and One Jour-
nal Square went into trusts owned by his
family. A long list of lenders and partners to
the familybusiness could benefit from
White House policies.Property fights
Jared Kushner is the chief architect of
Kushner Companies in its current form.
His grandfather, Joseph Kushner, a Holo-
caust survivor, developed garden apart-
ments in New Jersey. Charles Kushner
founded the business called Kushner
Companies in 1985 and led it until being
convicted for tax evasion, illegal campaign
donations and tampering with a witness.
Jared Kushner was 24 in 2005 when his fa-
ther went to prison; the next year he
bought the New York Observer, a newspa-
per, and went to work restoring his family’s
reputation. Butthe bigger transformation
came later in 2006, when Kushner Compa-
nies said it would buy 666 Fifth Avenue.
The financial market quickly plungedThe Trump family’s businesses (1)Searching for a Kushy landing
NEW YORK
In the first of two articles on the Trump family’s firms, we examine how Jared
Kushner’s White House job could harm both his firm and trust in policymakingBusiness
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