Trump gets busy bullying Chicago condo buyers.
As we all know, Donald Trump is running for president but he also is a part of many other businesses and opportunities including Trump International Hotel & Tower Condos in Chicago, and there’s an interesting, if not winding, story surrounding the ‘friends and family’ Trump offered buyers some time ago.
One of the residents of the Chicago condos, Garry Benson, was among a few dozen other people that agreed to buy a condominium in Trump’s Chicago skyscraper through an exclusive ‘friends and family’ program back in 2003. Buyers including lawyers, architects and brokers who worked on the $847 million project received a ten percent discount on their condos as a way of thanking them for their hard work.
However, several years later, Trump was not feeling as generous when the prices of condos went up. He went back on the deal with the argument that any gains “are profits we’re entitled to” and that he was legally allowed to tear up the contracts. Garry Benson, a real estate developer and consultant who ended up paying $595,000 for a 49th-floor condo that Trump originally agreed to sell for $542,000, stated that, “It shows you can’t take the man for his word.”
Buyers of forty-three of the condos, including thirty-two residences and eleven hotels took Trump up on his friends and family deal, including attorneys from DLA Piper, Trump’s law firm and architects at Skidmore Owings & Merrill, which designed the skyscraper. When some buyers demanded that Trump honor his deal, he backed down. Other people were not willing to jeopardize a valuable business relationship and accepted Trump’s terms without a fight.
Trump also took on his financial supporters when he was unable to pay off a construction loan. He sued Deutsche Bank in 2008 for more time, citing a ‘force majeure’ clause in his loan agreement. Such clauses are designed to give borrowers relief in the case of unforeseen, cataclysmic events, like floods or wars, but Trump argued that the financial crisis qualified. He also sought $3 billion in damages. Three weeks later, Deutsche Bank sued Trump demanding that he honor a $40 million personal guarantee on the overdue loan.
Trump did not wish to be interviewed on the condo issue but a spokesman stated that the hotel had a record year in 2015, achieving the highest occupancy and room rates since it opened. Trump’s residential condos are almost all sold out but he struggles to find tenants for building’s vacant retail space and many people that bought the condo and hotel units have suffered from big losses.
Anyway, chew on all that real estate gossip and feel free to let us know how you feel in the comments section below.