During Donald Trump's four years in the White House, the Trump Organization profited considerably from his presidency — and the former president still owns real estate all over the world. But according to NBC News financial reporter Gretchen Morgenson, the Trump Organization's partnership with the company Vornado Realty Trust now poses a "potent threat to the crown jewel of his real estate holdings."
"The partnership owns two first-class commercial buildings — one on 6th Avenue in New York City and the other in Downtown San Francisco — and it is the single most profitable asset in the Trump empire," Morgenson explains. "The Trump Organization owns a 30% stake in the buildings, while its partner, Vornado Realty Trust — a huge public real estate concern in New York City — owns 70%."
According to Morgenson, Vornado founder Steven Roth "is considering whether to withhold the partnership's cash flows from Trump, said a person familiar with the matter."
"Such a move would slash the Trump Organization's cash receipts," Morgenson notes, "and it could force Trump to sell his stake back to Vornado at a discount — leaving him with a smaller gain and eliminating a crucial source of cash."
Morgenson points out that the Trump Organization has owned its stake of the NYC and San Francisco buildings for over a decade and that Forbes Magazine has estimated its minority holding in them to be $784 million. And its share of the debt on the buildings is $285 million, according to Forbes.
Morgenson reports, "Almost $400 million in debt backed in part by Trump International Hotel in Washington, D.C., and the Trump National Doral Golf Resort in Miami starts to come due in 2023. And while a sale of his partnership back to Vornado would provide something of a cushion for paying down that debt, getting top dollar for the stake is critical."
Adam J. Levitin, an expert on commercial law who teaches at Georgetown University in Washington, D.C., told NBC News, "If he doesn't keep the facilities in good maintenance and up to date, the ability to attract future business becomes impaired. He needs money to keep running the facilities."