Trump Tower. Credit: Ajay Suresh on Wikipedia
In July, Bloomberg reported on a growing number of vacancies within the commercial podium of Trump Tower, which consists chiefly of retail and office space at its lower floors. In a related trend, CityRealty data shows that residential condo sales in the mixed-use building are also floundering, with nearly half of available units having reduced their initial asking prices. Furthermore, of the 11 closed condo sales recorded so far this year, all but two have sold at discounts — often greater than 10%. 2019's closed sales have come in at an average price per square foot of $1,643, an average not seen since 2006. Even with the discounts, available listings in the tower average $2,078 a foot, revealing a large rift between sellers and prospective buyers.
When Donald Trump, a 37-year-old real estate magnate, erected his namesake skyscraper in 1983, the 664-foot structure had the highest and some of the most expensive apartments in the city. The corner of 57th Street and Fifth Avenue has always seen heavy foot traffic, yet ever since the tower became a rarely-used alternative to the White House by now-President Trump, street congestion, barricades, and security outside its brass-trimmed doors have compounded, transferring the chaos the administration is notorious for onto the sidewalks of Fifth Avenue. Since the 2016 election, much of East 56th Street has been closed off to traffic to the chagrin of local business owners.
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These headache-inducing concerns, as well as the President’s less-than-welcome repute in a city that voted overwhelmingly Democrat in 2016, are likely reasons for commercial vacancies. According to Bloomberg, occupancy fell from 100 percent in 2013 to 84 percent this year, reaching a seven-year low of 82 percent in 2016.
The same factors are likely behind the dropping condo price listings. Of the 11 non-overlapping spreads that currently for sale, five apartments have shown price decreases of 8.5 to 20 percent since coming online. The most expensive offering, a three-bedroom, 2,509-square-foot unit on the 61st floor, has been reduced from $12.5M to $10M since debuting in January.
Trump Tower, #61L (Keller Williams)
(Douglas Elliman)
Bedroom
View south down Fifth Avenue
Trump Tower, #52A is a 3-bedroom condo renting for $25,000/month (Sotheby's International Realty)
Bedroom
Even with the city's typically fast-paced rental market, renting out Trump Tower apartments has not come easy. Of its eight available rental units, five were listed before Labor Day. One two-bedroom unit, with a monthly rent of $9,500, has languished on the market since September 2018, even after a 10% price cut this past June. Despite its premier location, the tower's median rental listing price of $73 per square foot is reasonable for Manhattan. One-bedroom listings in the building start at $4,950/month and two-bedrooms start at $9,000/month.
Trump Tower at 721 Fifth Avenue. Credit: Paul Arps on flickr
Despite the falling prices, the tower is far from empty. The 238 apartments remain at 89 percent occupancy, a figure comparable to similar luxury condo properties in the neighborhood.
Presidential pressures at the building’s doorstep will remain in place for years (until 2020 or 2024, depending on your political prognosis), yet Secret Service presence will persist for the duration of the future ex-President's residency. However, dropping prices open opportunities for apartment-seekers looking for a bargain on Billionaires’ Row. The building’s well-poised location, crisp design by architect Der Scutt, 60-foot waterfall atrium, and Central Park views will ensure enduring value even when the tower at 721 Fifth Avenue moves to a quieter chapter of its unique story.
Trump Tower atrium. Credit: Julian Stallabrass on flickr
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