02:43 - Source: CNNMoney
Kushner's vast real estate assets pose ethical risk
(CNN) —  

A real estate investment startup co-founded by Jared Kushner skirted New York City laws and earned his company more money than expected when they flipped the properties, according to a report by Bloomberg.

In the company’s first-known deal, according to Bloomberg, Cadre sold three rent-regulated buildings for $59 million in April 2017, about an 80% premium over what it paid a little more than two years earlier.

Kushner Cos., Cadre’s operating partner at the property, “told the city the buildings had no rent-regulated tenants when applying for construction permits to update the buildings in 2015 but tax records filed later showed almost 100 such residents,” Bloomberg reported, citing an earlier story by the Associated Press.

Additionally, Kushner, an adviser to his father-in-law, President Donald Trump, had not divested his holdings in Cadre by last December, according to Kushner’s latest financial disclosure report.

Rent-controlled units in the properties would have made the buildings worth less to prospective buyers.

In a statement, a Kushner Companies spokeswoman said the firm “values all of our tenants and takes our legal and ethical responsibilities very seriously.

“Our development team has renovated thousands of apartments with minimal complaints over the past 30 years. If mistakes or typographical errors are identified, corrective action is taken immediately with no financial benefit to the company. The investigation is trying to create an issue where none exists. Kushner Companies did not intentionally falsify (Department of Buildings) filings in an effort to harass any tenants.”

Correction: This story has been updated to correctly reflect reporting by Bloomberg and the Associated Press about the tax records that were filed. They were not filed by Cadre.