*Empty Trump tower is a metaphor

The world’s most famous property developer has a great business model. Create a brand that encapsulates the American dream, undertake some basic due diligence and then licence the brand to developers incurring almost no costs and taking an upfront fee plus a chunky sales percentage.

Nice work if you can get it.

The risk with it is that if you compromise your brand either through associating it with failing developments or by coming across as a little bit mental on national television, the model begins to fall apart.

A talented property developer though Trump is, the name is now associated with a number of projects which at best could be described as incrediably bad investments. He was paid upfront by Nakheel to build a $1.1 billion hotel on the on the luxury Palm Jumeirah development off the coast of Dubai. The project never completed and many high-profile celebrities were left out of pocket.

Another example is the Trump International Hotel and Tower which is the tallest residential building in Las Vegas. According to Trump it’s “very, very successful" and its marquee is "one of the greatest signs of all time".

However, the reality according to the LA Times is rather different:

“Conceived as a high-end hotel-condominium development in Las Vegas' go-go years, the project opened in 2008 amid the economic meltdown. Most investors pulled out and demanded their deposits, leaving Trump and his partners holding the bag”.

“The casino-free building, wrapped in 24-karat-gold-infused glass, now rests in the boneyard of the Las Vegas Strip, a collection of vacant lots, barren scaffolding and silent cranes left over from abandoned resort projects”.

Amazingly, the hotel is just about the only one on the strip without a casino, something of a “must have” in the world’s most famous gambling destination.

The LA Times suggest that the building is a metaphor for his presidential campaign “lots of splash but little in the way of substance” or as the British tabloid press might put it, “all fur coat and no knickers”.

Trump has the arguably the best business model in international residential property. His brand has suffered with a number of project failures but the bigger risk is that he is made to look foolish in race for the Republican nomination.

His judgement is already in question after he questioned Obama’s citizenship when an CIA investigation and multi-million Republican smear-campaign budget failed to uncover anything in 2008.

Trump looks set to put the biggest brand in international property on the line in his bid to hold the highest office in the land.

Pride before the fall? It has all the elements of a Shakespearean tragedy. Then again, Ronald Reegan was not taken seriously in 1980.

It is unlikely, but not inconceivable that developers using the Trump name could begin promoting their properties as the residences of the 44th president of the United States.

It's a scary thought!

Source: Global edge

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