TRUMP TOWER REPORT

August 21, 2019 at 4:30 am

Trump Tower was once one of the most desirable addresses in New York City. But, with occupancy rates plunging, a Bloomberg report reveals it has become the least desirable. We have the details.

Aired on June 11, 2019 and August 20, 2019. 

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GOOD EVENING AND WELCOME TO METROFOCUS
>> FOR MANY NEW YORKERS, TRUMP
TOWER REPRESENTED THE PINNACLE
OF LUXURY LIVING IN THE BIG
APPLE.
CELEBRITIES LIKE MICHAEL JACKSON
AND JOHNNY CARSON CALLED IT
HOME.
BUT THERE ARE MAJOR PROBLEMS
WITHIN THE GILDS WALLS.
THE REPORTER FROM BLOOMBERG NEWS
TAKES A LOOK.
I'M GOING TO ASK BUT WHAT YOU
FOUND AND HOW IT SURPRISED YOU.
LET ME START BY SETTING THE
STAGE.
WHEN TRUMP TOWER WAS BUILT IN
1983, HOW WAS IT VIEWED?
>> SO THE BUILDING WAS AHEAD OF
ITS TIME.
DONALD TRUMP SET OUT TO BUILD
THIS LUXURY TOWER IN MIDTOWN
MANHATTAN.
THE EARLY REVIEWS WEREN'T
PARTICULARLY POSITIVE BUT HE HAD
A VISION IN MIND.
AND THEY SET UP, IT WAS A VERY
UNIQUE BUILDING AT THE TIME IT
WAS BUILT.
A HUGE WATER FALL INSIDE.
IT IS FULL OF ITALIAN MARBLE.
IVANKA TRUMP ONCE JOKED THAT
THEY HAD SOME KIND OF A MOUNTAIN
OR BOULDER.
THAT'S HOW MUCH PINK MARBLE THEY
USED IN THIS BUILDING.
AND DONALD TRUMP'S LAWYER,
GEORGE ROSS, HE WROTE IN HIS
BOOK THAT DONALD TRUMP BASICALLY
CREATED THE LUXURY CONDOMINIUM
MARKET IN NEW YORK CITY WITH
TRUMP TOWER.
BECAUSE UP UNTIL THAT POINT, THE
CITY OF FULL OF CO-OPS AND THE
CITY WAS VERY UNIQUE IN A NUMBER
OF RESPECTS.
IN PARTICULAR, THE ESTABLISHMENT
OF HIGH END CONDOMINIUMS.
>> SO THAT PROBABLY WASN'T AN
OVERSTATEMENT SAYING HE
ESTABLISHED THE HIGH ENDS --
>> THE REAL ESTATE WORLD.
NOT JUST DONALD TRUMP.
IF YOU KNOW ANY REAL ESTATE
PEOPLE.
OVERSTATEMENTS ARE THE CURRENCY.
THE TRADE.
>> SO YOU DECIDED TO TAKE A
LOOK.
WHAT PROMPTED YOU TO LOOK AT IT?
AND HOW SURPRISED WERE YOU BY
WHAT YOU WERE FINDING?
>> SO I COVER THE TRUMP
ORGANIZATION.
SO MY JOB IS TO DIG INTO THE
TRUMP ORGANIZATION'S BUSINESS
AND THE BUSINESS AS YOU KNOW,
THEY OWN A LOT OF BUILDINGS
AROUND THE CITY.
AND THE NUMBER OF PROPERTIES
AROUND THE WORLD IN TERMS OF
LICENSING AGREEMENTS.
THE BIG QUESTION HAS BEEN, HOW
WOULD THIS PERFORM WITH THE HEAD
OF THE BUSINESS IN THE WHITE
HOUSE?
WOULD THE WHITE HOUSE SOMEHOW
INFLUENCE OR INTERFERE WITH THE
BUSINESS?
WOULD THE PRESIDENT BE KEEPING
AN EYE ON THE BUSINESS?
AND EVER SINCE THE INAUGURATION
OF JANUARY 17, HOW ARE HIS
BUSINESSES DOING?
THE BUSINESSES WITH THE GOLF
COURSES, HIS HOTEL IN WASHINGTON
ON PENNSYLVANIA AVENUE DOWN THE
BLOCK FROM THE WHITE HOUSE.
WHO IS GOING THERE?
WHO IS BUYING DRINKS?
WHO WANTS TO BE SEEN THERE?
SO WE KNOW WITH THIS HOTEL IN
WASHINGTON, IT HAS BECOME A
MAGNET FOR LOBBYISTS AND FAVOR
SEEKERS FROM ALL OVER THE WORLD.
THEY GO THERE AND THEY STAY
THERE BECAUSE THEY KNOW THEY'LL
RUN INTO INFLUENTIAL FIGURES.
>> AND IT HELPS THE BOTTOM LINE.
WE KNOW IT MAKES BOAT LOADS OF
MONEY AND IT HAS BECOME ONE OF
THESE SEE AND BE SEEN PLACES IN
WASHINGTON.
THERE HASN'T BEEN THAT MUCH OF A
LOOK AT TRUMP TOWER.
I THOUGHT WHY DON'T WE SEE HOW
THIS BUSINESS IS PERFORMING?
ARE PEOPLE STILL TRYING TO MOVE
OUT?
DO FOLKS WANT TO RENT SPACE?
I STARTED TO DIG.
>> LET ME ASK YOU SOME DIFFERENT
CATEGORIES.
START WITH RESIDENCY RATES, OR
OCCUPANCY RATES.
WHAT DID YOU FIND IN TERMS OF
HOW THE OCCUPANCY RATES HAVE
CHANGED?
>> SO WE'RE LUCK YES WITH THE
TRUMP TOWER BUILDING, THERE IS A
$100 MILLION MORTGAGE ON IT AND
IT IS BACKED BY A MORTGAGE
BACKED SECURITY.
THEY HAVE TO UPDATE THEIR
INVESTORS WITH A PERFORMANCE OF
THE UNDERLYING LOANS AND THE
COLLATERAL.
SO THERE'S PUBLIC INFORMATION.
WE FOUND THE OCCUPANCY RATE WAS
999%.
THERE'S NO TRADE IN TERMS OF THE
RETAIL BUILDING.
IT HAS NOW DROPPED TO 83%.
SO THE VACANCY RATE IS ABOUT
TWICE THE AVERAGE OF THE AREA.
IT IS IN THE PLAZA DISTRICT OF
MANHATTAN.
SO IF YOU KNOW MANHATTAN WELL --
>> A VERY HIGH END AREA.
>> AND BILLIONAIRES ROW RIGHT
OFF CENTRAL PARK.
IT IS ONE OF THE MOST, IF NOT
THE MOST EXPENSIVE AREA FOR
OFFICE SPACE IN THE COUNTRY IF
NOT THE WORLD.
PEOPLE KEEP DIFFERENT NUMBERS
AND TRACK DIFFERENT THINGS AND
THERE'S NOT THAT MUCH SPACE TO
BE HAD.
BUT THE VACANCY IS TWICE THE
AVERAGE DESPITE TRUMP TOWER
ADVERTISING RENT WELL BELOW THE
AREA AVERAGE.
SO SOMETHING IS OFF.
>> THE OVERARCHING QUESTION
BECOMES, AND I WANT TO MENTION
THAT YOU NOTE IN YOUR RECORDING,
THE BUILDING, NEVERTHELESS, IT
REMAINS PROFITABLE.
$10 MILLION A YEAR.
>> YES.
IT IS PROFITABLE.
>> THE OVERARCHING QUESTION,
GIVEN WHAT YOU'VE FOUND, THE
VERY DRAMATIC NUMBERS, WHY DO
YOU THINK THAT IS HAPPENING?
>> IT DEPENDS ON WHO YOU ASK.
IF YOU SPEAK WITH SOME OF THE
FORMER HOMEOWNERS, THEY'LL SAY,
LOOK, IT HAS NOTHING TO DO WITH
MR. TRUMP OR HIS POLITICS.
RATHER, IT IS JUST BECOME A HUGE
HASSLE.
WHEN YOU SPEND A COUPLE MILLION
BUCKS ON A CONDO, YOU EXPECT
LUXURY.
THAT'S NOT TO SAY THAT THE
BUILDING, THERE ARE LUXURIOUS
ELEMENTS OF THE BUILDING AND
THERE'S WHITE GLOVE OF SECURIT.
BUT THERE'S A LOT OF SECURITY
BECAUSE IT IS THE PRESIDENT'S
HOME AWAY FROM THE WHITE HOUSE.
HE STILL HAS THE TRIPLEX AT THE
TOP OF THE BUILDING.
AND THE BUILDING IS SURROUNDED
BY CONCRETE BARRIERS.
THERE'S POLICE, SECRET SERVICE
ALL OVER THE PLACE IN ADDITION
TO MR. TRUMP'S PRIVATE SECURITY.
AND I SPOKE WITH ONE FORMER
HOMEOWNER WHOSE PARENTS HAD
LIVED THERE ON AND OFF FOR A
NUMBER OF YEARS.
EVERY TIME THEY COME TO THE
CITY, THAT'S WHERE THEY STAY.
BEFORE THE ELECTION, THINGS WERE
GREAT.
THEY LOVED IT.
IT IS CENTRALLY LOCATED.
IT HAS GREAT VIEWS.
NO COMPLAINTS.
AFTER THE ELECTION, ALL THESE
CONCRETE BARRIERS COME UP.
IT IS HARD TOIVBUILDING.
AND ONE FORMER HOMEOWNER, HIS
MOTHER WAS SUFFERING FROM
CANCER.
AND SHE WOULD HAVE TO GET
DROPPED OFF.
THEY WOULD FLY IN FROM PHOENIX.
AND THE CAB WOULD HAVE TO DROP
THEM OFF A COUPLE HUNDRED FEET
FROM THE ENTRANCE REQUIRING THE
LONG AND PAINFUL WALK HOME.
THAT'S SOMETHING THEY NEVER
DEALT WITH BEFORE THE ELECTION.
FROM THEIR PERSPECTIVE, YOU
KNOW, THE BUILDING IS GREAT.
NO PROBLEM WITH THE POLITICS.
BUT IT JUST BECAME A HASSELL.
MORE THAN IT WAS WORTH.
OTHER FOLKS, YOU KNOW, YOU SPEAK
WITH REAL ESTATE AGENTS AND
COMMERCIAL REAL ESTATE BROKERS
AND THEY'LL TELL YOU, POLITICS
TURNS OFF POTENTIAL BUYERS.
ALTHOUGH MR. TRUMP HAS A CORE
GROUP OF SUPPORTERS WHO LOVE HIM
DEARLY AND WILL SUPPORT HIM
THROUGH THICK AND THIN, THERE
ARE A NUMBER OF AMERICANS OTHER
DON'T WANT ANYTHING TO DO WITH
HIM.
A GOOD PORTION OF THOSE FOLKS
HAVE MONEY TO SPEND.
THERE'S LOTS OF LUXURY BUILDINGS
IN THE CITY.
WHY WOULD YOU SPEND A FEW
MILLION ON A CONDO IN TRUMP
TOWER WHEN YOU CAN STAY
ELSEWHERE AND NOT HAVE TO DEAL
WITH TRUMP LAND, SECURITY,
EVERYTHING ELSE THAT GOES WITH
IT.
>> YOUR STORY WAS A REALLY
INTERESTING LOOK AT THE HISTORY
AND THE PERSONALITY.
AND THE LIFE CYCLE OF THE
BUILDING.
HOW ALL OF THESE FACTORS CAN
BECOME PART OF THAT.
IT IS REALLY INTERESTING
REPORTING.
WE APPRECIATE YOU SPENDING TIME
WITH US AND WE'LL GET YOU BACK
IN TO TALK WITH US.
THANK YOU SO MUCH.
>> THANK YOU.

Mutual of America PSEG

Funders

MetroFocus is made possible by James and Merryl Tisch, Sue and Edgar Wachenheim III, the Sylvia A. and Simon B. Poyta Programming Endowment to Fight Anti-Semitism, Bernard and Irene Schwartz, Rosalind P. Walter, Barbara Hope Zuckerberg, Jody and John Arnhold, the Cheryl and Philip Milstein Family, Janet Prindle Seidler, Judy and Josh Weston and the Dr. Robert C. and Tina Sohn Foundation.

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