Jared Kushner ( Jacquelyn Martin photo/AP)
By Caleb Melby, Bloomberg
February 24, 2019- 3:19 PM
(Bloomberg) — Kushner Cos., the real estate firm owned by the family of President Donald Trump’s son-in-law Jared Kushner, has sought financing from federally-owned lenders for its biggest purchase in a decade.
The company has been in talks with Fannie Mae and Freddie Mac about a loan for a $1.15 billion purchase of apartments in Maryland and Virginia, according to two people familiar with the discussions, who asked not to be named discussing a private transaction.
Such a deal would increase Kushner Cos.’ exposure to government-backed mortgages at the same time its former chief executive officer is one of the most powerful people in the White House. Jared Kushner divested ownership in many of the company’s assets to close family members when he joined the government. Kushner Cos. had more than $500 million in loans from Fannie and Freddie at that time. Government-backed financing on this latest deal could more than double that figure.
Spokesmen for both Fannie and Freddie said they had no information to share. Peter Mirijanian, a spokesperson for Jared Kushner’s attorney Abbe Lowell, said that Kushner has no involvement in the company’s management.
‘Walled Off’
“As part of an ethics agreement he has and has followed, Mr. Kushner has had no role in the Kushner Companies or its activities since joining the government over two years ago,” Mirijanian said. “He is walled off from any business or investment decisions and has no idea or knowledge of these activities.”
Laurent Morali, Kushner Cos.’ president, Emily Wolf, the company’s general counsel, and Karen Zabarsky, a company spokeswoman, didn’t respond to multiple requests for comment.
President Trump appointed Joseph Otting to oversee the Federal Housing Finance Agency, which regulates Fannie and Freddie. Otting previously served as CEO of OneWest Bank, founded by now-Treasury Secretary Steven Mnuchin, an ally of Kushner’s in the West Wing.
Officials at the German bank feared a public-relations nightmare would ensue if ever they found themselves in the position of having to collect on a sitting president. Government ethicists have raised similar concerns about Kushner Cos. and the federal agencies, for fear of the complications that could arise from refinancing or foreclosure scenarios.
The purchase from Lone Star is the latest sign that Kushner Cos. is returning to its roots as an owner of suburban properties. It sold almost $2 billion of apartments in 2007 to help finance the purchase of 666 Fifth Ave. The company set a record with the $1.8 billion purchase of the 41-story Manhattan office tower, which was then plagued by outsized debt payments for more than a decade.
Kushner Cos. reached a deal to sell a 99-year lease on 666 Fifth to Brookfield Asset Management Inc. last year, and has been pivoting back to the sprawling multifamily complexes that Charlie Kushner, Jared’s father, built his fortune on.
