Brookfield Reveals Pricey Makeover, Address Change For 666 Fifth Ave.
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Brookfield is embarking on a $400M upgrade to the beleaguered office building at 666 Fifth Ave.
The firm released new renderings and details of its plan to revitalize the building Tuesday. The plans include installing an insulated glass wall in the place of the 1950s era facade, new interiors, mechanical upgrades and changing the address to 660 Fifth Ave.
“The building in its current state is probably a $60- to $70-a-square-foot building,” Brookfield Property Group Chairman Ric Clark told The Wall Street Journal. “After investing this money, we expect to get substantially higher rents.”
The company, which paid $1.1B in cash for a 99-year lease on the building last year, is expecting to garner around $100 per SF for the more than 1.2M SF of office space in the building. In Manhattan, average office rent is nearly $82 per SF, an all-time high, according to CBRE.
Brookfield’s plans to spend $300M redoing the exterior and another $100M on the inside. It will be adding floor-to-ceiling windows, removing columns, creating taller ceiling heights and adding four terraces to the property.
Clark has previously said the firm will be taking a similar approach to that of Five Manhattan West, a 1960s era office building Brookfield spent $350M redeveloping. Brookfield bought the lease on the 666 Fifth Ave. property from Kushner Cos., which had paid $1.8B, backed by more than $1.2B in debt, for the building back in 2007.
The deal famously went through when Jared Kushner was leading the company as CEO. Charles Kushner — who is back running the company while Jared serves as a senior adviser to his father-in-law, President Donald Trump — has since said the decision to buy it was based on “bad timing and bad judgment,” but said he pushed his son to make the deal. Kushner still owns the land under the building.
When Brookfield swooped in, it allowed Kushner to pay off its significant debt on the property, which needed multiple extensions from its lenders. Since then, the Qatari Investment Authority, which has invested in Brookfield Property Partners, realigned their investment strategy after it learned it had helped fund a "bailout" of the Kushner family's crown property jewel, Reuters reported.
Brookfield expects to complete the building makeover in early 2023, and bring 1.6M SF of renovated space to the city’s supply.
“It’s an iconic building in an absolutely prime location, but it’s outdated and requires a major transformation," Brookfield Properties Head of Design and Construction Sabrina Kanner said in a statement to Bisnow. "When we’re done, it will have the look and feel of a new building."
CORRECTION, OCT. 16, 11:15 A.M. ET: The Qatari Investment Authority has invested in Brookfield Property Partners, but it is not a Brookfield Asset Management shareholder, Brookfield says. The QIA has denied any involvement in the 666 Fifth Ave. deal. A previous version misstated the nature of its investment. This story has been updated.