Donald Trump's net worth slips to $2.9 bn

Trump's net worth is estimated at $2.9 bn, compared with $ 3 bn a year ago

Donald Trump’s office properties aren’t bringing in as much cash as banks that loaned him money had expected. That’s the biggest finding in an updated assessment of the president’s net worth, which has slipped to $2.9 billion, according to the Bloomberg Billionaires Index, down from $3 billion a year ago.

The calculation, five months after Trump’s inauguration, relies on figures compiled from lenders, mortgage documents, annual reports, market data and a new financial disclosure released June 16. The decrease is driven mostly by a drop in the value of three office properties in Manhattan, where financial data compiled by Trump’s lenders offer a consistent picture: They’re underperforming appraisals conducted when Trump was issued loans. The buildings — 40 Wall Street, Trump Tower, and 1290 Avenue of the Americas, a tower in which Trump holds a 30 per cent stake — are victims of a changing New York office market, where gleaming new skyscrapers are attracting tenants and demand for space in vintage properties is falling.
 

The Bloomberg calculation, which previously relied in part on banks’ estimates and appraisals, is now based solely on the three properties’ actual financial results disclosed by managers of mortgage-security trusts that hold Trump debt. The present value of the three properties has been revised down by a combined $380 million.
 

Allen Weisselberg, chief financial officer of the Trump Organization, and Jeffrey McConney, the company’s controller, didn’t respond to emails detailing Bloomberg’s methodology. An outside spokeswoman didn’t return calls for comment. Hope Hicks, a White House spokeswoman, didn’t respond to emails.
 

The decrease in the value of the three towers was almost offset by successes in other corners of Trump’s empire. His portfolio of liquid assets, including cash, has jumped to $230 million from $170 million following condo sales and other payouts from the Trump International Hotel Las Vegas, as well as the sale of a Manhattan penthouse apartment. He sold most of his stock portfolio last summer, a spokesman said in December.
 

Trump’s companies received new licensing fees for branded projects in Vancouver and Kolkata, the financial disclosure shows. On an annualised basis, revenue at his 16 golf and resort properties rose 3 per cent. Mar-a-Lago, which Trump has visited frequently since the election, saw a 25 per cent jump in sales. The properties now have a combined value of $720 million, up from $710 million, according to the index, an increase damped by declining multiples for golf course properties.
 

At the same time, Trump’s debt load has shrunk to at least $550 million from about $630 million last year, according to lender data and repayment schedules. The Wall Street building, appraised at $540 million in 2015, had projected annual net operating income of $22.6 million, according to documents shared at the time with potential investors in the property’s debt.

It earned $17.4 million in 2016, a year in which it was on a lender watchlist for three months because rental income barely covered debt payments. The property was removed from the list as its situation improved. The index values the property at $400 million based on last year’s performance.
 

Trump Tower, the president’s home and headquarters before he moved to the White House, is facing a similar problem. Its offices and stores were appraised at $480 million in 2012, with net income estimated at $20.4 million. The property generated $14.1 million of net income last year after higher expenses ate into revenue, lender documents show. The building, including Trump’s penthouse apartment, is now valued at $450 million.

The office tower at 1290 Avenue of the Americas, which Trump owns in partnership with Vornado Realty Trust, also has failed to meet lender expectations. The building was appraised at $2 billion in 2012 on the assumption it would throw off $97.7 million of annual net income. But it generated $77.7 million last year.
 

“We’re in the biggest development pipeline in Manhattan since the 1980s,” said Keith DeCoster, director of real estate analytics at Savills Studley. “Older buildings -- circa 1980s, 1990s -- are having a tougher time competing.”
 

Trump has retained his ownership interest in his companies. Unlike previous occupants of the Oval Office, he neither divested his assets nor set up a blind trust. Instead, he transferred his holdings to a revocable trust managed by his adult sons, Donald Jr. and Eric, and Weisselberg, the Trump Organization’s CFO.

Trump’s own estimates of his net worth are frequently higher than independent appraisals. When he announced his candidacy in 2015, his campaign released a document stating he had a net worth of $8.7 billion. Later that year, when Bloomberg first assessed his net worth at $3 billion, he described it as “a stupid report.” He later repeatedly asserted he was worth more than $10 billion.

One difference between Trump’s estimates and Bloomberg’s is the value of his personal brand. The 2015 document released by Trump’s campaign said his ability to license his name and likeness to everything from international hotels to mattresses is worth $3.3 billion. Bloomberg assigns it a value of $35 million, or one times sales from ongoing licensing deals. That value hasn’t changed since Trump won the Republican nomination last July.

US courts foreign money to fuel America first 

It turns out that President Donald Trump’s “America first” push needs some help from abroad. After months of pledging to focus on US needs, the Trump administration this week was hyping America as a top investment destination for foreigners during a government summit.

The US is courting companies to join public-private partnerships for a massive infrastructure upgrade and touting plans to slash corporate tax rates to create a more competitive business climate. It’s not an easy ask: Globally and at home, investors have been faced with uncertainty as the administration struggles to advance its legislative agenda and sends confusing signals about its receptiveness to free trade and possible limits on foreign workers. Still, it’s hard for global companies to ignore the lure of the world’s biggest economy, which is about to complete its eighth year of expansion. There’s much to like these days in America’s economic outlook, including a strong job market, subdued inflation and low borrowing costs.
 

Yet against that backdrop is a growing pool of more anxious investors, who are trying to decipher the signals from an administration that is withdrawing from Paris climate accord, cracking down on immigration and threatening to impose tariffs on everything from imported steel to cars.

“I encourage you to invest in our great country,” US Treasury Secretary Steven Mnuchin said at the SelectUSA Investment Summit near Washington on Tuesday. “From manufacturing and infrastructure to financial services and technology, Americans benefit from having industrious and entrepreneurial foreign investors partner with us.”
 

About 40 percent of foreign-based companies say the business environment is souring, according to a survey of about 60 chief financial officers of the US units of multinational companies in May and June by the Organization for International Investment. That’s more than double the share in 2014. OFII represents the US operations of foreign-based companies such as Alibaba Group Holding, Samsung Group and Siemens.
 

“It is certainly much more desirable to invest in the United States today than it is in many other countries. At this point, there has been no permanent damage done to that perception,” Pete Selleck, president of Michelin North America, said in an interview at the investment summit on Monday. But “if the government does something to try to live up to a campaign promise or whatever, everybody will react. Everybody will react very quickly, and the consequences could be much wider than what people expect,” Selleck said.
 

Mnuchin and Commerce Secretary Wilbur Ross, a front-line champion of Trump’s trade agenda, have said they are eager to hear what business leaders have to say. In April, about a dozen executives from U.S.-based subsidiaries of foreign companies met with Mnuchin, Ross and members of Congress to talk about the benefits of foreign direct investment.
 

“We are now educating the administration on what the U.S. subsidiaries of foreign companies also do. We invest in this country,” said Mani Iyer, President of Mahindra USA Inc., a Houston-based arm of the Indian automobile manufacturer.

Investor Concerns

Part of that concerns of investors lies in regulations introduced during the Obama administration to curb inversion mergers and the uncertainty around trade deals such as the North American Free Trade Agreement, which is being renegotiated with partners Mexico and Canada, the OFII survey found.
 

Ross has said the Nafta revamp will serve as a template for future U.S. trade relations -- all with the common goal of seeking reduced trade deficits with America’s major trading partners by boosting exports. Investors worries have also been intensified by ideas that Trump’s flouted on imposing punitive tariffs and using currency manipulation designations to level the playing field.

Foreign direct investment supports 6.4 million American workers, with jobs paying an average $80,000 -- about 30 percent higher than the U.S. average wage, according to OFII. Any pullback in FDI could undermine Trump’s job creation plans for 25 million new positions in the next decade. Barely a third of the companies surveyed by OFII said they expect to increase employment in the U.S. in the next six months.
 

Investor Changes

With a more hawkish administration in power, some lawmakers are pushing for changes to America’s foreign-takeover review process that would make it harder for companies to win government approval for their investments, adding to investors’ worries. Republican Senator Chuck Grassley and Democrat Debbie Stabenow have proposed including top agriculture officials to the panel that reviews takeovers, to guard against threats to the nation’s food supply from foreign investment.

Mnuchin this week said that the U.S. panel that screens foreign investments for national security risks will not turn into an economic-benefits test, or unnecessarily block commercially-driven interests.

“I want to emphasize that we make our evaluations looking to national security as our guiding criterion -- we do not screen by industry or make blanket pronouncements,” he said, noting the importance of confidentiality and efficacy of the process. “The vast majority of foreign investment in our country does not pose unresolvable national security concerns.”
 

While the Trump administration’s position on foreign investment may still be a moving target, individual U.S. states are rolling out the red carpet. At this week’s conference, development agencies from Ohio to Alaska were aggressively promoting their states as attractive destinations for foreign capital.
 

Tim Vanderhoof, a senior vice president with economic-development firm Enterprise Florida, said he was unsure of what the impact of Trump’s America First agenda might be in the future. His firm announced a deal Tuesday to create 200 jobs in Florida.

“It’s yet to be seen until we get clear cut and defined policy,” he said. “Lowering the tax rate would be key in attracting all kinds of investment, including foreign direct investment.”