The commercial real estate market is tanking. Jared Kushner, the owner of the New York Observer, is invested up to his neck in that market. Is it time to start jumping to conclusions?

Maybe so! Kushner Companies' prize property is 666 Fifth Avenue, which they bought in 2007 for $1.8 billion. That's not a great thing to be holding in your portfolio, in the current economic climate. Particularly when you leveraged the hell out of yourself to get it! Today the Times names it as one of the nation's most troubled famous commercial properties, and quotes:

“Many of those buildings are basically underwater,” said Mr. Goade of CresaPartners. “The price they paid was too high to begin with. There’s no way anyone would lend that kind of money today.”

What does all that mean for the little old Observer? Well if you believe a lawsuit filed by an ex-Kushner exec last month, the paper is financed with an illegal slush fund that came out of the money designated to buy 666 5th. But even if that's not true, the fact is that Kushner Co. will probably have to refinance that building this year, vacancy rates are high by historical standards, rents and demand are likely to be lower than expected for the foreseeable future, and it's all bleeding cash.

So Kushner could either say "God, we're losing millions in real estate, and that paper isn't making any money. Get rid of it ASAP!" Or he could say "God, we're losing millions in real estate. What's another couple mil for a little paper? I like it." (Their lenders might disagree with option #2.)

We'll see!

UPDATE: An email from Rubenstein PR's Steve Solomon, who represents Kushner Co.:

The New York Times missed the boat on 666 Fifth Avenue today and led you to some “misspeculation” about the Observer. The fact is that Kushner stabilized 666 Fifth last year when it sold a 49% stake in the tower’s retail portion to Carlyle Group and Crown Acquisitions for $525 million. Kushner will not need to refinance the building this year, as you conjectured. Actually it has an 8-year fixed mortgage on the building so it won’t need to refinance until 2016 at the earliest. It feels the property is in very good financial shape.