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

Land Banking

This strategy is long-term in nature, because you’re investing in a
property that you intend to hold, and then either develop it some
time in the future or sell it to someone else who will. For example,
you could buy land and use it as a parking lot with the intention of
building an office building at some time in the future, when demand
for office space is greater.
Another example of land banking would be building relatively
low-cost storage rental units on a site that you feel will be very
strategic at some future time. Meanwhile, you rent out the storage
units with the intention of someday tearing the units down and
building something more profitable on the site, such as a retail store
or a fast-food operation. Land banking could consist of buying a va-
cant lot or a building in the path of future development then selling
it when the time is right.
I came across a classic example of land banking quite by accident.
My wife was talking to a friend of hers who mentioned that her hus-
band, Jerry, was offered almost $5 million to give up his lease on a
bar and grill on 6th Avenue in New York City. My wife didn’t think
she got the story straight and asked me to talk to Jerry and find out
the details. Jerry confirmed to me that he was negotiating with a
Rockefeller affiliate to sell the lease on his bar and grill for some-
where around $5 million, but he thought that it sounded fishy and
wasn’t sure it was a serious offer, because the price was so high.
When he told me the location of his bar I knew it was in a strategic
location where a new high-rise office building was contemplated. I
told Jerry, “It’s entirely possible this is a legitimate offer and if you
decide to accept the lease buyout you need a good real estate lawyer
and a good tax accountant. I’m not looking for work but if you need
me I’m available as the lawyer.” It was a Friday and he told me he was
going to Las Vegas over the weekend and he’d think it over. Saturday
night I got a call from Jerry asking me to be his lawyer on the deal. I

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