On the corner 59th Street and Park Avenue in midtown Manhattan stands a beautiful building named Trump Park Avenue. Once known as the Hotel Delmonico, it features arched windows, marble finishes and penthouses that have sold for upwards of $20 million. Donald Trump still owns a handful of units, including one that Jared Kushner and Ivanka Trump used to call home.
Recently, however, the property has lost some of its luster. The reason: Its storefronts went quiet during the pandemic. The parent company of New York Sports Clubs, which operated a gym in the building, closed its locations in March 2020, then declared bankruptcy six months later. Capital One, which was paying an estimated $1 million a year to lease space next door, left in May 2020, about a year and a half before its lease expired.
Like a lot of real estate owners, the former president has struggled to keep his commercial spaces humming in the Covid era. Heading into the pandemic, Trump had over 30 retail tenants in New York City. About a quarter of them either have left their properties or shut down their operations, according to a Forbes review.
A few blocks from Trump Park Avenue, GNC closed down its Trump Plaza location, for which it paid an estimated $400,000 in annual rent. A spokesperson for the Trump Organization says a new business will be opening soon. Data connected to the loan on the property shows that revenues have already dropped 23% from their pre-pandemic levels, causing profits to tumble 43%.
Starbucks used to have a bustling location inside Trump Tower, complete with a signed photo of Ivanka Trump kissing a coffee cup. The space was roped off on a recent visit, and the store finder on Starbucks’ website no longer shows a location inside the building. A representative for the Trump Organization claims Starbucks is still paying rent, but the outlook doesn’t look good. An employee answering the phones at the Trump International Hotel in Washington, D.C. said the coffee company had closed its location there, too.
EMPTY ENTRANCES
Signs came down and storefronts went still at several Trump properties.
Capital One, Trump Park Avenue
BEFORE: Capital One has had a space at Trump Park Avenue since 2008, when it acquired North Fork Bank, a longtime tenant. AFTER: There’s no longer a branch at the location, though Capital One will keep paying rent until its lease expires in January.
Google Maps
GNC, Trump Plaza
BEFORE: GNC used to sell supplements out of this Third Avenue location. AFTER: The location is shut down for now, but a representative for the Trump Organization says a new business will open soon.
Google Maps
Teresa’s Brick Oven Pizza and Cafe, 1290 Avenue of the Americas
BEFORE: Teresa’s Brick Oven Pizza and Cafe used to pay more than $400,000 a year to rent in this building, where Trump owns a 30% stake. AFTER: The eatery couldn’t hang on during the pandemic, despite accommodations from its landlords.
Google Maps
Not far from Trump Tower sits 1290 Avenue of the Americas, a massive skyscraper in which Trump owns a 30% interest alongside publicly traded Vornado Realty Trust. The former president doesn’t handle day-to-day management of that property, but he does collect money from it. So it wasn’t good news for him when it lost three of its retail tenants—Teresa’s Brick Oven Pizza and Cafe, Earl of Sandwich and Barilla Restaurant. It’s tough to run a midtown Manhattan lunch spot when so many workers are staying home.
Trump and Vornado are also partners at 555 California Street in San Francisco, another large office building. A ratings report published in April said the number of people entering the property dropped from roughly 5,000 to 200 during the pandemic. A handful of tenants—including Boys’ Deli, Bay Club and Proper Food—asked for rent relief, according to the report.
There are signs of a comeback. At Trump World Tower, on the east side of Manhattan, the World Bar shut down, but a notice posted to the door in August said that something called “Pure Beef Inc.” was applying for a liquor license. A spokesperson for the Trump Organization says the space has been leased, and construction should start soon. Downtown, an Italian bistro named Nerolab is preparing to open a space in Trump’s 40 Wall Street.
Gucci, the former president’s most important tenant, pays an estimated $24 million a year in rent and reportedly reupped its lease in 2020. Its previous deal wasn’t set to expire until 2026, so the retailer may have gotten a discount by renegotiating early.
Around the corner from the Gucci store sits Trump’s second-most important retail outpost, 6 East 57th Street. Nike rented that space for decades, paying an estimated $16 million annually, before moving out a few years ago and subleasing to Tiffany. The jeweler is expected to vacate in 2022. That might leave the former president looking for a new tenant at a time when retail real estate is still limping back from the pandemic.
IMAGE CREDITS
ILLUSTRATIONS BY LASAGNAFORONE/GETTYIMAGES (MAP); ANILYANIK/GETTYIMAGES (BUILDINGS); FINGERMEDIUM/GETTYIMAGES (DIAMONDS); CALVINDEXTER/GETTYIMAGES (TREES).
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
