In New York, the Trump brand is costing some condo owners
In the world of real estate, Donald J. Trump’s name has long been synonymous with luxury. At one of his buildings in Manhattan, a five-story waterfall slides down a wall of Breccia Perniche marble. White-gloved doormen, cascading chandeliers and panoramic views of the city’s skyline are the hallmarks of another.
It’s that image of luxury, which he turned into a brand, that the former president held up as a rebuttal to the recent lawsuit that he lost on Friday after a judge determined that Mr. Trump fraudulently inflated the value of his real estate holdings, ordering him to pay a penalty that will exceed $450 million.
“My client is worth hundreds and hundreds of millions,” said one of Mr. Trump’s lawyers, Alina Habba, during closing arguments at the trial, adding, “let alone the brand, which is worth billions.”
But up and down the spine of Manhattan, condominiums in high-rise buildings emblazoned with Mr. Trump’s name have underperformed, according to sales data from two real estate tracking firms, and an analysis of the data by the Columbia University economist Stijn Van Nieuwerburgh.
The line in the sand is the year 2016, when Mr. Trump was elected president.
In a one-year window, condos in buildings that had the Trump logo went from selling at a 1 percent premium compared with similar units, to selling for 4 percent less, meaning that Trump condos became a “bargain” among the city’s luxury units, said Mr. Van Nieuwerburgh, a professor of real estate.
Even the Trump Tower on Fifth Avenue, one of the crowning achievements of the Trump brand, whose 80-foot cascade flowing down a wall of peach marble was reportedly built with slabs handpicked at a quarry in Italy by Mr. Trump’s ex-wife, saw the average price per square foot of its condominiums tumble 49 percent since 2013, according to Ondel Hylton, the senior director of content and research at CityRealty. The building’s age, growing competition from the ultra-luxurious condos on nearby Billionaires’ Row and regular protests have all dampened interest, Mr. Hylton said.
By contrast, condominiums in four buildings where the Trump logo was removed at the behest of residents — sometimes after a legal battle — have seen their value shoot back up. [Continue reading…]