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President Trump has updated his most recent financial disclosure forms. The numbers show his overall wealth holding steady, but a recent analysis by Bloomberg News highlighted one potential issue. Revenue from Trump's office buildings has been coming in below expectations. That's part of a softening in commercial real estate, and it's happening all over the country. NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: This is the corner of 71st Street and Third Ave., on Manhattan's Upper East Side, one of the wealthiest ZIP codes in the country. On one corner sits what used to be a supermarket with a huge for-lease sign. There's another empty space on the opposite corner and still another on the next block. Former city councilman Sal Albanese says there are hundreds of empty retail storefronts in this 14-block area.
SAL ALBANESE: I've run into people, very wealthy people, who complain that they can't even buy a bagel anymore in their neighborhoods.
ZARROLI: Albanese, who's running for mayor, says too many restaurants and stores go out of business.
ALBANESE: Good businesses are going under, and communities and jobs are suffering as a result of it.
ZARROLI: It's always been hard to survive as a retail outlet in New York where competition is fierce. And the challenges are even greater these days because of the internet. Andrew McCullough is managing director of Green Street Advisors which tracks commercial real estate.
ANDREW MCCULLOUGH: You have more and more goods being bought online instead of at physical stores, and that's changing the retail landscape.
ZARROLI: The impact of online shopping on bricks-and-mortar stores has been chronicled a lot. What's less known is that the market for commercial office space has also softened. In cities such as New York and San Francisco, a lot of new buildings have gone up. At the same time, companies are learning how to get by with less room per employee, shoving more desks into smaller spaces. Keith DeCoster is with the commercial real estate services firm Savills Studley.
KEITH DECOSTER: So that means as they move to a new building, they're actually shrinking their footprint.
ZARROLI: It's always easier to design a smaller footprint in a new building, so older office buildings are at a disadvantage. Rents have been flat, and that appears to have hurt the properties owned by President Trump. Bloomberg News reported that 1290 Avenue of the Americas generated $77 million last year. It had been projected to bring in 97 million. There were similar shortfalls in Trump Tower and 40 Wall Street. DeCoster says the problem is likely to get worse because a lot of new buildings are going up.
DECOSTER: There's more new construction on the horizon. This is the biggest development pipeline since the 1980s.
ZARROLI: Normally, when supply goes up, rents go down. But big commercial real estate companies are reluctant to lock themselves into long-term leases with low rent, and they can afford to wait a bit for market conditions to improve. So space can sit on the market for a long time. And Andrew McCullough of Green Street Advisors says the outlook in the market is especially murky right now because there's so much uncertainty in Washington.
MCCULLOUGH: Uncertainty makes real estate investors more cautious, and you've seen a pretty big drop-off in transaction activity as a result.
ZARROLI: McCullough says many people had hoped the Trump administration would bring about big changes in tax policy, something that matters to anyone who owns real estate. But with so much political turmoil right now, that seems less likely. Jim Zarroli, NPR News, New York.
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