How much is Trump’s Mar-a-Lago worth? It depends on who you ask
Palm Beach real estate professionals are weighing the value of the former president’s club and residence after New York Attorney General Letitia James filed a fraud complaint highlighting the property.
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So what is former President Trump’s elaborate and historic Mar-a-Lago? in Palm Beach really worth it?
It depends on who you ask and the criteria you use to evaluate it.
“It’s priceless,” joked a seasoned Palm Beach real estate professional, who, like others in the Palm Beach real estate industry, has only spoken about Mar-a-Lago and Trump undercover. of anonymity.
Another was quick to provide a number: “I would put the value of Mar-a-Lago (conservatively) at $450 million,” the veteran realtor said.
The value of the 17-acre estate with its mansion-turned-private club made headlines last month as a key part of New York Attorney General Letitia James’ civil lawsuit against Trump, his three eldest children — Donald Jr., Eric and Ivanka — and others charged over The Trump Organization’s finances. Trump, the suit alleges, fraudulently and routinely overvalued his real estate holdings, including Mar-a-Lago, to further his own ends.
The lawsuit claims that Trump falsely inflated his wealth by billions of dollars to secure loans to the Trump Organization on “more favorable terms than would otherwise have been available to the company,” according to a statement released by James.
The action, which also includes charges of insurance fraud and tax evasion, seeks at least $250 million in restitution payments as well as other penalties.
Trump and his family members have denied any wrongdoing, and the former president dismissed the complaint as another political “witch hunt.”
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The lawsuit says that between 2011 and 2021, the Trump Organization assigned a high value to Mar-a-Lago which reached $739 million. These values, according to James’ statement, were “based on the false premise that (Mar-a-Lago) was unrestricted property and could be developed and sold for residential purposes, even if Mr. Trump himself signed deeds donating its residential development rights. , severely restricting alterations to the property and limiting the permitted use of the property to a social club.
The statement continued: “In reality, the club generated annual revenues of less than $25 million and should have been valued at over $75 million.”
That $75 million figure may seem miniscule to some Palm Beach real estate observers, given the size and importance of the area. Several residential properties much smaller than Mar-a-Lago, for example, have sold for prices exceeding $75 million in recent years.
But not everyone calculates the values in the same way.
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Take, for example, the Palm Beach County Office of the Real Estate Appraiser, which generates property values each year to calculate annual tax rolls. The agency‘s real estate values tend to be rather conservative, according to real estate watchers.
In last year’s tax rolls, Mar-a-Lago was assigned a total market value of $27.6 million. And while the 2022 rolls haven’t been finalized, the latest value assigned to Mar-a-Lago is $31 million, according to preliminary estimates released in August.
And how does the real estate expert arrive at his figures? It treats Mar-a-Lago like a private club – and that means it uses a different formula than it would use to assign a value to a private residence. Using what is known as the “income approach”, county assessors estimate the club’s income and expenses and determine its net operating income, which is then “capitalized” to establish the value. By law, financial data provided by a club is kept confidential.
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In the case of Mar-a-Lago Club, the market value is always the same as the taxable value used to calculate the final tax bill. The values for the new tax roll will not be finalized until the end of October.
And although Mar-a-Lago is the primary residence of Trump and former first lady Melania Trump, they never applied for a homestead exemption, which if granted could give them tax relief. .
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When asked to estimate the value of the club, two Palm Beach real estate agents said they would not attempt to guess a value unless they could review the club’s financial statements. Such numbers became press fodder during Trump’s presidency.
According to financial disclosure reports filed under the Trump administration, Mar-a-Lago’s revenue in 2017 was $25.1 million, which dropped to $22.7 million in 2018. There was a further decline in 2019 to $21.4 million, then a rebound in 2020 to $24.2. million.
In May 2016, before he was elected president, Trump announced a turnover of $29.7 million for Mar-a-Lago.
What if Mar-a-Lago was for sale?
The former president has never publicly expressed a desire to sell Mar-a-Lago. But if he did, the club would most likely be positioned for potential buyers as a revenue-generating asset.
But it’s also a one-of-a-kind trophy property, stretching from the Atlantic Ocean to the Intracoastal Waterway with a mansion originally built in 1927 for cereal heiress Marjorie Merriweather Post and her then-husband, stockbroker EF Hutton.
Several agents and brokers have stated that if sold in this market, Mar-a-Lago would be worth around $400 million at a minimum and possibly as high as $550 million or even more.
The land use act restriction dictating Mar-a-Lago can only be used as a social club since the mid-1990s. Trump negotiated it with city officials after he began pursuing plans to convert the mansion he bought in 1985 into The Mar-a-Lago Club. He paid a record $5 million for Mar-a-Lago, reportedly paid $3 million more for furnishings and another $2 million for his beachfront plot.
The deed’s restriction would appear to prevent anyone from buying the estate for use as a private residence rather than a club. But a Palm Beach real estate source who knows the language of deeds offered a theoretical scenario in which someone could buy and use Mar-a-Lago solely as a family estate.
Trump could sell the property to the buyer as a private club — and the new owner could then cancel each membership and treat the property instead as a “one-member club,” the source said.
During the club’s initial negotiations with Trump, the city also demanded an agreement that the property would never be subdivided. This deed restriction echoes one issued on the property by the National Trust for Historic Preservation.
If a single buyer purchased the property for use as a single-member club, the subdivision clause would not be breached, the source said.
“A phenomenal estate with a spectacular legacy”
If Trump ever decided to part ways with Mar-a-Lago, it’s a safe bet it would sell for well over $31 million.
But how much?
“It’s a phenomenal estate with a spectacular legacy,” said a Palm Beach real estate source.
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The size of the property sets it apart in Palm Beach, the source said, as does the historic mansion that has been featured in news stories around the world time and time again over the past six years.
The same real estate professional mentioned the recent sale of another commercial trophy property in Palm Beach County. Now known as Boca Raton, the former Boca Raton Resort & Club was sold in 2019 for $875 million – which included the historic hotel and a members-only club – to a company run by the billionaire Michael Dell.
The group of Mar-a-Lago buyers who could pay millions for Mar-a-Lago, the source acknowledged, are likely a rarefied group.
“But the 10 people who could? Who knows? And without comment.
Darrell Hofheinz is a reporter for the USA TODAY Network of Florida who writes about real estate in Palm Beach in his “Beyond the Hedges” column. It welcomes advice on real estate news on the island. Email dhofhe[email protected], call (561) 820-3831 or tweet @PBDN_Hofheinz. Help support our journalism. Subscribe today.