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

How Trump Avoided a Quick Deal

When Trump flew to Germany to meet with the owner of 40 Wall
Street, he knew the existing ground lease had to be changed com-
pletely to reflect what he had in mind—creating a lease that would
permit the flexibility of major renovations, leasing of space, and
covering the possibility of a residential use for the building. This
meant that he would have to carefully negotiate every point and
change all of the provisions of the existing lease. But as a prerequi-
site to discussing a deal he had to create an environment conducive
to success. Trump had to overcome the fact that the building had a
long history of failures, bankruptcies, and mismanagement. To
make an acceptable deal, he would need to use lots of preparation,
relationship building, and showmanship. First he learned every-
thing he could about the German landlord. From his connections
with banks that did business in Germany he learned that the
landowner was an 80-year-old multimillionaire who also was the
patriarch of the Hinneberg family that was well respected and in-
fluential in Germany.
Trump assumed that someone of that stature owning a property
over 3,000 miles away wanted the benefits of ownership without the
headaches and aggravation that came with the renovation, leasing,
and operation of a one-million-square-foot building in a distressed
area. So Trump had to amass an arsenal of weapons designed to im-
press. He assembled pictures of the buildings he had built to show
the quality and prestige. He was ready to outline his plans for res-
urrecting 40 Wall Street to the grandeur it had when it was initially
built. He had available for display full color renderings showing the
difference between the lobby as it presently existed and the lobby
after proposed renovation. He had an explanation of how and where
he would invest millions of dollars to re-create a building that
would make the ground leaseholder proud.

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