Bloomberg delves into the Manhattan properties owned by Kushner Cos., including a large number in the East Village. In an article published yesterday, Bloomberg finds that, in 60 percent of the properties, the Kushners own less than half of each; in nearly half, they own less than 20 percent.
So who actually owns these properties?
[T]he vast majority of the money behind the purchases didn’t belong to [Jared] Kushner or his family. Rather, it came from an obscure Israel-based company called Gaia Investments Corp. and related entities. Gaia has almost no public profile in New York real estate. Its principals have held roles in enterprises owned by the diamond-trading Steinmetz family, with close ties to Raz Steinmetz, the nephew of billionaire Beny Steinmetz.
A 2015 deal for 16 apartment buildings had a similar structure. Again, the Kushners were publicly credited with the acquisition, and again, most of the money belonged to someone else. The investors in this case, not previously reported, were C-III Capital Partners, a Texas-based asset manager run by Andrew Farkas…
From 2012 to 2015, Kushner Cos. purchased more than 40 Manhattan apartment buildings that they still own. In at least 80 percent of them, they’re minority partners to well-heeled investors.
Bloomberg notes that it’s not unusual for landlords/developers to be minority owners of their properties or projects, serving instead as the public face for behind-the-scenes investors.
However, there’s some concern in this case for the company, previously run by current White House adviser Jared Kushner.
The finding that the company is most often a junior owner heightens concern over conflicts-of-interest a year after Kushner entered the White House. As his family has hunted for investors overseas in countries as far-flung as China and Saudi Arabia, many inside and outside of government worry about the potential for quid-pro-quos — public policy driven by private business. In the partnerships where the Kushner Cos. have minor stakes, there’s pressure to make returns for the investors who put up most of the money.
Previously on EV Grieve:
Inside a classic East Village tenement before the whole building is renovated