Thursday, October 30, 2008
Donald Trump will go kicking and screaming into the new American "culture of austerity" that was thrust upon us all last month. Throughout the two-decade long credit bubble, the New York real estate developer has been a symbol of American success and excess, rebounding from near-bankruptcy during the 1990s housing bust, then returning bigger and better than ever with a reality TV show that has since become something of a bad parody of itself.
Apparently exhausting viewers with the original format of The Apprentice, the show has resorted to celebrity editions, apparently a necessary prerequisite for NBC signing on for another season that begins in January.
The "new frugality" sweeping the nation runs counter to everything the Trump name stands for - borrow big, build big, spend big, and make a lot of noise in the process.
Can the Trump brand survive during an era when "layaway" payment plans are making a comeback (seriously, I heard an ad for Shane Company Jewelers this morning where they touted layaway plans as an exciting new payment option).
Anyway, it looks like the Donald may be in for a rough patch according to this WSJ report:
Donald Trump's tallest construction project ever is facing some tall challenges.Just what we need - more condo and condo-hotel units.
Many real-estate developers are under pressure these days as lenders and investors rush to cut their exposure to the market. But Mr. Trump's 92-story Trump International Hotel & Tower in Chicago, which will be the tallest building constructed in the U.S. since the Sears Tower opened in 1973, may be especially vulnerable because it's getting hit by a triple whammy of colliding forces: the credit crunch, the reversal in the housing market and weak retail sales.
The shiny glass skyscraper is one of the few that the brash Mr. Trump developed without partners. The situation also puts pressure on one of the project's major lenders, Fortress Investment Group LLC.
So far, Mr. Trump has lined up buyers for a bit less than $600 million of condo units and condo-hotel units in a residential market that has virtually seized up. Yet he owes lenders as much as $1 billion when the loans are due, according to public records and several people familiar with the project. He has closed around $200 million in sales so far, with roughly $380 million still in contract. The retail portion of the giant building is for sale, at a time of rising vacancies for retail space in Chicago and one of the worst eras for retailers in years.
The article goes on at some length about all things Trump with a hideous sketch of the man himself, all in the free area of the Journal.
Like many others, I will welcome an end to the 'Trump era' if it comes, though I must confess that the first few seasons of The Apprentice were quite entertaining, if for no other reason that the Donald is so good at humiliating people who are in desperate need of being humiliated.