Ivanka Trump

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?

I.T.: I don't think that in those markets there's a fundamental decline in the intrinsic value of the real estate. I think there's ebbs and flows in terms of demand. We're very fortunate, and I think one of the things that we are greatly reliant on and we are uniquely able to access in this environment, is an incredible database of international buyers. I would argue that we're the only branded condominium developers that have international recognition. There are many other condominium developers who may or may not be known to a small group of people, but I wouldn't argue that they're brands in and of themselves. So we have the ability, and this has increased greatly due to The Apprentice, due to the fact that we have so many projects under construction or in the development process all over the world, is that we're accessing brokers that we never before, 10 or 20 years ago, would have ever had access to. We're accessing markets that we never would've been able to penetrate, so we have an incredible database of loyal buyers all over the world, and that really has been a hedge against the downturn.

L.G.: Are you concerned, now that oil is back at $70, that your Middle-Eastern customers will have less money to spend on your projects?

I.T.: If you had said oil was at $70 two years ago, you would've said that was very high, so that does not concern me. I think, in terms of oil, I would love it to be much lower than $70, as would most people. It has changed so radically that it's almost impossible, sitting here today in New York City, to even place a gambler's bet on what it would be tomorrow or even an hour from now. I mean, high oil prices have a negative effect across the board for multiple reasons-obviously from a travel perspective, from a hospitality perspective, they're cutting flights left and right all over the country. But then, naturally, for the cost of construction, they're fundamentally relate. So yes, the increase in oil prices is a disaster for the economy.

L.G.: How do you plan for a depression? People say that's where we're headed, and I don't know who of us would've thought that we'd see the government bailing out merchant banks that are over 100 years old.

I.T.: That's amazing.

L.G.: I guess most people were surprised about how bad things were getting, but did you have any notion that things were not quite right?

I.T.: Oh, absolutely. Primarily, my father was very ahead of the curve in his pessimism about the future of the market, so starting around two and a half years ago, he was saying that we're in for a severe and extreme economic downturn-and this was at a time when people were still arguing that bubbles no longer exist, and now that we have better controls over regulating the financial markets, we'll never experience another great recession or great depression. So I very much was cognizant of this. I think I was surprised at the magnitude of what we're seeing. I don't think there is anyone out there who could've foreseen just how catastrophic this would be on a global level.

L.G.: On a fear level, how scary is all that?

I.T.: I think it's extraordinarily frightening. I mean, you feel it. You walk the streets of New York today, and people are depressed in a way that they weren't two months ago. And if you're at all cognizant of the environment around you, it's impossible not to feel the anxiety that's in the air for people that are being directly being affected, people who are just more cognizant of that which they're spending, that which they're doing. I think we're in a very fortunate situation. For the past several years, my father has believed very firmly that prices were out of control, that good deals weren't being made in terms of asset purchases, and we really took a step back and we focused on growing our model. Internationally we focused on growing our management company, we focused on our license deals, which provide incredible returns to us.

L.G.: With very little risk, or zero risk on licensing?

I.T.: We'll only associate ourselves with great projects. The risk is hurting the brand, which is ultimately our greatest annuity, so there's nothing more valuable to this organization than our track record of execution.