Trump Brand Won’t Hurt Vornado Partnership on Offices, CEO Says
(Bloomberg) -- Donald Trump may be controversial, but his company’s partner on office towers in San Francisco and New York is shrugging that off.
The former president is “a very interesting and controversial man -- a lot of people like him and a lot of people don’t,” Vornado Realty Trust Chief Executive Officer Steven Roth said on the company’s earnings call Wednesday. “His role in the buildings is totally passive. He’s OK with that and I’m delighted with that.”
Vornado owns 70% stakes in Manhattan’s 1290 Sixth Ave. and San Francisco’s 555 California St., with the Trump Organization owing the other 30%. Vornado bought its share of the buildings in 2007, before Trump was a politician, Roth said.
While there are “some people who his presence affects negatively,” Roth said, “it is not a sufficient issue to be of any trouble to us at all.”
Vornado sought buyers last year for its stakes in the two buildings, to no avail. The New York-based real estate investment trust had to temper its price expectations, citing investor caution from the pandemic, and later pulled the assets from the market.
“I was disappointed in the reception,” Roth said on the call. “We found that the buyers were in two groups: bottom fishers, which were not for us, and the conventional, long-term institutional investors were tentative.”
The REIT said Bank of America Corp. agreed to extend its rental agreement at 555 California St., where Goldman Sachs Group Inc. also renewed its lease. Vornado is the process of refinancing the tower and expects no issues, Roth said.
This month, the Wall Street Journal reported that Vornado had internal discussions about buying out the Trump Organization, concerned buyers and lenders were shunning the buildings because of the association with the former president. Roth acknowledged he had read the article and said most of it was “news” to him.
Companies moved to distance themselves from Trump in the aftermath of the deadly riot at the Capitol last month. Roth condemned the violence, but said the fallout would have no impact on the buildings Vornado owns with the former president, who is a longtime friend.
“Obviously, every American wishes that Jan. 6 hadn’t happened,” Roth said on the call. “Having said that, we have some great buildings, we have great tenants in the buildings and those assets speak for themselves.”
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