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

$200 per month to be applied toward the purchase price. If the ten-
ant stays for a period of years he or she will have an incentive to buy
rather than leave and lose the opportunity.

Conversions

Sometime a piece of real estate requires a change of use to achieve a
greater value. If you have a residential building that isn’t doing well and
the zoning permits the change to office use, check it out. If it’s cost-
effective based on the cost of the conversion and the increased income
from office rents (which are often twice residential rents), you should
give it serious consideration. The reverse can also be true especially if
you’re converting to condominiums or co-ops. The sale of condo units
could bail you out of a poor investment. Sometimes, when circum-
stances warrant it, municipalities grant incentives to induce owners to
convert their buildings to other uses. Finding out if there are any in-
centives and their value could make a difference in your decision.

The Ultimate Holding Strategy—Bringing in a “Watchdog”

Once again I must use Leonard Kandell as a prime example of bril-
liant foresight and real estate savvy. Kandell owned land on Central
Park South in New York City under a ground lease owned by the op-
erator of a Ritz Carlton Hotel. It was a valuable piece of land in a very
strategic spot with a major hotel on it under a lease which had ap-
proximately 50 years left to run. The hotel was run by an operator
named John Coleman, but Kandell owned the land. Kandell found
Coleman an extremely difficult man to deal with. He was a source of
constant trouble: perpetually late in paying rent, taxes, and negligent
in carrying insurance. Kandell did not like the aggravation of dealing
with difficult people and so had absolutely no regard for him as a ten-
ant. He considered Coleman untrustworthy.

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