Donald Trump

What is Donald Trump’s net worth? It’s not as huuuuge as it used to be

PUBLISHED : Thursday, 22 June, 2017, 9:44am
UPDATED : Thursday, 22 June, 2017, 10:35pm

Donald Trump’s office properties aren’t bringing in as much cash as banks that loaned him money had expected.

That’s the biggest finding in an updated assessment of the president’s net worth, which has slipped to US$2.9 billion, according to the Bloomberg Billionaires Index, down from US$3 billion a year ago. The calculation, five months after Trump’s inauguration, relies on figures compiled from lenders, mortgage documents, annual reports, market data and a new financial disclosure released June 16.

The decrease is driven mostly by a drop in the value of three office properties in Manhattan, where financial data compiled by Trump’s lenders offer a consistent picture: They’re underperforming appraisals conducted when Trump was issued loans. The buildings - 40 Wall Street, Trump Tower, and 1290 Avenue of the Americas, a tower in which Trump holds a 30 per cent stake - are victims of a changing New York office market, where gleaming new skyscrapers are attracting tenants and demand for space in vintage properties is falling.

The Bloomberg calculation, which previously relied in part on banks’ estimates and appraisals, is now based solely on the three properties’ actual financial results disclosed by managers of mortgage-security trusts that hold Trump debt. The present value of the three properties has been revised down by a combined US380 million.

Allen Weisselberg, chief financial officer of the Trump Organisation, and Jeffrey McConney, the company’s controller, didn’t respond to emails detailing Bloomberg’s methodology. An outside spokeswoman didn’t return calls for comment. Hope Hicks, a White House spokeswoman, didn’t respond to emails.

The decrease in the value of the three towers was almost offset by successes in other corners of Trump’s empire. His portfolio of liquid assets, including cash, has jumped to US$230 million from US$170 million following condo sales and other payouts from the Trump International Hotel Las Vegas, as well as the sale of a Manhattan penthouse apartment. He sold most of his stock portfolio last summer, a spokesman said in December.

Trump’s companies received new licensing fees for branded projects in Vancouver and Kolkata, the financial disclosure shows. On an annualised basis, revenue at his 16 golf and resort properties rose 3 per cent. Mar-a-Lago, which Trump has visited frequently since the election, saw a 25 per cent jump in sales. The properties now have a combined value of US$720 million, up from US$710 million, according to the index, an increase damped by declining multiples for golf course properties.

At the same time, Trump’s debt load has shrunk to at least US$550 million from about US$630 million last year, according to lender data and repayment schedules.

The Wall Street building, appraised at US$540 million in 2015, had projected annual net operating income of US$22.6 million, according to documents shared at the time with potential investors in the property’s debt. It earned US$17.4 million in 2016, a year in which it was on a lender watchlist for three months because rental income barely covered debt payments. The property was removed from the list as its situation improved. The index values the property at US$400 million based on last year’s performance.

Trump Tower, the president’s home and headquarters before he moved to the White House, is facing a similar problem. Its offices and stores were appraised at US$480 million in 2012, with net income estimated at US$20.4 million. The property generated US$14.1 million of net income last year after higher expenses ate into revenue, lender documents show. The building, including Trump’s penthouse apartment, is now valued at US$450 million.

The office tower at 1290 Avenue of the Americas, which Trump owns in partnership with Vornado Realty Trust, also has failed to meet lender expectations. The building was appraised at US$2 billion in 2012 on the assumption it would throw off US$97.7 million of annual net income. But it generated US$77.7 million last year.

“We’re in the biggest development pipeline in Manhattan since the 1980s,” said Keith DeCoster, director of real estate analytics at Savills Studley. “Older buildings - circa 1980s, 1990s - are having a tougher time competing.”

Trump’s own estimates of his net worth are frequently higher than independent appraisals. When he announced his candidacy in 2015, his campaign released a document stating he had a net worth of US$8.7 billion. Later that year, when Bloomberg first assessed his net worth at US$3 billion, he described it as “a stupid report.” He later repeatedly asserted he was worth more than US$10 billion.

One difference between Trump’s estimates and Bloomberg’s is the value of his personal brand. The 2015 document released by Trump’s campaign said his ability to license his name and likeness to everything from international hotels to mattresses is worth US$3.3 billion. Bloomberg assigns it a value of US$35 million, or one times sales from ongoing licensing deals. That value hasn’t changed since Trump won the Republican nomination last July.