Ryan OriContact ReporterChicago Tribune
Jared Kushner’s real estate firm is facing scrutiny over the recent $184 million refinancing of its Loop office tower by a private equity fund after its founder met with Kushner at the White House.
Kushner Cos., owned by the family of President Donald Trump’s senior adviser and son-in-law, on Nov. 1 took out the $184 million loan on the 30-story building at 225 W. Randolph St., according to Cook County property records.
On Wednesday, The New York Times reported the loan from an affiliate of Apollo Global Management was made after Apollo founder Joshua Harris met multiple times with Kushner at the White House. Topics of the meetings included a potential White House job for Harris, which never materialized, according to the Times’ report. Kushner is married to Ivanka Trump, the president’s daughter.
The report is the latest twist in the 10-plus years that Kushner’s New York-based firm has owned the Randolph Street tower, which is AT&T’s Midwest regional headquarters.
A group of investors led by Kushner Cos. bought the approximately 849,000-square-foot office building for $275.7 million in December 2007, as real estate values were peaking ahead of an eventual crash.The deal was a sale-leaseback, in which AT&T signed a 15-year lease for the entire building.
Kushner has made multiple attempts to sell the building in recent years, for even more than the firm paid in 2007. Yet as the term of AT&T’s lease has decreased, thus driving down the perceived value of the tower, Kushner has been unable to find a buyer.
The loan from Apollo represents a significant increase in debt on the Randolph Street tower. It replaces a $132.2 million loan from PNC Bank that was set to mature two months before Kushner secured the new loan, according to county property records.
The loan from Apollo matures in 2021, with a potential extension to 2023, according to loan documents.
Since the sale-leaseback deal, AT&T has subleased some of its space in the building to other tenants. By the time the loan extension option arrives, AT&T’s long-term intentions for the building — and thus the property’s value — are likely to be clearer. AT&T’s lease expires at the end of 2022, according to an HFF marketing flyer from when the tower previously was on the market for sale.
Should AT&T reduce its space significantly, or leave the tower entirely, Kushner could be hard-pressed to secure a new loan large enough to replace the recent $184 million in debt.
The AT&T building is Kushner’s only Chicago property. The Holabird & Root-designed building was completed in 1967 and has been renovated in 1991 and 2007, according to the marketing flyer from brokerage HFF.
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