Trump Could Lose Real Estate Cash Cows
There was a time when having the name “Trump” on a casino, golf course or hotel was an asset. But now after Donald Trump’s disastrous term as president it’s become hyper-toxic, so much so that one of the nation’s largest real estate investors, which is run by a longtime friend of Trump, is trying to extricate itself from a partnership with the twice impeached former president.
The partnership between Vornado Realty Trust and the Trump Organization owns two first-class commercial buildings, one on Sixth Avenue in Manhattan and another in San Francisco. Vornado owns 70 percent and Trump 30 percent. Vornado tried unsuccessfully to sell and refinance the properties last year, but couldn’t find a buyer or lender willing to do a deal with the Trump name attached to it, The Wall Street Journal reported.
Now Vornado founder and chairman Steven Roth is considering withholding the partnership’s cash flow from Trump as leverage to get him to sell his stake back to Vornado at a discount. As the majority owner Vornado has great leeway in how it operates the partnership.
The partnership generates significant cash for Trump, which he badly needs since his Washington, D.C., hotel and several golf courses have seen business crater due in part because of the coronavirus pandemic, but also because of Trump’s tarnished image. Trump may be inclined to sell his stake in the partnership, even at a reduced value, as a way of generating a lump sum of cash that he could use to pay off more than $400 million in debt he has coming due in the next few years.
He also is facing the prospect of having to pay the IRS about $100 million in back taxes and interest in connection with a massive tax refund the agency is examining.