Kushner Family Expands Investments in Southern Midsize-City Apartment Complexes
Jared Kushner, former President Donald Trump’s son-in-law, wasn’t involved in deals, company says
The New York region’s Kushner real-estate family is expanding its investments in Southeastern states as it waits for the local commercial property sales market to reopen from the pandemic.
The family, which gained global attention during the Trump administration because of the senior White House role played by Jared Kushner, has either purchased or signed contracts to buy 2,500 apartments in Mississippi, Tennessee and Virginia in the past month. The total price was about $400 million, according to Laurent Morali, the president of New York-based Kushner Cos.
Mr. Kushner, the son of family patriarch Charles Kushner as well as former President Donald Trump’s son-in-law, has played no role in the southeastern acquisition strategy, which Kushner Cos. launched before the Trump presidency ended, Mr. Morali said. The company was run by Charles Kushner, his daughter, Nicole Kushner Meyer, and Mr. Morali during the Trump years, and Jared Kushner’s role in the family business since he moved to Florida in January hasn’t been announced.
Kushner Cos., which has a total real-estate portfolio valued at $15 billion, has been investing in suburban apartment buildings for decades. It began focusing on small to midsize cities in Southeastern cities, such as Memphis, Tenn., and Williamsburg, Va., last fall, partly because big investors have been driving up prices in larger cities.
The family’s recent deals included its purchase of 1,200 units in Jackson, Miss., for $160 million. Average rents are $1,000 a month for a two-bedroom unit and $900 for a one-bedroom unit, Mr. Morali said. Kushner Cos. found Jackson attractive because its economy has been strong thanks to stable local employers, including the state government and a Nissan assembly plant that opened in 2003, he said.
Mr. Morali said that Kushner Cos. continues to look for deals in New York but the market has been quiet, partly because of the pandemic and uncertainty about such things as the mayoral election and the rate at which office space will be repopulated as the pandemic fades. He predicted that commercial property sales would increase in a few months as these questions are resolved.
“We are looking for opportunities in New York,” he said. “It’s just that there are few opportunities.”
Suburban apartment buildings have been one of the most favored commercial property types by investors as the country has emerged from the pandemic. This has been especially true for apartments in states in the Southeast and other regions where landlords have faced fewer pandemic-related eviction restrictions than those in states like New York and Connecticut.
Investors purchased $62.9 billion worth of U.S. multifamily property in the first five months of 2021, compared with an average of $58 billion for the same period between 2015 and 2019, according to data firm Real Capital Analytics. “The apartment market has mostly recovered from the challenges of the Covid-19 pandemic,” the firm said in a May research report.
Kushner Cos. began as an investor in suburban apartments, mostly in New Jersey. It made a high-profile push into the Manhattan market in 2007 with its ill-fated purchase of the office building at 666 Fifth Ave., which suffered steep losses after the global financial crisis.
During the Trump presidency, Kushner Cos. increasingly focused on the suburbs, because many of its New York investments came under scrutiny by the news media and critics of Mr. Trump. But the family remained active in the New York region.
For example, Kushner Cos. later this year is planning to break ground on a $1 billion apartment project in Jersey City. Mr. Morali also noted that Kushner Cos. moved its headquarters to the General Motors building overlooking Central Park just a few months after the pandemic hit.
“We love it here,” he said.