The economic fallout from the coronavirus crisis, on top of a declining retail real estate market, could cost the Kushner family its Times Square property.

Kushner Cos. failed to make this month’s mortgage payment on the retail space in the old New York Times building, after they were late on the payments for November, January and February, Crain’s New York Business reported.

In addition to the $200M senior mortgage, the company took out an $85M mezzanine loan on the property with two real estate companies, SL Green and Paramount Group. While an SL Green spokesperson told Crain's that it has divested from the loan, it and Paramount indicated they would look to take control of the property before letting it go into foreclosure, according to CMBS tracking firm Trepp.

Kushner bought the property in 2015 for $295M, when it was being run by then-CEO Jared Kushner. The company is now being run day-to-day by founder Charles Kushner. Over the past year, the attraction Gulliver's Gate, which rented 45K SF, closed after its parent company went out of business, and another tenant is paying reduced rent, Crain's reports.

With most of the city on pause to prevent the spread of the coronavirus — with retailers especially suffering — it would be a major upset if Kushner could find a tenant to fill the empty space. The company, which primarily owned and built suburban apartments before Jared Kushner's tenure at the helm took it to buying high-priced Manhattan properties, in previous months used alternative loans to finance mortgage payments, like many commercial real estate borrowers in the past few years.

There has been an increase in developers buying up debt from their peers in exchange for partial ownership, with experts awaiting an eventual fallout, Bisnow previously reported. This trend emerged in large part because of banks’ increased hesitation to take on commercial real estate lending.

Several major developers across New York have started a debt fund of some sort over the past five years, including Related, RXR Realty, The Moinian Group and even Kushner Cos. itself. One of the reasons the debt space is attractive, alternative lenders say, is because it allows them the chance to take over the property if the borrower can't pay the mortgage.