What Does Trump Do Now?

Trying to determine what exactly Trump meant by that cryptic farewell, or if he meant anything in particular, is probably a fool’s errand. Trump may run again — if the Senate impeachment trial goes his way — he may launch a media company, he may go on an ex-president speaker tour, nobody knows.

One thing we do know is that he will almost certainly have to turn his attention back to his namesake real estate company, The Trump Organization.

What’s waiting for him is not pretty. Trump is facing a slew of lawsuits, a series of looming debt deadlines, and many previous allies in the real estate and finance world — including his frequent lender, Deutsche Bank (DB), and regular leasing brokerage, Cushman & Wakefield (CWK) — have turned their backs on him. And it’s all happening a year into the coronavirus pandemic, which has crippled the hospitality industry, leaving The Trump Organization particlarly scathed: Its revenues fell by nearly 38 percent in 2020, to $278 million, according to recent financial disclosures.

Perhaps most importantly, Trump’s most valuable asset — his brand — is now more toxic (or, at least, polarized) than ever. While Trump’s brand used to convey a blend of extravagant wealth and brash swagger, it now carries the taint of his belligerent and chaotic politics, something that will probably not conform to the gilded, luxury label he spent a lifetime cultivating.

The troubles for Trump’s brand started back when he began running for president, both because of his particular style of politics and because some companies were wary of doing business with Trump during his presidency, regardless of them. (After being elected, Trump stepped back from the company, putting his sons Donald Trump Jr. and Eric Trump, along with executive Allen Weisselberg, in charge.)

Throughout Trump’s presidency, some properties stripped Trump’s name from their titles; his partners, lenders and business dealings received endless scrutiny; and some companies and organizations boycotted his properties.

But the climax came in the wake of the Jan. 6 attack on the U.S. Capitol, when Trump supporters tried to stop the congressional vote to certify the election of now-President Joe Biden. In the aftermath, lenders, brokers, partners and law firms announced they would cut ties with the outgoing president, including Deutsche Bank, Trump’s largest creditor; Signature Bank (SBNY), another frequent lender; and Florida-based Professional Bank. Among the largest commercial real estate brokerages, Cushman & Wakefield, JLL (JLL) and CBRE (CBRE) have all indicated that they are not working with The Trump Organization.

Cushman & Wakefield, which handled office leasing at 725 Fifth Avenue and 40 Wall Street in New York and at a Chicago hotel, announced in a statement that the firm would no longer do business with The Trump Organization. JLL, which had marketed the Trump International Hotel in D.C. for a staggering $500 million, quit that contract, though they did not make a larger statement about working with Trump in the future.

And CBRE told Vanity Fair that it is not currently engaged, and has no work in the pipeline, with the Trump Organization. Newmark (NMRK), another one of the biggest commercial real estate brokerages, did not respond to requests for comment.

This was all followed by a statement from New York City, in which Mayor de Blasio said it would cancel its contracts with The Trump Organization, which are worth about $17 million annually. De Blasio told MSNBC that criminal activity constitutes legal justification for terminating the contracts. “Inciting an insurrection against the United States government clearly constitutes criminal activity,” he said.

The contracts include two ice rinks in Central Park and the Trump Golf Links at Ferry Point in the Bronx. De Blasio vowed to end the ice rink contracts, which expire this year, within 30 days, but said it will take longer to disentangle from the golf course agreement, which doesn’t expire until 2030.

In 2019, the city had removed Trump’s name from both rinks, Lasker Rink at the northern end of Central Park, and Wollman Rink, the iconic and tourist-friendly ice skating venue near the south end of the park, which The Trump Organization has managed since 1986, when he took over a years-long failed attempt by the city to rehabilitate it.

Other companies that have cut ties include law firm Seyfarth Shaw, tax law firm Morgan Lewis & Bockius — which is entangled in the civil fraud case against The Trump Organization brought by New York Attorney General Letitia James — and insurance brokerage firm Aon. For what it’s worth, two tenants at 40 Wall Street said they were trying to exit their long-term leases shortly after the Jan. 6 Capitol insurrection: the Girl Scouts of Greater New York and TB Alliance.

Moreover, besides potentially losing his contract in New York, Trump has lost other partners in the world of golf. The Professional Golfers’ Association of America (PGA) announced it would pull its flagship tournament, the 2022 PGA Championship, from Trump National Golf Club Bedminster in New Jersey. “It had become clear that conducting the PGA Championship at Trump Bedminster would be detrimental to the PGA of America brand,” the group said in a statement.

The R&A, an organization that oversees another golf tournament, the British Open, also announced it had no plans to hold any such championships at Trump Turnberry, a golf course and resort in Scotland.

To add salt to the wound, prior to Jan. 6, the first minister of Scotland, Nicola Sturgeon, made it clear that Trump was not welcome in Scotland, at least until the coronavirus threat was eliminated. “We are not allowing people to come into Scotland without an essential purpose right now, and that would apply to him, just as it applies to anybody else,” Sturgeon said. “Coming to play golf is not what I would consider to be an essential purpose.”

However, while those companies and organizations have made public statements, there are many more who have not cut ties with Trump, or who have chosen not to make a statement either way. None of the residential brokerages, many of whose brokers are selling Trump-branded residential units, have backed out of their contracts. Ladder Capital, Trump’s second-largest creditor and the senior lender on Trump Tower at 40 Wall, has not made a statement and did not respond to requests for comment.

Part of the reason might be that companies like Ladder Capital may not be able to disentangle from The Trump Organization so easily. Trump owes more than $250 million to Ladder, which will mostly come due between 2022 and 2026. These include a $100 million loan on Trump Tower due in September 2022, according to Forbes. And, while Deutsche Bank, after suffering years of government investigations because of its associations with Trump, has said it won’t lend to his company in the future, it still needs to work out the $340 million that The Trump Organization already owes. Most of that is due in 2023 and 2024, per Forbes’ list of Trump’s outstanding debt.

Trump’s closest debt deadlines involve loans on two office towers that Vornado Realty Trust (VNO) majority-owns: 1290 Avenue of the Americas in New York and 555 California Street in San Francisco, which Vornado was looking to recapitalize. The total senior debt on the properties, due in 2021, is $950 million on the New York tower and $543 million on 555 California, according to Vornado’s financial statement, though it is unclear how much of that Trump is on the line for. The originators of the larger debt, in 2012, were Deutsche Bank, UBS, Goldman Sachs (GS) and the state-owned Bank of China (BACHF), but it is not entirely clear who owns the debt today. Vornado did not respond to a request for comment.

Existing entanglements notwithstanding, many in the business community don’t care about his politics, said one real estate veteran in New York, who declined to be identified. It’s just business, after all. But Trump’s toxicity could affect their business.

In 2019, Brian Friedman, of Friedman Capital, bid on Trump’s lease at the Trump International Hotel in D.C. when it came on the market, on condition that he change the management and remove the Trump brand. “It’s the nicest hotel in Washington, D.C., but there’s an issue with that brand,” Friedman said. “There’s such a stigma.”

The Trump Organization rejected Friedman’s bid, and the hotel stayed on the market until September 2020, and has now lost its broker. “This property really matches his brand,” said Friedman. “I don’t think he’s going to want to lose that venue.”

It originally came on the market asking $500 million, even though it was reporting 57 percent occupancy, far below the D.C. average, according The Washington Post. And things have only gotten worse. The hotel’s revenues fell by 63 percent in 2020, according to the financial disclosures. Occupancy in D.C. overall fell by 47 percent, according to STR data cited by Bloomberg.

On the one hand, die-hard Trump opponents would never stay at the hotel, but it works the other way, too. “Only a certain type of person wants to be there,” Friedman said. “Only a Trump groupie wants to be there.”

Update: This story has been updated to reflect that Cushman & Wakefield has ceased leasing at 725 Fifth Avenue rather than 1290 Sixth Avenue. Cushman will continue to handle office leasing at that property as it is majority owned by Vornado.