As Donald Trump faces a $355 million court-ordered fine for conspiracy to exaggerate his worth, his most valuable, if unsung, New York City asset is in the spotlight. – He owns a 30% passive stake in the office building at 1290 Sixth Avenue.
The West 52nd Street tower is 70% owned by Vornado Realty Trust, headed by Trump’s longtime friend Stephen Ross. Trump’s name is not listed anywhere on the building, but minority ownership could be his saving grace.
All he has to do is sell it.
One of Manhattan’s biggest landowners said, “It would be ironic if Donald ran away through a building that didn’t bear his name.”
Mr. Trump also owns 30% of Vornado’s 555 California Street in San Francisco, an office market in far worse shape than New York.
Judge Arthur Engoron has put President Trump in a deep predicament. He must pay the money before he can appeal the judgment.
Stephen B. Siegel, a power trader at CBRE who brokered several deals with President Trump, including Gucci’s lease of Trump Tower, told the Post, “Some of his 1290 Sixes are 60% off before debt. It could be worth billions of dollars.” $950 million commercial mortgage-backed securities loan in November 2021;
Siegel valued the 2.1 million-square-foot tower, which is more than 98% leased, at about $900 per square foot, according to Vornado’s most recent SEC 10-K filing. As first reported by the Post, the most recent big deal was a 175,000-square-foot lease to law firm King & Spalding.
It seems logical for Trump to sell back to Vornado for 1290 sixes. Mr. Ross is said to be cautious about his relationship with his publicly traded company and his former (and possibly future) president.
In February 2021, shortly after the Jan. 6 Capitol riot, Mr. Ross was looking for a way to oust Mr. Trump from the partnership, The Wall Street Journal reported at the time. But nothing happened, and neither Mr. Vornado nor Mr. Trump acknowledged the meeting.
Mr. Trump may be reluctant to part with his 1,290 shares. Trump’s minority position resulted in rental income of $62 million in 2022, The Real Deal reported.
“Trump relief in 1290 is the realm of pure speculation,” the official cautioned. “Even if he and Ross wanted to pursue it, a lot of lawyers would be busy.”
That’s if the decision rests with him rather than court-appointed Supervisor Barbara Jones, whose role in the sale after the verdict is unclear.
Trump’s other large and prominent asset is the 72-story landmark Trump Building at 40 Wall Street, of which he owns a leasehold interest rather than the land.
Mr. Siegel estimated the potential sale value of the leasehold interest at “between $250 million and $300 million.” President Trump once considered selling Engoron for more than $400 million, but later valued it at $550 million, according to the lawsuit that imposed stiff penalties on Engoron. This is twice the amount announced by an external appraiser.
Siegel noted that Rudin is asking just $200 million for a similar-sized tower at 80 Pine Street nearby. “And it’s in much better shape than 40 Wall,” he said.
No matter how you look at it, 40 Wall is in trouble. Trump’s website describes it as a “Class A” office property, but brokers and analysts consider it Class B. Fitch downgraded some of Tower’s debt to junk status last year before the $160 million mortgage was placed into special repayments, but it is no longer classified as such. The office’s vacancy rate is about 18%, which is not as high as in other of his FiDi buildings, but older tenants are moving out and more are expected to leave.
To make matters worse, the 22,000-square-foot Duane Reade store closed in October with no replacement in sight. The retail loss is equivalent to the rent for four floors of office space.
“It’s a basket case,” one leasing expert, not Siegel, said of 40 Wall.
“While it is a beautiful landmark on the outside, it needs at least a $250 million capital increase to be competitive in this market.”
Of course, Trump’s other Manhattan assets could also be sold. However, they are not as large as many believe.
“The commercial portion of Trump Tower is often mistaken for the entire building,” one broker noted. “But with the exception of Donald’s own triplex, the other apartments are privately owned condominium units.”
“And the rest of his so-called ’empire’ in the city consists of a few apartments here and there, some retail units, and a garage or two. ”
Vornado declined to comment on the situation at 1290 Sixth Avenue. Eric Trump, executive vice president of the Trump Organization, did not respond to a request for comment.
