A New York judge put a spotlight on former President Donald J. Trump’s business empire this week, determining in a ruling that he had inflated the value of his properties by considerable sums to gain favorable terms on loans and insurance.
If the ruling stands, Mr. Trump could lose control over some of his most well-known New York real estate — an outcome the state’s attorney general, Letitia James, sought when she filed a lawsuit last year that accused him of fraud and called for the cancellation of his business certificates for any entities in the state that benefited from deceitful practices.
The ruling by the judge, Arthur F. Engoron of the New York State Supreme Court, came before a trial, largely to decide possible penalties, that could begin as early as Monday. Mr. Trump’s lawyers are likely to appeal.
Mr. Trump’s lawyers and a leading real estate expert have argued that Ms. James’s lawsuit does not properly factor in the Trump brand’s value or take into account the subjective nature of real estate valuations, with borrowers and lenders routinely offering differing estimates.
Nearly a dozen of the properties owned or partly controlled by Mr. Trump and his organization may be subject to Justice Engoron’s ruling. Here are the main ones that are vulnerable, as mentioned in the lawsuit.
Trump Tower and Mr. Trump’s triplex apartment, 725 Fifth Avenue in Manhattan
Trump Tower
Ms. James’s lawsuit claims that the Trump Organization, which is a collection of approximately 500 separate entities that operate for the benefit and under the control of Mr. Trump, used deceptive practices to come up with the highest possible value for Trump Tower.
For example, in 2015, the Trump Organization based its valuation of the tower on the sale of a single nearby building, described in the press as setting a world record, allowing Mr. Trump and his associates to claim the value of the property had increased by $170 million from the previous year.
Mr. Trump’s triplex apartment in Trump Tower
The three-story Trump Tower penthouse was Mr. Trump’s home for over two decades. It was the place that he used to show off his wealth to heads of state and film crews.
But the lawsuit says it was worth a lot less than he claimed: The value reported in financial statements by the Trump Organization went up 400 percent, to $327 million in 2015 from $80 million in 2011. Ms. James believes Mr. Trump and his associates justified this jump by grossly overstating the unit’s square footage, inflating it to 30,000 square feet from 10,996.
4-6 East 57th Street
In 2019, Mr. Trump and his companies that lease the buildings where Niketown, a tenant, was previously located valued the buildings’ interest at $445 million. The lawsuit said that amount was inflated by mismatching income and expense periods.
The Trump Organization is accused of using forward-looking income figures, which were higher, combined with backward-looking expense figures, which were lower, resulting in an inflation of at least $37 million, according to the lawsuit.
Trump Park Avenue, 502 Park Avenue
This property includes 12 rent-stabilized apartments, which were valued by the Trump Organization as if they were being rented at market rate. The valuation offered by the company for the rent-stabilized units was nearly $50 million, while the appraised value was $750,000, according to the lawsuit.
1290 Avenue of the Americas
Mr. Trump has a minority stake in this 43-story skyscraper in Midtown Manhattan, adjacent to Radio City Music Hall. According to the lawsuit, Mr. Trump has a 30 percent share of the entity that owns the building, and is hemmed in by the rules of the partnership, which limit Mr. Trump’s ability to sell his share.
Yet in valuing their stake in the building, Mr. Trump and his companies are accused of simply calculating 30 percent of the value of the skyscraper, minus its debt, and treating it as if it were an asset that could be sold from one day to the next. In fact, the partnership sharply restricts Mr. Trump’s ability to exit the agreement before 2044.
He is also accused of inflating the building’s worth by using an inaccurate “capitalization rate,” a real estate valuation measure that is used to compare different investments.
40 Wall Street
In 2015, the Trump Organization’s valuation for this property it leased in Lower Manhattan was $735 million. The lender-ordered appraisal came in at $540 million, the lawsuit claims. Mr. Trump’s valuation included a $1.4 million lease with Dean & Deluca, even though it was not yet signed.
His financial statements also understated expenses for the building. For example, the organization reported management fees and expenses of $100,000 annually for 2012, 2013 and 2014, when the fees were closer to $1 million each year.
Trump National Golf Club Hudson Valley, Hopewell Junction, N.Y.
The lawsuit claims the Trump Organization inflated the price of membership at this golf course to jack up the property’s worth. For example, the club’s listed initiation fee in 2011 and 2012 was $10,000. Yet in 2011, the Trump Organization valued 93 percent of the 161 unsold memberships at $15,000 and higher. In 2012, the company valued 78 percent of the 254 unsold memberships between $15,000 and $30,000 each.
Trump National Golf Club Westchester, Briarcliff Manor, N.Y.
The lawsuit claims the Trump Organization boosted the value of the 7,300-yard, par-72 golf course by including income they hoped to earn from new members. The valuation in 2011 relied on the assumption that 67 new members would pay approximately $200,000 each in entry fees, when many paid nothing.
Seven Springs, Westchester County, N.Y.
In 1995, a subsidiary owned by the Trump Organization bought a 212-acre property stretching across three towns in Westchester County. More than a decade later, Eric Trump, the former president’s son, made plans to build 24 luxury lots there. The appraiser hired by the Trump Organization in 2014 estimated the value of the lots at around $30 million. But the same year, the company reported a value of $23 million for each lot just in one of the towns, Bedford, according to the lawsuit.
Additionally, the financial statements reported these values as if the houses had already been built, though the Trump Organization faced a legal challenge from the Nature Conservancy, which sought restrictions on what the organization could build.