Donald Trump is threatening China with a trade war, but could he be persuaded to hold fire if one of China’s best-connected investors finances his son-in-law’s multi-billion dollar Manhattan real estate project?
Jared Kushner, the head of Manhattan developer Kushner Companies and the husband of Ivanka Trump, has spent the time since his wife’s dad was nominated for the presidency discussing a joint venture with Anbang Insurance to redevelop his family company’s multi-billion dollar commercial complex on Fifth Avenue, according to a report in the New York Times.
Influence in the White House could prove useful for Anbang with Trump having accused the Chinese government of currency manipulation and vowed to slap 45 percent tariffs on mainland imports.
Kushner Reaches Out to Acquisitive Chinese Insurer
Trump’s son-in-law, who has also been tied to a White House role under the incoming president, is said to be close to concluding a deal with Anbang’s Wu Xiaohui to invest in a project to renovate 666 Fifth Avenue which the Kushner family made into America’s highest value commercial real estate asset when they purchased the one square block property in for $1.8 billion in 2006. While the incoming president originally made his name running his family real estate firm, the Kushner Companies have been more active in New York in recent years, and have made more than $7 billion in acquisitions over the last decade, much of which leveraged foreign sources for financing.
Wu, who spent $1.95 billion to acquire the Waldorf Astoria in 2015, has been among China’s most aggressive buyers of US assets, even after China’s insurance regulator apparently squelched his company’s $14 billion bid to take over Starwood Hotels & Resorts in April of last year.
Sources familiar with Anbang’s activities who spoke with Mingtiandi confirmed that senior executives from the company, which is closely connected to the family of former paramount Chinese leader Deng Xiaoping, were in New York last month for discussions. Executives travelling to New York on that visit included members of Anbang’s real estate acquisitions team, however, the sources were not able to confirm any direct meetings with Kushner at that time.
Anbang Eager to Meet the New President
The soon to be presidential son-in-law had met directly with Wu and other Anbang officials less than two weeks after the election, according to the Times. During those meetings, Wu, who is seen as owing much of his meteoric business career to his wife’s family connections, declared to Kushner his desire to meet with the president-elect.
Representatives of the Kushner Companies confirmed its discussions with Anbang, the Times reported. However, while Jared Kushner has been involved in discussions to date, the company indicated that he would sell his stake in 666 Fifth Avenue before any deal would be concluded with the Chinese firm. With Jared Kushner already having hired a Washington consulting firm about divesting his portfolio to comply with US rules on White House staff, the businessman’s father has taken over more recent talks with Anbang regarding the investment project.
The Chinese firm has been recruited to help Kushner recreate the 41-storey, 60-year-old Fifth Avenue building into a Zaha Hadid-designed landmark. The planned redevelopment would include adding 280 metres to the 147 metre structure, and restacking the commercial building to include apartments, a hotel and retail. Kushner has been pursuing financing for the project since 2015.
The Manhattan deal would follow up on a Trump-branded apartment tower in New Jersey which Kushner had financed thanks to $50 million in EB-5 investor visas sold to wealthy Chinese individuals.
Wu Thrives Through Government Connections
China’s rich and powerful have also been a key force behind Anbang’s rise, with a Times report last year documenting how the mainland insurer had risen from its formation in 2004 into one of China’s largest insurers thanks in part to ties to the son of a former Chinese premier as well as the son of former top Chinese revolutionary leader, as well as to Mr Wu’s wife. While much of Anbang is at least nominally-owned by rural villagers said to be tied to the company’s chairman, the insurer quintupled its capitalisation in 2014, largely through injections of billions of dollars of cash from its network of shareholders.
In May last year China’s insurance regulator reportedly began investigating Anbang’s fund-raising methods after the company suddenly backed out of its attempted Starwood acquisition in April.