what is a white elephant 
a white elephant is something whose cost of upkeep is not in line with its usefulness or value from an investment perspective the term refers to an asset property or business that is so expensive to operate and maintain that it is extremely difficult to actually make a profit from it white elephants also tend to be illiquid assets meaning they cannot be easily or quickly exchanged or sold for cash without the seller experiencing a significant loss understanding white elephantsa white elephant is a burdensome possession when applied to investments it can be used to describe anything that is expensive to maintain unprofitable and impossible to sell in other words a white elephant is a name given to undesirable investments that are more trouble than they are worth corporations may invest money in property plant and equipment pp e with the goal of using these fixed assets to improve the company s bottom line in the future however if economic conditions change these assets can become white elephants for example suppose a company builds a factory to meet anticipated demand for its new product line if the product fails to sell that new factory becomes an expensive property that does not help the company generate enough revenue to cover the cost of its maintenance over the years the term white elephant has also been linked to various government funded construction projects governments look to these endeavors to generate rapid economic growth by funneling lots of money into subsidized building and infrastructure projects in the united states funding for these projects sometimes comes in the form of controversial earmarks which refers to spending provisions slipped into legislation that allocates money for a project favored by a particular politician or government official critics of these white elephant projects point out they are frequently ill conceived poorly planned and a waste of taxpayer money history of white elephantsthe term white elephant derives from asia the white elephant is an icon with roots in siam now commonly known as thailand these rare animals were regarded as holy in ancient times and automatically gifted to the reigning monarch the story goes that the monarch would give the white elephant as a gift of either good or bad fortune if he liked the recipient he would gift land along with the elephant to help pay for the cost of the elephant if he did not like you he would not include land turning the gift into a money pit examples of white elephantswhite elephants are common in real estate as the following examples illustrate the empire state building is an example of a property that initially seemed destined to stay a white elephant but eventually became a source of positive cash flow and growth the property did not become profitable until the 1950s more than 20 years after it was completed built against the backdrop of the great depression the building struggled to become an office building despite being planned for that purpose now owned by a real estate investment trust reit the building provides multiple sources of revenue in 2019 the building s observation deck generated approximately 128 8 million equal to about 39 of the building s total revenue 1 the building generates additional sources of revenue from leases of office and retail space along with fees generated from third party television and radio broadcasters for use of its broadcasting mast another example is the t mobile center formerly known as the sprint center owned by the city of kansas city mo the multi purpose arena opened in 2007 hosting a concert by elton john as its first event at a cost of roughly 276 million the t mobile center was supposed to house a major sports anchor team 2 kansas city did enter discussions with the national basketball association and national hockey league teams however as of 2020 neither league has agreed to relocate to the arena finally there s the ryugyong hotel originally intended to hold five revolving restaurants and over 3 000 hotel rooms the ryugyong hotel stands 105 stories tall as a pyramid shaped skyscraper in pyongyang north korea developers began construction on the tallest structure in north korea in 1987 but plans were later halted in 1992 due to a lack of funds eventually in 2008 work on the building resumed with a view to unveil its grand opening in 2012 the centenary of kim il sung s birth as of 2020 the building still remains unfinished earning it the nickname the hotel of doom and the dubious distinction as the tallest unfinished building in the world 