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

Avenue, through the lobby of the commercial portion of Trump
Tower. For this concession, the city gave Trump a valuable bonus of
additional square footage that he used to increase the number of
floors on the most profitable portion of the building, the luxury
apartments on the upper floors. But Trump went even farther to cre-
ate value by flanking the pedestrian walkway with retail stores and
showcases, which turned it into a moneymaker. The stores benefited
from the increased traffic using the walkway, and the wide walkway
with seating areas in the lower level made the public space in the
building atrium more attractive to shoppers.
Previously, New York City had passed a statute giving tax bene-
fits to developers who turned underutilized land into residential
units. These tax breaks were phased in over 10 years, and Trump was
able to pass them along to the buyers of the luxury condominium
apartments, which made it much easier to sell the units for the high
prices he sought. Small investors should be as savvy as Trump when
it comes to knowing about governmental incentives (and restric-
tions) on developing or renovating property. Sometimes taking ad-
vantage of tax breaks and other incentives can be the key to making
an investment profitable.
The concept of a mixed-use condominium building such as
Trump envisioned was not readily accepted by traditional mortgage
lenders, who are conservative by nature. Through his extensive con-
nections, Trump learned that Equitable Life Assurance Company
was interested in financing deals in which they also had a piece of the
ownership. I negotiated a joint venture agreement between Trump
and Equitable whereby Equitable agreed to put up all the money nec-
essary to build Trump Tower. In return, Equitable would eventually
receive all of its investment back, plus interest, from the sale of the
condominium units. Thereafter, Trump and Equitable would each
receive 50 percent of the profits.
But Equitable threw in a clinker that could have soured the deal.
Equitable had a policy that a lawyer or law firm that represented
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