How a 'brutal market for commercial property' could make Trump’s financial woes even worse

01 March 2024

In mid-February, Forbes estimated former President Donald Trump's net worth to be roughly $2.6 billion. But that figure goes way down when one considers his massive legal bills and recent civil judgements against him. And according to Fortune reporter Erik Larson, the state of the commercial real estate market can only aggravate Trump's financial woes.

Between New York State Attorney General Letitia James' civil fraud case and former Elle Magazine columnist E. Jean Carroll's two defamation lawsuits, Trump is facing civil judgements totaling more than $535 million. Trump is appealing Justice Arthur Engoron's ruling in James' case, which, according to estimates, will cost him around $454 million when interest is factored in.

Many of Trump's assets are in commercial real estate, and Larson stresses that the commercial real estate market's volatility is bad for Trump at a time when he can least afford it.

"A brutal market for many commercial property owners means he faces significant losses in his real estate empire if he unloads assets," Larson explains. "The billionaire has few options. He must pay the full judgment by March 25 or arrange a bond for at least 110 percent of the amount in order to put the fine on hold while he appeals."

Larson adds, "To get an appeal bond, Trump will need to hand over cash, sell properties or use them as collateral, tying up most, if not all, of his liquid assets for months or longer. Unless Trump can convince the appeals court to put the verdict on hold during his entire appeal, he could find himself in a financial squeeze."

Values for commercial real estate, Larson notes, "plunged as borrowing costs rose" in the U.S. and "the remote work trend that started during the pandemic continues to cut into demand for office space."

The Fortune journalist reports, "Prices slumped 22 percent in the year through January, according to real estate analytics firm Green Street…. The Trump Organization owns or invests in multiple office towers from New York to San Francisco. One of its key Manhattan properties, 40 Wall St., was purchased by Trump in what his business hails as 'one of the great real estate deals of all time' back in 1995. In 2015, it was valued at $540 million, according to commercial mortgage-backed securities data. That has since fallen to $270 million, the Bloomberg Billionaires Index estimates."

Larson points out, however, that "Trump's finances could get a boost from his Trump Media & Technology Group," the company that operates his Truth Social platform.

"A frenetic rally in a stock tied to Trump Media & Technology Group has minted a nearly $4 billion windfall for Trump," according to Larson. "But that won't help him for now. The profit is only on paper, and he'll have to wait months to monetize it. If the stock stays up, he could use it replenish his coffers down the road."

Read Fortune's full report at this link.

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