Donald Trump was born and raised in multifamily. His father, Fred Trump, was the largest middle-income apartment builder and owner in New York state. Today The Donald is the world’s most famous multifamily professional.
With all his power and seduction, Donald John Trump, perhaps the greatest self-promoter of our time, fashioned himself as the ultimate brand when the concept of brand wasn’t even being taught in B-schools. Today, his self-crafted signature promotes everything from apartment living to casinos to golf courses to the hit reality television show, The Apprentice.
Whether you love him or hate him, Donald Trump is a master of the lasting impression. For all his hubristic showmanship, gutsy deal making and unabashed self promotion, the Trump brand injects energy, glitz and power, transforming bricks and mortar into a luminary experience that attracts investors. His is often the deal many developers would call the jewel of their portfolio, yet with Manhattan’s Trump Tower, Trump World Tower and Trump Park Avenue, among others, The Donald has a whole rainbow of gems.
Net worth
In 2005, Trump ranked 83rd on Forbes’ America’s Wealthiest People list. The magazine reported his net worth at $2.7 billion; Trump, in typical style, responded citing his own net worth at more than double that amount. Like 241 of the 400 wealthiest individuals on the Forbes list, Trump inherited the start up money for his fortune.
What’s different about this media maverick is that he remains true to his real estate roots.
While Trump’s personal life sells magazines, his entrance into the world of real estate was by way of his childhood. The Trump back-story lies in his family’s humble New York roots. The road traveled by this sometimes barren, always famous, entrepreneur begins with his father, Fred Trump.
Trump senior was New York’s largest apartment owner in the 1940s and 1950s, a business he inherited from his German-born father.
The Trump empire began quietly in the early 1900s with a single family home in Queens, New York, purchased by Fred’s father, Friedrich Drumpf (later American-ized to Frederick Trump). In 1885 at the age of 16, Friedrich had immigrated to the United States from Germany to escape military service and poverty. Friedrich made his way through New York to Seattle, eventually settling in Yukon Territory. There he made a living operating the Arctic Restaurant and Hotel in Bennett, British Columbia, catering to miners during the Klondike Gold Rush. It wasn’t until he moved to New York that he made his true fortune selling real estate.
In 1918 his oldest son, Fred Trump, was 11 when Friedrich died. It was then that young Fred (Donald’s father) entered the family’s construction business. Fred built his first home shortly after high school.
Savvy and well-connected, he made good use of New Deal government programs to launch his empire of affordable urban housing. He constructed and operated rental barracks in the New York boroughs of Brooklyn, Queens and Staten Island. The Great Depression, World War II and the baby boom assured a steady stream of federally backed programs to the home financing and construction industries, and propelled Fred’s early multi-million dollar fortune. A man of few words, relatively reserved, yet an exceptional self promoter, Fred Trump became the state’s largest apartment owner managing more than 25,000 units, most of which he built himself.
He and his wife, Mary MacLeod Trump, raised five children, Maryanne, Fred Jr., Elizabeth, Donald and Robert. Each of the Trump children would eventually inherit close to $35 million from their father’s apartment empire.
Their fourth child, Donald, learned the real estate business firsthand working on family construction sites every summer. Emerging from military high school, Donald Trump went on to graduate from The Wharton School of the University of Pennsylvania in 1968 with a Bachelor of Arts degree in economics. Shortly thereafter, he joined his father’s real estate company, The Trump Organization, full time.
Becoming the Donald
In his book, The Art of the Deal, Donald Trump writes, “After I graduated from the New York Military Academy in 1964, I flirted briefly with the idea of attending film school… I decided real estate was a much better business.”
At the onset, Donald Trump focused on his father’s sweet spot, providing middle-class rental housing. Again in the 1970s, the Trumps harvested the fruits of a financially strained New York City by taking advantage of tax concessions in exchange for growing their real estate portfolio.
Curiously, while the real estate recession of 1982 and 1983 lives on in infamy, according to Forbes magazine, Fred Trump’s fortune doubled from the previous year to $400 million.
1984 marked Fred Trump’s last appearance on the Forbes’ list with a net worth of $200 million while his son Donald went on record with $400 million. The following year, Fred dropped from the list and Donald was ranked 51st with an estimated worth of $600 million.
Trump loves New York
While the elder Trump had always steered clear of Manhattan, Donald sought to conquer and claim the Big Apple for his kingdom. His first deal, the Penn Central merger, set him up for the sweetheart deal that would launch his Midas period: He renovated the rundown Commodore Hotel into the bejeweled Grand Hyatt with a little help from a tax abatement program. The all new, all Trump space opened in 1980. Shortly thereafter and in order to right the wrong of creating a project with someone else’s name on it, Trump Tower on Fifth Avenue followed.
In the 1980s Trump secured loans with little collateral to build a notable portfolio of Manhattan real estate, Atlantic City casinos, and sports and transportation enterprises. There were also dreams and deals that disintegrated, such as his attempt to construct the world’s tallest building and the short-lived Tour de Trump, an American cycling race. Such blunders were quickly smoothed away by the tide of extravagant ventures and flamboyant showmanship that made Trump a cult idol. Public recognition of Trump skyrocketed, and his tangible success as a savvy real estate developer was blurred with that of a celebrity.
Trump was feeling the power. In 1988, in what the media called the “War of the Shore,” he went head to head with Merv Griffin in a public battle for control of Resorts International, a hotel-casino conglomerate. While Griffin made the buy, Resorts International was forced into bankruptcy shortly thereafter. Emerging from Chapter 11 and subsequently going public, Griffin lost $713 million and was removed as owner. (Years later in 1996, the conglomerate was back in the black and successfully merged with Sun International Hotels, making Griffin a significant shareholder in the $1.5 billion company, but the initial deal remained a very public knock down for Griffin.)
When asked in a 2003 CBS interview on his thoughts of Trump, Griffin replied, “I think he’s brilliant. I would never, never deal with him again.”
Regroup and conquer
The king of deals would soon feel the sting of loss himself. By 1990, the recession proved
too much and Donald was left unable to service his loans. He attempted to borrow even more while delaying interest payments, but it proved too little too late.
The Wall Street Journal reported that he was $2 billion in debt with a net worth of minus $300 million. Fifty percent of the Grand Hyatt, all his casinos, a majority share of the Plaza Hotel and a number of his Trump Tower condominiums were seized by lenders. The Trump Organization was pressed into bankruptcy and Donald was facing personal bankruptcy. Of his looming debt, he had personally guaranteed $900 million of the outstanding loans.
Later in his book, The Art of the Deal, Donald Trump would recall the advice from his father he had woefully ignored, “Never personally guarantee.”
While his lenders and bondholders lost hundreds of millions of dollars, they eventually opted to restructure his loans to avoid litigation and greater loss. In the broader picture, the real estate industry was collapsing across the country leaving banks with stacks of bad loans. Donald was out of money and out of time, but he was far from alone.
Business gets personal
Indeed, when it rains, it pours. During the family’s Christmas holiday, his personal life was about to go the way of his business. Ivana Trump, Donald’s wife, mother of their three kids and business associate since 1977 uncovered his affair with former beauty queen, Marla Maples on a certain ski slope in Aspen, Colorado. A public, venomous battle ensued as Ivana filed for divorce in 1991 seeking more than specified in her prenuptial agreement. Her grounds, that she had contributed to commercial growth of The Trump Organization. Donald and Ivana had three children: Donald Jr., Ivanka and Eric, who were at the time 12, 8 and 6. She was ultimately awarded an undisclosed amount.
Gossip columns buzzed as the media held court. Everything, however, changed when Ivana’s father died suddenly of a heart attack. Donald stepped in to lend support and an olive branch. The divorce was settled shortly thereafter. And while the court documents remained sealed, Ivana’s famous line from her cameo in the movie, The First Wives Club sums it up: “Remember girls, don’t get mad, get everything.”
In this case, “everything” was open to interpretation. Donald pressed forward in dismantling his empire and reorganizing the vast number of loans and bonds on the properties that hadn’t been foreclosed. According to Timothy L. O’Brien in his book, TrumpNation: The Art of Being the Donald, it was during this time that Donald went to his siblings for a bail out to save him from complete financial shut down. O’Brien writes, “‘I had zero borrowings from the estate,’ he told me. ‘I give you my word.'”
No matter where he garnered the financial infusion, that was but the first challenge. From there Donald needed to reorganize his empire from the ground up. O’Brien writes of Trump’s irrepressibility: “When I was in trouble in the early 90s, I went around you know, a lot of people couldn’t believe I did this because they think I have an ego. I went around and openly told people I was worth minus $900 million,” Donald recalled. “And then I was able to make a deal with the banks.” O’Brien summed up Donald, “To survive a process as tortuous and unpredictable as a debt workout, however, requires a large dose of gumption. Donald had gumption in spades.”
In 1993, his daughter Tiffany was born and he married second wife, Marla Maples. Six years later as he cleared his second divorce, his estate was valued at $1.16 billion.
Donald Trump: Reborn for the 21st century
Just about the time his press clippings began to thin, 2004 dropped another golden egg. Donald became the star and executive producer of NBC’s prime time reality show, “The Apprentice.” On the show, contestants course through a series of business scenarios in hopes of landing the end-of-season prize: Top ratings for Donald and a high-level management job in one of Trump’s companies. Each episode is an elimination round.
In the first season, Donald eliminated a contestant by barking, “You’re fired,” and thus the catch phrase was born. The first season scored televisions’ highest ratings with over 14 million viewers. Donald was reportedly paid a meager $50,000 per episode. This sum was subsequently in-creased to a record $3,000,000 per episode making Trump among the highest paid television personalities ever.
Perhaps the real future is in pizza and revolving credit. Last year Donald pocketed $3 million for a Domino’s Pizza commercial and $5 million for a Visa Card spot featuring the master of credit. He walked away with a “Best Emmy Idol” for his performance of the classic Green Acres theme song, complete with farmer’s garb and rake, at the 2005 Emmy Awards.
Meanwhile, as the press again swells with Trump adventures, Donald’s real estate kingdom is becoming more family-friendly. Donald Jr., and Ivanka, both Wharton business school graduates, have since joined the Trump Organization, mostly on development and acquisitions. Eric attends Georgetown and plans on stepping into the family business upon graduation this year.
In a New York Times story, “Did their father really know best?” Jonathan Van Meter quotes Ivana Trump, “And now it is Donald’s turn. Donald didn’t know what to do with the kids when they were little… He would love them, he would kiss them and hold them, but then he would give them to me because he had no idea what to do.” But now that they’re grown, she says, “he’s starting to learn about them and teach them, and now it’s going to be his thing.”
And so Donald goes. As he brings his kids into the family business while he continues to grow his fortune further into the billions, he and model-wife Melania Knauss are expecting their first child, his fifth, this spring. Ever resilient. Ever inventing. Ever green.
That, perhaps, is the true wonder of all. For in the world of real estate, with all it’s ups and downs, a well developed ego is really critical to the job. There’s likely a little Trump in us all. And that’s why we can’t stop reading.
T-Talk
Around the office he’s known as Mr. T. You have to admit: He’s one of a kind. Here are just a few memorable Trump quips:
Quirks
I think the handshake is barbaric. Shaking hands, you catch the flu… you catch all sorts of things.
The Apprentice
All of the women on The Apprentice flirted with me consciously or unconsciously. That’s to be expected.
Real Estate
It’s tangible, it’s solid, it’s beautiful. It’s artistic and from my standpoint, I just love it.
The future is now
I try to learn from the past, but I plan for the future by focusing exclusively on the present. That’s were the fun is.
Money
Money was never a big motivation for me, except as a way to keep score. The real excitement is playing the game.
Winning
Part of being a winner is knowing when enough is enough. Sometimes you have to give up the fight and walk away, and move on to something more productive.
MHP also sat down for an interview with Trump.
