The day Donald Trump left the White House, his business was facing $900 million of debt coming due in the next four years. Working through those loans would have been a significant undertaking for any firm, but the Trump Organization was contending with additional challenges. Deutsche Bank, Trump’s longtime lender, was reportedly looking to end its relationship with the real estate mogul. Two other financial institutions, Signature Bank and Professional Bank, had spread the word that they were cutting ties in the wake of January 6, 2021. Meanwhile, the Manhattan district attorney was getting close to charging the Trump Organization with a series of financial crimes, including falsifying business records, conspiracy and fraud.
Soon plenty of people were trumpeting the end of an era. “The indictment of the Trump Org will likely result in its destruction as a viable entity,” Richard Signorelli, a former federal prosecutor in the Southern District of New York, tweeted in June 2021. “No bank will ever do business with an indicted company,” Dan Goldman, a onetime prosecutor who served as lead counsel during Trump’s first impeachment trial, said on MSNBC, calling an indictment “almost a death blow to the Trump Organization.”
Money Pit: The Trump International Hotel in Washington hemorrhaged cash and regularly needed bailouts. The buyers hope the new Waldorf Astoria brand will attract patrons of all political stripes.
Those predictions turned out to be dead wrong. In the last 15 months, the Trump Organization—under indictment, with its founder characterizing the charges as part of a “political Witch Hunt by the Radical Left Democrats”—has managed to rework almost all $900 million of the debt it had coming due. Two of its most troublesome Deutsche Bank loans, totaling $295 million, are now off the books. The former president sold his money-losing hotel in Washington, D.C., to an investment shop connected to former Major League Baseball star Alex Rodriguez and retired boxing champion Floyd Mayweather, thanks to help from a firm tied to computer billionaire Michael Dell. Trump also refinanced $125 million of debt against a Miami golf resort and reworked a $100 million mortgage at Trump Tower.
Trump’s business still has plenty of debt—an estimated $1.1 billion in all—but now most of it doesn’t come due until 2028 or later. Two loans that haven’t been refinanced—a $13 million mortgage against a property on Third Avenue in Manhattan and a $45 million loan against a tower in Chicago—mature in 2024. But neither of those should be too difficult to pay back. After all, Trump now has an estimated $375 million in cash on hand, more than three times the sum he had at any point during his presidency, thanks to the spate of dealmaking.
How did he manage to pull all this off? First, he got some help from Steven Roth, his near-billionaire business partner, who has a sterling reputation in the real estate world. Then Trump cut a miraculous deal with a murky investment firm called CGI Merchant Group. Finally, he found a Kushner family–connected lender to replace Deutsche Bank, which for years had financed his projects and overlooked his shortcomings. “Every business in the world is completely morality-agnostic when it comes to moneymaking opportunities,” says Mike Offit, who started Deutsche Bank’s relationship with Trump in the 1990s after the future president came off a series of bankruptcies. “He’ll always have lenders. Yes, it may be expensive. But there will always be entities that will lend to him.”
Donald Trump needed cash. It was June 2020, and the president had an estimated $95 million on hand, only $65 million of which he could freely access and $30 million of which was under Steven Roth’s control. Ninety-five million would have been plenty for most people, but it was not enough for Trump, a tycoon with $900 million in debt nearing maturity who also happened to be in the midst of a presidential campaign.
Fortunately, Roth, who had been Trump’s business partner for more than a dozen years, was there to help. His publicly traded company, Vornado Realty Trust, made it clear that same month that it was looking to sell or refinance two buildings, 555 California Street in San Francisco and 1290 Avenue of the Americas in New York, that it controlled in a 70-30 partnership with the president. “It’s kind of interesting that these two are on the block,” analyst John Kim of BMO Capital Markets said at the time, referring to the fact that Roth’s real estate firm owns more than 50 buildings. “I mean, the way Vornado said it was they’re in control of the decisions, like Trump is more like a silent partner. But it seems like a strange coincidence that these are the two assets [for sale].”
Thanks to all this dealmaking, Trump now has $375 million in cash, more than three times what he had during his presidency.
Vornado, which declined to comment for this article, failed to find a buyer, so it settled on refinancing. With Roth in control, the nation’s biggest bank, JPMorgan Chase, jumped at the opportunity, helping Vornado and Trump replace their $950 million mortgage against 1290 Avenue of the Americas with a new loan of the same size. At 555 California Street, the bank helped raise $1.2 billion in May 2021 to replace a $533 million mortgage, allowing the partners to suck out more than $600 million of cash, while pushing the maturity back to 2028. Trump’s estimated cash boost: $162 million.
Around the same time, Trump was looking to unload his hotel in Washington, D.C. The financials underpinning the property, which Ivanka Trump initially pitched to her father, had never made much sense. In exchange for the right to lease a government-owned building for 60 years, the Trump Organization agreed to spend $200 million on renovations, then pay $3 million in annual rent going forward.
Trump cut the ribbon at the grand opening on October 26, 2016, 13 days before he won the presidency. Supporters filled the place during the inauguration, when Trump allegedly charged his own inaugural committee more than $1 million—payments that later prompted a lawsuit from the D.C. attorney general, and ultimately a $750,000 settlement. Despite the bump around the time of the inauguration, business eventually fell off. In the 12 months ending August 31, 2018, operating income was just $900,000—not nearly enough to cover the $6.2 million that the Trump family owed Deutsche Bank in interest. To keep the operation afloat, the Trump Organization shifted $4 million from another of Donald Trump’s companies into the hotel. The next year, that small operating profit became a $2.1 million loss. Meanwhile, since the Federal Reserve had increased rates, interest expenses jumped to $7.5 million. Trump’s business had to inject another $9 million.
Against this backdrop, the Trump Organization came up with a bold plan: to sell the place for an outrageous sum. The Trump family brought the idea to the market in an unorthodox manner, not with a traditional listing but with a story on the front page of the Wall Street Journal on October 26, 2019. The paper printed the family’s fibs without evincing any skepticism: “People are objecting to us making so much money on the hotel,” Eric Trump was quoted as saying, “and therefore we may be willing to sell.” Anonymous sources suggested the Trumps might be willing to accept $500 million—about twice as much as independent real estate experts thought the property was worth.
Building Buddy: Steven Roth and his Vornado Realty lord over nearly 20 million square feet of premium office property, 3.8 million of which is owned with longtime partner Donald Trump.
Announcing a sale is easier than actually closing a deal, especially with that kind of price tag. One bidder, a local investor named Brian Friedman, offered $175 million, 35% of the proposed price but more in line with what industry sources believed the place was worth. The Trumps turned him down. The pandemic hit shortly thereafter, and on April 3, 2020, the Trump hotel laid off 237 employees. Things stayed mostly quiet for a year and a half until October 2021, when rumors began swirling that Trump had found a buyer willing to pay around $375 million, a long way from $500 million but still well above independent appraisals.
Who would be willing to overpay for the former president’s property? The buyer turned out to be CGI Merchant Group, a small Miami firm with limited experience in the hospitality business, whose investors reportedly include Rodriguez and Mayweather. Hilton, which CGI brought on to manage the hotel under its Waldorf Astoria brand, also put some money in. But the full roster of CGI’s investors remains secret. The firm did not even share the names with the General Services Administration, the federal agency that oversees the lease on the hotel, according to a letter that members of the House Committee on Oversight and Reform sent to CGI. The investment firm did not respond to a list of questions about the deal.
But the huge purchase price prompted speculation. After all, Trump couldn’t even produce enough income to sustain a $170 million loan. “Oh, my God,” said Friedman, the investor who had previously tried to buy the hotel, when he first heard about reports that the place could fetch roughly $375 million, wondering whether there might have been some sort of side deal involved. “That asset loses money.”
To finance the purchase, CGI borrowed $285 million from two entities connected to MSD Partners, which invests the assets of computer billionaire Michael Dell, who is the country’s 16th-richest person, worth some $52 billion. A small internet-based bank called Axos, which MSD had worked with on other deals, also took an interest in the loan. The transaction closed in May, providing the former president and his family with enough money to pay back its Deutsche Bank debt, which had been set to mature in 2024. Plus, Don Jr., Ivanka and Eric, each of whom held a small stake in the hotel, received an estimated $13 million apiece. Their father’s payday, meanwhile, added up to an estimated $135 million.
The little-known bank Axos played a key role in Trump’s financial redemption. Flush with cash, the former president now had the financial strength to tackle his debt, but his previous banking relationships had fallen apart. Deutsche Bank had recently lost Rosemary Vrablic, the high-profile banker who had helped him borrow hundreds of millions of dollars before she resigned from the firm. Meanwhile, Ladder Capital, a real estate investment trust that had also helped lend huge sums to Trump, got wrapped up in an investigation involving Trump’s indicted CFO, Allen Weisselberg, and his son, Jack, a director at Ladder. (Weisselberg plans to fight the charges in court.)
Trump needed new lenders. Enter Axos. A small institution, Axos has $16 billion in assets, making it an afterthought on Wall Street, where lenders like JPMorgan Chase oversee trillions. Founded in 2000, Axos in its early days largely focused on residential loans. The San Diego–based bank slowly expanded other lines of business, accumulating $61 million of commercial real estate loans by 2015. Then things took off. By March of this year, Axos had $4.3 billion of commercial real estate debt on its books, the biggest segment in its portfolio.
The Trump Organization came up with a bold plan: Sell the Washington hotel for an outrageous sum—about twice as much as experts thought it was worth.
Still, Axos isn’t the sort of institution you’d expect to find restructuring a billionaire’s balance sheet. Classified as a savings association, Axos has limits on how much it can lend to any one borrower. As of June 2021, the bank said it was not allowed to dole out more than $204 million to any individual. Its biggest outstanding balance, the bank disclosed, totaled $145 million.
But Axos did do business with some big fish, including the family of Jared Kushner, Ivanka Trump’s husband, who had introduced his father-in-law to Rosemary Vrablic at Deutsche Bank. Axos wanted more. Via a mortgage brokerage firm, it learned about an opportunity to refinance Trump Tower, Donald Trump’s most iconic property. Ladder Capital had helped Trump secure $100 million against it in 2012, but that loan was set to mature in September 2022.
Unfortunately for Trump, the building wasn’t performing very well. The Trump Organization reportedly extended its lease with Gucci, its anchor tenant, in 2020, the year the coronavirus crisis turned Fifth Avenue into a ghost town and six years before the Gucci lease had been set to expire. The terms of that deal remain unknown (representatives for the Trump Organization did not respond to requests for comment), but profits at Trump Tower tumbled after the ink dried, according to Securities and Exchange Commission filings. Operating profits in the first half of the year had averaged about $5.5 million before the pandemic. By the midpoint of 2021, however, they had dropped to $4.1 million, the sort of decline that could make banks nervous.
Axos was undeterred. The bank’s CEO, Greg Garrabrants, and its chief credit officer, Thomas Constantine, liked Trump enough to donate to his campaign. In addition, Trump Tower was worth more than twice as much as the $100 million Trump needed to pay off his previous loan, offering secure collateral should something go wrong. In February 2022, Constantine personally signed the documents, and Axos loaned the former president $100 million. In a statement, the bank suggested the deal was strictly about business: “Axos does not discriminate against borrowers because of their political beliefs.”
Trump also needed to refinance an estimated $125 million of Deutsche Bank debt against his golf resort in Miami, coming due in 2023. The property, Trump National Doral, had once been a money gusher, throwing off $12 million of annual net operating income. But business soured once Trump took office and turned off its largely liberal, northeastern customers who for years had made a habit of jetting down for a few winter rounds. Sales fell 14% in 2017, and profits dropped to just $4.3 million. Revenue barely budged from there until the pandemic, when it plunged more than 40%.
No matter. In May, Axos lent Trump $125 million to take care of his Deutsche Bank debt. The new deal brought Axos’ total loans with Trump to $225 million—not counting anything related to the D.C. hotel. Lending limits would have prevented Axos from giving $225 million to a single person last year. But by this spring, the bank’s capital had apparently increased enough, barely, to give it clearance to hand over the money. Donald Trump had found his new Deutsche Bank.
He still has a few lingering loans. There are two liabilities totaling an estimated $58 million coming due in 2024, plus a $130 million one expiring in 2025. Given that Trump is now sitting on $375 million, he could theoretically pay it all back with his own cash. He has already pulled that move recently, paying off a small loan against a Park Avenue building and wiping out others against golf courses in New Jersey and Virginia. It seems just as likely, however, that he’ll try to borrow more money, simply because he can. Even if Axos has nearly maxed out its lending limits, there should be plenty of other entities interested in lending to a former (and potentially future) president.
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