Kushner Quietly Raising His Stake in Manhattan

Real estate scion Jared Kushner, the 25-year-old who earlier this week purchased the New York Observer for about $10 million, is quietly expanding his investment portfolio in Manhattan, hatching plans to purchase 22 residential buildings north of 96th Street.In an interview, Mr. Kushner said his partners in the real estate venture include his siblings, Dara, 27, Nicole, 23, and Joshua, 21,all of whom have minority interests in the Observer. He declined to be more specific about the location of the properties, their current owners, or how much he expected to spend.A fourth-year New York University law and business student who has said he bought the controlling share in the paper with money he earned and inherited, Mr. Kushner made his first multimillion-dollar real estate purchase when he was a 19-year-old Harvard University sophomore. He is the son of Charles Kushner, a New Jersey developer who in 2004 pleaded guilty to witness tampering, tax evasion, and falsifying campaign-finance reports. He spent a year in an Alabama prison before being transferred in March to a halfway house in Newark, N.J., where he is being treated for substance abuse. He is expected to be released August 26.Having raised venture capital from his parents and a handful of family friends, the younger Mr. Kushner in 2000 established Somerville Building Associates — a division of his father’s Kushner Companies — and put down a reported $10 million on seven residential rental buildings in Somerville, Mass., which borders Cambridge. Soon thereafter, he purchased an additional investment property in Somerville.“I’d be in class, and get a call that a toilet broke, and have to get a contractor over there,” Mr. Kushner, a Livingston, N.J., native, said.“At this point, multitasking is what I do best,” he said. “I believe you have to push yourself, until one or the other begins suffering and then you have to make choices.”Mr. Kushner never had to choose between his studies and his real estate ventures. He graduated from Harvard in 2003, and sold his remaining Somerville real estate holdings for what he describes as a handsome profit the following year.His business strategy was to increase the value of the apartments through high-end building and renovations. “We did significant upgrades, putting in new kitchen countertops, new floors, and better lighting,” he said. “These were very neglected buildings, and we turned them into places that people could go home, and be proud of.”All but one of Mr. Kushner’s Somerville properties were rentals. The exception was a building purchased for about $2.3 million in 2000. After overseeing an extensive renovation, Mr. Kushner, then a college junior, went on to sell the building’s 16 condominiums for a total of $4.3 million in 2002.Four of his investment properties were in Somerville’s Kirkland Village neighborhood, where property values have soared over the past five years, a veteran Boston-area broker, Fred Meyer, said. “It was a prescient investment,” Mr. Meyer, a former president of the Massachusetts Association of Realtors, said. “Anyone who invested some years ago in Somerville deserves all the money they made. Five years ago, it was beginning to be apparent that the city was coming up, but it definitely wasn’t as apparent as it is now.”Mr. Kushner attributes his success, in part, to his billionaire father’s real estate know-how. “I had a very convenient expert at my disposal,” he said.Jared Kushner, who lives in NoHo, did not say how much he earned through these Somerville real estate ventures. He did say the profits from the sales — in addition to some “family money” in his name — allowed him to purchase the salmon-colored weekly.Asked if his father has advised him on the Observer deal or his current real estate ventures, he said: “We had private conversations that are private.”The younger Mr. Kushner said he became acquainted with the Observer, known for its cheeky and incisive coverage of politics, press, and evolving social decorum, while traveling between college and home. “It was given out on the shuttle,” he said, referring to the short flights between Boston and New York. “So many media properties are owned by big companies, and they either have a liberal bias or a conservative bias, but the Observer praises the good and goes after the bad. It’s about getting the truth.”He said he was confident he could help put the 19-year-old paper, which has never turned a profit and is rumored to lose about $2 million a year, on more solid financial footing. “I’m in it for the long haul,” he said, noting that he hopes to hold on to the paper for at least as long as its founding publisher, Arthur Carter, held it.In the three weeks since he emerged as one of the paper’s potential suitors, Mr. Kushner has gone from a little-known NYU student to mini-press mogul and a source of public fascination and speculation. He said he’s received calls from New York politicians, and e-mail messages from wellwishers — and some naysayers — adding: “A lot of people in their 20s write to me about their own business, or to say, ‘Do us proud.'”

Kushner Quietly Raising His Stake in Manhattan

Kushner Quietly Raising His Stake in Manhattan

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