Donald Trump loves to brag about what a great businessman he is, and yet there continue to be reports that his company — the Trump Organization — is facing financial collapse as an increasing number of banks and other businesses are cutting their ties to the former president in the wake of his connections to the Jan. 6 riots at the U.S. Capitol which left five dead.
And now we have another serious blow to the Trump empire, NBC News reports, as the two most profitable parts of the Trump Organization’s portfolio are on the verge of a financial crisis which could well leave Trump’s real estate holdings worthless:
“While Donald Trump undergoes a second impeachment trial in Washington, he is also confronting a potent threat to the crown jewel of his real estate holdings, according to a person familiar with the matter.
“The threat, involving a highly profitable real estate partnership that generates significant cash for the Trump Organization, is ratcheting up pressure on the former president as his real estate and hospitality operations struggle under hefty debt and vastly reduced revenues, largely a result of the coronavirus pandemic.”
More specifically, the buildings in question are located in San Francisco and New York. Both generate significant revenue that is currently helping the former president’s company stay afloat as the U.S. economy continues to suffer as a result of the COVID-19 crisis:
“The partnership owns two first-class commercial buildings — one on Sixth Avenue in New York City and the other in downtown San Francisco — and it is the single most profitable asset in the Trump empire. The Trump Organization owns a 30 percent stake in the buildings, while its partner, Vornado Realty Trust, a huge public real estate concern in New York City, owns 70 percent.”
The chairman of Vornado, Steven Roth, is considering withholding profits from the two commercial properties, a move that would drastically cut cash receipts that Trump’s company desperately needs to remain solvent. If Roth does cut off the cash spigot, Trump might be forced to sell his minority stake back to Vornado at a significant discount. That would be a major hit to an already struggling Trump Organization.
Even more concerning for the Trump Organization is the fact that the vast majority of his real estate holdings are already said to be “hemorrhaging revenues.”
Consider the financial losses at other Trump properties:
- Revenues at the Doral golf property in Florida fell by 43 percent last year from the previous year
- Revenues from the Trump International Hotel in Washington, D.C. have plummeted by 63 percent
Trump’s overall net worth has also fallen during his four years in office. He began his presidency with an estimated net worth of $3.5 billion, which now stands at $2.5 billion.
Dan Alexander, a senior editor at Forbes and author of “White House, Inc.: How Donald Trump Turned the Presidency into a Business,” summed up the crisis facing the ex-president’s corporation:
“When you polarize your business by becoming a political figure, then you lose a lot of potential customers. He’s still, at his core, a commercial real estate mogul. When his big customers, which are tenants that pay millions upon millions upon millions of dollars a year, when those leases start expiring, that’s when we’re going to find out what the real effects of all this were.”
The real effects are that Donald Trump stands on the verge of fiscal insolvency. And it’s safe to say there are few things he fears more than being broke and irrelevant.