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TR U M P STR A TEGI ES FO R R E A L ESTA TE

During his meetings with Walter Hoving, the CEO of Tiffany,
Trump learned that Tiffany also had an option to buy Kandell’s site
for its fair market value. It was a nebulous option at best but Trump
felt it would be used as a wedge to get Kandell’s cooperation. Trump
made sure that the price he paid for Tiffany’s air rights also included
the option it held on the Kandell site. Then, armed with the Tiffany
option, Trump went to Kandell and said, “I’m going to exercise the
option to buy your site.” Kandell, who was not intimidated in the
least, countered with, “You’ll have to sue me to exercise the option
and I’ll fight you every step of the way. The delay would throw your
construction timetable into a cocked hat. When you finally win, we’ll
fight over what amount represents the fair market value of my site.”
This was shaping up as a classic battle between an unstoppable force
meeting an unmovable object. Trump respected Kandell’s willingness
to fight even though Kandell knew he would ultimately lose his site
despite the fact he would receive a high price for it. Trump knew that
Kandell had the reputation for being tough but a fair dealer. Sensing
the necessity of building a relationship based on mutual respect,
Trump called Kandell and asked, “Len, we don’t know each other but
it’s in both our interests to hammer out a deal that we can both live
with. What do you want?” Kandell replied, “Donald, although I
know you would pay me a lot of money for a deed, I’d like to continue
to own my 57th Street site and maybe we can agree on the terms of a
long-term ground lease that would include a fair rent which will pro-
vide income for my children and grandchildren and give you what
you need to build your building.”
Relying on his ability to create good business relationships,
Trump asked me to join him and Leonard Kandell for lunch at the
University Club where Kandell was a member. Trump told Kandell,
“Even though I really want to buy your property, I’ll let you and
George try to work out a great lease that will provide substantial in-
come to your family and give me the flexibility I need.” Kandell
said, “Thanks, Donald, I appreciate your cooperation.” Before Don-
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