Is Trump Tower Now The Worst Address In America?

To get inside Trump Tower these days, visitors, workers and residents must approach a horde of police officers, declare their destination and allow their bags to be searched. That’s after braving protesters carrying signs like “Trump = con man” on the opposite side of Fifth Avenue and ducking to avoid ruining a TV news crew’s shot.

Welcome to the Trump transition HQ. The circus, however, is unlikely to end on Inauguration Day. That prospect is sure to raise major financial questions for the condo owners who also call the building home.

President-elect Donald Trump is among the residents of the 263 condominiums that occupy the tower’s 30th through 68th floors. He has indicated he wishes to return to his gold-plated apartment as often as possible, while his wife, Melania, and young son Barron will remain in residence at least until the end of the school year. Reports say the Secret Service is considering renting a floor of the building.

What will the constant presence of press, protesters and security personnel mean for the value of the 262 other apartments?

New York apartment search site StreetEasy shows 16 units currently for sale in Trump Tower. They are priced from $2.1 million for a 1,052-square-foot one-bedroom to $11 million for a two-bedroom more than twice that size.

A penthouse previously listed for $23 million was taken off the market less than a week after the election and the most recent sale closed was in September. No Trump Tower apartments have come on the market or had prices changes since Election Day, though a few were listed just weeks or days before. StreetEasy shows that the highest price ever achieved for a Trump Tower apartment was $24.5 million in 2013.

The Trump Organization, which owns the building, did not respond to FORBES' questions by the time of publication.

“For every person who doesn’t want to live at Trump Tower there is probably somebody who thinks it’s nifty to live where the president is,” says Donna Olshan, president of Olshan Realty and publisher of a weekly report on New York’s luxury real estate sales. She likens living in Trump Tower today to sharing a building with an A-list celebrity—albeit on steroids.

Experts agree it is too soon to make any sweeping judgement about the future of Trump Tower condo prices. There are pros to sharing a roof with the most powerful person on earth—like security and notoriety. But there are also many cons.

So far traffic has emerged as a key downside for New Yorkers. Since Election Day cars haven’t been permitted on 56^th Street between Fifth and Madison avenues--where the resident entrance is located—adding to typical midtown congestion. New York City Police Commissioner James O’Neil has said that residents should expect an elevated police presence around the tower going forward, but that Fifth Avenue would not be regularly closed to traffic as some had feared.

“Every time Obama came to the city all the cab drivers were swearing and there was steam coming out of their ears,” recalls Leonard Steinberg, president of real estate brokerage Compass and co-author of a monthly market report. “If that were to happen every weekend consistently for the next four years, I don’t know what would happen--but it would be ugly.”

Beyond inconvenience, there are also questions about how the Trump brand weathered its patriarch’s presidential campaign. Sure, he won, but his rhetoric alienated many. Only 10% of Manhattan voters chose Trump. Exit polls suggest Trump, like other Republicans, had a national edge with voters who earn more than $250,000 a year. But it’s harder to say which trend held with folks high enough on the income ladder to afford a Fifth Avenue apartment.

“The real question is: does the population that finds value in the [Trump] brand have the financial wherewithal to capture that value?” says Nir Kossovsky, CEO of reputation consultancy Steel City Re. “It is not that there won’t be demand, it may be that the segment that has the demand just can’t afford the price—or care to live in the city.”

Regardless of whether Trump's campaign reduced his brand's allure with the wealthy, experts say the tower’s biggest challenge has nothing to do with politics. In short: it’s old.

“People think of it as the forerunner of the modern-day condo, but it is a mature product and there is newer, better stuff out there,” notes Olshan. “There are people who will decide to just leave because they don’t want to bother renovating.”

Trump opened the 600-foot skyscraper at 721 Fifth Avenue in 1983. The apartments were largely one and two bedrooms, designed as luxury pied-a-terres. At the time Trump told Forbes, "I will probably never find as good a site as that again."

For most of the building’s history the only nearby competitors were Olympic Tower four blocks south and Museum Tower to the west. In recent years the midtown landscape has changed substantially. Now just blocks away there's One57, 432 Park Avenue, 220 Central Park South and the condos at The Plaza Hotel--just to name a few.

The price a Trump apartment can command will depend in part on size and how recently it has been renovated. The apartment asking $11 million, for example, is being renovated for the next buyer. For $8.5 million someone can get a larger apartment, but on a lower floor and with a less modern design. Some buyers will no doubt be lured away by the newer buildings’ amenities, like swimming pools and modern lobbies--not to mention the lack of Secret Service.

Across the street from Trump Tower one recent evening, Bergdorf Goodman employees were putting the finishing touches on their famous holiday windows. Downstairs from Trump's apartment, couples were shopping for engagement rings at Tiffany’s, while a few blocks north, horse-drawn carriages were trotting into Central Park. The bustling scene provides a useful reminder: Trump Tower’s residents already chose to live at the center of things.

“I don’t think anyone who chooses that location now or ten years ago or ten years in the future is looking for green leaves and open pastures,” observes Steinberg. “This is the center of the busiest, most densely populated city anywhere and people who are coming to this location are looking for city life.”

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