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Kushner Cos buys portfolio of apartments for US$1.15b

Its purchase of 6,030 apartments across 16 properties in Maryland and Virginia signals its return to its roots

New York

KUSHNER Cos, the property company owned by the family of Jared Kushner - US President Donald Trump's son-in-law and senior adviser - has acquired a rental-apartment portfolio for US$1.15 billion, the firm's biggest purchase in more than a decade.

The company bought 6,030 apartments across 16 properties in Maryland and Virginia from private equity firm Lone Star Funds.

This is according to a representative for Michael Campbell of the Carlton Group, a real estate investment bank helping to arrange financing for the deal, who confirmed the purchase.

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The purchase from Lone Star is the latest sign that Kushner Cos is returning to its roots after it sold almost US$2 billion of suburban apartments in 2007 to help finance the purchase of 666 Fifth Ave, a 41-storey Manhattan office tower.

Now, it has slowly been transitioning away from New York City and back to the sprawling multifamily complexes that Charlie Kushner, Jared's father, built his fortune on.

The deal comes less than a year after Kushner Cos unloaded its interest in the office tower, which was overburdened with debt from the record-setting US$1.8 billion purchase.

Brookfield Asset Management took a 99-year lease on the building and intends to update the aging property to attract new tenants.

As Jared Kushner ascended to the White House in early 2017, the family was in talks with China's Anbang Insurance Group Co for a deal that would have knocked down the 41-storey tower and built a second, twice as tall, in its place.

The transaction fell apart after the terms were made public. The sale to Brookfield paid off a US$1.1 billion mortgage that would have come due this month.

Talks between Kushner Cos and Lone Star began in the middle of 2018, according to a person familiar with the deal who asked not to be named discussing a private deal. Kushner Cos put down a non-refundable deposit this week, the person said.

The 6,030 apartments are spread across Baltimore suburbs such as Cockeysville, Owings Mills and Columbia, and Washington suburbs in Virginia including Alexandria, Fairfax and Reston.

In 2017, Kushner Cos teamed up with Israel-based Psagot Investment House to buy Quail Ridge, a 1,032-unit complex in Plainsboro, New Jersey, that the Kushner family had owned until a 2007 sale. In April last year, the firm bought the 360-unit Prospect Place in Hackensack, New Jersey. BLOOMBERG