As someone who has been in on many real estate deals, I thought it might be useful to think about how I would negotiate with Trump as an agent sitting opposite him in a real estate negotiation. First of all, I must admit, I have never been a part of a deal near the size Trump made regularly and don’t even know who would be in the room during one of those negotiations. But I do know that the more people you have on your side of the table the weaker you are. Bring lawyers, insurance men, structural inspectors, and the lone agent on the other side will beat you if he knows what he is doing. He might appear stubborn but he will know more and get his price. So let us assume Trump is in the room with his guys, for I don’t think he would be alone. On the other side is me, alone. And assume my guy, my client, not at the table, is the seller, the tougher side in a commercial deal. After all, if you want to sell there must be something wrong.
The first thing a real estate agent must learn is that nobody is going to hit anybody in a negotiating room. Being tough is all mental. There’s no real danger of getting slugged or shot. It is all theater. So there’s never a need to be intimidated. You can do anything except lie. Let it rip!
The most important invisible factor in any deal is the desires of seller and buyer to make the deal. If the building is hemorrhaging money the seller might be willing to take a loss just to get rid of it. On the other hand, if the buyer needs the building to complete some plan he has already committed to, he might be willing to pay more than the property is worth. There are, or course, many other factors that might affect the desires of buyer and seller. I assume my seller is willing to allow me to play my risky game. For Trump could walk.
I recognize that Trump does have an extraordinary talent, an eye for and a belief in glitz. He did an incredible job in popularizing and selling the ostentatious vulgarity he specializes in. I could never have done it. It would not be wise to underestimate him. It might be fair to say that he created a certain genre of “prestige” residence. He’s good at what he does. Secondly, we must realize that much of this value is in bullshit, “prestige”. Trump is now able to make a good living by selling the use of his name on buildings with which he has nothing else to do. Since he lives this way himself we must conclude that this is not hucksterism in the sense that Trump is a real part of the customer base he is appealing to and not just a carnival barker selling snake oil to the rubes. The best bullshitters believe.
I would be lost in this market since I pay attention to the numbers. Prestige value is not the result of doing the numbers. For we are dealing with, primarily, location, and secondarily, up to the minute vulgarity. The value is in the herd instinct of a herd that imagines itself elite. They want what others they admire want. It’s all a matter of perception, perception that can be molded. In the evaluation of such a thing the numbers are all worthless. Trump is a vision guy. We all know Trump will tear down or extensively renovate whatever he buys to realize his vision. He is thinking about what he will build when he gets rid of my client’s building. He hardly cares about what the income and expenses are now. Everything else I know about him confirms this.
I know of other deals he has made in which he has overpaid considerably, at least as far as the numbers tell the story. For example, of the Plaza Hotel in New York Trump wrote. “”I haven’t purchased a building, I have purchased a masterpiece – the Mona Lisa. For the first time in my life, I have knowingly made a deal that was not economic – for I can never justify the price I paid, no matter how successful the Plaza becomes.” You can say that again. He lost a bundle on it. I suspect it was not the first time. So he has a weakness for “prestige” buildings, which the one I am selling isn’t, but can be made into because of its location which is not great but could be made so with the right kind of bullshit. Otherwise Trump wouldn’t want it. Even with his weakness for prestige he has often come out on top because of the demand for his renovated properties. Trump knows how to add “value”. He knows how to sell prestige and has an eye for what he can turn into prestige. But all this value is in his head and the heads of the nouveau rich.
I would also expect his out-sized ego to be present and on full display. His large entourage will be trained to feed it, not think. I will be cast to play the patsy in his show. I will bungle and fumble and “accidentally” bring another bogus offer with me that somehow accidentally got into the folder of the property. The longer I can drag this deal out the more Trump will want the building. The more incompetent I look and irritating I am the more he will want to beat me and hate to lose to me. I will try to be the guy he would have fired right away on his show. I will try to get under his thin skin and shake his fragile ego. Think Paul Newman on the train in The Sting.
Although I have none of Trump’s strengths, I am good with numbers. I am also completely unimpressed with all that Trump admires. Prestige means nothing to me. I’m not in awe of any human now on the planet except for Andrew Wiles. Trump could bring Bill Gates, Vladimir Putin, and the Mormon Tabernacle Choir with him and it wouldn’t impress me at all. I look only at the numbers and don’t really care how I look to him. If I were negotiating with another agent like me the whole thing would be a question of numbers. By the time it got down to intangibles such as location we would measure that too. Everybody would know everything they had a right to know. There would be a fairly close agreement about what a good price is. Of course a good part of it would be measured by the pressures to buy and sell. We would both be feeling one another out about this. But we both would know that the other would walk if the price was too out of line. I would never engage in such theatrics with a normal intelligent real estate agent.
In a commercial deal the seller has no obligation to disclose defects. It is strictly caveat emptor. For this reason the buyer’s agent usually carries out extensive inspections of whatever seems relevant. The seller can refuse to allow these inspections. Since I am pretty sure Trump plans to tear down or renovate the building I would refuse to allow them. I would try to make any information as vague as possible. The numbers can only hurt me in this instance and would count on Trump’s desire for the property to keep him in. His plan is to tear down or renovate, and therefore he is ultimately indifferent to the numbers in the deal except as a tool to attack my price,
Trump would also want to look at the rent rolls and expenses, again for the sole purpose of beating me down. This is routine, but I would refuse. His banker would complain, but since he knew Trump’s plan ahead of time he will not back out, and Trump might threaten to pull out, but he wouldn’t because he would not want to lose to me that irritating little idiot, and hopefully, because I had made the location seem better with my boundless admiration for it. I would do everything I could to express my belief that he is no match for me. I would subtlety disrespect him, ask him if he understands what I am talking about. I would piss him off with delays, lost documents, whatever I could. At the same time, I would make it clear that I, like Trump think of the negotiation as a war. I would talk about the world being made up of winners and losers. How could he lose to this asshole! Pulling out would be losing, and Trump does not like to lose, especially to a fool. I will count on his competitive nature and fragile ego to hook him. With innuendo and body language I would express my skepticism over his ability to perform in the deal. I would suggest that perhaps he is financially unsound. I would joke about his whole way of doing things. I would challenge his real estate manhood and at the same time come on as an incompetent fool. I would make it personal, suggest, though not directly, that he was small potatoes. He would want to beat me in the worst way.
Had Trump seen the numbers he would know that my asking price was ridiculously high, outrageously high, absurdly high. Or course he will still think and say that it is outrageously high even though I will insist that I am offering him a bargain. Any other buyer would have walked away from the deal when I refused to disclose information, assuming that my client didn’t really want to sell. But Trump is mad and in a war and does not want to retreat. All Trump cares about is how much he thinks that particular location is worth and beating me. But the value of a location depends only upon what others think it is worth. However I could, I would hint that others had been interested, without of course, saying so. Every now and then I would say, “location, location, location” in as stupid and naive way as I could if I couldn’t counter some argument of one of his minions. I would toss his evidence back across the table with contempt, not even looking at it.
Meanwhile, I would carefully monitor the mood at the other side of the table. I wouldn’t budge until I saw they were at the edge of exasperation. Then, when they were practically out of their chairs, I would give in a bit, but just a bit. Maybe I would make some apology, some excuse for myself. I might even butter Trump up a bit about his toughness, for I know how susceptible he is to flattery. I would offer a slightly lower price. As soon as they were back in their chairs I would return to my intransigence. Painfully, interminably, modeling myself on the Israelis in the Israeli-Palestinian “peace process”, I would let them slowly wear me down. Drawing it out, perhaps making a few telephone calls before yielding a little more, I would allow myself to get beaten down to a price that was still far above what I thought the property was worth. From that point I would not budge, and I would threaten to walk out the door. Finally, admitting defeat I would go down a tiny bit more and make the deal at a price far below my asking but well above the property’s value. I would praise Trump on his negotiating skill and his toughness.
Trump would think he won and I would think I won.