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The Trump empire

REAL ESTATE
By Mkala Mwaghesha | March 10th 2016

Republican presidential front-runner Donald J. Trump is rich and arrogant. If he were Kenyan, he would be a noisy governor or a hot-headed parliamentarian. When he was campaigning in Sioux Centre, Iowa, America, he said: “I could stand in the middle of 5th Avenue and shoot somebody and I wouldn’t lose voters.”

Trump makes for great sound bites and while he started the campaigns as an outsider, he has gained considerable traction and left many seasoned politicians dumbfounded. Today he is a front-runner for the Republican ticket to succeed President Barack Obama.

Besides the hullabaloo around Trump and his insensitive comments, he makes for an interesting case study in managing a global real estate brand. Last month, Steve Cuozzo wrote in the New York Post that Trump is “New York’s most important and bravest real-estate developer”.

This for a good reason. The Empire State Building in New York is one of US’s most iconic structures. The 102-storey skyscraper is a landmark and a tourist attraction. What many may not know is that it was at one timed owned by Trump. Trump Empire State Partners, a joint venture of Trump and Japanese mogul Hideki Yokoi acquired the building in 1994. This was for a reported $42 million (Sh4.2 billion) and sold it in 2002 for $57.5 million (Sh5.75 billion).

His father

Born on June 14, 1946, Trump is not the typical zero-to-hero story. His old man, Fred Trump, was a real estate magnate who hired his son to work for him after the younger Trump graduated from the University of Pennsylvania’s Wharton School.

In 1971, Donald took over the business and renamed the company The Trump Organisation. Cuozzo explained how the Republican candidate took New York head-on by coming up with Riverside South, an apartment complex on the Upper West Side of Manhattan, in New York City.

It was later embroiled in controversies, a constant highlight in Trump’s real estate career. Trump, who is worth $4.5 billion (Sh450 billion) according to Forbes 2016, is commercially aggressive and is always looking at expanding his empire. On its website, the organisation describes itself as “the world’s only global luxury real estate super-brand, and is responsible for many of the world’s most recognisable developments”.

In his 1987 memoir, The Art of the Deal, Trump wrote: “I play to people’s fantasies. I call it truthful hyperbole. It’s an innocent form of exaggeration - and a very effective form of promotion.”

His ambitions to make other people achieve their fantasies has seen the Trump Organisation build eight hotels in prime global cities such as New York, Toronto, Miami and Las Vegas and Nevada, a state he got 46 per cent support in the ongoing primaries. In the pipeline are hotels in cities such as Rio in Brazil, Vancouver and Washington.

Trump is also famous for his Trump Tower, a mixed-use skyscraper located in Midtown Manhattan, New York City. The tower, where he actually lives, was conspicuous during the billionaire’s hosting of The Apprentice, a programme many Kenyans keenly followed. Opened in 1983, the tower has had notable tenants, including celebrated footballer Christiano Ronaldo, American actor Bruce Willis and ‘Baby Doc’ Duvalier, a Haitian dictator.

Cats

Others are Saudi royal Mutaib bin Abdulaziz Al Saud and disgraced former President of America and Caribbean Football Federation, Chuck Blazer, who had an apartment set aside for his cats.

Besides, he also owns Trump World Tower, a residential skyscraper also in Manhattan. Construction began in 1999 and concluded in 2001. The building is 861 feet tall and has 72 floors, and was briefly the tallest residential tower in the world prior to the completion of the 21st Century Tower in Dubai (2003) and the Tower Palace 3 in Seoul (2004).

His real estate empire, said to be worth $3.5 billion (Sh350 billion) transverses the world, with Trump’s sky-high towers, hotels, golf courses, casinos, residential projects and other properties dotting the map in global cities such as Mumbai, Istanbul, Panama and Uruguay. He collects $41.9 million (Sh4.19 billion) in rental income from his buildings a year.

Controversies

Despite all that, Trump is a man who Sussanne Craig and David Chen, writing in the New York Times, term as not as influential as he appears to be. Part of the reason for this is that although Trump and his family are well-rooted in New York, he is marred in controversies and bad debts.

Trump’s controversies have seen him lose business as some contractors avoid him over notorious slow payment for services. He is also blacklisted by some powerful banks in Wall Street, with executives citing caution when dealing with a man who has faced bankruptcies and litigation.

“I don’t use Wall Street much because I don’t need money,” Trump said. “I do my own financing.”

His other failed project is the infamous Trump University, later renamed Trump Entrepreneur Initiative. Currently facing a lawsuit in a New York court, Trump is said to have lured thousands of students with claims that his university, launched in 2005, would help them “make a killing in the real estate field”.

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