Trump’s office buildings made less money than expected: report

Net income in 2016 lagged behind appraisals

TRD New York /
Jun.June 21, 2017 10:40 AM

Trump Tower, President Donald Trump (credit: Getty Images) and 40 Wall Street

Amid a changing office market, President Trump’s Manhattan office towers made less rental income last year than initially projected by lenders, according to a new report.

The office tower at 40 Wall Street, where Trump owns the leasehold, made $17.4 million in 2016, according to CMBS data analyzed by Bloomberg. A 2015 appraisal valuing the property at $540 million predicted that it would generate $22.6 million in annual income.

At Trump Tower, a 2012 appraisal valued the retail and office portion, which Trump owns, at $480 million and estimated that it would make $20.4 million in annual income. But last year the property had a net income of $14.1 million.

Vornado Realty Trust’s 1290 Avenue of the Americas, where Trump owns a 30 percent stake, generated a net income of $77.7 million last year. A 2012 appraisal valuing the tower at $2 billion had estimated an annual income of $97.7 million.

“We’re in the biggest development pipeline in Manhattan since the 1980s,” Savills Studley researcher Keith DeCoster told Bloomberg. “Older buildings — circa 1980s, 1990s — are having a tougher time competing.”

Based on these income numbers, Bloomberg claims that the value of Trump’s office properties has fallen, pushing his estimated net worth from $3 billion to $2.9 billion. Bloomberg cited mortgage documents, lender statements, market data and the president’s most recent financial disclosure on June 16 in determining value. But it’s still not clear exactly how Bloomberg arrived at its estimate, or whether it accounted for the fact that property values rise can rise even as rental income shrinks, depending on factors like interest rates or investor appetite. [Bloomberg]Konrad Putzier 

(To view more properties owned by the Trump Organization, click here)


Related Articles

arrow_forward_ios
Make Greenland Great Again? Trump wants to buy Arctic territory

Make Greenland Great Again? Trump wants to buy Arctic territory

Make Greenland Great Again? Trump wants to buy Arctic territory
Hamptons’ priciest summer rental to host MAGA extravaganza next month

Hamptons’ priciest summer rental to host MAGA extravaganza next month

Hamptons’ priciest summer rental to host MAGA extravaganza next month
An illustration of Vornado's Steven Roth and Facebook's Mark Zuckerberg

Revenge of the hoodies: Big Tech may be breaking up with Big Office for good

Revenge of the hoodies: Big Tech may be breaking up with Big Office for good
MetLife researchers “expect many firms to try (and fail)” permanent work from home arrangements in the near-term, though the long-term impact may be offset by other considerations. (Credit: iStock)

TRD Insights: “Pandemic compliant” offices may offset remote work impact

TRD Insights: “Pandemic compliant” offices may offset remote work impact
Mortgage lenders are beginning to see missed rent payments from office buildings. (Credit: iStock)

Add office tenants to the list of those not paying rent

Add office tenants to the list of those not paying rent
Andrew Florance, CEO of CoStar (Photo by Jeffrey MacMillan for the Washington Post)

EXCLUSIVE: CoStar’s Andy Florance on buying Ten-X, the future of office buildings and why brokers don’t need discounts

EXCLUSIVE: CoStar’s Andy Florance on buying Ten-X, the future of office buildings and why brokers don’t need discounts
An institutional investor’s sale of a 7 percent stake in an exchange-traded real estate fund reveals deep concerns about the sector. (Credit: iStock)

Mystery investor dumps big stake in real estate fund

Mystery investor dumps big stake in real estate fund
A CBRE global survey of over 200 companies found the vast majority are taking a cautious approach to reopening their workspaces. (Credit: iStock)

TRD Insights: Most companies will reopen their offices in phases, CBRE global survey shows

TRD Insights: Most companies will reopen their offices in phases, CBRE global survey shows
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...