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Former Cushman exec disputes Trump valuation claims

Douglas Larson testified to deny advisory in 40 Wall Street, Niketown values

Former Cushman Exec Testifies on Trump’s 40 Wall Street

From left: Newmark’s Douglas H. Larson and Donald Trump along with 40 Wall Street (Getty, Newmark, Own work of ChrisRuvolo, Public Domain – via Wikimedia Commons)

The Trump Organization said it leaned on an assessment from a Cushman & Wakefield executive for its valuations of two key properties at the center of a civil fraud trial against the company. That executive begs to differ.

Douglas Larson, a former Cushman executive director who is now with Newmark, testified in Donald Trump’s trial on Tuesday, where he took issue with valuations by a former Trump Organization employee for some of the company’s key properties. 

Larson was “taken aback” when presented with former Trump Organization controller Jeffrey McConney’s valuation spreadsheets, which named the former executive as an outside expert involved in the valuations, the Associated Press reported. 

“It’s inappropriate and inaccurate,” Larson testified. “I should have been told, and an appraisal should have been ordered.”

In coming to a valuation for the company’s Midtown storefront asset formerly known as Niketown, Larson testified McConney used an unrelated property type. 

Larson also denied, during his testimony reported by the Messenger, that Trump’s firm ever retained him to provide an appraisal for the Financial District office building. 

The Trump Organization said in a 2016 financial statement it came to its $735 million valuation of 40 Wall Street based on information provided by Larson in November 2015, which reflected a capitalization rate of 3.04 percent; cap rates are a valuation tool typically formed by dividing net operating income by current market value.

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The company used that cap rate to make its valuation, which New York Attorney General Letitia James alleges was fraudulently inflated from $540 million. The organization has claimed in Larson relayed his advice in a February 2016 phone conversation, which the appraiser denied ever happened. 

Trump’s financial statement said the phone call resulted in a conservative increase of the cap rate to 3.29 percent, claiming Larson advised the company that the lengthy remaining ground lease had a minimal impact on the cap rate.

In cross-examination, Trump’s lawyers pointed to a 2019 interview Larson had with the attorney general’s office, where he denied making the valuation. 

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Donna Kidder, the Trump company accountant, said in testimony the same day that then-CFO Allen Weisselberg told her to act as if the skyscraper would be fully leased by a certain date, which she did not realize would boost the property’s performance in financial statements. 

Real estate witnesses are expected to play a key role in Trump’s civil trial, which centers on accusations that his company fraudulently inflated the value of real estate assets on loan and insurance applications. The judge in the case ordered the dissolution of numerous Trump businesses, an order his team is fighting.

— Holden Walter-Warner

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40 Wall StreetCushman & WakefieldDonald TrumpFinancial DistrictFraudLetitia JamesOfficeReal Estate LawsuitsTrump Organization