The real estate firm run by the family of White House adviser Jared Kushner is adding 6,000 apartments in Maryland and Virginia — likely including hundreds more in the Baltimore region — to its vast portfolio, raising questions about whether more local tenants will face aggressive debt-collection tactics the company has been alleged to use in the past.
The New York-based Kushner Cos. reportedly spent $1.1 billion to buy the apartments from Lone Star Funds, a Texas-based private equity firm that property records show is affiliated with at least 19 complexes in Maryland with about 10,000 units.
Jared Kushner, President Donald Trump’s son-in-law, was CEO of Kushner Cos. from 2008 to 2017 when he stepped down to join the Trump administration while retaining ownership in the firm.
Kushner Cos. did not return messages seeking comment and Lone Star Funds declined to comment on the property sale.
The transaction is the company’s largest purchase since 2007 when it paid $1.8 billion for a Manhattan skyscraper, which strained its finances until last year when it sold the 41-story tower at 666 Fifth Ave.
The Wall Street Journal first reported the apartment sale on Friday.
With its latest acquisition, Kushner Cos. is expanding its suburban apartment holdings. The company owns about 22,000 apartment units and plans to grow that number, according to the Journal.
It is unclear which Lone Star Funds properties were sold to Kushner Cos., but state records show the Texas firm is operating complexes throughout Maryland as Home Properties. Lone Star acquired Home Properties in 2015 for $7.6 billion and its holdings were described in a filing with the U.S. Securities and Exchange Commission.
Among the properties affiliated with Home Properties are the 1,350-unit Howard Crossing complex at 8732 Town and Country Blvd. in Ellicott City, the 1,050-unit Morningside complex at 106 Pleasant Ridge Drive in Owings Mills and the 960-unit Bonnie Ridge complex at 6617 Bonnie Ridge Drive near Baltimore’s Mount Washington neighborhood, according to the state Department of Assessments and Taxation’s records.
In Maryland, Kushner Cos. has owned nearly 9,000 rental units at 17 complexes, most of them in Baltimore County. The firm began operating in Maryland in 2013. Four of the complexes affiliated with Kushner’s Westminster Management were sold in 2017.
An investigation by The Baltimore Sun in 2017 found Kushner Cos. to be the most aggressive in Maryland in using a controversial debt-collection tactic. Under their practices, corporate entities affiliated with the complexes have sought the civil arrest of more than 100 former tenants for failing to appear in court to face allegations of unpaid debt, the newspaper found.
Between 2013 and 2017, Kushner affiliates had filed at least 1,250 legal actions. Judges had awarded a total of $5.4 million in judgments against tenants who owed an average of $4,400, The Sun's analysis showed. That includes the original debts, plus lawyers' fees, court costs and interest.
In nearly all of those cases, judges have approved the garnishment of tenants' wages and property, actions that had helped the Kushner-controlled companies collect $1 million, the data show.
Three of the Kushner portfolio's apartment complexes — Dutch Village in Northeast Baltimore, Carriage Hill in Randallstown and Highland Village in Lansdowne — received $6.1 million in federal rental subsidies designed to help the poor pay rent since Jan. 1, 2015, according to records obtained through a Freedom of Information Act request. The Housing Choice vouchers from the U.S. Department of Housing and Urban Development have helped 268 tenants pay rent at the Kushner properties, finance records show.
The Kushner Cos. properties had generated at least $90 million in revenue annually, according to offering circulars from mortgage giant Freddie Mac, and at least $30 million in profit, according to financing documents provided to investors who hold the mortgages.
The Morning Sun
C. Matthew Hill, a staff attorney for the Public Justice Center, is representing tenants in a case against Westminster Management, which oversees properties affiliated with the Kushner Cos. The Kushner Cos. is the parent company of Westminster Management.
The case alleges that Westminster Management charges illegal fees and threatens eviction to force payment, Hill said. A hearing is set for March 7 in Baltimore Circuit Court to determine whether to award the case class-action status.
Westminster Management did not return a message seeking comment. The company has argued in court filings to dismiss the case based on the statute of limitations and said the tenants failed to present enough facts to prove Westminster violated Maryland’s debt collection and consumer protection acts.
Hill said the plaintiffs in the case “continue to be very concerned with the illegal and excessive fee practices of Westminster Management, particularly if those practices are going to expand with Westminster into new properties in Maryland.”
If the court grants the plaintiffs class-action status, any Westminster tenants who have been charged “illegal and excessive fees” could join the lawsuit, Hill said.
A review by The Baltimore Sun of online property tax records shows at least 19 complexes in Maryland affiliated with Lone Star’s Home Properties. It could not be determined which — if any, some or all — were sold to Kushner Cos. They include:
- Annapolis Roads with 282 units at 1 Eaglewood Rd. in Annapolis.
- Canterbury with 618 units at 9206 Oswald Way in Rosedale.
- Charleston Place with 858 units at 3182 Normandy Woods Dr. in Ellicott City.
- Country Village with 344 units at 201 Idlewild Rd. in Bel Air.
- Heritage Woods with 164 units at 700 Heritage Ln. in Bel Air.
- Middlebrooke with 208 units at 410 Baldwin Park Dr. in Westminster.
- Owings Run with 504 units at 4604 Owings Run Rd. in Owings Mills.
- Ridgeview at Wakefield Valley with 204 units at 800 S. Burning Tree Dr. in Westminster.
- Saddle Brooke with 468 units at 307 Foxfire Place in Cockysville.
- Top Field with 156 units at 10701 Cardington Way in Cockysville.
- Cambridge Court with 544 units at 386 Attenborough Dr. in Rosedale.
- Village Square with 370 units at 8096 Crainmont Dr. in Glen Burnie.
- Peppertree Farm with 879 units and Cinnamon Run with 511 units at 14120 Weeping Willow Dr. in Silver Spring.
- Westchester West with 345 units at 3214 Hewitt Ave. in Silver Spring.
- Tamarron with 132 units at 18101 Marksman Circle in Olney.
Baltimore Sun reporter Lillian Reed and The Associated Press contributed to this article.