In the real estate world, former U.S. President Donald. J. Trump has long been associated with affluence. One of his buildings in Manhattan features a five-story waterfall that slides down a wall of Breccia Perniche marble.
Another has white-gloved doormen, cascading chandeliers, and panoramic views of the city’s skyline. But despite these enticing features, all the former President’s branded properties are selling for way less than usual.
A Luxury Image As Defense
Mr. Trump lost a recent lawsuit in which the judge ruled that he inflated the value of his real estate holdings. With the ruling ordering him to pay a penalty worth over $450 million, Trump has turned this branded image of luxury into a means of defense.
One of Trump’s lawyers, Alina Habba argued in court that her client is ‘worth hundreds and hundreds of millions let alone the brand which is worth billions.’
Poor Performance Of Trump’s Condos
However, recent reports have revealed that condominiums branded with Trump’s name have sold poorer than expected. The data from two real estate tracking firms and analysis of the data by Columbia University economist, Stijn Van Nieuwerburgh have confirmed these claims.
The defining moment was the year 2016 when Trump was elected president. Within a year, condos in buildings that had Trump’s logo went from selling at a 1 percent premium compared with similar units to selling for 4 percent less. This meant that Trump’s condos became a ‘bargain’ among the city’s luxury apartments.
Famous Trump Tower Prices Hit Record Low
For example, the creme de la creme of the Trump brand, the Trump Tower on Fifth Avenue saw the average price per square foot of its condominiums fall by 49%. This is the lowest it’s fallen since 2013 according to Ondel Helton. He’s the senior director of content and research at CityRealty.
Mr. Hilton claims that the building’s age, intense competition from the ultra-luxurious condos on Billionaires’ Row, and regular protests are reasons for this fall in value.
Trump’s Brand To Blame?
In stark contrast, condos in four buildings have recently removed Trump’s logo at the behest of residents after a legal battle. Guess what? Their values have shot back up as a result.
“This analysis clearly identifies that it is the Trump brand that is responsible for the value deterioration,” Mr. Van Nieuwerburgh said. “Removing the Trump name from the building removes the loss associated with the name.”
ATTOM And CityRealty Analysis
According to CityRealty, a real estate listing website, the price per square foot of condominiums in the seven buildings under Trump’s brand fell by 23 percent between 2013 and 2023.
An analysis by ATTOM, a property data analytics company reported that the drop was 17 percent. While the four buildings that left the brand ended the decade with a 9 percent increase in value. This figure is ahead of the average Manhattan condominium market which rose by 8 percent over the same timeframe.
Location Dynamics: Manhattan Vs. Other Cities
The data that was analyzed was obtained from just buildings in Manhattan. It is possible that the brand is faring better in other cities like Florida and Hollywood where the former president is more popular among residents.
In an email, Eric Trump, the former president’s son and the de facto chief executive of the Trump Organization, questioned the analyses. “Data can be manipulated to tell any story you want, but the fact remains that our buildings sell for the highest prices per square foot of any properties in the world. That is undeniable,” he wrote.
Comparing Trump’s Hotel Sale To Top Sellers In NYC
He claimed that in 2024 alone, Trump International Hotel and Tower New York ‘closed on a $17 million unit, exceeding the prices at Time Warner, Essex House, and the most prestigious properties in the city.’
However, the $17 million condo sale at the hotel is modest when compared to other top sellers in the city. For example, the West Village penthouse recently sold for $52 million at $11,400 per square foot. The Trump condo sold for around $4,600 per square foot according to CityRealty.
Lowly Ranked Amongst The Top 100
The best-selling condo in a Trump-branded building was placed at 47th in a recent review of top 100 sales in 2023, CityRealty found.
“I just crunched the numbers in the past half hour, and I’m still trying to wrap my head around it,” said Mr. Hylton, CityRealty’s senior director of content and research. He expressed his surprise at how much the values of Trump-branded condos had fallen.
Trump’s Success Story
Even the most ardent of Trump’s critics don’t deny the fact that Trump deserves praise for how he’s expanded his family’s wealth. In the 1970s, when even the Chrysler Building was in for seizure.
Trump bought the aging hotel and transformed it into a shiny Grand Hyatt. This in turn animated the area that was regarded as ‘blighted’ at the time. “It was ingenious,” said Barbara Corcoran, who is now a judge at Shark Tank.
Corcoran Report Reveals False Claims
She was in her 30s and a newcomer to real estate when she launched the ‘Corcoran Report’ in 1981. The report ranked the top-selling properties in the city. She launched the ‘Top Ten Condominiums Report’ four years later.
During the report, she discovered that Trump’s claims that his Trump Tower Condos on Fifth Avenue were the most expensive in the world were wrong. The apartments did appear on the list, but just not at the top, she said.
Clash With Corcocan
Before publishing her report, she arranged a meeting with Trump so he could respond to her findings. As expected, the meeting ended on a sour note with Trump rejecting her methodology.
On the spot, she suggested a solution. She decided to recalculate the value of Trump’s condos based on the price per room or price by square foot instead of the overall sales price. By this method, Trump’s condos were at the top because the rooms in his buildings were small and therefore, more costly.
Born Out Of Turmoil
But Mr. Trump ran into financial and legal challenges soon after. His companies filed for Chapter 11 bankruptcy protection at least six times between the 1990s and 2000s. As he fought his way back from financial failure, he stumbled on something new.
He began leasing out his name for a fee which appeared on buildings he didn’t build, and only some of which his company managed. The move which came ahead of its time transformed the real estate formula.
