Kushner Companies has made an unsolicited bid to buy Veris Residential in a deal valued at $4.6 billion.
Kushner Companies
Laurent Morali, Chief Executive
Nicole Meyer, President
Charles Kushner, Chairman
Westminster Management
Property management subsidiary of Kushner companies
Jared Kushner is co-owner
Jared Kushner
Fortress Investment Group has agreed to finance Kushner Companies unsolicited bid for Veris.
Fortress Investment Group
Previously financed Kushner Companies and Trump Chicago deals
Softbank may soon sell Fortress to the United Arab Emirates sovereign wealth fund Mubadala.
Softbank Group
Japanese Conglomerate
Owner of Fortress since 2017
Mubadala Investment Group
United Arab Emirates Sovereign Wealth Fund
In discussions to purchase Fortress in $2 billion deal
After Kushner Companies bid was made the Veris board voted to reject the offer.
Veris Residential
Formerly Mack-Cali Realty Corp.
Jared Kushner’s family real estate business, Kushner Companies, is attempting a hostile takeover of rival Veris Residential with financing from Fortress Investment Group. Fortress may soon be owned by the United Arab Emirates state-owned sovereign wealth fund, the Mubadala Investment Company.
Kushner Companies launched a hostile takeover of rival Veris
In October, Kushner Companies launched a hostile takeover bid to buy rival apartment building owner Veris Residential, which was formerly called Mack-Cali Realty Corp. The Wall Street Journal reported that Kushner Cos had amassed close to a 5% stake in Veris and that the deal would value Veris at $4.3 billion, including debt.
According to Kushner Cos, they had attempted to offer to manage Veris properties and launched the takeover bid because their offer was ignored.
After the bid was made, the board of Veris unanimously voted to reject the $16 per share price offer because it undervalued Veris and the deal was not financed.
Fortress Investment will finance Kushner Cos bid to buy Veris
Fortress Investment Group has now agreed to finance Kushner Cos unsolicited $4.3 billion bid to buy Veris. Kushner Cos said it would alternatively agree to manage the Veris portfolio in place of a takeover. Either transaction would add about 7,700 units to Kushner’s current portfolio of approximately 21,000 apartments in 14 states across the U.S.
Fortress has previously financed Kushner and Trump
Fortress has a history of providing financing to both Jared Kushner and Donald Trump. In 2018 Fortress provided a $57 million loan to Kushner Companies for One Journal Square, a controversial real estate project in New Jersey, that Kushner Cos had previously tried to fund through Chinese investors.
Fortress co-financed a loan for $130 million, for the Trump International Hotel and Tower in Chicago, along with Steven Mnuchin’s Dune Capital and Steve Feinberg’s Cerberus Capital. In 2012 Trump defaulted on the loan and finalized a deal to repay $48 million of the outstanding debt of approximately $100 million.
Fortress may soon be owned by the United Arab Emirates
Fortress Investment Group has approximately $50 billion in assets under management and was acquired by the Japanese multinational conglomerate Softbank Group in 2017. In July 2022 Reuters reported that the United Arab Emirates sovereign fund — the Mubadala Investment Company — was in talks to buy Fortress from SoftBank. A September story indicated Softbank was close to selling Fortress for $2 billion to Mubadala.
If the Softbank-Mubadala deal and the Fortress-backed Kushner deals all close, the United Arab Emirates will become a major financier of Kushner’s family business.
Note that there is no indication that the discussions between Softbank and Mubadala about the sale of Fortress have any connection to the Fortress deal to finance Kushner Companies. However if both deals close this will become yet another deal in which Jared Kushner’s work while in the White House has overlapped with the financial partnerships that have benefitted him or his family.
Jared Kushner is an owner of Kushner Companies subsidiary Westminster
Kushner Companies was founded by Jared’s father Charles Kushner. In 2005, when Charles was convicted of tax evasion, witness tampering and illegal campaign donations he was sentenced to prison and Jared took over as CEO. Jared stopped running Kushner Companies when he went to work for his father-in-law Donald Trump in the White House. His sister, Nicole Meyer, is president of Kushner Companies and his father Charles is chairman.
After Jared left the White House he launched an investment firm, Affinity Partners, that received over $2 billion from Saudi Arabia’s Public Investment Fund, which I covered in this piece on Saudi Arabian funding of Kusher and Trump:
While Jared no longer runs Kushner Companies, he is an owner of Westminster Management, the property management arm of Kushner Companies. Last month Westminster reached a $3.25 million settlement for a 2019 Maryland lawsuit for violating consumer protection laws by charging tenants illegal fees and failing to adequately maintain the properties.
Kushner Companies, 666 Fifth Avenue and Qatar
In 2007 Kushner Companies purchased 666 Fifth Avenue for a record breaking price of $1.8 billion. By the time Jared Kushner was working in the White House, the investment was losing money and Kushner Cos had tried but failed to partner with Anbang, a giant Chinese insurance company, and Hamad bin Jassim Al-Thani, the former prime minister of Qatar.
In 2018, Brookfield bailed out Kushner Companies by signing a 99 year lease on 666 Fifth Avenue, and paying the rent up front ahead of a looming $1.4 billion mortgage payment that was due from Kushner Companies in early 2019.
Brookfield’s 666 Fifth Avenue deal came a few days after the Committee on Foreign Investment in the U.S. (CFIUS) gave Brookfield approval to purchase Westinghouse.
The Qatar Investment Authority is the second largest investor in Brookfield:
Brookfield is one of the world’s biggest real estate companies, and among its investors is the Qatar Investment Authority, one of the world’s largest sovereign funds, which bought a $1.8 billion stake in one of the company’s subsidiaries, Brookfield Property Partners in 2014, and is the second-largest investor in the company, ranking only behind Brookfield Asset Management. That has raised questions given Jared Kushner’s portfolio in the White House, which includes the Middle East. Brookfield has said that the Qataris had no knowledge of the deal before its public announcement. (New York Times)
As Just Security noted in their detailed timeline on Kushner, Qatar, 666 Fifth Avenue and White House policy in addition to Brookfield Kushner Companies also received a mezzanine loan of over $300 million from Apollo Global Management, which also has strong ties to Qatar.
In order to finance its over $1 billion deal on 666 Fifth Avenue, Brookfield receives a $300 million-plus mezzanine loan from Apollo Global Management, a private equity company with ties to Qatar that had previously loaned $184 million to the Kushners in November 2017.
In October 2022 Senator Ron Wyden sent questions to Brookfield Asset Management about whether Qatar was involved in financing the 666 Fifth Avenue deal.
Members of Congress and the media continue to look at how Jared Kushner’s White House deal-making has been closely followed by a steady flow of personal business opportunities.
If Kushner Companies buyout of Veris and the sale of Fortress to UAE state-owned sovereign wealth fund Mubadala all proceed, this will be one more significant foreign financing partner to watch — especially as Kushner’s father-in-law makes another bid for the White House.