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Guy Fieri’s Restaurant Shut Down May Spell Trouble for Kushner TS Condo

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A new report says that the closing of Guy Fieri’s restaurant may have a negative impact on the Kushner Companies’ retail condominium, which is located at the former-New York Times building.

According to Bloomberg News, 220 West 44th Street received a combined $9.9 million in rent annually from Fieri’s American Kitchen & Bar run by celebrity chef Todd English and a space that was behind on rent, which showcased a miniature model of Manhattan.

Back in 2016, when Deutsche Bank loaned Kushner $285 million to refinance the property, which expected to generate an annual income of $24 million with the retail space fully occupied. With interest payments and operating costs for the property equal to around $22 million a year, the landlord could easily lose money if any major tenants failed to pay rent.

On December 31, 2017, the 15,000-square-foot restaurant owned by Fieri closed. A spokesperson for Kushner insisted that the closing of the restaurant was a positive for their company, since they could replace it with a tenant who would pay a higher rent.

The spokesperson told The Real Deal, “A restaurant which had a below market rent agreement surrendered their keys and vacated the space. We now have written offers at the higher market rate. Hardly a bad fact. The new well-known tenant will only create more value by attracting even more visitors.”

Bloomberg news cited loan documents which showed that the 49,000-square-foot space operated by Gulliver’s Gate that showcases the building miniature models, is two months behind on rent. Meanwhile, a spokesperson for the company told Bloomberg that it is “is up to date on their rent and paid in full on their lease.”

TRD was told by a Kushner spokesperson that Gulliver’s Gate “was not put in default of their lease as Bloomberg wrongfully claims. They were a few days late but are current on all payments.”

According to TRD, “Kushner bought the property at 220 West 44th Street for $296 million in 2015 from Africa Israel. A year later the company refinanced the building with the Deutsche Bank loan and $85 million in additional debt from SL Green Realty and Paramount Group. The property lost money in the first nine months of 2017, according to Bloomberg, in part because of newly signed tenants’ free-rent periods.”

By: George Kaufman

 

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