Tag Archives: Jared Kushner

Agalarov Oligarchs Sell NYC Real Estate

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By Vugarİbadov - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=19869321

Emin Agalorov, son of Aras Agalarov

The Daily News quoted me in Oligarch family in Trump Russia dealings sells $2.8M Manhattan apartment. It opens,

The oligarch tied to President Trump’s dealings in Moscow sold a multimillion-dollar apartment in Midtown as his family’s name began to surface in the Russia investigation.

Irina Agalarova, the wife of Kremlin-connected billionaire Aras Agalarov, closed the sale of her pad on W. 52nd Street at the end of June, according to city property records.

The two-bedroom property fetched more than $2.8 million, up only $300,000 from what the Agalarovs paid for it last February.

It was not immediately clear why the wealthy family, whose patriarch rose from his roots in the former Soviet republic of Azerbaijan to become one of the biggest real estate developers in Russia, chose to sell its Manhattan digs.

The sale, which had not previously been reported, closed roughly 15 months after the apartment was purchased.

Agalarov’s connections to Trump came under scrutiny as part of the probes into alleged Moscow meddling in the 2016 election.

Property documents list the Midtown apartment contract date as May 11, as investigations into possible Kremlin collusion with the Trump campaign heated up with the firing of FBI Director James Comey.

The family’s connections to Trump go back further, however, to when Emin Agalarov, the pop-star son of Aras, featured Miss Universe in a music video.

That choice that later led to the family bringing Trump and his Miss Universe pageant to Moscow in 2013, with the then-reality TV star trotting out his catchphrase, “you’re fired,” in another of Emin’s Europop videos.

Trump and Agalarov also had discussions about creating a Trump Tower Moscow, which never materialized.

While Aras Agalarov had a passing mention in the unverified “dossier” against Trump published in January, his family was brought back into investigators’ orbit after Trump’s son-in-law, Jared Kushner, unveiled his list of foreign contacts in late June.

Those contacts included a June 2016 meeting at Trump Tower with a Russian lawyer promising dirt on the Clinton campaign that Aras Agalarov had obtained from Moscow’s top prosecutor.

Emails show that Rob Goldstone, the British publicist for Emin Agalarov, told Trump Jr. that the information was part of the Russian government’s “support for Mr. Trump.”

Trump Jr. and others have said that nothing came of the meeting, which also included Trump campaign chair Paul Manafort, Kushner, Goldstone, Russian lawyer Natalia Veselnitskaya, Russian-American lobbyist Rinat Akhmetshin, a translator and Agalarov employee Ike Kaveladze.

News of the June 2016 Trump Tower meeting sparked interest in the oligarch family’s dealings, including that Aras Agalarov had put his posh home in Bergen County, N.J., up for sale in mid-June.

Real estate website Zillow shows that the listing was removed on July 14, in the aftermath of the Trump Jr. emails.

Scott Balber, a lawyer representing the Agalarovs in the U.S., told the Daily News Wednesday that the timing was not in any way a reaction to swirling investigations in Washington.

“There is absolutely no connection between selling these two properties to anything in the news,” Balber said.

“I can assure you that Mr. Agalarov knows a lot more about real estate investment than you or I do,” he said.

In fact, the Agalarov clan’s properties in New York, which public records show include two other apartments, are just a few tacks on the map of foreign buyers gobbling up Manhattan real estate.

David Reiss, a real estate expert at Brooklyn Law School, told The News the buyers from abroad can have numerous motivations for coming to New York including “getting real estate as an asset class, taking money from their home country and bringing it abroad so it can’t be clawed back by the local government, or to have another home for family members.”

While Balber trumpeted his client’s investment acumen as a reason for the sale, Reiss said that the $300,000 gain may have actually been a loss after other fees are included, raising questions about its use as an investment.

“In the context of the Agalarovs’ portfolio this is probably a very small item so it was unlikely that this was considered a significant investment by the family,” he said.

While Reiss said there are no indications of wrongdoing on the Agalarov’s part, money laundering has become a persistent worry as multimillionaires and billionaires stash possibly ill-begotten cash in Manhattan apartments.

Obamas Buy Their Rental

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2011 portrait by Pete Souza of the Obama family

Realtor.com quoted me in Former President Obama Finally Buys the DC Home He’s Renting: 6 Smart Reasons Why. It reads, in part,

Former President Barack Obama has decided that buying beats renting. The former first family have surprised many by purchasing the Washington, DC, house they’ve been leasing and living in since January, coughing up $8.1 million to call the place their own.

After vacating the White House, the Obamas had moved into the 6,441-square-foot, nine-bedroom, 8.5-bath mansion, located at 2446 Belmont Road NW in the tony neighborhood of Kalorama. The neighborhood has since become the place for the new political elite, with Jared Kushner and Ivanka Trump moving into a luxe rental a couple of blocks away, and Secretary of State Rex Tillerson snapping up a $5.6 million Colonial Revival down the street.

The reason the Obamas decided to stick around DC in the first place was so their younger daughter, Sasha, then a freshman at posh Sidwell Friends, could finish up high school there. With only three years to go, renting seemed to make sense so that the Obamas could easily pick up and move once she’s done.

But apparently, there’s been a big change of heart. Why?

On its surface, their decision seems a bit puzzling, given Sasha now has only two–and-a-half years to go. In real estate, the general rule is that it makes sense to buy a home only if you plan to stay put for five years, because this allows time for your house to appreciate, which helps you recoup hefty closing costs.

“People who sell after a year or two of ownership will often find that they have lost money on their purchase,” explains David Reiss, research director at the Center for Urban Business Entrepreneurship at Brooklyn Law School.

Nonetheless, real estate agents and other experts we spoke to say there could be plenty of reasons it’s smarter for the Obamas to buy rather than rent, even for this short span of time. Here are a few possibilities to ponder.

Reason No. 1: They’re making a commitment to DC

As presidential spokesman Kevin Lewis explained in a statement, “Given that President and Mrs. Obama will be in Washington for at least another two and a half years, it made sense for them to buy a home rather than continuing to rent property.”

Granted, you can read a whole lot into that “at least” if you want. After all, as Atlanta Realtor® Bruce Ailion explains, “Many buyers think they will only be in a property for two to three years and end up living there three to seven years. That is common.”

And it might be an indicator that our former commander in chief isn’t ready to shed the political life quite yet.

“Perhaps they want to keep a foothold in Washington, DC, for other reasons with regard to political advocacy and involvement,” says Florida Realtor Cara Ameer.

Reason No. 2: In certain markets, 2.5 years is long enough to make a profit

While 2.5 years might not be long enough to profit on a home in general, that rule varies widely by neighborhood, based on rent levels, home prices—and how quickly both are going up. And this is one hot neighborhood.

It isn’t known exactly what the Obamas were paying in monthly rent, but estimates hover at around $22,000. It’s entirely possible that the former first couple did the math and determined that buying made far more financial sense, and that mortgage payments would be less of a monthly nut. (To find out what’s best for you, you can crunch the numbers in an online rent vs. buy calculator.)

*     *     *

Reason No. 5: This home will sell for a premium—he’s a former president, after all!

“It was always a little perplexing why the Obamas would ever rent if they planned to stay for anything longer than a year,” contends Washington, DC, real estate agent Rachel Valentino.

Her reason: “While they’re buying at market value, they can eventually financially benefit on the back end, where a buyer will pay significantly more for the celebrity factor. We aren’t Southern California, where every house has that star appeal. So, I can only imagine what a buyer will eventually pay to own a piece of history.”

Reason No. 6: Profits aren’t everything

“One lesson we can draw from this story is that buying a home should not always be seen as a financial transaction,” says Reiss. “Sometimes we buy a home because it’s best for our family at a particular time. Sometimes we buy a home because we fall in love with it. And sometimes those are the best reasons of all to buy a home, profits be damned.”

Kushner Conflicts with Fannie & Freddie

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photo by Lori Berkowitz

Jared Kushner, Senior Advisor to President Trump

Bloomberg quoted me in Kushner’s Use of U.S.-Backed Apartment Loans Poses Conflict Risk. It opens, 

Jared Kushner relinquished control of his family’s multibillion-dollar real-estate business in January to eliminate conflicts of interest when he became a top White House adviser to his father-in-law, President Donald Trump.

Yet Kushner Cos. has apartment buildings from New Jersey to Maryland with more than $500 million in government-backed mortgages financed by Fannie Mae and Freddie Mac. That could put officials at those agencies in an awkward spot: If Kushner Cos. applies for a new loan, or wants to refinance, would Freddie turn them down? If Kushner Cos. fails to comply with the terms of a loan, will Fannie seek to foreclose on a property owned by the president’s in-laws?

“It clearly represents a conflict-of-interest because the government or the president can take actions that would benefit his family,” said David Reiss, a professor at Brooklyn Law School who has written about issues related to Fannie and Freddie.

Hope Hicks, a White House spokeswoman, said Kushner would comply with applicable ethics rules and would recuse himself from any discussions about overhauling Fannie and Freddie, which lawmakers have sought to do in recent years. Jamie Gorelick, an attorney who has represented Jared Kushner, didn’t respond to a request for comment.

Kushner Cos. says Jared’s White House position won’t have any effect on the family business. “The election has not changed Kushner Companies’ relationship with Fannie Mae and Freddie Mac,” said Kushner Cos. spokesman James Yolles. “And we will respond to policy changes like any other private company in the marketplace.”

The federal government took over Fannie and Freddie in 2008, amid the financial crisis, putting them under the control of the Federal Housing Finance Agency, an independent regulator.