Forbes Reporter Explains Donald Trump's Ongoing Cash Troubles

7 months ago

Two anonymous office buildings have provided Donald Trump with massive windfalls in the past. Forbes money in politics reporter Kyle Mullins joins Brittany Lewis on "Forbes Newsroom" to discuss why the former president shouldn’t count on them for cash now.

READ MORE: https://www.forbes.com/sites/kylemullins/2024/05/10/why-trumps-most-valuable-towers-would-be-so-hard-to-sell/?sh=fa67336c3d4e

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Transcript

00:00 I'm Brittany Lewis with Forbes breaking news. Joining me now is my Forbes colleague,

00:03 money and politics reporter Kyle Mullins. Kyle, thanks so much for joining me once again.

00:08 Always great to be here, Brittany. We have a theme in some of our conversations,

00:15 and that is Donald Trump's cash troubles. Today is no different. Those troubles are

00:20 in the neighborhood of millions of dollars. What do they look like now?

00:26 You know, his cash troubles may not be as in the headlines anymore. He's gotten some reprieve from

00:31 an appeals court, but they're still very much present, and he's going to have to deal with

00:36 them sooner or later. We're talking about cash troubles stemming from two different legal battles

00:40 in New York. You've got his fraud case where the New York Attorney General won a hundreds of

00:48 millions of dollars judgment against him. Then you have a lawsuit by, or multiple lawsuits actually,

00:55 by E. Gene Carroll accusing Trump of defamation and sexual abuse. He lost those as well, lost

01:02 those verdicts. All of it adds up to $540 million, in other words, more than a half a billion dollars

01:09 of legal penalties that he is on the hook for as of right now. Now, he's appealing in all these

01:14 cases. He denies any wrongdoing. So we're going to see where it ends up, but that is the situation

01:20 as of right now. Something else we know about the former president, he got his start in real

01:26 estate. He has a very impressive real estate portfolio, and you're reporting this. Two

01:31 anonymous office buildings have provided Donald Trump with massive windfalls in the past. Here's

01:36 why he shouldn't count on them for cash now. What are these buildings? So when I talk about these

01:43 two buildings, I'm talking about 1290 Avenue of the Americas, which is in Manhattan, and I'm talking

01:48 about 555 California Street, that's in San Francisco. These are both big office skyscrapers,

01:54 some of the largest buildings actually by square footage in his portfolio, and they're some of the

01:59 most valuable buildings in his portfolio. He owns 30% of each. The other 70% is owned by publicly

02:07 traded Vornado Realty Trust. And Trump is kind of in the backseat in this partnership. He has,

02:13 you know, like I said, a minority partnership, only 30%, and he doesn't have much control over

02:16 the operations of these buildings. Vornado manages pretty much everything, but he owns 30%.

02:21 They've done very, very well in the past, pre-pandemic. These were, you know, I think

02:26 combined worth something like $900 million after debt. Now they're worth closer to about $400

02:30 million after debt. But, you know, they've done very, very well for him in the past. They're still

02:36 a very large piece of his empire, despite, you know, they don't have his name on them. They're

02:40 much less famous than Trump Tower or Trump Las Vegas, but they are, they're key financially for

02:46 him. The market for office spaces really took a plunge that we all saw in a post-pandemic world.

02:56 And because these buildings are office spaces, because he doesn't control them,

03:01 is that why you're reporting that he shouldn't count on them for money?

03:04 Yeah, in short, it's pretty tough to sell a building that you have a minority,

03:09 excuse me, tough to sell a minority partnership in a building, especially a building that is

03:14 primarily office and retail space. The retail space has bounced back better than the office

03:18 market has, but overall the office market in New York and especially in San Francisco are just not

03:24 doing very well. I talked to multiple experts who told me this is one of the worst cycles they've

03:28 seen in a really long time. One San Francisco expert told me he's seen four or five, you know,

03:32 business cycles in San Francisco, and this is the worst one he's ever seen. You know, you have the

03:38 rise of remote work that has taken people out of the office, so they're going into the office less.

03:43 You've got all these tenants who are less interested in renting big swanky office spaces

03:47 and downtown office cores. So these buildings are still doing fine from a financial perspective.

03:52 They don't have extremely high vacancy rates, but the rents that they're getting are lower than

03:58 they were before the pandemic. And overall, from a sale perspective, they're worth a lot

04:02 less than they were before.

Forbes Reporter Explains Donald Trump's Ongoing Cash Troubles

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