It was one of the Trump Organization’s most tortured projects and also one of its most notable, but now the family firm is checking out of Trump Soho for good.
According to the New York Times, the president’s namesake real estate company has signed a deal with Trump Soho’s owner, CIM Group, to drop its licensing agreement and remove its name from the troubled 46-story lower Manhattan hotel-condominium tower.
The Trump Organization, which manages the building, can leave by the end of next month. Although framed as the Trump Organization walking away, CIM is actually paying the company to leave with years left on its contract. Under the exit terms, Trump still gets a cut of the hotel’s revenue. (However, according to the Times, the contract also requires the Trump Organization to pay CIM if the property fails to hit certain performance measures.)
A buyout allows CIM to rebrand the building, buy additional condo units and expand the hotel before selling the property, the Times reported.
The building has struggled to thrive since the time it was in pre-development more than a decade ago, wracked by community opposition and lawsuits, including a squashed criminal probe into what some investigators thought constituted sales fraud by members of the Trump family.
CIM took control of the 391-unit Trump Soho in 2014. It was originally developed by a partnership of Bayrock Group and the Sapir Organization, with the Trump Organization providing branding and management. The Times reported earlier this year that Trump Soho’s financials were faring poorer than they had prior to the 2016 presidential election, citing sources familiar with the business.
According to the Times, Donald Jr. and Eric Trump made the decision to exit the property, along with several senior executives at the firm.
CIM, a secretive firm that is one of the biggest condo developers in the city, has partnered with Kushner Companies on a number of real estate deals in the city, including the repositioning of the Watchtower building in Brooklyn.
CIM did not immediately return a request for comment. The Trump Organization put out a press release announcing the buyout, but did not answer The Real Deal’s questions about how the deal was struck. [NYT] — Will Parker