Trump sells DC hotel to investment firm for $ 375 million
WASHINGTON (AP) – Donald Trump’s opulent hotel near the White House that has drawn lobbyists and diplomats seeking favor with the ex-president as well as critics as a symbol of his ethical disputes is sold to a Miami investment group, according to published reports citing anonymous sources.
CGI Merchant Group has agreed to pay the Trump Organization $ 375 million for the rights to the 263-room hotel and intends to rename it the Waldorf Astoria, according to the Wall Street Journal and The New York Times, citing sources with knowledge the subject. .
Neither the Trump Organization nor CGI responded to numerous requests for comment.
The deal is expected to be concluded early next year, after which the hotel will be managed by the Waldorf Astoria under a separate agreement concluded by CGI, according to the Journal. Waldorf Astoria is owned by Hilton Worldwide Holdings.
The hotel has been a big loser for the Trump family since securing the right to convert a stately federal building called the Federal Government’s Old Post Office under a lease that, with extensions, can last nearly 100 year.
The federal agency that owns the property, the US General Services Administration, must approve any sale.
The Trump organization paid $ 200 million to convert it into a luxury hotel, opening in late 2016, shortly before Trump became president. He then lost more than $ 70 million over four years, according to verified reports obtained by a House committee investigating Trump’s conflicts of interest with the company. The losses came before the pandemic even resulted in closures, hammering the hospitality industry.
Ethics experts urged Trump to sell the hotel and other business assets before he took office, but Trump refused and the hotel quickly became a magnet for the powerful and those seeking power: lobbyists for industries trying to shape politics, Republican politicians seeking a presidential printer, and diplomats from Azerbaijan, the Philippines, Kuwait and other countries.
Above all the din in his sparkling lobby was the question: to what extent were the decisions Trump made a few blocks away in the Oval Office shaped by his financial interests, and, if not at all, why risk to tarnish American policy with even the appearance of conflict?
Trump dismissed those concerns, saying he was too busy with government to care about making money from his office. The Trump Organization has pledged to send a check annually to the U.S. Treasury equal to the profits of patrons of foreign governments, in response to criticism that it violated the U.S. Constitution’s emoluments clause prohibiting gifts to foreign governments.
“The Trump DC Hotel was an illuminated neon sign telling foreign countries and financial interests how to bribe the president and a stark reminder to Americans that his decisions as president were just as likely to concern his bottom line as our interests.” said Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington, a watchdog group. “Selling him now that he’s no longer in office and the scam has dried up is, to say the least, too little, too late.”
The acquirer, CGI, manages $ 325 million from wealthy families, artists and sports figures, investing in office buildings and hotels, among other types of property, according to its website. Additionally, the company teamed up late last year with baseball star Alex Rodriguez and another investment firm to launch a $ 650 million fund to buy hotels and convert them into Hilton brands. .
CGI has also launched a chain of “socially responsible” hotels that donate to local charities, support local businesses and purchase environmentally friendly products. In September, he announced he would open a hotel in Miami with a glass-bottom pool overlooking the Atlantic Ocean called Gabriel South Beach as part of his socially responsible offerings. The hotel will be part of Curio Collection, a Hilton chain.
Jamaican-born company boss Raoul Thomas has made big donations to Democratic Party politicians, including Joe Biden’s campaign. He is a senior member of the board of directors of the National Association of Black Hotel Owners. His company has invested $ 30 million in Morris Brown College in Atlanta for a hospitality and hospitality training program at the historically black institution in Atlanta.
It is not known how much money the Trump family is making from the sale as the terms of the deal have not been disclosed. Hotel sales sometimes include “earn outs” in which the seller only receives all of the money promised if the buyer achieves certain financial goals in the years after the deal is closed.
The Trump family originally hoped to get $ 500 million for the hotel when they first released it in the fall of 2019. It was taken off the market and then returned to service this year. .
Some hotel experts were surprised by the advertised price given the few businessmen, tourists and lobbyists who come to Washington.
Bill Collins, executive vice president of commercial real estate broker Cushman Wakefield, said that a price equivalent to $ 1 million for each room is the “best dollar” in the industry. Based on that rough estimate, the Trump Hotel would be worth no more than $ 263 million, almost $ 100 million less than it would have gotten.
“They put too much money into it and couldn’t increase the occupancy rate,” he told the AP last month. “Can anyone handle it better?” Maybe, but only marginally.
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