TRUMP TOWER REPORT

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. 

TRANSCRIPT

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.

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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