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

better alternative, the Kinson group agreed that it would give Trump
an option to buy the building for $1 million. (The huge building was
one million square feet, which meant Trump could buy the building for
a dollar per square foot—a ridiculously low price.) Trump also as-
sumed liability for the $1 million of liens.
Trump realized he could never make a deal with Percy Pyne, so in
a stroke of pure genius he flew to Germany and met directly with the
owner of the property. He was following one of the basic principles
that good salespeople know—find a way to get around the gate-
keeper and talk directly to the decision maker.
Trump told the owner, “If you work with me and give me a fair
ground lease, I will make 40 Wall Street a very successful building
that you will be proud of. But, he added, I can’t pay you any rent for
at least a year while I am renovating the building. I know you have
had a parade of failing tenants but I guarantee I won’t join the list.”
Trumpwon over theowner,who agreed to rewrite the lease to make
it financeable and feasible for either an office or residential building.
Part of what Trump loved about this deal was thefactthatno one
else had been able to make the building work. He loved the chal-
lenge. What made it even more enticing was the location: it had won-
derful viewsofthe NewYorkHarborand fantastic potential. Also,
Trump thought the rental market would turn around, the building was
huge, and where intheworldcouldyoubuyaprime-locatedoffice
buildingfor $1 a square foot even with all its problems? It’s unheard
of. Even though in 1996, the downtown New York City area was still
adisaster,Trumpexercisedtheoptiontobuy40WallStreet.
Trump had an advisor named Abe Wallach who played an instru-
mental role in the purchase of 40 Wall Street and was of the opinion
that it could never be successful as an office building. He thought the
only feasible solution was a conversion into residential co-operative
apartments. At this particular time, there was a glut of office space,
and in fact, the city was offering developers incentives to convert
vacant office space in the downtown area to residential units. So
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