President Trump’s real estate conglomerate just took a huge hit. In the borough of Manhattan, Donald Trump has a lot of real estate properties, but not a lot of popularity – Trump got only 10% of the vote from the borough of Manhattan in the 2016 presidential election. So in Manhattan Trump can’t very well capitalize on political cache to woo commercial tenants to lease space he owns – or to get them to stay in spaces they are already leasing. A huge tenant loss has just been announced. According to Forbes, Nike is leaving its flagship Niketown space at the president’s 6 East 57th Street property in New York City and:
Of all of the commercial properties in President Trump’s portfolio, the site known as Niketown is by far the largest occupied by a single tenant. With Nike leaving, the Trump Organization is left searching for a new identity at the marquee property, which Forbes estimates is worth $253 million.
Finding a new tenant for the 65,000 square foot building in close proximity to Trump Tower itself may be pretty difficult. As online shopping burgeons, large brick-and-mortar retailers are not as interested in leasing, let alone leasing such large, expensive spaces. The association with Trump may make finding a new tenant additionally difficult. The site next door to Niketown is occupied by Tiffany’s, which according to Forbes said that “post-election traffic disruptions” influenced a 14% drop in sales during the holiday shopping season last year. That isn’t an appealing statistic to potential tenants in Trump’s building.
Nike is moving to a new location just a few blocks away, in a building not owned by Trump. Nike has refused to confirm or deny whether their decision to move was influenced by politics or Trump’s controversial presidency. According to Forbes, Nike spokeswoman Ilana Finley said only that the company had been planning a move “for years” and that the new location “gives us more opportunities to play with new concepts than we have now.”
At least for the time being, the loss of Nike as a tenant, which happens in March 2018, will not create a financial imposition on the Trump Organization. According to Forbes, the Trump Organization just recently paid off all the debt it has on that specific property.
One wonders, though, whether Nike’s departure will start a trend of commercial departures from Trump buildings. And one wonders how many tenants the Trump Organization can afford to lose.