Why impoverished Donald trump

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In 2014, even before Donald trump announced that he is running for President, in 2017 — the first held in the White house, operating income Trump Organization fell by 27%. When a businessman came down the escalator, to launch his presidential campaign, no one could not imagine where it will lead. Even those who conceded that trump has any chance of success, thought he would give up his assets before taking office.

Refusing to get rid of his business, trump unwittingly raised a fundamentally new question: how the most controversial in American history presidential term will affect the company built thanks to the charisma of the President? The editors of Forbes is working on the answer to this question since the election trump and managed to interview almost 200 players in the real estate market and industry analysts. The first results are already there. As trump tried — and he does it struggling to make a fortune on his presidential term he fails. On the contrary. According to our estimates, his fortune within two years from 2015 was reduced from $4.5 billion to $3.1 billion During this time in the ranking of the richest Americans, the Forbes 400 is the President of the United States have fallen by as much as 138 degrees.

Почему беднеет Дональд Трамп

Why impoverished tramp? First, the reduction in its state is influenced by more detailed statements which he is forced to take as President. From it, for example, we learned that before the trump lied about the size of his penthouse. There are also more fundamental factors. Donald trump manages commercial real estate in an era when traditional manufacturing destroys e-Commerce. And no matter how much I swear at Amazon on Twitter, nothing can be done.

The third reason is how trump is President affects your personal brand. For players personally acquainted with Donald trump, his campaign looked like a ridiculous marketing ploy. Yes, and the trump back in 2000, told the publication Fortune: “it is Very possible that I will be the first presidential candidate who will work on the election campaign.” Since then, trump was unexpectedly in the White house, he tries to circumvent limitations associated with the presidential position, and wrap them for the benefit of their commercial projects. And it concerns absolutely everything: from visits to the Golf course before meeting is not the highest level in the private residence of the Mar-a-Lago in Florida and discuss the new business licensing of hotels, focused first of all on voters (in the Trump Organization claim that the licensed business has nothing to do with politics).

“To go into politics, my father brought a huge victim — left the company, which is building all his life, said in response to the request of Forbes middle son trump, Eric, who is now co-managing the Trump Organization on behalf of the President. — Everything he does, he does for the benefit of Americans. He was not involved in the current activities of Trump Organization, and, frankly, to assume otherwise is just savagery.” However, after the inauguration of the Eric trump told Forbes that “perhaps, quarterly” will inform the President on the Affairs of the company.

Anyway, so far, the attempt to combine politics and business turned to trump a complete failure. Splits into two camps over the country, it split in two, and a private business. How did this happen? The answer to this question opens the door to worlds of the Empire trump and America trump.

Discord, shame, and questionable morals

In may 2016, about a dozen of real estate appraisers settled in Trump National Doral, a luxury hotel in Miami, where they waited for several days of seminars and Golf games. At that time, the trump just took part in the primaries the Republican party and criticized the Mexicans, the Muslims and even the Pope. It is not surprising that on its own the resort we were talking about how public opinion may affect the business associated with Golf.

To clarify the situation was ready one of the top managers of Trump National Doral. He acknowledged that business (by the way, the resort has earned ten other Golf clubs are trump taken together) is suffering because of the campaign owner. It so happened that a substantial portion of Doral clientele were residents of the northeastern States, where Donald trump was particularly unpopular. One of the appraisers, who was present at the seminar, recalls: “At that time there was much talk about reviews of trump, and no such turn of events was not entirely surprised”.

Cooperation with the resort declined and the major brands like NASCAR and the PGA Tour (organizer of Golf tournaments). According to people familiar with the operation of the resort, after winning the trump in the presidential election in Doral canceled reservation per 100,000 nights. Despite the fact that, according to research firm STR, the market of luxury hotels in Miami for 2017 rose 4%, revenue Doral fell 16%. And all this has happened before in may of this year an armed man walked into the hotel lobby, put the reception flag of the United States and opened fire on the chandeliers.

In General, for 2017, the revenue of Golf clubs owned by the President of the United States fell by 9%. And it’s not just politics — in the resorts has changed the rules of safety and now guests are greeted with metal detectors and sniffer dogs. A source familiar with the Golf business trump says: “there is no atmosphere of the country club. At first it was impressive, but then I got bored”. Resorts don’t even help periodic visits trump: strongest revenue falls exactly on his three favorite sites.

Similar things are key to trump the direction of the residential real estate market. The President owns about 500 residential complexes, condominiums and estates, and all of them are experiencing difficulties. In Manhattan, trump 37 properties for $215 million Starting in 2015, when Donald trump announced his participation in the presidential race, the prices for apartments in the Trump Tower fall every year, today they are below their maximum values at 33%. A similar trend is observed in other areas in the complex, Trump Parc East, prices fell by 23%, and Trump Park Avenue, at 19%.

In Chicago the prices for apartments in the buildings of trump, also heading South, although the overall market is on the rise. Cindy Salgado, broker real estate, previously worked at the Trump Organization and selling apartments in Trump Tower, explains: “the New tenants moved in here because for them the brand trump has been the epitome of luxury. Now for many it has become associated with strife, shame, and questionable moral compass”. Due to the fact that the perception people have changed the value of residential properties trump in Chicago and new York fell by $50 million.

Mario Molinari, a real estate agent on the island of Saint Martin in the Caribbean sea, recalls how several months ago he tried to sell the Villa to a Chinese billionaire. The seller, according to him, he was Donald trump. For the $16.9 million he offered to the buyer, eleven bedrooms, an outdoor bar and a private tennis court. But when the agent and the customer drove up to the checkpoint, they were told that in order to drive further, you should check their personal data, and it will take a couple of days. In the end, the Chinese were dissatisfied: “For me there’s too little space”. To sell a Villa not managed so far.

It seems that the whole Empire trump was struck by the disease. After a series of bankruptcies businessman deftly changed the business model, instead of taking up construction to property management and licensing. Trump puts his name on other people’s buildings, ties, steak, and even pregnancy tests. All this allows him to earn money, and the financial risks to pass on to someone else. However, the name of the President of their projects has already removed its partners in three hotels (in Toronto, Panama and SOHO in new York). According to Forbes, trump’s revenues from licensing decreased by $30 million for Such clients as the Department store chain Macy’s and mattress manufacturer Serta has discontinued a partnership with trump at the very beginning of his controversial election campaign. Since then, the trump Corporation has not concluded any new licensing agreement. In 2015, Forbes estimated the whole business of the President on licensing of $23 million and now the cost is only $3 million, “He is so contradictory personality that lead him simply scared to conduct business together — says Jeff Lotman, CEO of Global Icons. — His reputation tarnished beznadezhen”.

Theoretically, headache from what is happening can relieve the popularity that trump received among the less wealthy, although larger audience of voters. Four months after trump took office, his sons Eric and Donald Jr., announced the creation of a new joint venture for the development of American hotels of middle price segment. In the registration documents, published a few months later, the main owner of this business indicated the President himself. Its share is 77%, which is a direct evidence of personal gain trump from his own political glory.

However, the returns were quite modest. Trump has signed contracts for the licensing of four hotels in Mississippi, but these agreements over the past year, there have only been $27 000. The family told reporters that in the process of concluding there are 35 contracts, although none on the market on these contracts had not heard.

Presidential fame

However, Trump still has something to boast. A few blocks from the White house, Trump International hotel, his fans can easily communicate with the leading news and secretaries of the presidential administration. For the first four months of 2017, the hotel revenues were $2 million, greatly exceeding the expectations of the Trump Organization. According to the Federal election Commission, the lion’s share of these funds, the hotel receives from the national organizations since it opened in the fall of 2016 invested more than $1.3 million.

It would seem that this situation constitutes a violation of article “On remuneration” in the US Constitution. It also says that the American President should not be in the financial interests abroad. Despite this, the warm reception at the Trump International have the governments of other States. According to reports, the money in this hotel spent all from Kuwaiti officials to the Prime Minister of Malaysia. For example, according to lobbyists, promoting the interests of Saudi Arabia, they left Trump International $270 000 in just six months.

What about the sales of the apartments? Yet trump has only sold one in new York, a woman named Angela Chen. It happened a month after his inauguration as President. Chen paid $15.9 million — $1.8 million more than the previous year laid out for almost the same apartment her neighbor on the floor below. The deal did not appeal to many, as Chen leads the organization of Global Alliance Associates, which advises entrepreneurs at work in the Chinese market including through communication “highest state officials”.

The presidential status of trump is what brings dividends. As soon as the newly elected President praised the resort Mar-a-Lago for the whole world, the club has doubled its membership fee to $200,000. However, after the August demonstrations of the extreme right in Charlottesville, Virginia, about which trump has not expressed condemnation of the order of 20 organizations refused to hold events at the club. The President is worth more than $1 million in revenue. Now, however, Forbes estimates the Mar-a-Lago to $160 million — $10 million more than before the possession became a summer White house.

Glory trump also had an impact on his penthouse in Trump Tower. Although the prices of apartments in the skyscraper and fell, the presidential apartment with an area of over 1000 sq. m. is a landmark. According to the edition of Forbes, because of the involvement of trump in the presidential race, the price of the penthouse was up $10 million.

Similarly, Boeing 757 trump, who has become an inherent part of his meetings with voters. Players on the market of business aviation believe that now, trump’s jet is almost twice as expensive as those $20 million which would be bailed out for any other owner. Forbes believes that the presidential allowance is much more modest — $6 million on top. Eric Roth, who designed the interior, said: “How much is the baseball? About $3. And if it’s signed by some famous player? Price will be totally different.”

Benefits the President receives and more straightforward methods: on the day of the inauguration, trump took the unusual decision for immediate launch of a new campaign for his re-election. Money poured in — including in the form of lease payments. As a result, the first American President-the billionaire received more than $900,000 in his pocket, not investing in the business dime.

Stubbornness Trump

While trump remains President — and has no plans to get rid of the business he will be able to increase your condition in a way that would not work, none of the entrepreneur. Three days before Christmas last year trump was sitting in the oval office and signed the project the most important in many decades of tax reform. “I’m very proud of this decision, he said. It will bring many benefits to Americans and our country as a whole”.

Benefits it will bring to the Donald Trump. The President refused to disclose his tax return, but judging by the current documents, there is something to see. According to the Forbes, trump could save on taxes up to 10% of their income. Which, according to the tax return policy from 2005, could reach $11 million.

Other aspects of the policy trump can contribute to the growth of his condition. For example, customs tariffs. Because of increased prices for steel and aluminum development companies more expensive construction. And that means less chance that trump, who owns the skyscrapers, but hasn’t built, there will be many new competitors. Its migration policy, which, apparently, also contributes to the increase in the cost of labour, has a similar effect. Baird analyst Dave Rogers argues that these two factors “very favorable for someone who has assets in the estate.”

And though trump has promised not to sign new deals with foreign organizations, at the end of the presidential term it’ll be looking for new prospects. In Georgia and Kazakhstan, for example, the former business partner of Donald trump, I got very excited by the possibility of new joint projects and made it clear that he is ready to pay for them. Last year the former partner of a President of the United States in Georgia, admitted to Forbes: “the Tower is fully ready to take trump’s name, of course, if the brand is willing to return to Georgia”. And trump’s not forgetting: according to Forbes, a year ago he asked about this project at the meeting with the Prime Minister of Georgia.

But while that term Trump brings nothing but losses and not the profit which he anticipated. Refusing to sell assets, creating a situation in which any action — and his own, and his partners provoke constant conflict of interests or, at least, its visibility. Meanwhile, if trump sold the business, paid taxes and invested money in the stock market through a “blind” trust Fund, it is estimated Fobres, would have been $500 million richer. And without any headaches.

Translation Of Anton Bundeena