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THE MARKET IS GOOD FOR TRUMP

'The Market Is Good for Trump'

Donald Trump shares his perspectives on the power of the Trump brand and various projects in the pipeline from Hawaii to New York. November 16, 2007

The Wall Street Journal's Alex Frangos sat down with Donald Trump earlier this week. Here are edited excerpts of their conversation. See the related article.

WSJ: You have a lot of condo, hotel-condo projects going on.

Mr. Trump: I'll go over a few of them if you like. Somebody says, "How's the market?" I say, "Not good except for Trump." The reason is, let's go over a few of them. I'm doing one in Waikiki, Hawaii, Trump International Hotel and Tower, combination hotel and tower. Mark it down to the penny, $729 million sold in less than one day. It's the talk of the country and the talk of Hawaii. You've heard about that?

WSJ: When was that one-day sale?

Mr. Trump: That was six months ago. And a friend of mine in Hawaii called me who's a big builder. Said you have to be kidding. Now the market in Hawaii is not bad but not good. It's not a Manhattan market, which is a strong market, probably the only really strong market. But he couldn't believe it and it's because of the Trump brand. Totally sold out…$729 million sold, to be exact, in five hours, less than one day, a five-hour period, totally sold out at the highest prices in the history of Hawaii… Normally I wouldn't want to sell that fast. But we set a high price, but a fair price, and it sold immediately and there are two things. I had the brand and I had the best location in Hawaii… So that's one job. Then there's Cap Cana -- Trump Cap Cana, Dominican Republic -- $359 million sold out in one day. Less than one day.

WSJ: When did Cap Cana sell?

Mr. Trump: That was about five months ago. Dominican Republic. The entire job sold out in $359 million, sold out in less than one day. Amazing. The Las Vegas job, that's called Trump International Hotel and Tower… Anywhere from two years to a year ago it sold over a period of less than a year. $1.3 billion totally sold, 20 to 25% nonrefundable [deposits]. I only do nonrefundables otherwise it doesn't make sense. I will never tell you it's sold if someone gets a refundable deposit. OK. That you can have my word on…

It's 68 stories, the tallest building in Las Vegas, actually. It's finished. We start closings on Feb. 15. The building is complete. I finished three months ahead of schedule, under budget, beautiful building tallest building in Las Vegas, $1.3 billion totally sold. 100% sold. Now I have a site for a second building that at some point I'll do when I think the market is good or whatever. I'm not racing to do it, although I think I would sell it. Although other people have not been doing well in Las Vegas. I think I would probably do very well, but I'm not doing the second site, it's right next door. I got $1,300 a foot average in Las Vegas, nobody has come close.

WSJ: Where are the buyers coming from?

Mr. Trump: They are all different in terms of the buildings. For instance, Las Vegas is Asia and U.S., but mostly Asia and U.S. A lot of New Yorkers. And a lot of Los Angeles. The Soho [hotel/condo project] is New York and Europe. More so than Asia. In other words, different buyers for different cities and locations. Very different actually. The Las Vegas is a whole different profile from New York.

But Trump Soho you've probably heard. Everybody is talking about it. $3,000 a foot. More actually, $3,300 a foot, more than $3,000 a foot. Four thousand and five hundred applications for 450 units. That's the building where we had the protests because of the height. It's 45 stories. And we had protests and I thanked the people for protesting because they put the building on the map. You know it's, like, crazy. I got it done.

In Chicago, I've sold $600 million in units. On a building I'm building at the Sun-Times site. All these buildings I owned. I have a couple of franchise. There's one job in Tampa.

WSJ: You put your name on the Tampa Tower and the folks who put deposits on it saw you say that you have a "stake" in the project. Now they are disappointed that things have not gone well. [Mr. Trump has filed a lawsuit against the local developers, SimDag LLC, over lack of payments for licensing his name on the project.]

Mr. Trump: Well they have to read the prospectus. The prospectus says that I don't. That was one of the deals where I did a license. By the way it was a great success. They sold it out.

They asked me if I would abate my lawsuit. I'm not looking to sue them, but I want them to go through with the project or give their money back. We sold out the building once and gave the money back. [The developers then raised the prices] Then they sold it out a second time. How many times am I supposed to sell out a building before they say gee whiz. No, that's a licensed deal that says in the prospectus that says it's a licensed deal. From what I hear they just got their financing, I don't know if you've heard this. If you check the newspapers recently. They asked me if I would abate my lawsuit against them until they finish up their financing, but from what I hear they have a commitment for financing to do the job. You know they have a lot of sales in that building.

WSJ: Are you going to abate your lawsuit?

Mr. Trump: Yeah. I'm not looking to sue them but I want them to go through with the project of giving the people their money back. We sold the building out the one time, totally 100%, 100% sold out, you know that. Then they sold it out a second time and I said, at what point are you finished with this building? How do you keep doing this? Now what's happened is they, based on the sales, which have been very successful, I hear they have financing. And certainly, if they can do that, that's fine…I want to do whatever I can to help. I'm frankly more interested in the buyers than in anything else. I really want them

 

to be happy but, you know, how many times do you have to sell out a building before you say, hey I've done a good job here. But the Tampa deal is different from New York or other deals.

WSJ: SimDag, the local developers, told me that they've arranged financing through a hedge fund who is willing to do it if SimDag can basically sell the building again get people to re sign contract for at least $100 million worth of the sales.

Mr. Trump: Again, I'm not involved in that building, other than I gave them the right, I gave them the license and we checked the building as to its amenities, and its ceiling heights and its window sizes and its equipment and its refrigerators and all the amenities I insist on having before I put the Trump name on it. Again, this is a job that's been crazy. How many times is Trump supposed to be selling out a building before they decide to go forward. So they sold the building then they gave the money back. Then they sold the building again, then of course they, they as the developer, ran into a credit crisis which is a lot different today raising money than it was before. I built a building, I just completed a building on Park Avenue and 59th St, the Delmonico hotel site, it's called Trump Park Avenue, 100% sold out. I recently completed a building, the tallest residential building in the world, also in New York, it's 90 stories, although Chicago is going to top it at 92. It's 90 stories opposite the United Nations.

WSJ: What's the status with your Chicago project? How many units are still available?

Mr. Trump: I would say we are about 70% sold out. I don't know the exact number of units. And you know we have another 18 months to go. I've sold $600 million worth of units.

WSJ: There was a report that the hotel portion of the building is behind schedule.

Mr. Trump: No. It's exactly on schedule. The hotel is perfect. In fact it's a little ahead of schedule. We were going to open in January and the hotel is ready to open now. We'll open in December sometime. We're actually about a month ahead of schedule. The thing I do best in life is build.

WSJ: In Tampa, you're a brand guru, that's your thing…

Mr. Trump: No. Mostly, I own my stuff.

WSJ: But you're a great marketer and people respond to Trump, the folks I've talked to in Tampa said they wouldn't have bought except for Trump's name.

Mr. Trump: That's why I want to protect them.

WSJ: But what does it do to your brand. Are you afraid of associating with these developers? They don't seem to be up to the Trump brand quality? Mr. Trump: I hope they get the building done. Because it's been sold out and they sold units for record prices in Tampa. I'd like to see them get the building done. In the meantime, they owe me a lot of money. I'm suing them to get the money they owe me. They owe me many, many millions of dollars because I get a large percentage of the sale. The building was sold out one time 100% and the building was sold out almost the second time. How many times are they allowed to sell out a building with my name. That's different from Trump Park Ave. I own 100% of that. Or Trump World Tower in New York I own 100%. Those are buildings recently completed in New York. By the way totally sold out. Trump World Tower, I just sold an apartment last week as you possibly read for $38 million. One unit.

Those buildings sold, like, unbelievably. The one I'm doing now in Manhattan is Trump Soho and that's setting records in downtown Manhattan, nobody has ever gotten numbers like this. If you look at that one [Tampa], they sold the building out twice with my name. If you say how is the market, I say, the market for Trump has been amazing. The market for other people has not. For instance, my job in Hawaii, where I have a smart developer, I'd love to give you his name but I think he'd kill me. I have a very smart Hawaiian developer I know very well and he says is that true you were able to sell that building out in one day. I said 100% true. It's now legendary out there than $729 million worth of apartments in less than five hours.

WSJ: There are two projects with your name on it on the east coast of Florida, Ft. Lauderdale…

Mr. Trump: Very successful.

WSJ: There's another one in Fort Lauderdale that is stopped.

Mr. Trump: You're wrong. If you want to do a bad story, you can. But I think you want to do a truthful story. There were two jobs in Fort Lauderdale, one I'm a partner in. That one is up, we're 75% sold out in a very bad market. We are 75% sold out. That's called Trump International Hotel and Tower. [Designed by architect] Michael Graves. It's 75% sold out and it's been very successful. The other one is a very small job [Trump Las Olas]. It's a very small job that hadn't been started and I told these people don't start a job in a bad market. What's the purpose. We didn't start the job. It was a little job. It was much smaller level job. But I said don't start a job in a bad market. So we'll wait until the market gets better. But this wasn't a job that got started.

WSJ: We heard that the Las Olas job started even before the Graves one.

Mr. Trump: No. That came after the Graves one. Plus it can't really compete wit the Graves one, because the Graves job is a much bigger site, frankly it's a better site. It's a bigger building. It's a more impressive building. And it was started a long time ago. The Graves job is almost built. And it's 70% sold out. The Hollywood job, I'll give you an example, the Hollywood job, Related is my partner, Jorge Perez [owner of Related Group of Florida], the Hollywood job was started about six months ago. We get our financing in

 

a bad market, although I must say just prior to the crash, in all fairness, to the credit crash. And the job is almost 70% sold out.

The only job in that whole list that I said don't do it, it wasn't like it didn't sell, I said don't do it, why should we build the building now in a bad market, what you do is sit back. It's a small job in Fort Lauderdale.

WSJ: There's a job in West Palm Beach...

Mr. Trump: There's one in West Palm Beach that we haven't decided yet. This isn't a job that's a failure. We have a piece of land. We have a price on a piece of land. We are pricing our construction. We are pricing our sales and we will make our decision on whether or not we build it. If the market is there, we'll build it. If the market isn't there, so big deal, we'll wait until the market comes back a little bit. We are not building a job that isn't selling. In fact we've had great response to the job, but we'll wait to see what the full response is and also what the construction cost is. It's a beautiful job, very nice location, but we'll wait to see what the response is.

WSJ: Do you have deposits and reservations on that?

Mr. Trump: We are just starting to take orders and at the end of a few months we'll decide whether or not we want to build that one now or whether we want to wait. Now that's not like a failure. That's called intelligent planning.

Let me give you another one. In Jersey City I'm doing a job, 55-stories, totally sold out. It's just being completed right now. It's 55-stories, totally sold out.

WSJ: What about Toronto? You got a late start on that.

Mr. Trump: Very successful. Starting construction right now. Eighty percent sold out. Just got our construction financing in a bad market, we got our construction financing. Very complicated job. Very tall job. Structurally very tall. Beautiful site. We just started construction recently, we are 80% sold out. It's been a very successful job.

What can you say, Cap Cana, Hawaii, $600 million in Chicago, Trump Park Avenue 100% sold out. Trump World Tower 100% sold out. Trump Soho 4500 applications for 450 units. And the only reason I talk about applications because we just got the approval from the Attorney General to sell.

WSJ: What's happening with your Atlanta project?

Mr. Trump: It's a beautiful job that's going very well. It's very premature, it's very early. We just started the sales. We haven't started construction in Atlanta yet. Beautiful job. Just going through zoning and the attorney general process.

WSJ: Do you feel like you missed the market there? It's a bad housing market there with lots of unsold homes…

Mr. Trump: You know I can't be everywhere. It's like somebody says why didn't you build here or there? Who's done better deals than me? I bought 40 Wall Street for $1 million now it's worth $750 million. You can't sort of do everything. I bought the job, the big job out in Palos Verdes in Los Angeles, it's been a tremendous success. The big golf course that fell into the Pacific Ocean, I don't know if you heard about it, I ended up buying it from the banks at a bankruptcy. It was a huge seven or eight-year bankruptcy deal. I bought it seven years ago. Got that approval from the Costal Commission, which is not an easy feat and have something that is phenomenal there now. The various golf magazines say it's the best course in California, better than Pebble Beach. I've gotten tremendous reviews on it. And it's very valuable now because I was able to get all the approvals. The other thing I have the advantage of, because of the name and the brand and because of the quality of the brand, is I get approvals… Another job I did was a job in Westchester, a very successful job. The job in White Plains I did with Capelli, totally sold out. The job in New Rochelle that I'm doing with Capelli, 80% sold out. Doing one with Stamford, Conn., with Tom Rich, you know the Rich family, we just started it, it's 50% sold out and we just started selling a month ago.

WSJ: People say where you had so many projects clustered together, that it's too much, a brand dilution.

Mr. Trump: I don't think so. Based on the sales it isn't. We did Trump Towers [in Miami], 1,200 units, 100% sold out, and again closings are taking place now. As I told you 20% nonrefundable deposits, everybody is closing. We did 1,200 units totally sold out and then a mile down the road I did the deal with Dessers, the Trump Grande, and you know that job is totally sold out also… You know, I get the best sites. I sometimes do them 100% where I own. Like in Las Vegas I own it. In Chicago I own all of it. In New York I own all of it. Sometimes I'll have partners. And sometimes I do licensing deals in Asia that are doing very well, in Korea that have done unbelievably well, in other parts of Asia and other parts of the world. And one other job that is close to the United States. In Mexico, huge. Baja Peninsula, tremendous success. Totally sold out. $350 million sold out in the first week. So I think it's hard for you to write a bad story, I'll be honest with you.

WSJ: Do projects like Tampa hurt your reputation?

Mr. Trump: It doesn't hurt me. I sold the project out twice.

WSJ: But people down there who bought in because of your name, say things like, 'I'm really angry at Trump.' They felt you represented that you were going to save the day if there was a problem.

Mr. Trump: Well the document [offering prospectus] will tell you that I licensed my name in Tampa. They owe me many millions of dollars. They sold the project out twice.

 

That's going to be an ongoing saga and I hope they got their financing because that way everybody is going to be happy, but we'll see. But based on the sales, they should be able to get their financing. But you are asking about sales, based on the sales, as you understand.

WSJ: But it's more than sales. They bought into the project thinking that…

Mr. Trump: The one thing I can't do. When I own 100% of a job like I do in Chicago, like I do in New York, like I did at the site of Delmonico Hotel, 59th Street and 5th Avenue. I own 100% of Trump World Tower. I can do that myself. And the beauty of that is that I can solve any problems that come up myself. When I license my name to somebody, I don't have the same power over a job. In other words, I'm not responsible for going out and getting financing, and things that I can do easily that other people can't do easily. For instance I could have pulled off the Tampa job very easily. But other people can't necessarily pull off a job like that. Now they tell me they have pulled it off, I hope they have pulled it off. But based, and based on sales, they should be able to pull it off.

WSJ: You said you could build the Tampa project out of your back pocket.

Mr. Trump: That's true. I'll say that on the record to you. I could build that job out of my back pocket. The problem is, I don't own the land. It's a licensing deal. And its not for me to build it. It's for them to build it. Now if they don't build it, I would be very tempted to buy the land and to build it.

WSJ: In Tampa, they discovered the foundation caissons were insufficient to support the building, that the ground was softer than the engineers anticipated. You said when this was discovered that you knew a lot about caissons.

Mr. Trump: I built the biggest caissons ever used in building in Chicago. A caisson -- all you do is make it bigger and deeper and you solve any problems with earth. Go ahead, what's the point?

WSJ: Buyers in Tampa felt you were saying, don't worry, I'll step in and fix it.

Mr. Trump: No. I wasn't saying that. I know a lot about. The thing I do best, even better than the Apprentice. I did a show that, by the way, goes on in January. We just literally wrapped up. I did a show that because the number one show on television. To be honest with you, the thing I know best is construction. So I fully understand caissons and I fully understand how to build. In Las Vegas I'm the only one who built the building ahead of schedule and under budget. Everybody else is way over budget and behind. They are talking about my building, the most successful building built in Las Vegas in many years. Have you heard that, by the way?

WSJ: From you…I don't pay attention that closely.

Mr. Trump: But you have heard that my building in Las Vegas is totally sold out.

WSJ: You mentioned it. I knew it was going up as opposed to others that weren't, so yes. I knew it was successful.

Mr. Trump: Totally sold out. Well you know. It's been a great success. All of my stuff has been a great success. Now as you mentioned Tampa. Licensing deal. Sold it twice and we don't have to go over it again. If there was a job that today was going to start, I would most likely, if I had a partner or something, I'd most likely, say let's wait a little while. For instance like the smaller building [Las Olas] in Fort Lauderdale. I suggested they wait a little while and see how the market goes. Why should you build into a bad market. Which I think is just common sense.

But my jobs have been tremendously successful…Nobody else has the track record that I do and nobody has even close to the track record that I have.

WSJ: The folks I've talked to in Tampa…

Mr. Trump: Why do you keep going back to Tampa? And I've given you these gobs of projects that are monster successes. You're talking about markets and I'm telling you I sold out in Las Vegas, I sold out in New York. I'm doing numbers that nobody has ever done before and you keep going back to a job in Tampa, that excuse me, that has been sold out twice.

WSJ: We are clearly going to write about Tampa, and I want to do it in the right way and get my facts right, that's why I ask about it.

Mr. Trump: The job should have been a tremendous success. I hope it's going to be successful in the future. But it is really a licensing deal. But again, I am not the developer of that job. I'm the developer of every other job I mentioned. But I'm not the developer of that job. All along the coast of Florida I've had tremendous success. Now my timing was better than other developers. I didn't start a job, although in Hollywood we started a job six months ago and it's successful. I have better locations, better everything else. But the Tampa job, I'm not the developer of that job. SimDag is the developer. Again if I'm not the developer of the job, I can do things as a developer of a job that I can't do as the nondeveloper of the job. All I can do is, I can say is, they had tremendous sales success on the Tampa job.

WSJ: And it was your job to make the sales happen?

Mr. Trump: Yeah. That was it. What can I do. The building is beautiful. The design is beautiful. My people worked very hard. I will only do a job if it's going to be a quality job in the best location. They worked very hard. But it was a tremendous sales success…

WSJ: Let's say the financing doesn't come through, should SimDag simply give people back their money and say, "We're sorry, it didn't work out"? Mr. Trump: That's what I would hope they would do. Or if it doesn't go through with them, I'd love to buy the site and develop it as the developer as opposed to as somebody that licensed the job. I would be very interested if the deal doesn't go through, if they tell me they have their financing, which would be wonderful, because they have great sales success. If that doesn't happen, I would like to see the developer take care of the people who put up deposits.

Now, if the deal doesn't go through, I would be very interested, respectfully, in buying the site, and I would develop it and it would be a very successful building. And you can quote me on that…I'm trying to be nice to them with respect to my litigation against them. I want to give them every opportunity to build that building. And I hope you can quote me on this. I want to give them every opportunity to build that building. Every single opportunity. I want to give them every opportunity to build that building. I don't want to do anything that is going to impede them from building that building. If they don't build the building, you know, they owe me many, many millions of dollars. But I would be very willing to buy the site at a reasonable price and I would love to build that building, because I think it's a very good building at a great location. But I'd love to see them succeed because, you know, they've worked hard. I'd love to see them succeed. And their sales success has been phenomenal. The only reason they had sales success is because of the name of Trump. If for some reason they don't succeed, I would be very willing to buy that site and develop the building, because I think it's a very good project. But I hope they succeed. I hope you can put that. Because I hope they do succeed. And supposedly they have their financing.

WSJ: Do you know who the hedge fund is who has tentatively agreed to provide the construction financing in Tampa?

Mr. Trump: I had heard of it. They say they have a hedge fund. We've even been notified to that effect. That's why I've held back the lawsuit, the litigation.

WSJ: What's happening at Jones Beach, N.Y.? You're a big time guy, why are you doing such a small project there, a catering hall?

Mr. Trump: It's a 100-year lease on the boardwalk in Jones Beach to build a very, very large 88,000-square-foot catering hall facing the ocean. It's not like the biggest deal. Anytime you can get a long-term lease on the ocean on Jones Beach. In July, they have a million people a day and we pay very little rent. It's under construction now. You do those deals, and big deals. Then you die and nobody gives a s---.

Just treat me good. The market is good for Trump. Not good for other p

Published Saturday, November 17, 2007 3:44 PM by Zinnia Q.

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