Trump's Profitable Realty Assets At Risk

While Donald Trump undergoes a second impeachment trial in Washington, he is also confronting a potent threat to the crown jewel of his real estate holdings. The threat, involving a highly profitable real estate partnership that generates significant cash for the Trum

BY Realty Plus
Published - Monday, 15 Feb, 2021

Trump's Profitable Realty Assets At Risk

While Donald Trump undergoes a second impeachment trial in Washington, he is also confronting a potent threat to the crown jewel of his real estate holdings. The threat, involving a highly profitable real estate partnership that generates significant cash for the Trump Organization, is ratcheting up pressure on the former president as his real estate and hospitality operations struggle under hefty debt and vastly reduced revenues, largely a result of the coronavirus pandemic. The partnership owns two first-class commercial buildings — one on Sixth Avenue in New York City and the other in downtown San Francisco — and it is the single most profitable asset in the Trump empire. The Trump Organization owns a 30 percent stake in the buildings, while its partner, Vornado Realty Trust, a huge public real estate concern in New York City, owns 70 percent. But now Steven Roth, Vornado's powerful founder and chairman, is considering whether to withhold the partnership's cash flows from Trump, said a person familiar with the matter. Such a move would slash the Trump Organization's cash receipts, and it could force Trump to sell his stake back to Vornado at a discount, leaving him with a smaller gain and eliminating a crucial source of cash. Roth is considering ways to exit the partnership with Trump, including holding back on the partnership's cash flows. Controlling partners in such deals have great leeway to run their operations as they see fit.