Price drop in the luxury tower
Trump’s name becomes a value destroyer
February 19, 2024, 2:59 p.m
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Residents have had the ex-president’s clearly visible name removed from some of Donald Trump’s high-rise buildings in New York. This has had a positive impact on the value of their apartments.
Donald Trump’s real estate represents quite ostentatious luxury. His name worked as a marketing tool for years. He had it prominently displayed on his high-rise buildings in New York – but the name has now become a burden in the liberal city of over a million people. This is the result of an analysis by the New York Times.
For many years, higher prices were paid for “Trump” apartments than for corresponding properties in other high-rise buildings. But that changed in one fell swoop: In 2016, condo prices in Trump’s buildings began to decline on average and underperformed the Manhattan market.
Trump became president in 2016 after a polarizing election campaign, and his time in the White House was no less polarizing. After his defeat in 2020, prices in Trump’s New York real estate projects rose again and the gap to comparable apartments even narrowed. But they are still trading at a significant discount.
In the world of real estate, many associate the name “Trump” with luxury living. In one of his buildings in Manhattan, a five-story waterfall flows down a marble wall. The trademark of another high-rise building: doormen with white gloves and large chandeliers in the entrance area. This represents the image that Trump paints of himself – an extremely rich man who enables a lavish lifestyle. It doesn’t fit into the picture that a judge ordered Trump to pay hundreds of millions of dollars because his real estate conglomerate “Trump Organization” had inflated its assets in order to get cheaper loans. “My client is worth hundreds of millions,” said a Trump lawyer. “Not to mention the brand is worth billions.”
“Responsible for the decline in value”
At least in Manhattan, however, the Trump brand does not glitter, as the New York Times analysis shows. She compiled sales data from two real estate companies and had it analyzed by real estate economist Stijn Van Nieuwerburgh of Columbia University. It’s not just the name Trump that plays a role in price developments. The location, furnishings and age of the apartments are also crucial.
Trump condos have become “bargains” among the city’s luxury apartments since 2016, the economist said. This is even the case in Trump Tower on Fifth Avenue, the most important building in Trump’s real estate empire. The average price per square meter of its condominiums there has fallen by 49 percent since 2013, according to one of the real estate companies that compiled the data. The age of the building and growing competition from ultra-luxury condos nearby have contributed to the price decline that began there before Trump’s presidency. But Trump’s image and numerous protests in front of the building also dampened interest.
By contrast, the value of condos in four buildings where the Trump logo was removed at the behest of residents – sometimes after a legal battle – has shot up again. “This analysis clearly shows that the Trump brand is responsible for the decline in value,” said economist Van Nieuwerburgh.
The study of the price per square meter of condominiums in the seven Manhattan buildings that still bear the Trump name found that the value fell by 23 percent between 2013 and 2023. In contrast, the four buildings that removed the gold Trump logo saw their value increase by 9 percent over the decade from 2013 to 2023, outperforming the Manhattan condo market, which increased 8 percent over the same period.