Kushner Companies’ $186 Million Acquisition Killed by Court

The Kushner Companies has been rebuffed by a New Jersey Court on its attempt to force the completion of a $186 Million Deal. The Real Deal has reported that a judge refused its attempt to block the seller of a real estate portfolio of suburban properties from backing out of the deal.

In January 2020, a Kushner Companies affiliate company entered into a $267 million deal to acquire a 1,000-unit portfolio of seven properties across northern New Jersey and Middletown, New York from First Realty Investment Trust FREIT of New Jersey. But that was just before the whole Coronavirus pandemic crisis hit and as everyone knows, Covid-19 changed everything. The deal was delayed and eventually one of the properties, which included most of the units that were to be acquired, was pulled from the sale.

So Kushner Companies felt that a deal is a deal and that the seller should not be allowed to renege on it. Unfortunately for the firm, a judge saw otherwise. He agreed with FREIT which argued that operations were suspended when the State of New Jersey declared a state of emergency due to the Covid crisis. This meant that the properties for sale could not be inspected according to the agreed upon timetable which FREIT determined constituted a breach of contract, thereby nullifying the deal for those properties.

The good news for Kushner Companies, however, is that the judge ruled that it should be refunded its $15 million deposit. FREIT decided to keep the money after the deal fell through because it said it was entitled to the money for damages. But the judge disagreed. He did, however, deny Kushner’s claims for damages for itself.

A spokesman for Kushner Companies told The Real Deal that it is “disappointed in the decision and would have liked to purchase the properties,” and that it “was not possible to close when the world was shut down.”