The outlook on Trump’s 40 Wall Street is looking worse for wear after Fitch Ratings downgraded a portion of a security tied to the Financial District office building.
Fitch downgraded the portion from investment-grade BBB- to BB, a junk credit rating, Crain’s reported. The ratings agency pointed to “performance concerns” when casting a more negative pall over the security, which is also tied to three additional properties.
The 1.2 million-square-foot property generated $45 million in rent last year, according to Fitch. While some of the rent goes to the Hinneberg family, which owns the land underneath the building, the revenue still makes it Trump’s second most valuable holding in the city. The property trails only 1290 Sixth Avenue, which earned Trump $62 million in rent last year, despite Vornado Realty Trust being the majority owner.
At the Trump Building on Wall Street, occupancy is suffering as older tenants move out and newer tenants delay move-ins. After boasting an occupancy of 94 percent in 2018, it dropped to 86 percent in 2021 and stood at 83 percent at the end of last year.
Due to concessions, the average rent at the Trump Building was a mere $37.34 at the end of last year, roughly a third of the asking rent at similar properties in the neighborhood. Major tenants include the Green Ivy School, Country-Wide Insurance and Hadassah.
The mortgage on the building was placed on a lender watchlist in February amid concerns of performance and expenses. At the time, the Wells Fargo-serviced mortgage had a balance of $126.5 million.
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The building is also in the crosshairs of New York Attorney General Letitia James as one of the many properties folded into a civil lawsuit accusing Trump and others of inflating the value of their assets in annual financial statements, fraudulently obtaining favorable loans and insurance deals.
James recently argued that the lawsuit doesn’t need to go to trial, which is tentatively scheduled for October. The attorney general is looking to prevent Trump and his children from leading the family business and wants Trump to pay a $250 million fine.
Unsurprisingly, Trump’s lawyers filed a motion of their own in the case, asking for it to be thrown out based on an appellate court decision that arguably narrows the scope of the case.
— Holden Walter-Warner