When it came to selling condos in Panama, Ivanka Trump really was her father’s daughter. WNYC and ProPublica published the definitive account of the Trump Panama project (which included a bizarre standoff between Trump Organization staff and its new owners earlier this year—it’s now going to be run by Marriott). The piece covers the project from its inception to its demise and includes cameos from Bear Stearns, a broker “linked to money laundering,” and a “Stormy Jack Daniels” cocktail.
It also includes another look at Ivanka Trump, real estate saleswoman. The president’s daughter, WNYC and ProPublica report, “gave false sales figures for projects in Mexico’s Baja California ; Panama City, Panama ; Toronto and New York’s SoHo neighborhood.”
The way it worked for the Panama City project was that the Trumps and their partners had to presell a certain number of units to be able to sell bonds to fund the project. This became the motivation for making potential buyers think that units were being snatched up—not only would that increase the units’ desirability and justify higher prices, it would also make the potential buyers confident the project would get off the ground. And once the partners were able to float bonds to finance the hotel, they needed to talk up the deal so that the original buyers would stay involved, future buyers would buy in, and the partners could maintain their (already low) credit rating.
“Ivanka briefly boasted that she had personally sold 40 units. (A broker on the project said he couldn’t remember her selling even one.),” WNYC and ProPublica wrote, “Meanwhile, Ivanka told a journalist at the time that ‘over 90 percent’ of the Panama units had sold—and at prices five times as high as comparable buildings. Both statements were untrue.”
A year after the bonds were sold in November 2007, Ivanka said in an interview that “it’s a 1,000-unit building, we’ve sold over 90 percent of it,” and that they were pricing the units at a “500 percent premium to anything the luxury market has ever experienced prior to our entry.” It turns out that, according to the bond ratings agency Moody’s, 79 percent of the units had contracts and the premium was 130 percent “of what similar luxury properties fetched.”
This was happening, of course, while the world economy was melting down and the financial system were freezing up, and buyers of things like junk-rated developing-world hotel bonds were fleeing to safety, and everyone else was running out of money.
And although they had been able to start construction and fund the project initially, the Trump Organization’s partners still needed to make interest payments on the bonds—which means they needed to sell the remaining units and close the deals they had already made. Which meant they had to create a sense of urgency and value around the project.
It worked—sorta. There’s a fancy hotel in Panama City called the Bahia Grand Panama, and the rooms, according to WNYC, go for $169 a night.
This is not the first time Ivanka has been accused of … creative … salesmanship. ProPublica and WNYC reported last year that Manhattan prosecutors had investigated her and Don Trump Jr. for how they sold units in the Trump SoHo, a similar residential/hotel development. While charges were never brought, the investigators found “emails from the Trumps making clear that they were aware they were using inflated figures about how well the condos were selling to lure buyers.”