We valued the president at $ 3.1 billion a month ago. Now it is worth $ 2.1 billion. Here’s why.
TTo approximate how much the coronavirus affected the president’s fortune, we analyzed changes in stock prices similar to each segment of his business. Commercial real estate fell sharply, with shares in several companies, including Boston Properties and Vornado Realty Trust, plunging an average 37% from March 1, 2020 to March 18, 2020, when we calculate fortunes for the list of billionaires. Similar decreases have reduced the value of hospitality companies, apartment owners and golf companies. Using these refusals as a guide, we apply discounts to Trump’s pre-avonavirus numbers and review changes with industry experts.
The bottom line: an equity valuation of $ 2.1 billion – a decrease of $ 1 billion in less than a month. This will certainly change again, as every index works like an electrocardiogram. But, says Eric Anton, a New York City real estate agent, “the analysis is as good as any other way I can think of.”
The core of Trump’s empire, which the president still owns, but his sons Eric and Don Jr. maintain on a day-to-day basis, remains tied to commercial properties. Before the coronavirus stopped everything, these properties were worth about $ 1.9 billion after deducting the debt. As of March 18, 2020, that amount was reduced to $ 1.2 billion. Part of the problem: Trump owns 125,000 square feet of retail property near Fifth Avenue in Manhattan, typically a busy retail corridor. Today, it is a virtual ghost town. Currently, office space also doesn’t seem like a safe investment, especially if America’s home-based experiment proves successful.
COMMERCIAL REAL ESTATE
Retail and office space in New York and San Francisco
In addition to commercial stakes, the president owns more than 500 residential units across the country. The shutdown happened so quickly that there is still little data on property sales, making it difficult to determine the value of anything. “Buyers are unlikely to make the biggest financial investment of their lives through a virtual tour,” says Jonathan Miller, a New York housing expert. Public markets, however, point to declining values. The share prices of five apartment owners fell by more than a third, on average, from March 1, 2020 to March 18, 2020.
RESIDENTIAL REAL ESTATE
More than 500 units in five states
The situation is even more dire for Trump’s hospitality properties. The Trump Organization was trying to sell its hotel in Washington, DC, but those plans are on hold. The president’s companies laid off more than 550 employees, according to the Washington Post.
Hotel in Washington, DC, and resort in Miami
During a press conference at the White House in March, President Trump answered a question about the effect of coronavirus on his business: “I’m very little and everything, so that’s a good thing.” However, not necessarily at the D.C. hotel or at the president’s golf resort in Miami. Deutsche Bank gave Trump $ 170 million to remodel the Trump International Hotel and another $ 125 million for Trump National Doral in Miami, which produced $ 9.7 million in profits in 2018 (measured as earnings before interest, taxes, depreciation and amortization). “It looks very leveraged,” says hospitality analyst Dan Wasiolek.
HOTEL LICENSING AND MANAGEMENT
Branding and management offerings in Hawaii, Uruguay, India and other countries
The impact on Trump’s golf course portfolio largely depends on how long the coronavirus keeps the economy closed. The good news for golf investors is that social links are easy to distance yourself from. The bad news is that expensive clubs don’t tend to do well in recessions. “The first thing that gets cut from the diet is the golf budget,” says Jeff Davis, managing director of the golf brokerage firm Fairway Advisors. The value of Trump’s business, estimated at around $ 271 million in early March, has dropped by about 20%.
Ten golf clubs in the USA, three European properties
Mar-a-Lago, the president’s most famous club, may be doing better than the rest of his clubs, despite having been in the news for hosting people who later tested positive for the coronavirus. This is because Mar-a-Lago is more valued as a billionaire’s trophy than an operational business, which seems to protect the impact of the current crisis.
TROPHIES AND OTHER PROPERTIES
Mar-a-Lago, Trump Tower coverage, Trump Winery and other assets
The best performing part of the president’s portfolio is his pile of money. The president got rid of his shares a long time ago and now maintains about $ 160 million in security on demand accounts. It looked like a bad investment in recent years, with the stock market skyrocketing and the president losing earnings. But today, a flat return is a great return.
Amid all the sadness, there is still room for optimism. By the end of Wednesday, the stock market had risen 3% since Forbes calculated its equity valuations two weeks earlier. Says Joel Paige, a resort operator who managed Doral, before Trump bought the property: “My guess is that it will just be a hiccup for him.”