Interview With Ivanka Trump

PREV 2 of 6 NEXT

L.G.: Is Vegas construction still mobbed up?

I.T.: We've actually had a great experience with our contractors. Perini is doing our development.

L.G.: All I know about that is what I saw in Bugsy.

I.T.: I think that was a few years ago.

L.G.: That was when Warren Beatty was wearing less makeup.

I.T.: There you go, that's right. So to answer your question, internationally we tend to find partners who are world class from the development perspective, and who are able to execute and oversee the day-to-day construction aspects.

L.G.: Like in Dubai, its licensing a deal, right?

I.T: Yes, but then we'll manage the hotel asset. So one of the things that we have that's, I believe, unique from a hotel perspective, is there are no other operators who are also developers. So we lend value through the whole process. Not only do we have the capability to oversee design and development, whether or not we oversee the actual construction, but we get extremely involved programmatically in the building, whether it be residential or hotel. In terms of programming the building, whether it's floor plans, whether it's allocation of common space, whether it's backup house, this is something we love to do, and we do on all of our projects, irrespective of whether it's a license or whether it's our own job. One of the things that I found that makes our model so viable is ultimately we're doing deals with developers, and we speak their language. We don't just come from an operator perspective whereby we're requesting that they build things that we would never build on one of our own jobs. So it's given us superior negotiating stances as we look to enter markets, in that we add value through all of these processes, through the sales and marketing perspective. Obviously we have an incredible internal database of Trump buyers who are loyal to our brand and will travel with us from project to project, from a design and construction basis, from affiliations with some of the best restaurateurs and retail tenants. All of this we bring to the table as we go into these deals.

L.G.: I guess what I'd like to know is how many projects are in the pipeline, with all the financing in place, versus projects that you may want to do but can't because of the absence of credit and just hugely scary economic times?

I.T.: I think new construction is certainly a challenge in this environment.

L.G.: That's such a euphemism, Ivanka. It's a "challenge"?

I.T.: It's almost impossible.

L.G.: Okay, thank you, I want you to speak frankly to me.

I.T.: I understand, but that's not true in all markets, and when you have your construction, when you have your financing in place as we're very fortunate to have in most of the jobs that we currently have out there, it's an incredible advantage in certain perspectives. There was an enormous pipeline of potential projects that I think we all knew a year ago would never ultimately come to fruition but were still perceived as competition in certain marketplaces—competition for retail leases, competition for deposit interests, competition from prospective buyers. Those projects will never get built, and people recognize that. People aren't interested in putting down deposits so that they can wait six years for a developer to put together the financing and ultimately have that locked up in escrow. So for the projects that are under development—and we're fortunate to fall into that category for the majority of our jobs—we actually have much less competition today than we did. Across the board, obviously, velocity of sales has slowed, but you know that would be the plus for the projects that are actively going up. I don't think for a very long time in most of the markets domestically, which isn't the case internationally, but for most of the markets domestically, you'll be seeing a lot of new projects.

L.G.: And you talked about velocity of sales, so projects that are going up and will be completed, it'll take a longer time to fill the buildings.

I.T.: It depends on if you're in a presale market where you have certain thresholds to meet, but, yes, of course, these are very uncertain times, and I think a lot of the rendered plans that people once felt comfortable buying off of, they're just not going to do anymore. Why lock up your money for several years if you can buy into an existing asset or one that's under construction?

L.G.: The assets are actually declining in value even as we speak. It's a scary situation.

I.T.: Well, you know, the markets we choose to enter, I don't think you see that in the way that you do if you have a diversified portfolio in multiple states within the country. The markets we're in—central Chicago, New York City—are  very strong markets.

L.G.: And Vegas, is that a strong market?

PREV 2 of 6 NEXT