How the pandemic hit Trump’s retail real estate empire

Through Dan Alexander

ohin the corner 59th Street and Park Avenue in midtown Manhattan stands a magnificent building named Trump Park Avenue. Formerly known as Hotel Delmonico, it features arched windows, marble finishes, and penthouses that have sold for over $ 20 million. Donald Trump still owns a handful of units, including one that Jared Kushner and Ivanka Trump used to call home.

Recently, however, the property has lost some of its luster. The reason: its windows fell silent during the pandemic. The parent company of New York Sports Clubs, which operated a gym in the building, closed its premises in March 2020 and then filed for bankruptcy six months later. Capital One, which was paying around $ 1 million a year to rent a space next door, left in May 2020, about a year and a half before its lease expired.

Like many property owners, the former president has struggled to make his commercial spaces buzz in the Covid era. Before the pandemic, Trump had more than 30 retail tenants in New York City. About a quarter of them have left their properties or closed their activities, according to a Forbes review.

A few blocks from Trump Park Avenue, GNC closed its Trump Plaza location, for which it paid an estimated annual rent of $ 400,000. A spokesperson for the Trump Organization said a new business will be opening soon. Home loan data shows income has already fallen 23% from pre-pandemic levels, leading to a 43% drop in profits.

Starbucks had a bustling location inside Trump Tower, with a signed photo of Ivanka Trump kissing a cup of coffee. The space was blocked on a recent visit, and the store search engine on the Starbucks website is no longer showing a location inside the building. A representative from the Trump Organization says Starbucks still pays rent, but the outlook does not look good. An employee answering the phone at the Trump International Hotel in Washington, DC, said the coffee company has also closed its location there.

EMPTY ENTRIES

Signs fell and storefronts remained motionless at several Trump properties.


Capital one, Trump Park Avenue


CNG, Trump Square


Teresa’s Brick Oven Pizza and Cafe, 1290 Avenue of the Americas

Not far from Trump Tower is 1290 Avenue of the Americas, a huge skyscraper in which Trump has a 30% stake alongside the listed Vornado Realty Trust. The former president does not take care of the day-to-day management of this property, but receives money from it. So it wasn’t good news for him when he lost three of his retail tenants: Teresa’s Brick Oven Pizza and Cafe, Earl of Sandwich and Barilla Restaurant. It’s hard to run a restaurant in midtown Manhattan when so many workers are staying at home.

Trump and Vornado are also partners at 555 California Street in San Francisco, another large office building. An assessment report released in April said the number of people entering the property increased from around 5,000 to 200 during the pandemic. A handful of tenants, including Boys’ Deli, Bay Club and Proper Food, have asked for rent relief, according to the report.

There are signs of a return. At the Trump World Tower on the east side of Manhattan, the World Bar closed, but a notice posted at the door in August said something called “Pure Beef Inc. was applying for a liquor license.” A spokesperson for the Trump Organization said the space has been leased and construction is expected to begin soon. In the city center, an Italian bistro named Nerolab is about to open a space in Trump’s 40 Wall Street.

Gucci, the former president’s largest tenant, pays around $ 24 million a year in rent and would have resumed its lease in 2020. Its previous deal was only due to expire in 2026, so the retailer may have gotten a discount by renegotiating earlier.

Around the corner from the Gucci store is Trump’s second retail outpost, 6 East 57th Street. Nike rented this space for decades, paying around $ 16 million a year, before moving a few years ago and subletting to Tiffany. The jeweler is expected to vacate the premises in 2022. That could leave the former president looking for a new tenant at a time when commercial real estate is still receding from the pandemic.

IMAGE CREDITS


ILLUSTRATIONS BY LASAGNAFORONE / GETTYIMAGES (MAP); ANILYANIK / GETTYIMAGES (BUILDINGS); FINGERMEDIUM / GETTYIMAGES (DIAMONDS); CALVINDEXTER / GETTYIMAGES (TREES).

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