Former President Donald Trump’s Manhattan tower at 40 Wall St. has had its mortgage transferred to a special servicer, signaling potential financial troubles.
The building, located in the Financial District, has been on a watchlist since February due to increased costs and vacancies.
According to a recent filing, negotiations are underway with the borrower, and payments for the tower’s debt were made through this month. The outstanding balance on the mortgage stands at $122.6 million, down from an original $160 million.
While the Trump Organization insists that the loan is in full conformance, the former president is currently facing a civil fraud trial in New York. The trial alleges that Trump inflated his wealth on financial statements, with the state seeking fines and penalties.
In light of these financial and legal challenges, the tower’s occupancy rate dropped to 77% as of June 30 from 98% in 2015, and the mortgage, at a 3.67% coupon, is set to mature in July 2025.
As New York, like other US cities, grapples with office vacancies and rising borrowing costs, the share of office CMBS managed by special servicers has climbed, indicating broader challenges in the commercial real estate market.
Additionally, the owner of the Trump International Hotel Waikiki in Hawaii has decided to rename the property and buy out the licensing agreement with the former president’s company.
Despite these financial setbacks, Trump’s fortune has actually increased, now valued at $3.1 billion according to the Bloomberg Billionaires Index.
–With assistance from Erik Larson.
