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Trump Park Avenue penthouse could rent for just US$1, lawyer alleges

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A 7,132 square-foot penthouse in the Trump Park Avenue building may have to go on the rental market for an impossibly cheap amount because New York City has too many luxury units.

New York

IN WHAT would be one of the biggest bargains ever in Manhattan real estate, a 7,132 square-foot penthouse in the Trump Park Avenue building may have to go on the rental market for as little as a US dollar because New York City has too many luxury units.

The prospect of an impossibly cheap midtown apartment at Park Avenue and 59th Street was raised on Wednesday in a New York state court, where a unit of US President Donald Trump's company is suing a Saudi prince who used to live in the 21st-floor penthouse.

The property - with seven bedrooms and eight full bathrooms - is currently on the market for US$28.5 million.

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In 2013, it was offered at US$40 million, but the listing was pulled.

Mr Trump's lawyers say the owner can't re-rent the apartment for anything close to what the former tenant owes.

Faisal bin Abdul Majeed al-Saud had leased the property for several years, but he stopped paying his monthly rent of US$115,762 around January 2017, according to a Trump Park Avenue lawsuit filed in February.

The prince owes the owner almost US$4 million for unpaid rent and repairs, according to the Trump lawsuit.

At Wednesday's hearing, New York State Supreme Court Justice Melissa Ann Crane in Manhattan denied the prince's motion to dismiss the case, citing the language of the lease.

Jeffrey Goldman, a lawyer for Trump Park Avenue, said the prince should be on the hook for rent owed until the lease expires in June 2019.

Ms Crane suggested during the hearing that the landlord might still be able to find another tenant, which would be deducted from what the Trump unit is seeking from the prince.

"I don't think that in today's residential market you're going to find a tenant willing to pay US$100,000 a month for a residence," Mr Goldman said, adding that his client may be forced to rent it out for just "zero or US$1". The comment drew a groan from the judge.

The prince argues he notified Trump Park Avenue in 2015 that he no longer had any use for the penthouse. He also faults the Trump Organization for insisting on using a broker selected by the company that sought an "inflated rental amount in order to prop up sagging values in the building". The prince says Trump Park Avenue didn't comply with the lease's terms by failing to notify him he was in default.

His lawyer, Bruce Wiener, has said the Trump Organization also waived any right to added rent after it accepted the keys and took the prince's US$200,000 security deposit on Dec 27 last year. BLOOMBERG