Be a Trump!

In the shadow of his famous father, Donald Trump Jr. talks about the global meltdown, why some rich people can't get mortgages, Kazakhstan, and his dad's '80s office.

There are lots of Donald Jr.'s in the world, but only one who is the son of the Donald, as in Donald Trump Sr. We caught up with the familial apprentice at Michael's restaurant in Manhattan, where Trump Jr. had come to lunch, accompanied by his publicist, Richard Rubenstein. Richard, perhaps fittingly, is the son of well-known publicist Howard Rubenstein, who has represented the Donald over the years. Young Rubenstein, it soon becomes clear, is along to make sure that Donald Jr. remains perpetually aware of his Trumpness as he begins to talk with Condé Nast Portfolio about life in the fast lane (and in his father's shadow).

Recently promoted by the Donald to executive vice president for development and acquisitions at the Trump Organization, Donald Jr. is considered to be next in line to take over his father's real estate empire. While one of his current projects is overseeing the construction of Trump Soho, a luxury high-rise hotel in downtown Manhattan, he had just returned from a series of whirlwind trips to Asia and the Middle East, where the company is also looking to develop properties. But not long after he had announced the creation of a hedge fund to invest $1 billion in what had been India's hot real estate market, the U.S. and global markets began to melt down, causing him to offer a reassessment of the Trump Organization's near-term prospects. Our interview, which began at the restaurant, continued through a rainy tour of the Trump Soho project.

How are you weathering the current market crisis?
It's going to be bad, and it's going to be bad for quite some time. We haven't been investing substantial equity in many projects for the past couple of years because we didn't want to be competing with stupid money. We're in a good position because we haven't been long much in the past few years. We'll look for the opportunities that will present themselves. For companies like ours with a strong cash balance, cash will be king and we'll see a lot of good opportunities for pennies on the dollar. We're not overly leveraged like we have been in the past.

Are there any new deals in the pipeline in this environment?
Big landowners are coming to us and saying, "Can you come in?" They know we have a lot of cash, and we add premium because of the brand. So we're seeing a tremendous amount of deal flow, but it's still not going well for anyone. Today, to try to build or sell anything is virtually impossible. If you adjust for inflation, you're not going to hit the 2005 peak for years. People are saying it won't be like 1930, but all of a sudden it's like 1930. Valuations across the board are coming down.

Could you have seen this crash coming?
I didn't think it was going to be this bad, but it had to happen. Everything else has been overvalued for so long.

You just got back from Kazakhstan. How much do you travel?
My passport reads like a phone book, especially now that so much of what's going on in the world is going on in emerging markets. Yes, I just got back from the land of Borat. They're getting $2,000 a square foot for certain high-end properties. When I was there, a home just sold for $20 million.

You were recently in India shopping the real estate �market. Are you still interested in investing?
Yeah, but I'll take my time. [The trip before this one] I got so sick I thought I was going to die. This time, I told them I wanted plain pasta made in bottled water with no sauce. That's all I ate, except a granola bar.

We don't have to take a lot of the equity risks that perhaps a lot of other developers have to take. We partner with a local company in a joint venture. It makes sense because we're able to generate so much premium for our brand. They can build as long as they're building to our standard.

Richard Rubenstein (interjecting): But it will still have Trump written all over it. It will still say luxury like all Trump properties. Come on, be a Trump! You haven't even mentioned Dubai yet.

You're building the flagship hotel for one of Dubai's new Palm Islands. How does that stack up with the rest of your projects?
It's very cool, because if you want to build a one-story building in downtown New York, you'll have everyone and their brother fighting you and saying it's too much. America has gotten to that point where you can't do anything without someone complaining. But when you go to Dubai, you're limited purely by your imagination and the laws of physics. It's the one place where developers are allowed to have a little artistic vision, as opposed to a hostile environment.

Are you a golfer?
I've come to enjoy it better, but golf would be perfect for me if it were 12 holes. After the first nine holes, I lose interest. Then I get sloppy.

Any other hobbies?
I like fly-fishing and hunting. You're in nature. I want to get away from the structured, manicured world that I create and immerse myself in something that's perhaps more natural. I tend not to talk about the hunting thing-people react to it. I love trout fishing, but I spend a lot of Sundays in the office.

How would you compare your office with your father's? How different are your styles?
His is a little more '80s. I'm not gonna lie-I love '80s music, I love '80s movies, but '80s style? I'm kind of like, "Eh, if you see my dad's office, it's so '80s you can pinpoint the month-September '82." Our office [the one Donald Jr. shares with his Trump siblings] is much more contemporary and elegant and more in the direction of where we'll be taking the brand in the future. Every time he comes down to our floor, I can see him eyeing our offices as though he knows he wants to move, but he won't admit it to us.

In terms of style, will Trump Soho be totally '80s too?
It's very un-Trump in terms of what you'd look for in many Trump buildings, but it has the same ultimate luxury level of perhaps any hotel in New York, and certainly when you look at it relative to other downtown hotels. This is going to be the first really five-star product in that market. David Rockwell is doing the interiors and the design, and he's much more fitting in a fresh, young, hip Soho building than many of the other incredible designers we've worked with who are much more Upper East Side. It would be out of place and out of context to do our more typical Trump building here.

Isn't this a bad time to try to be selling condos, even in a building like Trump Soho?
Do you get the kinds of closings you want? Maybe not, but we have a lot of flexibility because what we don't sell, we can rent. But it's a mess. It's scary. I know of buyers who have virtually perfect credit ratings who want to put down 40 to 50 percent, and they can't get a loan for the rest, and that's unheard of.

Passerby (outside Trump Soho): Where is the closest subway?
I think it's this way. Or it could be up there. I don't know. I haven't taken the subway in a long time.

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