Times have changed. Gazing around, almost all the tenants are now gone. The hollowing-out began years ago, but it has only gotten worse since Trump entered politics. Nike abandoned its attached flagship store earlier this year, and Ivanka Trump’s accessories business closed up shop as well. What’s left is basically nothing but Gucci, Starbucks and The Donald, wall-to-wall. Trump Bar sits atop Trump Grille, next to Trump Café, the Trump Store and Trump’s Ice Cream. It is unlikely Trump pays himself rent for any of them. “Things are all different now,” Res says.
That difference includes profits. Net operating income dropped 27% between 2014, the year before Trump announced his run for president, and 2017, his first year in the White House. When the real estate mogul descended the escalator to launch his campaign, in this very building, no one could have predicted the chain of events that would lead to this point. Even among those who gave his moon-shot presidential bid a chance of success, the assumption was that Trump would dump his assets before taking office.
By refusing to divest, Trump raised an unprecedented question: How would the most divisive presidency in modern American history affect a company built on the president’s persona? Forbes has been working to answer that question since the moment Trump got elected, interviewing nearly 200 colleagues, partners and industry observers. While the experiment continues to unfold, in real time, the early results are in. Much as he’s trying—and he’s definitely trying—Donald Trump is not getting richer off the presidency. Just the opposite. His net worth, by our calculation, has dropped from $4.5 billion in 2015 to $3.1 billion the last two years, knocking the president 138 spots lower on the Forbes 400.
Three factors are at play. Much of that decline is due to deeper reporting, which revealed, for example, that the president had been lying about the size of his penthouse. Some of it is due to larger market forces. Trump owns commercial space at a time when e-commerce is decimating brick-and-mortar retail, shaving more than $100 million off his fortune—and no amount of bully-pulpit Amazon-bashing will change that.
But the third factor comes from how Trump the president affects Trump the brand. Those familiar with him saw his 2016 run as a surreal marketing strategy, and Trump has said as much, telling Fortune way back in 2000, “It’s very possible that I could be the first presidential candidate to run and make money on it.” Since his unexpected ascent to the White House, Trump has tried to leverage the trappings of the presidency to benefit his commercial projects, from visits to his golf courses to hosting summits at Mar-a-Lago to launching a new hotel-licensing business aimed at his voters. (The Trump Organization denies the licensing business has to do with politics.)
“My father made a tremendous sacrifice when he left a company that he spent his entire life building to go into politics,” counters Eric Trump, who now comanages the Trump Organization on behalf of the president, in a statement to Forbes. “Everything he does is for the good of the American people—he has zero involvement in the Trump Organization and quite frankly to suggest otherwise is outrageous.” (Eric Trump himself, however, told Forbesshortly after the inauguration that he would provide the president bottom-line updates “probably quarterly.”)
Either way, Trump’s mixture of politics and business has proved to be a net loser for him so far. In further polarizing the country, he has also further polarized his business—to the tune of an estimated $200 million hit against his net worth. Understanding how that has happened offers a fresh window into the state of Trump Inc.—and Trump’s America.
In May 2016, a dozen or so golf course appraisers settled in at Trump National Doral, the president’s 643-room Miami mega-resort, for a few days of seminars and golf. At the time, Trump was steamrolling through the Republican primaries while bashing Mexicans, Muslims and even the pope. So it was no surprise when, inside his resort, the conversation turned to how the tumult was affecting Trump’s golf businesses.
A top Doral executive, of all people, was willing to provide an answer. According to three witnesses, he told the room of appraisers that business at the resort—whose revenues were as big as Trump’s ten other U.S. golf courses combined—was suffering because of the campaign. Historically, Doral had drawn much of its clientele from the Northeast, where Trump was and is especially unpopular. “At the time there was a lot of talk about comments that Trump had made,” says Jeff Dugas, who attended the event. “Nobody was extremely surprised.”
Big names like Nascar and the PGA Tour also pulled business from the club. After Trump won the election, Doral lost 100,000 booked room nights, according to someone who knows the resort’s business. While revenues for the Miami luxury hotel market jumped 4% overall in 2017 according to the data analytics firm STR, Doral’s revenues fell by an estimated 16%. And that was before a deranged gunman wandered into the lobby earlier this year, draped an American flag over the front desk and began shooting at the chandeliers before he was apprehended by police.
The same goes for the president’s penthouse in Trump Tower. Although declining prices in the building have likely hurt its value, the 11,000-square-foot apartment became a historic landmark the moment Trump won the presidency. Forbes figures the election could have added $10 million to any potential deal.
This phenomenon also extends to the value of Trump’s Boeing 757, which became a backdrop for his campaign rallies. Some plane brokers think it could be worth double the roughly $20 million it would fetch if anyone else owned it (Forbes estimates a more conservative $6 million presidential premium). Eric Roth, who customized the interior of the plane for Trump, says, “What’s a baseball worth? About $3. What about if Babe Ruth signed it? It’s not $3
Some of the presidential profiteering appears more direct: On the day he assumed office, Trump took the unusual step of immediately launching his reelection campaign. Donor money kept flowing, and Trump’s companies have kept charging rent to the campaign. The result: America’s first billionaire president has turned more than $900,000 of donations into revenue for himself, without putting up a dime.
s long as he’s president—and refuses to divest his business holdings—Donald Trump will be able to boost his fortune in ways no other businessman can. Three days before Christmas last year, Trump sat in the Oval Office to sign the most significant tax reform legislation in decades. “This is something I’m very proud of,” he said, clutching a black marker. “Great for our country, great for the American people.”
Great as well for Donald Trump. The president famously refused to release his tax returns, but the new bill clearly benefits him. A Forbes analysis shows that Trump could save about 10% on business income. Based on Trump’s 2005 tax return, which leaked shortly after the real estate mogul took office, that could mean as much as $11 million annually.
Other policies, which went into effect with far less fanfare, may also bolster his fortune. Take tariffs. Higher steel and aluminum prices make it more expensive for developers to build. For someone like Trump, who owns buildings but hasn’t done much construction recently, that raises the barrier to entry for competitors. His immigration policies, which appear to be raising the cost of construction labor, could have a similar effect. Those two factors are “very favorable to a guy who owns hard assets,” says Dave Rodgers, a real estate analyst at financial firm Baird.
And while Trump promised not to do any new foreign deals while in office, cutting off a source of growth, opportunities will be waiting once his presidency ends. In the former Soviet republics of Georgia and Kazakhstan, Trump’s ex-business partners felt empowered to move ahead with potential projects, making it clear they are prepared to pay him down the road. “The tower will be ready for the Trump mark,” the president’s former partner in Georgia told Forbes last year, “if the Trump mark is ready to come back to the tower.” And Trump has not forgotten about his business: He asked about the Georgia project in a meeting with the country’s prime minister last year, according to the partners.
For now, though, Trump’s presidency remains a net loser for him, which seems ironic. In not divesting, he set himself up so that his actions, and those of people who engage with his businesses, present perpetual conflicts of interest—or the appearance of them. Meanwhile, if he’d liquidated, paid capital gains tax on his entire fortune and created a blind trust to invest it all in the booming stock market, Trump would be $500 million richer than he is today—without the headaches.