Vornado and Kushner Get Creative at 666 Fifth Avenue
666 Fifth Avenue, the gleaming aluminum-clad silver office tower between 52nd and 53rd Streets has been a hot topic of discussion. In 2007, the Kushner Companies bought the asset for a record $1.8 billion. The deal was so highly leveraged that rent roll equated to a mere 65 percent of the debt service. Shortly after their overly-bullish purchase, “The Great Recession” struck the Kushner Family- as well as every other NYC Landlord. Rents began to tank and tenants began to disappear. New leases were scarce and most tenants sat on the sidelines- waiting nervously as the worldwide financial markets crashed.
in 2010, Kushner’s loan was transferred to a special servicer under the assumption that there would be a default on the loan. However, foreclosure never happened. Kushner was saved by the publicly traded REIT and their new partner, Vornado.
As a part of Vornado’s partnership deal, they agreed to contribute millions of dollars towards capital improvements and renovations, including an amenities center on the 10th floor. The amenities floor will have a useable terrace, fitness center and gallery. With these upgrades, which are in the process of being implemented, 666 Fifth Avenue is looking to compete for some of the top name tenant’s. The base of the building has roughly 78k square foot floorplates and about 24k square feet footprints in the tower. The higher floors are ideal for boutique financial services tenants and hedge fund office space, as the floors divide nicely.
As of now, the main tenants in the building are Citibank (lease expiring), Millennium Management, AEA Investors and Golub Capital.
Below is a sneak preview of the asset’s future.