"This was not an easy one - getting it built, getting it zoned, getting it everything," said Donald Trump at a ribbon cutting on Friday with his development partners, the Sapir Organization and the Bayrock Group.
A local group, the Soho Alliance, opposed the building at every turn, from the zoning (does a condo-hotel really meet the requirements of the site's "transient" hotel zoning?) to the protection of a historic site (workers digging the foundation uncovered the remains of an old burial ground).
But don't write the Donald off yet. Trump Soho's hotel condominiums are now selling for as much as $3,000 a square foot, according to Eric Trump, and more than a third of the condos are now under contract. Sales should begin to close this month. And true to form, the Trumps are not conceding an inch.
The pricing is strong, although the percentage sold is certainly smaller than the developers had anticipated when they took out their original construction loans. That's not unusual in this economic climate, but an undersold project can create cash flow issues. How are the the developers making up for the cash they don't have from the condos they have not yet sold?
"We have a very good relationship with banks," says Eric Trump, executive vice president of development and acquisitions for the Trump Organization. The developers are now restructuring about $350 million in construction loans for the tower, according to the Wall Street Journal, probably starting with the payment schedule.
Trump Soho also has an edge over conventional condominium buildings opening in this challenging real estate market. Because the tower operates as a hotel, its unsold condominiums can produce income. People that buy rooms or suites at Trump Soho can stay at the condo hotel up to about a third of the year. The rest of the time, their rooms are available for rent as hotel rooms.
The Trumps, by the way, did not invest any of their own money, so they are insulated from any major losses.
The first guest checked in at 7 a.m. Friday morning. Of the 175 rooms that were open and ready for guests Friday, 80 were reserved at the time of the ribbon cutting at a promotional weekend rate of $289 a night.
By June, all 391 of the rooms at the condo hotel are expected to be open and charging between $400 and $500 a night, according to Jim Petrus, chief operation officer for Trump.
In addition to the predictable flood of super luxury amenities, the building has height advantage over everything nearby, so that even rooms halfway up the 46-story tower have river views - on both sides of the building.
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