Trump’s Real Estate Blues: The Biggest Reason He’s Down $800 Million This Year

Despite forays into airlines, casinos and steaks, Donald Trump’s fortune remains largely tied up in the industry that made his family rich: real estate. A new Forbes investigation into Trump’s wealth pegs his net worth at $3.7 billion, down $800 million from a year ago. Much of that drop — some $475 million — comes from a decline in the estimated value of his properties.

The presidential hopeful lost the most in New York City, home to roughly 53% of his fortune. Cooling markets for retail and office space in Manhattan helped lop about $300 million off the net value of some of his most notable buildings, including Niketown and Trump Tower (which also experienced an estimated 20% decline in net operating income). Plus a slowdown in the city’s luxury residential market hurt the value of high-end properties, such as the two dozen apartments Trump still owns in Trump Park Avenue, a former hotel he converted into condos in 2002, and his personal residence, a three-story penthouse atop Trump Tower.

Graphic by Nick DeSantis
Graphic by Nick DeSantis
Some of Trump’s holdings outside of the Big Apple fell in value as well, including his Mar-a-Lago club in Palm Beach, Fla. Forbes revised the property’s value down $50 million after other top luxury properties, including a nearly 16-acre, 33-bedroom compound down the road, struggled to sell at a higher price.

New information discovered by Forbes also played a role. For example, it turns out that many of the residential lots Trump had previously claimed to own on his Palos Verdes, Calif. golf course have either already been sold or are not yet approved for sale. Forbes adjusted its estimates for three Manhattan properties — 40 Wall Street, Niketown and Trump Plaza — in part because Trump only holds the right to lease out the spaces; he does not own the buildings outright. Additionally, in December Trump granted a conservation easement on 158 acres of his 230-acre estate in Bedford, N.Y. that prohibits development on the land, reducing its market value.

Chase Peterson-Withorn , FORBES STAFF
I cover billionaires as part of Forbes’ wealth team.

By Chase Peterson-Withorn and Jennifer Wang

Despite forays into airlines, casinos and steaks, Donald Trump’s fortune remains largely tied up in the industry that made his family rich: real estate. A new Forbes investigation into Trump’s wealth pegs his net worth at $3.7 billion, down $800 million from a year ago. Much of that drop — some $475 million — comes from a decline in the estimated value of his properties.

The presidential hopeful lost the most in New York City, home to roughly 53% of his fortune. Cooling markets for retail and office space in Manhattan helped lop about $300 million off the net value of some of his most notable buildings, including Niketown and Trump Tower (which also experienced an estimated 20% decline in net operating income). Plus a slowdown in the city’s luxury residential market hurt the value of high-end properties, such as the two dozen apartments Trump still owns in Trump Park Avenue, a former hotel he converted into condos in 2002, and his personal residence, a three-story penthouse atop Trump Tower.

Graphic by Nick DeSantis
Graphic by Nick DeSantis
Some of Trump’s holdings outside of the Big Apple fell in value as well, including his Mar-a-Lago club in Palm Beach, Fla. Forbes revised the property’s value down $50 million after other top luxury properties, including a nearly 16-acre, 33-bedroom compound down the road, struggled to sell at a higher price.

New information discovered by Forbes also played a role. For example, it turns out that many of the residential lots Trump had previously claimed to own on his Palos Verdes, Calif. golf course have either already been sold or are not yet approved for sale. Forbes adjusted its estimates for three Manhattan properties — 40 Wall Street, Niketown and Trump Plaza — in part because Trump only holds the right to lease out the spaces; he does not own the buildings outright. Additionally, in December Trump granted a conservation easement on 158 acres of his 230-acre estate in Bedford, N.Y. that prohibits development on the land, reducing its market value.

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Still, Trump’s real estate portfolio remains sizable. His single most valuable asset is his $409 million stake in 1290 Avenue of the Americas, a 2.1-million-square-foot Midtown office tower. Trump owns 30% of the building (though he once tried to mislead a reporter into believing he owned 50%); Vornado owns the rest. And, even with Niketown’s $52 million drop this year, the prime retail space is Trump’s second-most-valuable holding at $390 million.

[SOURCE:-Forbes]