This is one of the stranger sentences I have read lately. Per Reuters:
When news emerged that Qatar may have unwittingly helped bail out a New York skyscraper owned by the family of Jared Kushner, Donald Trump’s son-in-law, eyebrows were raised in Doha.
This is one of the largest real estate deals in American history, and it’s hard to see how anything could have happened “unwittingly” given the massive amount of money at stake. What happened is that the Qatari wealth fund (QIA) bought a nine percent stake in Brookfield Property Partners in 2014 (based out of Toronto and New York), who then invested in Kushner’s albatross in 2018—taking a 99 year lease on the property and paying 99 years of rent up front (worth $1.1 billion).
Kushner made what is objectively one of the worst real estate purchases in American history when he sank $1.8 billion into 666 (yes, really) Fifth Avenue in Manhattan—and all but $50 million of the sale was financed entirely with debt. This came in 2007, just as the market began to collapse under the weight of Wall Street’s byzantine mortgage derivatives market. It is worth, uh, significantly less than $1.8 billion today. Before selling the building last summer, Kushner had a $1.4 billion mortgage payment due this month.
“A source close to Brookfield Asset Management” told Reuters that the Qatari wealth fund was not involved in the deal and there was no requirement for the company to inform the QIA before closing the deal with the president’s son.
In fact, “according to two sources familiar with the QIA’s strategy,” this investment angered members of the Qatari government thanks to Kushner and Trump’s staunch support for the Saudi ruling family who helped to organize the Qatari embargo that still lasts to this day. Brookfield Property Partners is its own independent company and at a nine percent stake, the QIA cannot boss them around, but given that Qatar has followed the model of Saudi Arabia, Israel, Russia (and countless other countries who want to spread their influence), and poured tons of its $320 billion wealth fund into the West—investing in landmarks like New York’s Plaza Hotel and Herrods in London—it’s fair to question their motivations in Brookfield Asset Management’s business.
The story of Trump’s business is the story of foreign governments like Russia taking advantage of legitimate market activity to gain leverage over a man only governed by the almighty dollar. This is just how a lot of the world works. Governments try to buy influence in myriad ways, and while there is nothing on Brookfield Asset Management’s side of this deal to suggest that this is anything less than a fund trying to buy low on an asset, there is plenty of reason to question Kushner’s motivations given the dire straits in which he found himself.
The Kushners spent two years on an international search for financing on their albatross. The $1.4 billion debt payment due this month is really the only context you need to understand their desperation. While it does seem strange that Qatar would do a solid like this for an ally of one of their chief enemies, if they calculated that they could use it to pressure Kushner to pressure the Saudis to reverse the blockade, then this deal makes a lot of sense for Qatar to bring to Brookfield Asset Management.
In 2016, Charles and Jared Kushner pitched investors on an idea to level the building and replace it with a $7.5 billion luxury supertower. According to the New York Times, they almost made a deal with Qatar’s former prime minister, Hamad Jassim Al-Thani, and Anbang, a Chinese insurance giant. The deal fell apart largely thanks to Chinese legislators.
Two years later, an entity in which Qatar holds a nine percent stake bought the building outright. Given that their former prime minister was close to a deal with Kushner, it’s fair to doubt the categorical denial from two sources in the Reuters report that “Doha played no part” in the bailout. We’re just supposed to uncritically believe that the Qatari wealth fund and the former Qatari prime minister stumbled upon the same investment independent of one another as Kushner was directly courting people like them? Come on, man. That categorical denial reads like Brookfield protecting one of their investors.
Again, this is all speculation brought about by Kushner and Trump’s outright corruption, and the Reuters reporting paints a picture of a Qatari leadership genuinely unnerved by an “accidental” investment which has triggered a “strategy revamp.” The only thing that gives me some doubt over the Reuters report is that its sources speaking on the Qatari government’s position are from Brookfield (and Reuters said QIA declined to comment), and Brookfield is not privy to all Qatari foreign policy. It’s entirely possible that this is what they were told by QIA despite the mountain of circumstantial evidence pointing to some knowledge of this deal in Doha.
Given the opacity of foreign influence through sovereign wealth funds like QIA, it’s good to be skeptical about any reports involving these funds since the only thing that we know for certain is that their endgame is ultimately to purchase some kind of influence in the West while turning a profit.
Jared Kushner is corrupt. He owned maybe the most overvalued piece of real estate in American history, where analysts said that the building itself was worth less than its debts. He is also the president’s son-in-law, and he is the de facto Secretary of State and Chief of Staff. This building was impossible to sell pre-2016, and yet, post-2016, Kushner went on an international charm offensive and found a buyer in just two years. Given the transparent desperation on Kushner’s side of the deal, the soulless transactional nature of the Trump Administration and Kushner’s elevated position in the government, it’s not only fair to question anyone rescuing him out from under this albatross, but what the United States may have given up to make a deal that seemed impossible to make before Kushner’s father-in-law became the most powerful man in the world.
Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.