Former US president Donald Trump’s slashing rhetorical style and divisive politics allowed him to essentially take over the Republican Party, but the same tactics that inspired fierce political loyalty have undermined his business.
Key points:
- Donald Trump’s focus on his political brand has increasingly overtaken his identity as a real estate mogul, one hospitality industry veteran said
- Financial records show Mr Trump’s real estate business has declined
- But Eric Trump, the former president’s middle son and a Trump Organization executive, said in an interview that the company was in a “phenomenal spot”
Mr Trump’s business brand, built around real estate development and branding deals, was once synonymous with wealth and success, an image that now clashes sharply with a political brand rooted in the anger of his largely rural and working-class voter base.
His presidency is now associated in the minds of many with its violent end, after supporters stormed the US Capitol on January 6.
Those searing images, along with years of bitter rhetoric, are costing Mr Trump money.
Revenues from some of his high-end properties have declined, vacancies in office buildings have increased and his lenders are warning that the company’s revenues may not be sufficient to cover his debt payments, according to Mr Trump’s financial disclosures as president, Trump Organization records filed with government agencies and reports from companies that track real estate company finances.
Prospective tenants in New York are shunning his buildings, one real estate broker said, to avoid being associated with Mr Trump.
Organisers of golf tournaments have pulled events from his courses.
Mr Trump’s focus on the political brand has increasingly overtaken his identity as a real estate mogul, one hospitality industry veteran said.
Prior to his political career, the Trump brand was about luxury — the casinos and the golf resorts, said Scott Smith, a former hotel executive and hospitality professor at the University of South Carolina.
When he entered into politics, he took the Trump brand in an entirely different direction.
Trump fundraising for hinted 2024 presidential run
Mr Trump’s business also remains under the cloud of a joint criminal fraud investigation by the Manhattan District Attorney’s office and the New York Attorney-General.
The company and its long-time chief financial officer, Allen Weisselberg, have been charged with a scheme to evade payroll taxes, and investigators continue to probe whether Mr Trump or his representatives committed fraud by misrepresenting financials in loan applications and tax returns.
Mr Weisselberg and the company deny wrongdoing and are contesting the charges.
As his development business struggles, Mr Trump has announced his first major deal since leaving office and it has nothing to do with real estate.
On October 20, he said he would build a new social media platform aimed in part at giving him a political forum after being banned by Facebook and Twitter, who said after the US Capitol riots that Mr Trump used their platforms to incite violence.
Mr Trump has also been raising money for his political operation, which reported having $US100 million ($133 million) on June 30, as he hints at a 2024 presidential run.
Eric Trump, the former president’s middle son and a Trump Organization executive, said in an interview that the company is now in a “phenomenal spot”.
He cited a refinancing of a loan on San Francisco office buildings that gave the Trump business about $US162 million in cash, according to loan documents and a release by Vornado Realty Trust, the venture’s majority owner.
“We’re sitting on a tremendous amount of cash,” Eric Trump told Reuters.
In an email, a spokesperson for Donald Trump denied that the business has slumped since he entered politics.
“The real estate company is doing extremely well, and this is evident in Florida and elsewhere,” Liz Harrington said in an emailed statement.
“Considering the coronavirus pandemic, in which the hotel industry was hit particularly hard, Mr Trump’s company is doing phenomenally well.”
Some Trump tenants looking to get out
Financial records show Mr Trump’s real estate business has declined.
Income from the family’s holdings, heavy on golf courses and hotels, took a beating during 2020 amid the coronavirus pandemic.
Revenues at his Las Vegas hotel, for instance, fell from $US22.9 million in 2017 to $US9.2 million during 2020 and the first 20 days of 2021, according to Mr Trump’s financial disclosures.
Mr Trump is now making a second attempt to sell his lease on one high-profile property, the Trump International Hotel, housed in a former federal building in Washington, DC, after failing to secure a buyer at the original asking price of $US500 million.
Meanwhile, the business is paying the federal government $US3 million annually in lease payments, according to documents released earlier this month by the House Oversight Committee of the US Congress. Those records show Mr Trump’s Washington hotel lost more than $US73 million since 2016.
In Mr Trump’s home base of New York, the Trump name has become increasingly toxic. One high-profile property, the Trump SoHo hotel in lower Manhattan, was rebranded the Dominick in 2017.
New York City in January cancelled his leases on a golf course, two Central Park skating rinks and a carousel.
Mr Trump has sued the city for wrongful termination of the golf course lease.
At 40 Wall Street, the 72-storey skyscraper that was among Mr Trump’s proudest acquisitions, problems that started before the pandemic have gotten worse, according to reports from firms that track real estate performance.
After the January 6 US Capitol riots, some of Mr Trump’s large tenants, including the Girl Scouts and a nonprofit called TB Alliance, said they were exploring whether they could get out of their leases.
One commercial real estate broker said many prospective tenants would not consider the building because Mr Trump’s name was on it.
The Girl Scouts did not respond to comment requests, and TB Alliance said it was “exploring all options” for leaving the Trump building.
In a statement for Mr Trump, Ms Harrington blamed “the disastrous policies of Bill de Blasio”, New York’s mayor, for the downturn in the city’s office market.
“Despite all these serious headwinds, Mr Trump has very little debt relative to value and the company is doing very well,” she said.
Reuters
