Former President Donald Trump’s top New York properties have been placed on debt watch lists by banks after the coronavirus pandemic compounded the buildings’ longtime struggles, CBS News reports.
Banks have been warning investors that Trump’s properties -- the mortgages on which are packaged with others into commercial mortgage-backed securities for investment -- are unlikely to meet their earnings goals.
But the properties’ struggles have been evident for years. The famed Trump Tower, for example, has missed its earnings projections for the past five years.
In fact, all four properties have never met their income targets.
Four buildings flagged:
Trump Tower was projected to earn over $20 million per year when the Trump Organization received a $100 million loan in 2012 but has missed the mark every year.
"You would expect buildings to meet [underwriters' projected profits] in the first year," Steve Jellinek, the head of CMBS research of credit rating firm DRBS Morningstar, told CBS News. Afterward, investors expect earnings to grow every year barring the exit of a major tenant, which has not been the case with these properties.
The Kroll Bond Rating Agency in January place a mortgage debt linked to the Trump International Hotel & Tower near Central Park on its "Loans of Concern" due to a "deterioration in financial performance."
Wells Fargo warned investors that Trump’s building at 40 Wall Street has been placed on its watch list.
PNC Bank also flagged the Trump Plaza on the Upper East Side for its "weak performance” in December but ultimately removed it from the list in February.
Buildings under DA probe:
The Manhattan District Attorney’s office is also investigating the loans for the four buildings.
New York prosecutors have obtained years of Trump’s tax records and are reportedly investigating whether Trump inflated the value of his assets when seeking loans while deflating their value in cases where it would benefit him.
