Page 59 - Forbes Magazine-October 31, 2018

FORBES DONALD TRUMP

by an estimated 9% in 2017. It goes be- million from the value of his residential
yond politics—guests now endure metal TRUMP TOWER’S units in Chicago and New York.
detectors and bomb-sniffing dogs. “It’s SHRINKING VALUES On the Caribbean island of St. Mar-
not a country club experience,” a source tin, Mario Molinari, a real estate agent,
familiar with Trump’s golf business says. CONDOS HAVE SOLD AT LOWER recalls trying to show a Chinese billion-
PRICES PER SQUARE FOOT EACH
“It was captivating at first, but it has be- YEAR SINCE TRUMP ANNOUNCED aire a villa a few months ago. The sell-
come tiresome.” Not even the chance to HE WAS RUNNING FOR PRESIDENT. er, he says, was Donald Trump, who was
rub shoulders with a sitting president can 2015: $2,800 / sq. ft. offering 11 bedrooms, an outdoor bar
overcome this problem: Revenues appear and a private tennis court for $16.9 mil-
2016: $2,300 / sq. ft.
to be down at the three courses Trump lion. But when they got to the gate, the
visits most often. 2017: $1,900 / sq. ft. president’s property manager told them
A similar scenario has played out in they needed background checks to go
2018: $1,500 / sq. ft.1
Trump’s traditional wheelhouse: luxu- inside, which typically take a couple of
1BASED ON A SINGLE SALE.
ry residential real estate. The president days to process. “It’s too small for me,”
still holds roughly 500 condos, co-ops the billionaire responded, miffed. More
and mansions, all with their own complications, in terms of than a year after the place went on the market, Trump still
both hassles and branding. He has 37 units worth an estimat- hasn’t sold it.
ed $215 million in midtown Manhattan. Prices for condos in Such weakness seems to have infected the Trump brand
Trump Tower have fallen every year since 2015, when Trump across the board. After multiple bankruptcies, Trump adroitly
declared his candidacy, and are an estimated 33% below their turned his business toward real estate management and licens-
highs. Similar trends are playing out a few blocks away at ing, slapping his name on other people’s buildings, ties, steaks
Trump Parc East, where prices are down 23%, and at Trump and even a urine test—allowing him to make money while
Park Avenue, where they have dropped 19%. others take all the financial risk. But partners at three Trump-
In Chicago, values of Trump condos have crept downward, branded hotels (Toronto, Panama, New York City’s SoHo) have
the opposite direction of the overall market. “People bought taken the president’s name off their projects, which helps ex-
into the building based on the brand being synonymous with plain why politics has dragged that segment of the Trump
luxury,” says Cyndy Salgado, a real estate broker who once hotel empire down about $30 million, by Forbes’ estimates.
worked for the Trump Organization, selling condos in the Meanwhile, many of his licensing customers, including Ma-
Chicago tower. “Now many people feel that the brand repre- cy’s and the mattress-maker Serta, fled in the early days of his
sents divisiveness, embarrassment and questionable morals.” abrasive campaign—and the president’s company doesn’t seem
All told, the shift in perception has erased an estimated $50 to have landed a single new deal since. In 2015, Forbes val-
ued Trump’s product-licens-
WHAT TRUMP REALLY OWNS
ing operation at $23 million.
It’s now down to a mere $3 mil-
lion. “He’s so polarizing that
people are afraid to do business
6 % with him,” says Jeff Lotman,
who runs the licensing compa-
ny Global Icons. “He has signif-
icantly tarnished the brand.”
Headaches in the luxu-
ry market could, in theory, be
offset by Trump’s newfound
popularity with the larger,
7 % less affluent MAGA set. Four
months after their father took
office, Eric and Donald Trump
Jr. announced a new busi-
ness venture to bring lower-
priced Trump brands to hotels
in Middle America. Filings re-
leased months later indicate
TRUMP PLAZA, NYC TRUMP INTERNATIONAL HOTEL TRUMP PARC, NYC that the majority owner of this
Retail space, two 36th- & TOWER NEW YORK 57-space garage
floor co-op units, 11th floor hotel-condo, retail space (Jean- venture is none other than the
128-space garage Georges restaurant), 88-space garage president himself, with a 77%

66 | FORBES OCTOBER 31, 2018