Exploring the Intriguing Valuation of Mar-a-Lago: Insights from Real Estate Insiders

Last week, Judge Arthur Engoron in New York declared that former President Donald Trump had greatly exaggerated the value of his Mar-a-Lago estate by an astonishing 2,300%. This ruling, which was part of a stunning verdict that held Trump and his adult sons accountable for fraud, highlighted numerous other instances where Judge Engoron found the Trump real estate empire to have been significantly overvalued.

In his ruling, Judge Engoron stated that the assessment of Mar-a-Lago's market value by the Palm Beach County Assessor ranged from $18 million to $27.6 million between 2011 and 2021. This specific finding has caught the attention of real estate and legal experts, who are questioning the metric relied upon by the judge.

The judge pointed out that Trump exaggerated the value of Mar-a-Lago by at least 2,300% compared to the assessment done by the tax assessor. However, it is widely acknowledged that the assessment value assigned by the tax assessor is often lower than the actual market value of a property.

Appraisal values and market values are fundamentally different, as clarified by Eli Beracha, Chair of the School of Real Estate at Florida International University. Beracha emphasized that this distinction holds particularly true for properties of a distinctive nature, making it effortless to argue for the uniqueness of this specific property.

According to Dina Goldentayer, the executive director of sales at Douglas Elliman in South Florida, the valuation made by tax assessors is not taken into consideration when determining the value of a property in the ultra-luxury market.

Goldentayer criticized the judge, saying that he would not be a good realtor, as it is widely known that tax assessors' valuations do not accurately reflect the market value of a property.

Goldentayer stated, "The tax assessors office would have the lowest valuation, followed by Zillow, and the realtors valuation would be the highest."

According to Jonathan Miller, president and CEO of Miller Samuel Inc., a real estate appraisal company in New York City, it is incorrect to assume that a tax assessment and market value are the same thing.

According to Miller, they can be the same thing in some markets, but in most others, they are not.

Melissa Cintron, a partner at Harrington Ocko & Monk specializing in insurance defense, corporate, and real estate practice groups, confidently states that based on improvements and a market analysis, it is undeniable that Mar-a-Lago is worth more than $28 million.

The judge's use of a potentially underestimated tax assessment value for Mar-a-Lago does not guarantee that Trump employed a fair valuation for the property. The matter of Mar-a-Lago's value remains subject to debate.

Miller stated, "The property's value is not distinctly determined. The determining factor lies in what the market would ascertain for the property. Complicating matters is the fact that Mar-a-Lago is not a typical single-family house."

The judge highlighted in his decision that Trump had consented to the utilization of Mar-a-Lago as a social club, and certain limitations exist that restrict its potential use as a single-family home.

Valuing a property usually involves realtors, buyers, and sellers comparing it to recently sold properties in the same vicinity. However, this approach may not be feasible for a distinctive property, particularly one owned by a well-known individual and serving as a private club.

"Mar-a-Lago is a truly exceptional asset, unparalleled in its class," stated Goldentayer, the realtor based in South Florida.

According to Goldentayer, determining the value of Mar-a-Lago would involve hiring three impartial appraisers and calculating an average of their assessments. The valuation provided by tax appraisers would not be taken into consideration.

Trump and his legal representatives vehemently denounced the ruling from the previous week. Christopher Kise, Trump's attorney, deemed the ruling as "completely detached from factual evidence and the applicable legislation."

Trump leveled accusations against Engoron, stating that they were "carrying out the agenda" of New York Attorney General Letitia James.

The ruling, in addition to Mar-a-Lago, did not solely rely on it. The New York judge discovered various occasions where Trump and his adult sons magnified the worth of properties. One example is Engoron's uncovering of Trump's overvaluation of properties such as 40 Wall Street, the Seven Springs Estate in Westchester County, NY, and a golf course in Aberdeen, Scotland.

Engoron's findings revealed that Trump had exaggerated the size of his triplex apartment at Trump Tower by three times, resulting in an overvaluation ranging from $114 million to $207 million. Engoron deemed this significant discrepancy, as a real estate developer evaluating his own living space over the course of several decades, to be an act of fraud.

Cintron, a partner at Harrington Ocko & Monk, does not believe that the controversy surrounding the valuation of Mar-a-Lago has any bearing on whether or not Trump committed fraud.

According to Cintron, the repeated occurrence of this practice in relation to Trump's properties is enough to support Judge Engoron's findings of an intention to defraud.

CNNs Anna Bahney contributed to this report.