A new report published this week by Forbes outlines significant financial difficulties at former President Donald Trump’s flagship Trump Tower in Manhattan.
In short, the building’s tax burden is significantly higher — by millions — than prospective totals to which previous estimates pointed. “At Trump Tower, he had to pay $11.8 million in property taxes last year—more than twice the amount he was paying a decade ago,” Forbes explains. An exemption Forbes says was meant “for fixed-up industrial and commercial properties” evidently lowered tax bills at Trump Tower by millions, but from the beginning, the tax break wouldn’t last forever. Those at the lending firm Ladder Capital behind a $100 million loan Trump took out in 2012 didn’t factor rising valuations for Trump Tower by New York City into their calculations of the property taxes that would be incurred in the following years, according to available info.
“The underwriters analyzing Trump Tower for the 2012 loan apparently did not factor in the increased assessment, even though it was publicly known at the time of the refinance,” as reported in Forbes. “In 2017, Trump’s property taxes hit $10.6 million, and, according to lending records, his annual operating expenses reached $19.5 million, 59% higher than the underwriters had predicted.” Estimates put Trump Tower taxes he would pay at $6.3 million — which was subsequently far surpassed.
Profits reached $19 million in 2014, but they’re now down at the property, having reached just $14.6 million in 2020 amid years of fluctuation. There are other difficulties as well, like the push to keep the building actually occupied. In October of last year, occupancy at the Manhattan development fell below 80 percent. Earlier this year, Trump secured a refinancing of the 2012 loan, which itself involved refinancing earlier obligations. Going forward, he will likely have to also face potential push-back to his brand on the basis of his name. He has associated himself with divisive politics and overall chaos, which isn’t the most promising business environment for those either looking for company space or just to be a patron.
During an interview in the civil investigation into the Trump family business by New York state Attorney General Letitia James, Donald Trump Jr. started talking up one of the family’s nearby properties, suggesting the prosecutors move their base of operations. “I did all the leasing of the lovely building over your right shoulder,” he told his questioner. “And I’d be remiss as a Trump to not point out the lovely real estate that sits right there and I get to stare at all day… you know, have you thought about moving office buildings?”
