Times are tough in the U.S. housing market, as home sales and values are declining and foreclosures are going up.
Donald Trump, who boasts developments from Panama to Phoenix, from the Middle East to Midtown Manhattan, admits that away from the sparkling oasis of Manhattan, times are hard.
"The real estate market throughout the United States is a basic disaster," Trump said. "But Manhattan is unbelievably strong. It's probably as strong as I've seen it. I sold an apartment recently for $34 million. I have another apartment for $45 million that I suspect will sell pretty easily. It's been an amazing market in Manhattan. Outside of Manhattan, it's a basic disaster."
The Department of Housing announced today that new-home sales declined 2.8 percent in January, and RealtyTrac estimates there will be more than 600,000 foreclosures across the United States in 2008. So what does "the Trumpster" recommend?
"The biggest problem that I see in this country is that the bank will send, from a computer, a notice of default to a homeowner. And they'll say, 'Please leave the house in 10 days' and the homeowner doesn't know any differently. And they'll pack up their belongings from a house that they've lived in for 20 years and leave and they have no place to go. And it's a travesty."
What should the homeowner do instead? Call up the bank and negotiate, Trump says.
"If the bank is nice, they'll give them an extension, they'll give them lower interest, they'll cut something off the mortgage — they'll make it so it works," he said. "And if the bank is smart, they'll do that. If the bank isn't nice, fight the bank. Fight till the death."
Trump explained that, "the last thing the bank wants is a house."
Successful People Are Vain
Trump's advice is worth heeding, if only because he's been in real estate for a long time. His father, Fred Trump, began buying small rental properties in the 1950s around the family home in Queens and in Brooklyn.
"My father really worked hard, he was a really good negotiator," Trump said. "He was a really good builder. In other words, he knew how to build an apartment house ahead of schedule, ahead of budget, or a house in Brooklyn. If he built a house, he would come in under budget and ahead of schedule."
Armed with the example, even burden, of his hardworking father, Trump embarked upon his first major project during the property recession of the 1970s.
"I took over the old Commodore Hotel, which was pretty scary because the market was terrible," Trump said. "As I get older, I do become a little bit more conservative in a financial sense." At the same time, he also says he's gotten more confident.
"You do develop a confidence, sort of like golf. If you sink the first putt, and if you keep sinking a couple of more putts and as the round goes on, you just feel confident. It's that way in life. If you sink the putt, you get more and more confident. And very few people have sunk more putts than I have."
In 30 years he says his company has completed more than $200 billion worth of business worldwide. The sign of Trump's confidence is emblazoned across every one of his buildings.
"I have a lot of buildings," Trump said. "I have [the Trump] sign on some buildings, yeah. I have it on Trump International, I have it on Trump Tower, I have it on Trump World Tower. … I can go on and on."
When asked whether he was vain, Trump replied "probably."
"Most successful people I know are vain," he added. "That's why they're successful. … I don't think there is anything wrong with being vain. If there was, I probably wouldn't admit it."
Trump invited "Nightline" to follow him to his proudest achievement in Manhattan, the appropriately titled Trump World Tower across the street from the United Nations. Trump said the building cost "about $320 million."
While the downturn has affected most of the real estate market, Trump says that high-end properties are still going up in value. We visited a couple who are the owners of a penthouse on the 87th floor whose value has quadrupled in three years.
The kitchen cost "around 140 grand," said the owners.
The owner, who is Greek, added that everyone in her home country is familiar with the name Trump.
But the Trump brand is not welcome everywhere. Trump plans to build two golf courses, a five-star hotel and 900 vacation properties on a strip of land near Aberdeen in Scotland. But the locals don't want the development and the planning application is still awaiting approval. Some of the opponents say the development would damage important wildlife, including seven species of rare birds.
"We disagree with them entirely," Trump said. "And you know the amazing thing is, you're right, there is a group of bird supporters on the site and right now you know what the site is used for? It's a hunting site for birds. … And if I build a golf course all we're gonna shoot is birdies and eagles. I hope we get the approvals. And if we do, it'll be the greatest job of its kind anywhere in the world."
'I Love What I Do'
Back in Manhattan, the 61-year-old real estate mogul says he's now a double billionaire. So, as the majority struggle through this period of economic slowdown, what are upsides and downsides of having so much disposable cash?
The Center for Risk Research at the Stockholm School of Economics recently published some research that found "obsession with money or the excessive pursuit of it is really reflective of a deep deficiency of our emotional lives and of our relationships." Trump said he agrees.
"Many people that I know who were the happiest and in many ways, the most secure, are not wealthy. They have a good family, they have a nice wife, they have a nice this, and they're not wealthy. Many of the really wealthy people that I know are insecure, never satisfied, have lots of problems. I don't put myself in that category by the way."
Trump did say that his commitment to business caused him problems in his personal life.
"Look, I've had three marriages," he said. "I've had three nice wives. But in a certain way, I could only speak for the first two — it was very hard for them to compete with my business."
When asked whether he loved his business more than his wives, he said, "I just know it's very hard for them to compete because I do love what I do. I really love it."
Is that why his first two marriages failed?
"Possibly, it's really possible," he said. "You know, you never really know why marriages fail but certainly possibly that's true."
And with that, Trump had to rush off — not to see his wife but another development he's planning in Manhattan.