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Is Donald Trump a good negotiator?
Sean Quinn, lives in The United States of America
Updated Feb 8, 2017
I’ve known a few real estate and construction heavy weights, including someone who worked for him, who operated in NYC back when Trump was actually a real estate investor and developer compared to the last 20 or so years when he’s basically been a brand (his own) marketer. When he actually had to negotiate the finer points of deals they’ve said he wasn’t great and that what he ended up doing was just not paying people and defaulting on those contracts. Those contracts were with vendors and lenders. I know it’s cliche now and it obviously didn’t matter to those who voted for him but from everything I’ve heard from people who dealt with him back then (and I heard some of these stories well before the Presidency was even a twinkle in Trump’s eye) was that he was nothing special. He had inherited equity, good family relationships with both equity and debt investors and his father had a tough yet good reputation in town that Donald was able to ride in the 70’s and 80’s.
After people saw how he dealt with the fallout-and a lot of real estate developers in the 80’s blew up just the same as he did-they just weren’t going to deal with him again. In the cyclical real estate development world, especially pre-1990’s when it wasn’t so institutional and there were many more independent cowboys out there building large scale projects, people failed all the time. However, the ones who were able to bounce back dealt with the fallout better. They tried to repay vendors and lenders and renegotiated in good faith with them. Donald didn’t. His negotiating skills didn’t matter because he wasn’t going to pay them: you can say that you want 100, and I can say sure but it doesn’t matter to me because I’m only ever planning to pay you 50. So do I get to say I’m a good negotiator?
That’s why he hasn’t really invested in NYC real estate at scale since then. No one wanted to do a deal with him. The projects that have his name on them are primarily deals that he’s lent his name to, not his money, in a marketing deal where he receives a cut of the profit and gets ongoing property management and development fees in exchange for putting his name on the project. Cunning marketing and a great rebound because no one was really willing to deal with him as a developer again? Yes. And maybe he’s good at negotiating those deals but when you’re the developer of a project that’s in the hundreds of millions to billions, the marketing, branding and property management folks are small parts of much larger moving pieces so I’d guess that they didn’t really care that The Donald got an extra few bps here or there. There’s no doubt that he built his brand up because that’s what he’s good at: selling a concept, no matter how ugly it is. Did you ever stay in one of his old casinos or hotels? Gaudy as all hell. Gold-colored crap everywhere with tacky marble. But he was driving his brand of 80’s style wealth.
I suppose he’s been able to gain foreign investors since he became a TV star because New York wasn’t willing to. He sold them on the glitz and glamour of the Trump brand. I don’t know about that one for sure, but I hadn’t heard of anyone going into a deal with him who was from NYC.
I spent a couple of decades in private equity. My role was to source, structure, negotiate and close deals, most of them very complex with multiple negotiations occurring simultaneously. I attended a few classes and read a wide variety of negotiating books and a fair amount were helpful but at the base I found that empathy was the most important quality for someone who was negotiating. Not a wishy-washy empathy where I wanted someone to cry on my shoulder, but simply being able to understand where the other person was coming from and being able to put myself in their shoes. I was a fairly tough negotiator, but I took a long outlook on my career. I never wanted to sucker someone or beat the crap out of them when they were down because if I got a reputation as someone who was willing to #^&#^&#^&#^& someone over I wasn’t going to be able to be in my business for very long. Those are the best negotiators in my opinion: put yourself in the other person’s shoes, think about how you can both walk away from the situation at least feeling somewhat content and get the best terms for your side while doing so. Those are the people that I emulated early on in my career and who themselves built long careers with reputations as solid individuals with integrity. But it takes empathy. I highly doubt Donald Trump has that character trait.
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