And it’s not just plummeting profits, the Trump Organization is also being accused of reporting bogus earnings statements to a leading financial journal.
Editor’s Note: Samuel Warde is the editor-in-chief of Liberals Unite (recently re-branded as The Art of Living) as well as a contributor to Mindy Fischer, Writer. The opinions expressed in this commentary are his own. You can view a list of his articles here.
We have yet to see the numbers for the Trump Organization for 2018. However, by all accounts the figures are expected to be worse than last year.
Looking at that, Kyle Griffin, a producer for MSNBC’s The Last Word, posted an interesting tweet about this time last year linking to an article detailing the apparent collapse of the fortunes of the Trump Organization.
The Trump Org. claimed it had $9.5 billion in revenue in 2016.
Turns out, the number is actually $600-700 *million*. Nowhere close to the original figure. https://t.co/yyDCYQjE9x
— Kyle Griffin (@kylegriffin1) December 17, 2017
That article, published by daily and weekly business news organization Crain’s New York Business in mid-November 2017, details how “the Trump Organization, a perennial leader on the Crain’s list of largest privately held companies, has fallen steeply in the rankings, to No. 40 from No. 3 in 2016, following the president’s disclosures to federal regulators that revealed the organization’s revenue is less than a 10th of what the firm had reported since at least 2010.”
Crain’s began their article reporting that “these are halcyon days for real estate developers” in New York.
Yet the city’s best-known landlord is missing out. Not only are the Trump Organization’s plans to develop a hotel here going nowhere, but prices are slumping for condos at Trump Tower and the Trump International Hotel and Tower.
And golfers are shunning the Trump Golf Links at Ferry Point in the Bronx, where revenue through mid-September had fallen by more than $1.1 million in the past two years, to $5.7 million, amid a 16% drop in rounds played.
Continuing, Crain’s reports that “the market for Trump-branded apartments in the city is cooling fast.”
The average price per square foot for a Trump Tower apartment has fallen by 23% since 2015, according to The Wall Street Journal, while prices have held steady at other Midtown towers, excluding new developments. At the Trump International Hotel and Tower on Central Park West, the average price per square foot is down 24%.
According to Crain’s, Special Prosecutor Robert Mueller’s looming Russia investigation is at least partly to blame for the recent collapse of the Trump Organization.
In addition to grappling with a crowded hotel and condo market and hostile political atmosphere here, several Trump Organization leaders are dealing with federal investigations. Executive Vice President Donald Trump Jr., who runs the family business with brother Eric, has been questioned by Congress over Russian interference in last year’s election.
Michael Cohen, a top Trump Organization lawyer, also was called to appear before Senate investigators about the Russia matter. Special prosecutor Robert Mueller reportedly wants to interview Rhona Graff, a Trump Organization senior vice president and the president’s longtime personal assistant.
Crain’s concluded their article with the discrepancy in reporting noted by Kyle Griffin in his tweet:
Graff was the executive who typically reported Trump Organization revenue figures to Crain’s, which relies on companies to self-report for the list. Last year’s $9.5 billion in revenue reported by the organization looks preposterous in light of federal filings made by the president in the past year. Those indicate the Trump Organization generates between $600 million and $700 million in annual revenue.
And it’s not just Crain‘s that is reporting on the Trump Organization’s financial woes.
On 16 October 2017, NBC News reported that Trump’s businesses in Scotland were losing millions of dollars.
[The] release of 2016 financial reports for Trump’s luxury golf courses in Scotland offer a rare, detailed look at the Trump operation’s financial health. The iconic Turnberry resort, which he famously visited in the middle of the Brexit referendum, saw losses that doubled to $23 million in 2016 and revenue that fell by 16 percent, according to the documents.
Losses at Trump International Golf Links, north of Aberdeen, Scotland, also increased — by 28 percent to $18.4 million, the filings showed. Revenue fell by 12 percent.
On 20 November 2017, Newsweek reported that “Trump’s hotels were losing money” as room rates plummeted:
Room rates across President Donald Trump’s global hotel empire have nosedived by as much as 63 percent since he moved into the White House while the billionaire continues to deal with allegations of conflicts of interest since taking office.
Twelve of Trump’s 13 titular hotels experienced a decline in room rates when comparing prices from January 2017 to January 2018, according to the Telegraph, which cited travel currency service FairFX.
Prior to his inauguration, a two-night stay at Trump Las Vegas cost $844, but now goes for $314, the biggest fall for one of the president’s properties.
Forbes reported on 6 December 2017 that the Trump organization was “losing one of its most important tenants.”
Trump’s private real estate empire officially lost one of its most important tenants on Monday [December 4], when Nike announced that it is closing its store at the president’s 6 East 57th Street property in New York City next spring in favor of a new location just a few blocks away….
Of all of the commercial properties in President Trump’s portfolio, the site known as Niketown is by far the largest occupied by a single tenant. With Nike leaving, the Trump Organization is left searching for a new identity at the marquee property, which Forbes estimates is worth $253 million.
Continuing, Forbes reported that Eric Anton, a Manhattan real estate broker at the firm Marcus & Millichap, stated that it would be difficult for the Trump Organization to find a new tenant.
“I don’t know of any tenants that need that much space other than department stores,” Anton stated, adding: “And I don’t think there are any expanding department stores. Maybe Harrods comes in and takes it. But any foreign group is going to be looked at as weird–you know, collusion or some kind of crazy Trump conspiracy theory.”
Losses are not limited to the Trump organization either, as NBC News reported.
Trump’s personal wealth fell $600 million on Forbes 2017 ranking of the 400 richest people in the world, dropping 92 spots to #248. The magazine cited a tough New York real estate market, a costly presidential campaign, and declining visitors at several of his golf properties.
The retail side has suffered, as well. Ivanka Trump’s fashion line was trying to expand into Japan, but the deal was canceled, her company said in a letter to the House Judiciary Committee, after it said it learned that the company’s major shareholder was the state-owned Bank of Japan.
Macy’s dropped Trump’s signature ties in July 2015 after he made disparaging remarks about Mexicans in announcing his candidacy.
NBC News also reported that:
Even before taking office, Trump’s acrimonious presidential campaign had already started to shave the shine off his own brand. The number of luxury consumers who rated the Trump brand as “upper class” fell to 50 percent, according to the January 2016 results of an annual brand survey from BAV Consulting, a division of advertising giant Young & Rubicam. Those equating the Trump brand with prestige also saw a 40 percent decline.