Trump real estate portfolio showed widespread distress before reelection

The Trump Organization’s core real estate holdings are struggling mightily behind the scenes.

The portfolio’s issues forced a strategic pivot away from property development toward brand licensing and cryptocurrency ventures, the New York Times reported. The publication took a look at thousands of documents filed in the president’s New York civil fraud case.

Take 40 Wall Street. The office tower operates at 25 percent vacancy and generates $2 million less annually than required for mortgage payments, Fitch Ratings reported. The building faces a significant ground lease payment increase in coming years, further pressuring cash flow. The building’s financial distress led the organization to pay off its $115 million mortgage last month using proceeds from non-real estate ventures.

At Trump Tower, the once-prestigious retail floors that housed Cartier, Asprey and Buccellati sit largely vacant. Escalators to upper retail levels are roped off; only Gucci remains, complete with its visibility from street level. Two small spaces selling Trump-branded merchandise occupy the ground floor and basement.

Trump’s 92-story Chicago tower, completed 16 years ago, carries 70,000 square feet of below-street retail space left completely vacant since construction finished. The poorly positioned retail component was designed to generate millions in annual rental income.

Golf course operations show similar distress patterns. Expert analysis for the New York attorney general found at least half of Trump’s 14 courses reported negative cash flow for multiple years between 2011 and 2021. In 2017, the golf portfolio’s operational shortfalls contributed to the Trump Organization generating just $2.2 million in pre-tax income, according to an Allen Weisselberg email.

Trump National Doral, the organization’s highest-revenue resort, was valued at $297 million, according to a 2021 Deutsche Bank appraisal, $82 million below Trump’s $379 million investment. The appraisal cited reputational damage affecting bookings and room rates; property managers told appraisers that “the Trump brand has negatively impacted” revenues.

The organization has divested properties over recent years, selling its Washington D.C. hotel, a Bronx golf course, a Los Angeles mansion, Caribbean land holdings and luxury condominiums previously held as rentals. The D.C. hotel sale for $375 million appeared profitable but company records show it didn’t cover what Trump invested in the project.

Development activity has seemingly ceased. Trump testified that in regards to Trump National Doral, he’s “not actively looking to build” and might sell approved development sites “to another developer for a lot of money.” The organization’s last major construction projects both failed to generate profits.

The real estate portfolio distress has, in part, driven the organization’s pivot toward cryptocurrency partnerships and international licensing deals requiring minimal capital investment. Since securing the Republican nomination for the 2024 presidential ballot, the Trumps announced nine international licensing agreements: one each in Vietnam and Serbia, two in India, one in Qatar, one in Jeddah, one in Dubai and two in Riyadh.

Cryptocurrency ventures have proven particularly lucrative. Memecoin sales have generated $320 million in fees, according to Chainalysis. The family’s World Liberty Financial partnership has produced coins worth at least $236 million. 

These revenue streams provide the cash flow that traditional real estate operations cannot generate.

— Holden Walter-Warner