We can hardly turn on the television or stand in a supermarket line without seeing his face on the screen or the cover of a magazine.
But how much of Trump’s success can be attributed to his serendipitous moniker? Would he have had better luck in a less opulent arena if his grandfather, Friedrich Drumpf, hadn’t changed the family name to Trump when he arrived in the U.S. from Germany in 1855? Ask any branding expert and they’ll tell you that in the branding game, brand name association is very important. Branding begins with a name that promotes positive qualities, but, to be successful, the product must deliver what that name implies.
The Trump brand, by The Donald’s own calculated design, is intended to set the gold standard for luxury, celebrity and the good life. Trump says he looks for “quality, above all,” when choosing a product that will bear his name. “People know that the Trump name on something will mean it’s the best. I worked hard to establish that level of quality, and now Trump is synonymous with the best,” he said.
There’s no denying that the man, who has made the Forbes 400 list of wealthiest Americans for 24 straight years, has the Midas touch. Even Trump’s father, a successful real estate developer in his own right, said of his more famous son, “Everything he touches seems to turn to gold.”
Lately, Trump has his hand, or at least his brand, on myriad upscale products through a trademark licensing program. “All of our products have been very successful, and I’m very pleased about that. There is such a demand for the name that it’s hard to keep up with all the requests,” he said.
Products sold under the official Trump brand include Porterhouse, New York and Kobe-style beef, a fragrance for men, a beyond-Monopoly- style board game, bottled water, a travel Web site (www.gotrump.com), a mortgage company (www.trumpmortgage.com), upscale furniture, men’s clothing and vodka.
Consumer goods aside, Donald, like his mentor father and his grandfather before him, chose real estate as the vehicle to ride to fame and fortune. He’s developed casinos, hotels, apartments and condos and, in that space where location is king, Trump says branding means a great deal. “When people will buy an apartment sight unseen because it has the Trump name on it–that says it all. They already know what they’re getting.”
Equity Residential understood the power of the golden T when the REIT acquired the three high-rise apartment towers at 140, 160 and 180 Riverside Boulevard on the Upper West Side of Manhattan in November 2005 for $809 million, or approximately $723 per sq. ft. of rent-able apartment space, and negotiated to retain the Trump Place name for its cachet.
“My (condo) buildings are sold out before they’re built because people know they will be a great investment and a beautiful place to live. In Las Vegas, I was building one tower that sold out so quickly we added another one. I don’t know of too many other developers who can claim the same thing happens to them,” said Trump, referring to sales at the second 1,200-plus-unit phase of the Trump International Hotel & Towers now rising along the Las Vegas strip.
Those two 64-story condo-hotel towers that will be the tallest buildings on the Strip (beside the Stratosphere, which Trump points out really isn’t a building) are scheduled for completion in 2008 and 2011. Condo sales may be cooling in Glitter City and elsewhere, but nearly 500 of the units in the first gold-glass-encased tower have been purchased. Trump’s partner in the deal, Phil Ruffin, reportedly just sold the New Frontier hotel next door for $1.2 billion, or $33 million per acre, to the Elad Group, a subsidiary of Israeli developer El-Ad, which plans to build a $5 billion mixed-use project called the Plaza Las Vegas on the site. Trump sees that development as great news for the investors in his $1.3 billion project.
These days, the Trump cachet means that the Trump Organization doesn’t have to invest a dime to see its logo grace some of the most prestigious pieces of real estate in the world. In Dubai, the epicenter of the oil world, Trump had only to lend its name to Nakheel, a development company controlled by the Crown Prince of Dubai Sheikh Mohammed bin Rashid Al Maktoum, which plans to emblazon the large T on at least three hotel and residential projects under the Trump International Hotel & Tower’s brand. However, the Trump Organization development team personally checks out the sites and carefully scrutinizes every aspect of every project or co-development.
According to Forbes, which put Donald’s worth last year at $2.9 billion (Trump, himself, says $6 billion), the most valuable piece of the Trump Empire is his real estate brand-licensing business, managed by his three oldest children. In calculating Trump’s worth, Forbes figured he receives eight to 15 percent of other developer’s gross condo sales in exchange for the use of his name and gets upfront payments of several million dollars.”My three eldest children, Don Jr., Ivanka and Eric do a lot of traveling and at this moment we have 33 real estate projects going on around the world. None of these are small projects. It’s amazing,” said Trump, adding that Istanbul, China and India could be the next development locations.
Although some project starts have been pushed back because of the housing industry slowdown, new Trump Towers are in various stages of development in a number of U.S. cities. The developer and entrepreneur knows how to ride the waves of a cyclical real estate market, and he’s been just as successful at capitalizing on his, uh, failures. He weathered bankruptcy twice, but both times it was his corporation that filed Chapter 11, while his personal finances remained protected. And he did it with extreme grace. Trump Entertainment Resorts (Nasdaq: TRMP) has behaved more like a Phoenix than a failure.
“Everything can be viewed from a different perspective. Part of life includes the ups and downs that come with it. One way to deal effectively with that aspect of life is to be able to put a spin on the down side–and know it has a purpose too,” he said.
Emerging from a second Chapter 11 last year, Trump hired Merrill Lynch & Co. to market TRMP, which saw shares soar last month after a press release disclosed the company had “received preliminary and conditional indications of interest from parties proposing to acquire the company.”
A little tarnish never seems to diminish Trump’s glow. He is a master at keeping his brand fresh in the mind of his investors and the public, although these days it doesn’t take much effort. “I don’t do much, actually, as the media’s interest in my life and my activities does it for me. I don’t seek out attention, they seek me. It works well for keeping my brand in the public eye,” Trump said.
Even outside the real world of real estate, the spin-master comes out smelling like a rose.
With the sixth season ratings of The Apprentice falling below that of The Bachelor, rumors spread that NBC had dropped the show from the next season’s roster, but the network hedged at making a formal announcement. Within a week of the rumor, Trump trumped the network, saying he was moving on from the show. Now speculation is brewing that NBC may attempt to convince him to stay. Trump said he’s already been approached by several other networks looking to pick up the show.
In January, Trump proudly received a star on the Hollywood Walk of Fame, which he attributes to the success of The Apprentice, as well as his name and what that stood for before the television show appeared. “If I hadn’t already established a brand, the show most likely would not have happened,” said Trump.
What’s next for the real estate turned television celebrity? “Very exciting things will be continuing, as well as happening. I’ll be in Mexico City for the Miss Universe Pageant next week, which I own along with NBC, and it’s become a huge success, nationally and internationally,” Trump told MHP last month, days before that contest became swathed in controversy when Miss Sweden, Isabel Istapier Wingvist, dropped out, claiming the swimsuit competition is degrading to women and unprofessional.
And in May, just fourteen months after Trump’s third wife, Melania, gave birth to his fifth child, Barron William, the real estate mogul became a grandfather when Donald Trump, Jr.’s wife, Vanessa, gave birth to a baby girl, Kai Madison. Trump calls both births very positive developments in his life. “I’ve never been happier,” he said.
