THE RIGHT HOUSE?
How to sell a Trump Tower apartment in the age of President Trump
A little over a year ago, Brown Harris Stevens broker Jason Karadus was walking a potential buyer around Trump Tower when, coming out of the health club, they ran into the development’s namesake.
“I remember thinking, ‘Don’t try to shake his hand,’” Karadus recalls, noting the Donald’s reputation as a germaphobe.
As he tells it, the two parties exchanged pleasantries, and then Karadus and his client went down to the quiet lobby and left.
Needless to say, things have gotten a bit more complicated — and busier — at Trump Tower. For one, it has a visible security presence, including a half-dozen or so black SUVs (“Secret Service,” says a doorman) outside the building. Want a latte at the Trump Tower Starbucks? Not until your bags are searched by the Secret Service. You’re also unlikely to bump into Trump on a stroll.
But more importantly, from a broker’s perspective, Trump’s controversial presidency has exacerbated the divide between people who care to live in a Trump property and those who, given the choice, would choose a tent in Rio. It’s not an overstatement to say selling a Trump apartment now has its challenges.
“A Trump building has always been a turn-off for some people and a turn-on for others,” says BHS broker Wendy Maitland who, along with Karadus, has the listing for a $7.5 million three-bedroom in Trump Tower. That distinction, she says, is now much starker. In other words, she says, don’t look for realtors to pitch “the DNC [Democratic National Committee] mailing list.”
The Trump Tower listing is a renovated, 2,219-square-foot unit on the 39th floor that boasts Venetian plaster, Carrara marble finishes and sprawling Central Park views. But despite its features, the brokers say there are people they know won’t be interested, including those locals with front-row seats to the decadesold Trump show who just aren’t that into him.
“There are maybe [some] quintessential, homegrown New Yorkers who would cut off their right arm before they’d ever live in a Trump building,” Karadus says.
Maitland adds that “there are certain high-profile people . . . who may feel like it’s going to connote support of Trump [and his presidency]. That’s not necessarily the case.”
So, where do Maitland and Karadus plan to prospect most heavily for clients? You might have seen this coming, but, in a word, Russia.
“Russians love New York. [Many] with significant money have pieda-terres here, and all of a sudden being in a Trump building might appeal to them,” Karadus says. He and Maitland are researching which Russian magazines to advertise in to reach those individuals.
“Russians are excited by Trump’s excitement for Russia,” adds Douglas Elliman broker Dina Goldentayer, who works in South Florida. She says she’s seen a dramatic uptick in Russian buyers since the election, with strong interest in Trump properties like the Trump Towers in Sunny Isles.
Since November, she says, eight sales have closed with five more pending at Trump’s Sunny Isles development: “[It’s] more activity than we saw in those buildings in all of 2016 prior to the election.” While Goldentayer couldn’t specify whether the buyers were Russian, it’s well-known that Sunny Isles, aka “Little Moscow,” has many deep-pocketed Russian residents.
As for New York, Russian bigwigs Vadim Trincher, David Bogatin and Vyacheslav Ivankov have or had units in Trump Tower. “[The Trump name] has always symbolized to the Russians status and money,” Karadus says.
Recent Trump property-related transactions have been less obviously robust in Manhattan, however, where, according to numbers from Street Easy, one unit has sold in Trump Tower since the election, while two have been taken off the market. Of the 20 active sales listings, seven have seen price cuts.
Other Manhattan Trump properties have also fared poorly. For instance, at Trump World Tower (845 United Nations Plaza), five of the 11 units on the market have had price cuts, and three of the four that have sold since November did so at a discount. At Trump International (1 Central Park West), five of 12 active listings have lowered their prices, as did two of the three units sold since the election.
Still, the election’s effects are mixed. There were 127 sales across Trump’s 12 New York City apartment buildings in 2015, according to Gabby Warshawer, director of research at CityRealty.com. In 2016, that total dropped to 99. The average sale price of units decreased from $2.8 million in 2015 to $2.5 million in 2016. But that same figure is up so far this year, to $3.5 million.
Like much of the luxury market right now, Maitland and Karadus’ listing struggled even before Trump stepped into the Oval Office. The unit originally went to market with Town Residential in December 2014 for $10 million. After a price cut to $8.95 million it was delisted in October 2015, then went on and off the market at that price with BHS. It just reappeared for $7.5 million.
While buyers from China are not out of the question — Maitland says a recent Chinese investor insisted on “Central Park, Fifth Avenue, Madison Avenue, Trump” — they’re less likely. Rupert Hoogewerf, publisher of Shanghai-based luxury magazine the Hurun Report, which tracks the spending habits of Chinese one-percenters, says, “I’ve talked to a lot of [wealthy Chinese] in the past about property in New York and other cities, and nobody has ever come forward and suggested Trump Tower.” Instead, he notes, “it was always talk about new developments.”
Which raises the issue of Trump Tower being overshadowed by the taller, more luxurious towers popping up in Midtown, even as the Manhattan luxury market slows.
Trump Tower, built in 1983, “is part of a submarket of Midtown that was built from the late-’70s to the mid-’80s,” says appraiser Jonathan Miller. “It doesn’t really have a relationship with [what’s] being built. That’s a new super-luxury class.”
Of course, at Trump Tower there’s always the remote possibility of gaining access to the president. At, say, One57 you might run into building developer Gary Barnett and, sure, he’s a big deal in real estate, but does he have access to the country’s nuclear codes?
Karadus and Maitland also assume that folks associated with the Trump administration might want to live in the tower. “We’ve already reached out to somebody within the administration to basically let them know [the apartment] is available,” says Karadus.
Then there are those agnostic enough about Trump to simply be attracted to the pumped-up security. One potential customer for the Karadus / Maitland listing, who asked to remain anonymous due to a planned business venture, says the building’s Trump affiliation “is neither negative nor positive,” but that its security upgrades are a draw.
“I like a secure building,” says the businessman, who splits his time between New York, Europe and Qatar, and is looking for a pied-aterre. “As a somewhat high profile, busy businessman . . . my privacy is important to me. I see it as a plus.”
Despite the clear challenges, Maitland says there’s no point in ignoring the Trump connection. His name is in giant block letters over the front door, and the Trump moniker will likely be prominent for at least the next four years.
“We have to embrace it,” says Maitland. “We’re leaning in. There’s no other way.”