The Trump International Hotel Las Vegas. (Photo by David Paul Morris/Bloomberg)
Donald Trump’s name hasn’t boosted his bottom line since he was elected president. The billionaire’s real estate empire is down some $600 million in the last year, Forbes estimates, with his divisive political actions partly to blame for declining values of the Niketown retail store adjacent to Trump Tower (which the retail giant will soon be leaving) and the Trump National Doral golf club and resort in Miami. Last month, the Trump Organization announced that its namesake would be taken off the Trump SoHo Hotel after a buyout with the building’s owner.
The Trump International Hotel in Las Vegas is another story.
The gleaming, 64-story tower is a bright spot in the president’s portfolio. Since Trump was inaugurated last January, 40 of his units in the building have sold, making it his most active real estate property. What’s more, Trump’s units have sold for a roughly 11% premium over other, comparable units offered by sellers on the secondary market. (That is, units with identical square footage on the same floor of the building, all of which are maintained by management to the same standard.) It’s unclear how much of an impact, if any, Trump’s ownership has had on sale values. But real estate analysts say it’s common in the luxury market for first-time sales to fetch a higher price than units that are later resold on the secondary market.
The 40 sales since Trump’s inauguration have brought in more than $13 million for Trump and his business partner Phil Ruffin, property records show (the billionaires co-own the units in a 50-50 split). On average, the units sold for about $333,000 apiece.
Forbes interviewed dozens of buyers in the building to determine what influence Trump’s name has had on sales. Recent buyers include corporate executives, small business owners, retired police officers and former stock brokers, among others. Some said that Trump’s name added to the allure of the building, but none said they bought strictly because he was president.
Many recent buyers said they were incentivized when the Trump Organization waived the first year’s worth of homeowners association fees, which add up to between $6,000 and $9,000 per year, depending on the size of the unit. It also doesn’t hurt that studio units at Trump, which account for the majority of sales in the building, start at a significantly lower price point than competitors.
Every buyer at Trump is recognized on the building’s Facebook page, where a stream of perfunctory messages (“Congratulations to our newest owner on their __ floor, ____ residence! Welcome to Trump!”) greets visitors. Actual deed transfers are signed by Eric Trump, who along with his older brother, Donald Trump Jr., run the family real estate business for their father.
Trump’s biggest buyer in the building over the years, by far, has been the Hilton Hotels & Resorts company. Since 2013, the hotel giant has purchased blocks totaling more than 300 units in the building, infusing the Trump Organization with tens of millions of dollars along the way.
Nicole Milner-Breen, the on-site broker for the Trump Organization responsible for selling individual units in the building, declined to comment for this story. A spokeswoman for the Trump Organization did not respond to requests for comment.
Local brokers point to a handful of factors that are driving sales inside Trump Las Vegas, which is outperforming an already strong market overall. Since 2015, when Trump announced his bid for the White House, the value of units at Trump Las Vegas is up $71 per square foot, compared to $51 per square foot at the famed MGM Grand Hotel & Casino, according to Anthony Phillips, a realtor at the firm Luxury Real Estate Advisors. Other factors include the impending move of the Oakland Raiders NFL franchise, which is scheduled to begin playing its games in Las Vegas in 2020, as well as an increasingly limited supply of available condos.
Many sales in the building have been completed with LLCs, an approach common to real estate buyers looking to maintain privacy for their purchases. In the months since Trump began his campaign, the percentage of buyers who purchased units through these shell companies has spiked, a trend first reported by USA Today.
One of those LLC buyers is Elaine Chenoweth. Chenoweth, whose husband, Ray, is fixture in the local taxi industry through his Nellis Cab company, confirmed the couple purchased four studios inside Trump Las Vegas this summer. Property records show the couple paid $250,000 apiece for the units. “It seemed like a good investment,” Chenoweth said, in part because the president’s name adorns the building in giant block letters.
The Chenoweths are longtime supporters of Republican officials and candidates in Nevada. Federal Election Commission records show they each gave $2,500 to Nevada businessman Danny Tarkanian during his failed 2016 Congressional bid, which Tarkanian narrowly lost. In 2008, the Chenoweths donated $5,000 to the legal defense fund of embattled former Lt. Governor Brian Krolicki, a Republican who was indicted on felony charges of misappropriating millions of taxpayer dollars during his time as state treasurer (those charges were later dropped).
“My husband donates to everybody’s campaign,” Elaine Chenoweth explained. “When you’re in business, that’s a good idea; you never know who is going to win.” Chenoweth dismissed questions about whether politics played a role in their decision to buy condos owned by Trump. “We didn’t buy because it was Trump,” she said, adding “there’s nothing political about it.”
Kevin Taylor lives an hour and a half outside of Las Vegas. He runs a cellular signal amplification business and regularly travels to Las Vegas for work. Taylor said he met someone at a trade show earlier this year who sold him on the idea of owning a condo-hotel unit. Typically, these units (often called “condotels”) are cash-buys, serving as both a second home and an investment when rented out. Rental profits are split between the owner and the hotel.
For Taylor, a key advantage to buying a condo at Trump rather than the handful of competitors in town is that the hotel is managed directly by the Trump Organization, not licensed out. This means that owners deal directly with on-site management for repairs and other issues, rather than an intermediary.
Taylor paid $260,000 for his studio unit on the 40th floor. He considered upgrading to a corner unit, which he said a hotel employee told him were “selling like hotcakes.” But Taylor said he went with a studio because it’s the “best bang for your buck.” He estimates that he stays there once “every couple months,” adding that rates when he’s not there fluctuate between about $80 to more than $220 per night. During high-profile events, such as the Consumer Electronics Show earlier this week, Taylor said rooms like his can go for as much as $400-$500 per night. In October, Taylor said his room was occupied 90% of the time. In addition to high occupancy rates, Taylor said he was attracted to the building by its boardroom and various meeting spaces, which he reserves for business meetings when he’s in town.
“The desire to buy the unit had nothing to do with the name ‘Trump.’ It had everything to do with the corporation, which happened to be Trump,” Taylor said, adding that politics did not play a role in his decision. “People can say whatever they want. I don’t get any favors from the president because I spent a quarter million dollars on one of his condos.”
Taylor said he “liked the idea” of buying a condo from Donald Trump. But when asked if there was a certain “cool factor” to owning one, Taylor backtracked. “No, not at all,” he said. “Trump’s going to be president for four years. And I’ll have a room that will survive the presidency. If he was a really popular president? Maybe. But nobody wants to brag about Trump.”
The Trump International Hotel Las Vegas. (Photo by David Paul Morris/Bloomberg)
Celia Sneary did not intend to buy a unit from Trump when she and her husband explored purchasing a condotel in Las Vegas last year. The couple runs a construction business in Southern California, and Sneary said they were leery of buying in the building “because of all the politics.” The Snearys checked out condos at The Palm and Cosmopolitan, among others. On the advice of their realtor, they eventually wound up at Trump. “The atmosphere was great, there’s no gambling, no smoking,” Sneary said, echoing what other buyers told Forbes about a friendly staff and tidy environment. “When you walk in it doesn’t smell like it’s from the 70’s.”
The couple paid $650,000 for their one-bedroom unit, which they use “once or twice a month.” Sneary said they are considering buying the connected unit next door as well. “I actually like Trump; I’m giving him a chance. But that’s not why we purchased,” Sneary said. “If the name was to change, it still doesn’t take away from the spot. … We’re happy with the decision we made.”
The Trump name was “certainly not a deficit” for Joe Zarcone, a retired stockbroker from New York who has spent the past 15 years in Las Vegas. Zarcone looked at condos inside the MGM Grand, among others, before buying a $255,000 studio at Trump last June. Zarcone said he purchased the unit primarily as a rental property. “I need the income. I bought something that would hold its value and give me a nice [return],” Zarcone said, adding that he and his wife were “living a bit beyond our means.”
“We go out to dinner more. We buy nicer cars,” Zarcone explained. “I didn’t want to go into the stock market because I’m already in with my 401K. So I said ‘let’s go for some rental real estate.’ I thought it would be the least headache.”
The majority of people who buy condos from the president use them only sporadically, brokers who sell at the building said, instead preferring to collect a small return on their investment through rentals managed by the hotel. But a few are year-round residents of the building.
Perhaps none is more well-known among staff and other residents than Bill Freed. Freed, 68, is a retired Seattle police officer. He’s affable, easy-going and, if you ask any of the handful of local brokers who have sold units at Trump Las Vegas, the first to buy there with outside financing. Before Freed closed on his modest studio in June, no one had bought with a traditional, bank-financed mortgage.
Freed wanted to buy a condo in Trump Las Vegas for a decade. After bouncing around different Las Vegas hotels for years, he decided in 2007 that he wanted to live permanently in a condotel. At the time, Trump Las Vegas was under construction. Freed liked the idea of not doing your own maintenance while still having access to the hotel’s amenities. “It was like being on vacation all the time,” Freed explained. “The amenities, the pool, the gym, the concierge, room service… I thought ‘Wow, that would be the life.’”
The catch? The least expensive unit that Freed could recall seeing at the time was “around $600,000 — way outta my league.” So Freed shelved the idea, moving between other hotels in town. But between rising fees at other hotels and what Freed described as a “party atmosphere” at some of them, he kept coming back to Trump. Even with good credit, Freed’s bank would only finance multi-bedroom units, which were out of his price range.
Through Phillips, Freed met Jesse Leeb, of Security National Mortgage, a mortgage wholesaler. Leeb helped arrange a meeting with Freed and Trump’s broker, Milner-Breen. Leeb explained that he had an agreement with Citadel bank, which was willing to finance a condo. A few months later, with a 25% down payment in-hand, Freed returned to Trump to finish what he had started years earlier. “I was the first one to finance a condo in the whole building,” Freed said, adding that Milner-Breen told him she had “a list of hundreds of people” who wanted to follow his lead.
In the end, Freed paid $265,000 for what he describes as a “million dollar classic strip view.” While the price was “a bit higher” than what Freed could have paid elsewhere, for him, “it was worth it.” Freed insists his decision to buy at Trump was “not a political choice whatsoever.”
Still, he concedes, “it is an unusual situation. In a sense, it’s a historical event,” Freed explained. “To have a piece of history from any President of the United States is an amazing accomplishment. I feel happy that I’m part of a little bit of history, buying a condo from the president.”
Phillips credited strong sales at Trump to it being one of the “most recognized” global brands in the Las Vegas condo market. Another factor is that the number of available condos has steadily dropped in recent years, with no new condo-hotels planned for the area. It hasn’t hurt, Phillips said, that Trump Las Vegas has kept prices steady. “The market finally caught up to their price,” Phillips said. “Now, Trump doesn’t look so expensive.”
Overall, Leeb said, sales inside Trump appear poised to remain strong, in part because most other similar condos along the Las Vegas Strip are more expensive. It also helps, Leeb said, that HOA fees at Trump are relatively low, hovering around $500 per month for studios, compared to $800 to $1,200 at other buildings. “Values are going to go up,” Leeb said, citing billions in planned development along the northern end of the Strip where Trump Tower stands.
How much this will impact sales inside the building remains to be seen. As of today, Trump and Ruffin own a total of 351 units in the tower. (Of these, 19 are the more expensive townhouse style units; the rest are studio units that look just like a standard hotel room.) It is widely believed in the Las Vegas real estate community that the pair will hold onto at least 300 of the units, the minimum required to open a casino in Nevada. Pointing to the vacant parking lot adjacent to the building last year, Ruffin told Forbes that the “highest and best use for that would be a casino.”
Meanwhile, Leeb’s firm, Security National Mortgage, is planning a marketing campaign to attract buyers of the remaining units. Advertisements to this point have mostly targeted southern California, long a major source of second home buyers for Las Vegas. But moving forward, the plan is to market condos to potential buyers overseas, said Leeb’s boss, Brian Kemp.
“We are very interested with doing some international marketing with Trump on board,” Kemp explained, adding that potential buyers in Asia are the top priority. “We’re trying to decide if we want to go print, radio or television,” Kemp said. “And we also talked about, ‘Do we want to use the Trump name?’ The Trump name is a bit toxic. So marketing Trump tower itself, we’re not concerned there. But his name is a bit of a hot button [issue].”