Make China and Ivanka Filthy Rich Again
AP Photo
2016
Meet Trump'southward Filthy Rich Advisers
The real estate magnates on his economic team tell united states a lot about the way he really thinks.
When y'all're looking for advice on how to manage the world's largest economy, why not get it from a young man reality TV star?
That's what Donald Trump has washed. Some voters might know Howard Lorber, who'due south a fellow member of Trump'southward economical advisory team, for his occasional appearances on "Million Dollar List New York," the Bravo reality evidence that charts the careers and personal flailings of iii top real manor brokers in New York. On the show, he appears as boss and mentor of ii of the agents.
In actual reality, Lorber is a swain New York real manor magnate who's known Trump for 30 years and, like him, enjoys the highest of the loftier life. He lives at the tony Sherry Netherland edifice at the foot of Key Park and recently forked out more than than $15 meg for an additional flat at 432 Park Avenue in Manhattan, the tallest residential belfry in the Western Hemisphere. He besides owns homes in Southampton and on Fisher Island in Florida.
As of last Friday, Lorber is likewise a key effigy in Trump'southward entrada, one of the13 members of his new economic informational squad. When the group was announced, information technology immediately came under fire for a lack of diversity in gender and economic status: The team was all-male and mostly white and wealthy businessmen. In addition to real-estate titans, the appointees include several prominent hedge-fund managers and bankers. Just the group too drew questions about merely who these figures were. They weren't fatigued from the pool of well-known economic thinkers from previous GOP administrations whom typical candidates would tap for such a job. By many accounts, the near recognizable name on the list was John Paulson, the economist and hedge fund titan who fabricated billions betting against U.S. subprime mortgages in the financial crisis of 2007. Paulson, a media-shy Wall Streeter, fabricated $15 billion in 2007 alone by betting against the existent manor market, a bet that led to what'due south been widely been described at the greatest trade of all fourth dimension. The list likewise includes Andy Aggravate, a young man billionaire investor and another long-time Trump acquaintance who spends a lot of time playing professional person poker.
"It'south typical if you lot're going to build a coherent economic policy you need to take a wide group of economic advisers," says Rob Scott of the Economic Policy Institute in Washington. "These people are more often than not economists who come out of the elevation x or 15 schools, or the leading recall tanks. … He'due south got a bunch of real manor guys and a poker player."
To empathize the people Trump has appointed and is getting his advice from, it's helpful to start with the real-estate moguls who know him the best and, perhaps, have his ear the most. All of them have intersected with Trump in the real life business earth—Trump at i bespeak described Lorber as his best friend—and ane is even the co-owner of several of Trump's most-prized real manor assets.
Lorber is CEO of Vector Group, the parent of the Liggett Group, a tobacco company, and of New Valley, a real manor-focused investment business firm that'south poured coin into several of New York Urban center's most expensive condo projects and owns a bulk stake in Douglas Elliman, i of the biggest existent estate brokerages in the state. Like Trump, Lorber has a lot of friends in loftier places. He was 1 of a select few moneymen invited to celebrate Carl Icahn'southward 80th birthday over dinner at Mastro's Steakhouse in midtown Manhattan earlier this year. That group reportedly also included Apollo Global Management's Leon Blackness and Jefferies CEO Rich Handler. Lorber took home $42.5 million in total pay in 2015, according to regulatory filings, making him the highest paid CEO in South Florida. He also heads the Nathan'due south Famous hot dog chain. And like his famous advisee, he'due south non shy virtually his wealth.
Likewise similar Donald, Lorber likes to combine uber-ritzy living with a little slumming—especially when it comes to consuming fast food. "When I bought my Rolls-Royce, the first matter I did was become to a McDonald'southward drive thru," Lorber said at an industry event in March.
But in contrast to Trump—whose rich father gave him a big liftoff in real estate—Lorber says his self-fabricated wealth doesn't keep him from agreement the needs of the middle form. "Maybe if yous're born with it, it does," he told The Real Bargain. "If yous've had to work for it like most of these guys, it helps you understand."
In add-on to Lorber, the existent estate players include Thomas Barrack Jr. and Steven Roth. Here is a brief introduction to their world.
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Steven Roth may be one of the few people who can rival Donald Trump's lifelong endeavor to build palatial structures not for the i pct—few of them take nearly enough money—only for the zero-point-1 percent. The vast quadruplex apartment at the tower Roth'southward company is building at 220 Central Park S, a striking limestone tower under construction on Manhattan'south socalled Billionaires' Row, is rumored to be selling for record-corking $250 meg, more than twice the previous record for a New York Metropolis home.
Roth is widely seen every bit one of the most powerful players on the New York Metropolis real estate circuit. His publicly traded company, Vornado Realty Trust, has a market cap of more than $xx billion. The Key Park tower is backed past up of $950 million in loans from Bank of China. Roth is predicting it will bring in $3.1 billion in sales.
"Steve's building a large building on Cardinal Park Due south," Trump said during his New York primary victory spoken communication in April. "It'due south a tremendous success. I said 'Steve, congratulations on the building.' He said: 'Donald, it's nothing compared to what'southward happening with yous.'"
He so pointed to Roth and said: "My man."
Past every metric, Vornado is a much larger player than the Trump Arrangement with i of the land'south largest commercial real estate portfolios and more than 30 million square anxiety of commercial, retail and residential space in New York and elsewhere. Vornado pegs Roth's bounty at $10.9 meg a yr, according to Securities and Exchange Commission filings..
Known every bit one of New York real manor'due south more coarse personalities, Roth shares Trump's willingness to work the arrangement to his reward. Roth was sharply criticized for letting the site of an Alexander's department store in midtown Manhattan, which eventually became Bloomberg'south HQ, sit vacant with no development for years. In 2010, Roth reportedly told a oversupply at Columbia University's architecture school that this dereliction had been completely intentional.
"Why did I exercise nil? Because I was thinking in my own awkward way, that the more the edifice was a bane, the more the governments would want this to be redeveloped; the more than assist they would give united states of america when the time came. … And they did."
Roth's comments about the New York site defenseless the ire of then-Mayor of Boston Tom Menino, who flipped at the suggestion that Roth would let a site stay in blighted condition with the intention of coercing the government to give him more than incentives to build. At the fourth dimension, Vornado held an empty lot in the Massachusetts upper-case letter, where it had demolished an existing department store building in 2008 and planned a 54-story skyscraper. Vornado let the site sit empty for five years before selling its stake in the project in 2013.
Trump, a human who in one case sued the Bloomberg administration in New York for one-half a billion dollars over allegedly unfair tax assessments and who got a settlement worth $97 million for his efforts, may be an gentleman of the Rothian approach to government as well as business partners. In a boast about getting his style with banks, Trump wrote in the 1997 book Recollect Big: Make it Happen in Business and Life, "I actually told one bank, 'I told you, you lot shouldn't take loaned me that money. I told you that goddamn bargain was no good.'"
Roth and Trump get-go crossed paths in the 1980s, when each bought a pale in the Alexander's department store chain and planned the redevelopment of its flagship shop on 59th Street in Manhattan, a plan that fell through definitively once Trump'south finances headed south at the onset of the 1990s and his shares in Alexander's were turned over to CitiBank. Roth took over the project.
Vornado is also a partner of Trump'due south son-in-law, Jared Kushner, in various New York backdrop such as 666 Fifth Artery. Virtually notably, Vornado was instrumental in getting the once over-leveraged building back on track later Kushner came close to losing information technology in 2012. Kushner paid a record $one.8 billion for it in 2007.
Roth'due south wife, Daryl Roth, is a Broadway producer and has won ten Tony Awards. In 2009, the couple bought Bernie Madoff'due south beach house in Montauk, New York, for $ix.41 million.
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And then there is Thomas Barrack, a tanned Californian whom those who watched the GOP convention in July volition retrieve from his occasionally jarring introduction of Trump on the final nighttime. ("I feel similar the anchovy in Ivanka's Caesar salad," Barrack said, before describing his friend Donald as having the "field of study of an animal in the jungle.")
Banter is CEO of the Los Angeles-based, private-equity business organization Colony Capital, which has pregnant property holdings nationwide and has invested more than than $60 billion over the past three decades, mostly concentrated in real estate, mainly troubled and delinquent loans, including assets like Michael Jackson's Neverland Ranch in Santa Barbara. A real manor investment trust co-chaired by Banter, Colony Starwood Homes, owns more than than xxx,000 unmarried-family homes beyond the country.
At Neverland, Banter agreed to bail out Michael Jackson from his dire financial situation—the King of Pop was almost to exist foreclosed on—by paying off a $23.ix million annotation on the property, but only if Jackson worked on a improvement bout. After Jackson died, Banter renovated the belongings and put it on the market for $100 million.
Even in his personal life, Barrack doesn't shy away from assuming deal making. He listed his sprawling, neoclassical mansion in Santa Monica for $46.5 million this week, nearly twice the $24.5 1000000 he paid simply two years agone.
Barrack, a major donor to the Trump Victory election fund, got to know Trump when he sold the Plaza Hotel to him in the tardily 1980s. Trump eventually lost control of the iconic hotel equally role of a restructuring of some $900 meg of his personal debt.
In a July interview, Barrack said Hillary Clinton was "phenomenally qualified" and called her footing game "unbelievable," simply said he supports Trump considering he'south seen firsthand his skills as a negotiator, man of affairs and friend. Still, Barrack indicated that on some policy bug pertinent to his manufacture, neither candidate was likely to disturb what is already a favorable state of affairs.
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Ultimately, the question is what kind of advice are these guys giving Trump—and how good is it?
At first glance, Trump's announcement Monday in his big economic speech in Detroit that he wants to end the "carried interest" revenue enhancement loophole would be devastating to some of his friends and his team, especially hedge-fund managers like Paulson. Merely in truth, Trump'southward additional proposal to slash so-chosen pass-through income for family unit corporations to 15 percent would requite the Roths and Lorbers a huge boost.
In a July interview, Barrack pooh-poohed the idea that public policy is going to change his or his fellow real estate titans' lives much. "The full general tax policy for real estate in full general is pretty practiced the way that it is, and either candidate is probably not going to dramatically impact that," he said, pointing out that many of the incentives for existent estate operators have more to do with local, non federal, concerns. "And so, I think it really comes down to who's going to practice a better job at stimulating growth and incentives for entrepreneurs to build businesses and then that in that location's more than demand and supply and existent manor developers tin can build things. Otherwise, it'southward a pretty tedious business."
Steven Roth declined to comment for this commodity, just Lorber has talked a lot near his views. He has said that Trump'south proposals to cutting taxes for all Americans will benefit the housing market and the economic system at large.
"We all know why nosotros demand tax decreases and these will exist the biggest tax decreases since the Reagan era. We need it to get the land going again. That's pretty obvious," he told CNBC on Tuesday of his reasons for supporting Trump. "With lower rates, yous have more spendable income. People are going to buy more than houses and that spurs the economy into a much ameliorate growth pattern."
He also indicated that he'southward with Trump—the old Trump, that is, from the belatedly '90s—on abortion. "I don't concord with everything" the Republicans stand for, Lorber told The Real Deal. "I believe in a woman's correct to choose, I surely have no problem with gay and lesbian marriages. Everyone should do what they're comfy doing." By contrast, Trump controversially said that women should be punished for having abortions, though he later on recanted.
As for the preponderance of wealthy white men and the lack of females on Trump'southward committee, Lorber told CNBC: "I retrieve he should always selection the best people. That doesn't imply that in that location aren't women that are well qualified. I of the people he goes to for advice all the fourth dimension is [his daughter] Ivanka. He doesn't have a problem asking women for advice."
Banter, in the July interview, said in the stop he's voting for the man, non the man of affairs, in Trump. "You lot don't accept to be the smartest, you don't have to be the most clever, you don't have to know a lot well-nigh policy—you accept 10,000 policy wonks that you can hire. You need to be able to lead. And this is a guy who's had a start, a middle and an end in everything he's done in life, and he's reliable," Barrack said.
As for whether Trump will actually listen the advice of his chosen consiglieri, the jury is still out. "I've always found that you can tell Donald anything—say anything to him—he's going to listen," Lorber told CNBC. "That doesn't always mean he will agree and practise it."
Source: https://www.politico.com/magazine/story/2016/08/donald-trump-2016-rich-economic-advisers-214157
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