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Trump's Towers pale next to ultraluxury buildings, studies show
[NEW YORK] President Donald Trump has long claimed that residential towers and condominium hotels bearing his name in gold or silver letters were more valuable than those of his competitors.
But new analyses of Trump-branded buildings in Manhattan by two real estate companies show that far from leading the market, the president's ageing buildings are lagging behind.
Trump apartments in 2017 sold for an average of US$1,741 per square foot, or 6.6 per cent lower than the average Manhattan condominium, according to CityRealty, a brokerage firm.
Even at Trump Tower, where Trump has a triplex, sales peaked in 2013, with average prices at US$3,000 per square foot, and have fallen since then, according to Nancy Packes, a real estate marketing consultant. Sales are now running about US$2,000 a square foot, about the same price as two nearby condo towers also built in the 1980s, Metropolitan Tower and Museum Tower.
"The luster on Trump buildings has faded," Ms Packes said.
And when compared with the new generation of ultraluxury buildings along Billionaire's Row, a stretch of 57th Street that includes Trump Tower, the average Trump apartment is worth far less. The sales average, for instance, at 432 Park Ave. was US$5,564; US$4,051 at Time Warner Center; and US$3,812 at One 57, the skyscraper at 157 57th St., according to CityRealty.
Even sales at Trump International Hotel & Tower in Columbus Circle, where the average price was more than US$3,000 per square foot, paled in comparison with the building next door, 15 Central Park West, which averaged a market-leading US$6,758 in 2017.
The Trump Organisation sharply disputed the idea that Trump apartment prices are in decline. Condominiums at Trump International "beat the pants off the prices" at the Time Warner Center. And comparing 35-year-old buildings with new luxury towers is unfair, the organisation said. "Data can be manipulated to tell any story you want," said Eric Trump, the president's son and an executive vice president of the organisation.
"The fact remains, our buildings sell for the highest prices per square foot of any properties in the world," he said. "That is undeniable." The CityRealty Report, which is being released Tuesday, compares the average price per square foot of 11 Trump-named buildings in New York with the average price for Manhattan condos, from 2007 through 2017.
At the request of The New York Times, Ms Packes compared the average price per square foot for Trump buildings with the average prices of similar condominiums built at roughly the same time.
"The prices most Trump condos are now selling for no longer merit the luxury designation," the CityRealty report said. "In part, this is simply a function of the age of the buildings," as luxury buildings built over the past decade sell for more, the report said.
But, brokers say, the difference is about more than just age. The features, amenities and styles that define ultraluxury have changed dramatically since Trump Tower on Fifth Avenue opened in 1983, or Trump World Tower opened in 2001, near the United Nations. And foreign buyers, who dominate the top of the residential market in New York, are gravitating to the latest buildings on the market.
"Everybody wants the newest, coolest apartment with the most amenities, the newest architect," said Dolly Lenz, a broker who represents high-end buyers and sellers. "The aesthetics have also changed. Back then, brass and gold was cool. Today, the aesthetic is much more minimalist. They show their status through art, so they need very high ceilings." All this is a far cry from how the Trump brand was perceived in the 1980s and 1990s when Trump was building his condominium portfolio.
(BEGIN OPTIONAL TRIM.) Trump started building his first eponymous building in 1980, the Trump Tower on Fifth Avenue, between 56th and 57th streets, when the city was emerging from a long period of economic and fiscal crisis. He was one of the rare developers at the time to build luxury condos. But he thought he had a great location and a hefty tax break to boot.
Even before he sold the first condo at the Trump Tower, Trump told The New York Times in 1980 that projects with his name on them were "25 percent more valuable." The original marketing brochure for the bronze Trump Tower likened it to a "precision-cut diamond" that epitomized elegance, sophistication and beau monde with the highest prices and an entrance "inaccessible to the public." (END OPTIONAL TRIM.) The claim that luxury buyers paid a premium for Trump condos became part of the Trump marketing strategy. It was the key reason in the 1990s that General Electric selected Trump to convert its Gulf & Western Building at Columbus Circle into what became Trump International Hotel & Tower, recalled Barbara Corcoran, a businesswoman and television personality who was a prominent broker at the time in its sales and marketing.
"It was the only brand known to consumers at the time," Ms Corcoran said, adding that buyers did pay a premium, though not as much as Trump claimed.
He did get top dollar for the apartments at Trump Tower and did well with his other buildings. By 1997, he had two buildings - Trump Tower and Trump Palace - on the Corcoran company's list of top 10 sales per square foot. And six apartments at Trump International placed in Corcoran's top 10 list of sales by price.
Ms Packes traces the Trump brand's decline in New York to the recession in 2008. As the market recovered and then took off in 2013, prices at Trump properties stayed flat or declined, compared with contemporary buildings and a new generation of ultraluxury buildings, like 432 Park Ave. or 15 Central Park West.
Sale prices at Trump Park Avenue have fallen since 2013 to the point where the average price is less than its contemporaries, the Chatham, at 181 E. 65th St., and 515 Park Ave.
"The overwhelming majority of the buildings that carry the Trump name," she said, "underperformed the comparable building or buildings after the Lehman crisis." Brokers, political analysts and apartment buyers have speculated about how the turmoil and division after Trump's election might affect the value of his brand, both in heavily Democratic New York and in the world.
The evidence is mixed.
Certainly, Trump International Hotel in Washington has done well, filling its rooms with lobbyists and visiting dignitaries and turning a profit, according to the Trump Organization.
Donald Trump Jr., who is running the family company with his brother Eric, was recently in India pitching apartments in five Trump-branded projects in cities.
The Trump Organisation has not built a condominium tower in a decade, but Trump is the rare developer who can license his name for buildings erected and financed by others.
The Trump Organisation and local developers claim that the Trump apartments in India are selling for 30 per cent more than the average luxury units in Mumbai, Gurgaon and Kolkata.
But in Toronto, the Trump International Hotel and Tower was renamed Adelaide Hotel Toronto. And last week, a worker pried the silver T-R-U-M-P letters off a troubled hotel and residential condominium in Panama City.
The Trump name also came off Trump Soho, a hotel and condominium in Manhattan and three adjoining rental buildings on the West Side of Manhattan, where anti-Trump sentiment is high. A condominium nearby, at 200 Riverside Blvd., is also in court seeking to peel away the Trump name.