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Famous facade: More expensive without Trump?
Photo: Sarah Yenesel / EPA
To support Donald Trump financially, gold sneakers emblazoned with the letter T are being offered. Trump's gold sneakers are a reminder of the situation with his real estate. What is currently being talked about are those apartments in his corporate empire that are sold with the Trump name as a brand.
On the one hand, the former president, as a businessman, always wants to stand for splendor and luxury, no matter how tasteful you might find gold sneakers or apartment lobbies with a five-story waterfall. On the other hand, the Trump kicks are a picture of how urgently the most likely next Republican presidential candidate needs money - and that also has to do with his real estate.
Trump and his lawyers have repeatedly emphasized the value of this brand: the name alone makes expensive luxury apartments even more valuable on the market. But Stijn van Nieuwerburgh has serious doubts about this. The professor of real estate economics at New York's Columbia University has evaluated the market prices of Trump apartments in Manhattan and comes to the conclusion: The value has fallen significantly since Trump's successful presidential campaign in 2016.
It's not just about the principle. Just on Friday, Donald Trump was ordered to pay more than $350 million. The reason: His company has apparently manipulated the value of its own real estate for years in order to get cheaper loans and insurance contracts.
One line of defense on the Trump side was that apartments with the Trump label are not just about the usual features that drive up the value, such as location, condition and amenities. You also have to take into account the good sound of the Trump brand. Trump's lawyer Alina Habba said: "My client is worth hundreds of millions, not to mention the brand is worth billions."
Better results without Trump lettering
Van Nieuwerburgh's analysis challenges this narrative. According to his analysis of relevant real estate prices over the past 20 years, the value of the Trump condos fell by around 5 percentage points in 2016. Until this year, a price premium of around one percent was paid for these properties compared to comparable properties, after which they changed hands at an average discount of 4 percent.
An analysis by the real estate platform CityRealty, from which the New York Times quotes, fits in with this. In a list of the 100 most expensive condominiums sold, the best-placed property in a Trump building was ranked 47th; the next one only reaches number 77.
According to van Nieuwerburgh, the decline in value of the brand is particularly obvious in the comparison cases: the gold name lettering was removed from four Trump Organization buildings between 2018 and 2019 at the instigation of residents. The apartments in these buildings have not suffered any loss in value.
Van Nieuwerburgh makes one restriction in his analysis: He only looked at the housing market in Manhattan; it is conceivable that the brand has performed better in other areas.
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