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The Bubble that Blew Up Donald Trump’s Net Worth Is Popping

A view of the Trump Tower on 5th AvenueA view of the Trump Tower on 5th Avenue
A view of the Trump Tower on 5th Avenue in New York.TIMOTHY A. CLARY AFP/Getty Images

There is considerable disagreement over Donald Trump’s actual net worth.

If you ask the billionaire real estate magnate, he’ll tell you it’s north of $10 billion, while independent experts estimate it to be $4.5 billion or less.

Whatever gauge you prefer, they all rely on estimates of the value of his many real estate assets, like 502 Park Avenue or 6 E 57th Street in Manhattan, which both feature tens of thousands of square feet of commercial real estate space. And unfortunately for Trump, the headlong upward march of commercial real estate prices in America has come to a halt, according to data from Real Capital Analytics Inc. cited by the Wall Street Journal.

Just $25.1 billion worth of office buildings, retail space and apartment complexes were sold in February, according to the data cited by the Journal, down from $47.3 billion in February of last year. The report continues:

Prices, which had been on a steady march higher since 2009, are beginning to plateau, and have started falling in certain sectors and geographies, according to analysts and market participants. An index of hotel values compiled by real-estate tracker Green Street Advisors, for example, was 10% lower in February than it was a year earlier, due in part to reduced business and international travel.

Owners of residential real estate in Manhattan may be running out of luck as well. Take a look at the following data from Street Easy, which shows how Manhattan condo prices have exploded over the past generation:

This trend has helped pad Trump’s wealth in recent years, as he owns many properties with significant residential square footage, but there is evidence that the great Manhattan luxury condo boom is coming to an end. A report earlier this month showed that luxury rental prices in Manhattan fell 4.2% in February from a year earlier.

And it’s not just Trump’s net worth that has been puffed up by the real estate bubble. Shares of publicly traded office REITs SL Green (SLG) and Vornado Realty Trust (VNO) are currently trading at the equivalent of price-to-earnings ratios of 35 and 25, much higher than the rest of the market. Shares of those REITs have been falling recently too.

One reason for the slip in Manhattan real luxury real estate prices is economic weakness in places like China and Russia, which was a source for much of the demand for pricey American real estate.

This is not to say that Donald Trump is at risk of losing his shirt. On the contrary, his ownership of some of the most valuable real estate in the country will ensure that he is a wealthy man for years to come. But the extent of his wealth is dependent on the whims of the market, which may be taking a turn for the worse.