Around the time that the pandemic set in, Gucci renegotiated its Trump Tower lease, apparently taking the artist of the deal to the cleaners.
Street in midtown Manhattan stands a storefront with three stories of glass windows. It’s the sort of real estate that for years drew big-money shoppers and, therefore, astronomical rents. But the market for such properties has soured, thanks to the rise of online shopping and surprise of Covid-19. Landlords in the neighborhood are hurting, including Donald Trump, who owns this particular location at the base of Trump Tower.
The renegotiation took place in 2020, though the exact month remains unclear. Covid-19 shut down the country in March of that year, creating an enormous challenge for both Trump’s presidency and for his real estate firm. In March and April, the president’s clubs and hotels furloughed or fired over 2,400 workers. Even though Trump had handed off day-to-day management of his business to his sons Eric and Don Jr., the president was clearly aware of the issues.
Donald Trump joins Gucci executives at the February 8, 2008 ribbon cutting for the retailer's Fifth Avenue flagship in Trump Tower.Rather than try to pay off the debt with cash, the Trump Organization decided to refinance, making the Gucci lease a pressing concern. Gucci’s estimated $22 million of annual rent represented roughly two-thirds of the money flowing into the building. The next-largest tenant was likely only paying $2 million a year or so.
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