Once in Mr. Trump’s office, the haggling began. Mr. Barrack said he expected 10 to 15 participants in the coming auction and an ultimate price as high as $500 million. What if I gave you $390 million today? Mr. Trump asked. Mr. Bass has an offer of $410 million in hand, Mr. Barrack countered. Mr. Trump raised his bid, and they settled on a final price of $407.5 million.
“Then he did something amazing,” Mr. Barrack recalled. “He said: ‘You’ve owned the property for four months. I want you to tell me everything that’s wrong with it and how to fix it. I said, ‘We just said, no contingencies.’ He said: ‘This is not in a contract. Nothing in writing. Just tell me what is wrong with the property and how to fix it.’”
In essence, Mr. Trump was telling Mr. Barrack that he trusted him to disclose everything that a team of lawyers and inspectors would typically need at least 90 days to unearth. It was like asking an enemy for a map of a minefield. And by saying, in effect, “I’m at your mercy and will believe what you tell me,” Mr. Trump was appealing to Mr. Barrack’s integrity. Which was very disarming.
Mr. Barrack thought over Mr. Trump’s question for a moment. He had already worked out most of the major problems.
“The biggest issue,” he told Mr. Trump, “is Fannie Lowenstein.”
He was referring to a woman, who might have been in her 80s, who lived by herself in a tiny, rent-controlled apartment in the Plaza. With Ms. Lowenstein there, reconfiguring the building as a condominium or a co-op, which was Mr. Trump’s plan and the only way to justify the $407 million price tag, would be far more difficult. But she had adamantly refused to give up her rent-control rights and move to a larger apartment in the Plaza.
“I’ll do the deal in a week, for $407.5 million,” Mr. Trump said, “and you take care of Fannie Lowenstein. All I want at the closing is to hear that Fannie Lowenstein is happy.”
Mr. Barrack left the meeting in a daze, both thrilled and anxious.
“It was a genius deal for Trump,” Mr. Barrack said, “because while an auction would have fetched a bigger initial price, it would have been tangled up in contingencies. And he’d just convinced me to fix everything for him.”
Mr. Trump had correctly sized up Mr. Barrack: someone who was trying to prove himself and wanted a major coup.
“He kind of looked at me and said, ‘I’ll make you a star,’” said Mr. Barrack, who now runs Colony Capital, a real estate investment firm based in Los Angeles with 300 employees. “It’s the same talent on display when he gives political speeches. He reads an entire crowd with the same precision that he reads an individual.”
For Mr. Barrack, winning over Ms. Lowenstein was a project. She knew more about tenant law than any lawyer, and for the next two months, the two spoke four or five times a week. He ultimately offered her an apartment in the Plaza that was almost 10 times as large as her studio apartment, with a view of Central Park. Rent-free. For life. Also, new furniture, new dishes, new everything. She grudgingly agreed. But she also wanted a piano. She got a Steinway.