the material de-risking events/roadmap during corona have been
1) close 220 CPS units and generate gobs of cash, this has more or less happened
2) lease Farley to FB at underwritten rents, this has more or less happened
3) get some level of clarity on high street retail values to give confidence that the $1.8B of preferred is both a) money good and b) monetizable <--in my view, this hasn't happened
4) generate gobs of cash and term out the maturity wall through a sale / recap of 1290 / 555
as of today, number 4 has not and will not happen. trump ownership appears to have been a problem or maybe the market has deteriorated enough such that VNO jsut didn't want to sell.
they could still refi (hopefully with substantial cash out)
this decreases conviction.
(Dow Jones) -- The Trump family's partner in two of its most valuable properties halted an effort to sell the buildings, cutting off what could have been a big cash payout for the Trump Organization, which has hundreds of millions of dollars in debt coming due.
Vornado Realty Trust, which co-owns with the Trumps an office tower in San Francisco and another in Midtown Manhattan, decided to shelve the sales process when it couldn't attract a buyer at the prices it wanted, according to one of the selling brokers and other people familiar with the matter. Concerns about conflicts of interested presented by selling the buildings with President Trump still in the White House also hampered the efforts, some of these people said.
Vornado was hoping to raise up to $5 billion in a sale of the two properties, these people said. At that price, the Trumps' 30% stake in each of the towers would have been worth $1.5 billion.
As recently as this month, Vornado Chief Executive Steven Roth said during the property firm's analyst call that he was continuing to actively pursue a deal for the buildings despite what he described as investor caution. "There is active interest from investors and widespread appreciation for the quality of these assets," he said.
New York City and San Francisco office buildings have been among the hardest hit real-estate sectors since the outbreak of Covid-19. The markets were the most expensive in the U.S. when the pandemic arrived.
Since then, many workers have been working from home or fled to cheaper cities, reducing corporate demand for office space. Vornado's asking price proved lofty given how rapidly office values have declined in those cities, these people said.
The Trump Organization has more than $400 million of debt due in the next few years, and it isn't known how many lenders might be willing to work with the Trumps to refinance it. Mr. Trump's tumultuous business history and concerns over his political activities have made banks reluctant to do business with the company.
The Trump Organization has also considered selling its Seven Springs estate outside of New York City, and it has previously looked for a buyer for the Trump International Hotel in Washington, D.C.
The company has said its businesses are financially sound. "The Trump Organization is an incredible company with tremendous cash flow. We have never been stronger," it said.
With its minority stake, the Trump family is a passive owner and has no control over the sales decision-making for the two Vornado buildings, these people said. Vornado's Mr. Roth has served as an adviser to Mr. Trump, part of a yearslong relationship between the men.
The high price tag limited the number of potential buyers. In many cases, flush foreign-government funds with an eye for trophy American properties would be leading candidates for these high-end properties. Some of these buyers were concerned about potential conflicts, or the perception of conflicts, in buying an asset from the U.S. president, these people said.
The two buildings, at 555 California Street in San Francisco's Financial District and at 1290 Avenue of the Americas not far from Manhattan's Rockefeller Center, are both modern office towers. They are near-fully leased properties with blue-chip tenants in the law, technology, finance and investment industries.
Vornado now plans to refinance its loans on the buildings, said Doug Harmon, an investment adviser at Cushman & Wakefield. His firm led marketing on the New York property, while Eastdil Secured LLC led on the San Francisco tower.
"We are now focusing more on refinancing both assets," Mr. Harmon said. He added that the owners hope to put the properties back on the market sometime next year after election uncertainty fades, a coronavirus vaccine arrives and "when international investors can travel with less restrictions, and the path back to normal is under way."
The Trumps are unlikely to receive much if any cash from refinancing, which is typically used for a building's cash reserves or improvements.
