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R AISING M ONEY

ture that fronts on 5th Avenue and Madison Avenue at the southeast
corner of Central Park in Manhattan. It is one of the few buildings in
the world that takes up an entire square block bounded by two major
avenues. It is regarded as the premier office building in New York
City.
When the property came up for sale in 1998 by a real estate in-
vestment trust, Trumpfelthehadtohaveit.However,oneofthe
majordrawbacks was a long-term lease of 400,000 square feet
with a major law firm ataverylowrentwithmanyoptionsforad-
ditional space as well as renewal terms. So, in effect, 20 percent of
the buildingwas frozen from future growth. That lease, together
with other long-term leases at below market rents, were key nega-
tive factors. On the positive side, the building was prestigious, had
agreat location, and the tenancy consisted of companies or indi-
viduals that were giants in the business world making the building
extremely attractive to major lenders who wanted the securityofa
stable rental stream.
The sales price of the GM Building was $800 million—all cash.
The challenge Trump faced was obtaining a huge mortgage loan at a
low interest rate, raising money for the balance of the purchase price,
and raising sufficient working capital since the existing cash flow was
anemic. The solution was finding a partner with deep pockets who
could be induced to participate in a massive undertaking.
Quite by accident, Trump met Steve Hilberg who was the CEO of
the Conseco insurance group, a public company loaded with money.
They became friends and Trump proposed a plan in which he and
Conseco would become partners, buy the GM Building, and make a
profit of $300 million within one year by turning the building into an
office condominium. Since major corporations had big blocks of
space, Trump believed that they would rather buy the space they oc-
cupied than face a major increase in rent when their respective
leases expired. Hilberg liked the concept especially since Donald
Trump, who was a superstar in New York City real estate, proposed it.
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