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P RINCIPLES OF N EGOTIA TION

were right. The first lease we made on 40 Wall Street with a major fi-
nancial company was at $23 a square foot. Moreover, the average rent
in the building ended up being over $30 a square foot.
Don’t be misled by the aura of legitimacy. It is often created by
sellers who cloak and tailor their figures with information they
picked up from dubious sources to make something appear as gospel.
Be skeptical of the expenses and income that are reported on any real
estate building, that you are interested in purchasing, and verify all
this information for yourself.

Trump versus the Aura of Legitimacy

In the 1990s, New York City helped create an aura of legitimacy for
converting downtown office buildings to apartments in the form of
tax incentives and other benefits. All types of inducements were of-
fered, including reduced rates for electricity, property tax reductions
or abatements, and credits for rehabilitation costs, all of which were
designed to reduce the glut of office space and turn it into residential
housing. This would give the city increased tax revenue from the
converted buildings. Thus, the city created the aura of legitimacy
that residential conversion was the way to go. We also had the real es-
tate brokers pointing to an array of statistics that indicated that 40
Wall Street was doomed as office space. If we succumbed to the aura
of legitimacy going residential with 40 Wall Street would have been
the thing to do.
Smart real estate investors refuse to accept the aura of legitimacy
without intensive investigation, so Trump investigated. He gave me
the project and told me to make an independent analysis and tell him
what to do. I told him that based on my own firsthand research I
thought it could work as office space if he used the aura of legitimacy
to his benefit. He began an extensive renovation plan to create new
vitality and a new image for a building that had suffered in the past.

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