Trump Owns Half of Empire State Building
The Empire State Building has new owners--and one of them, Donald Trump, wasted no time Thursday in shouting his involvement from the top of its 102 stories.
Trump, the flamboyant owner of the Plaza hotel, Trump Tower and three Atlantic City casinos, cut a deal with a group of Asian and European investors to snap up the highest point in mid-town Manhattan’s famous skyline.
The arrangement did not cost Trump a dime, the developer said. In return for arranging equity financing for NS America, the group that bought the building for $45 million in October, Trump took over 50% ownership of the building.
“Trump Buys Empire State Building,” blared a news release from the developer’s publicist. NS America, which invited Trump aboard, was mentioned only after Trump’s name had appeared five times.
“The offshore people don’t have much experience with New York real estate,” said lawyer Henry Bubel, who represents NS America. “They thought Mr. Trump would be helpful.”
While Trump was proclaiming his latest move, sources in his organization were speculating that there might be a showdown between Trump and the current leaseholder, a group led by real estate investor Harry Helmsley.
“It is my intent to take the actions necessary to restore the Empire State Building to its rightful position as a world-class real estate asset. . . . I intend to make my position worth a fortune,” Trump said in a statement.
The lease on the building runs through the year 2075 and gives the buyers an annual return of 5%--a low figure for such a large commercial property investment. The lease now pays $1.9 million a year and drops to $1.7 million in 2013.
“The building has not been run as the lease requires,” the Trump source said, speaking on condition of anonymity. “There may be a renegotiation of the lease. There’s the potential for cancellation of the lease.”
There’s already bad blood between the two sides. Trump once denounced Harry Helmsley’s wife, Leona, as “a disgrace to humanity” and “a vicious, horrible woman.”
Leona responded by calling Trump an “S.O.B.” and “a skunk,” adding, “I wouldn’t believe Donald Trump if his tongue was notarized.”
The Fifth Avenue building, which opened May 1, 1931, holds 2.24 million square feet of office space and is at 85% occupancy. The Trump source said a plan to convert the upper stories into apartments is one possibility.
Fran Friedman, a spokeswoman for Helmsley and his wife, Leona, dismissed that speculation and said the new owners should have no effect on the lease.