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Special Report: Baja Real Estate and the Trump Organization

SPECIAL REPORT: Trump Siblings Share Real Estate Observations

By Teresa O'Dea Hein, Managing Editor

JUNE 27, 2007 -- New York -- The Trump Organization continues to become "less New York-centric and expand its brand globally," noted Donald Trump, Jr. in his keynote speech with his sister Ivanka Trump this morning at the 27th annual BuildingsNY trade show at the Jacob K. Javits Convention Center in Manhattan. In fact, immediately after his well-attended speech, Trump Jr. was heading to the airport to fly to Mexico for a sales event at the company’s new Baja, Calif. condominium-hotel development. (Plus, he pointed out, his famous father doesn't love to travel.)

The Trump Organization is partnering with Irongate, a Los Angeles real estate investment firm, on Trump Ocean Resort Baja Mexico in Rosarito Beach, which will feature three high-rise towers, with the first tower expected to be completed by the end of 2008.

Trump Jr. reported that real estate buyers from emerging economies in Latin America, Asia, the Middle East and Russia find security in a brand name like Trump.

To that end, the company is also building The Palm Trump International Hotel and Tower, a flower-shaped condo-hotel located on the man-made Palm Jumeirah island in Dubai, United Arab Emirates, in a joint venture with Nakheel, a major developer in the Middle East. Trump Jr. likes the fact that in Dubai, what you can build is “limited only by two things: your imagination and the laws of physics.”

Partnering with local developers is important, Trump Jr. added. “It’s key to partner with someone who’s a big player” in the local area since they have experience and knowledge of the region.

Also in the works, Trump Jr. said, is a joint venture with a major Mexican developer on seven locations within Mexico as well as a land play on an island resort with six miles of untouched oceanfront property.

Plus, the company expects to be able to soon announce that it has locked up its financing for the 44-story Trump SoHo condo-hotel, where it expects to reach average prices of close to $3,000 per square foot. “With the way the dollar is trading relative to other currencies,” Trump notes, “overseas investors are buying at essentially a 40 percent discount—we see a continued influx of capital.”

At the same time, the Trump Organization is also ramping up its hotel management company, because it believes strongly in the potential of the condo-hotel market. “This may be the greatest business model of all time,” Trump said. He reported that the company has a total of nine hotels opening in the next few years. “It’s also an opportunity to grow, do something different and get out from our father’s shadow.”

However, Trump cautioned, “Problems can come up with people creating condo-hotels where they don’t work as either a hotel or as a condominium.”

Trump, who started working at one of father’s properties at the age of 13 and has racked up some time on construction sites, shared what he said was one of the most important lessons he’s learned from his father: “You don’t get anything you don’t ask for. Many people are afraid to negotiate, but the worst that can happen is someone says no.”

Trump Jr. noted that many credit his father for being a great promoter and marketer but Trump Jr. said that was “because he knows how to build, by offering great layouts and by amenitizing buildings.”

Ivanka Trump agreed, adding, “We have a strong real estate brand, but we execute on that vision to deliver a quality building. Increasingly, branding will stay important but only [to the extent] that people can deliver quality.”

Furthermore, Ivanka added, “My father spends money in a smart way, not on $400 packets of marketing manuals. He’s very old school in that way.”

Her brother concurred, noting, “If you’re spending $400 on your collateral material, chances are your building doesn’t stand for itself.”

And in the overheated Las Vegas marketplace, where Trump is developing a project that’s on budget and ahead of schedule, Ivanka said, “We’re even more proud of being on budget there, because it’s a tremendously difficult environment in which to build.”

In their posed, articulate remarks, both Donald Jr. and Ivanka praised their father and mother for instilling a strong work ethic and respect for the value of a dollar in all their children. “That’s what separates us from people who are getting out of jail because of DUIs,” Donald Jr. noted, in a gentle poke at Paris Hilton’s recent legal troubles. “We were brought up to work and to get an education and use our minds. We had no time to have idle hands and minds to get in trouble; we never had the trust fund mentality. And if wanted to spend time with our father, it was going to be on a construction site,” not a ball field.

Ivanka recalled the enduring example of her grandfather, Fred Trump, picking up nails on construction sites and puting them in his pockets because he hated to waste anything.

Each emphasized the importance of loving what you do, too, even though, Donald Jr. admitted, “it’s not always easy to work for my father.” But he’s proud to have recently brought the fourth generation of Trumps into the world, with the birth of his own son six weeks ago.

BuildingsNY, a trade show and conference for the tri-state region of New York, New Jersey and Connecticut, is sponsored by Associated Builders and Owners of Greater New York (ABO).

Teresa O'Dea Hein, MHN's Managing Editor, reported on-site for this story.
 
Published Monday, July 2, 2007 4:55 PM by Kanoa Biondolillo

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