President-elect Donald Trump may be forced sell his Washington D.C hotel at a financial loss, if he decides to bow to mounting pressure and separate himself from the property.
The Trump Organization spent $212 million — 80 percent of which was borrowed from Deutsche Bank — redeveloping the historic Old Post Office into a 263-room hotel, Bloomberg reported. For the organization to recover its investment, it would need to sell it for around $806,100 per room. The property, which is on Pennsylvania Avenue, has attracted intense scrutiny over the conflicts of interest issues it presents.
In terms of its value, the hotel only opened in September and there’s limited information on its earning capacity. “At $800,000 a room, it would certainly be at the top end of the market for luxury hotel values in the district,” Andy Wimsatt, a Washington-based managing director in hotel brokerage and investment sales at CBRE Group Inc., told Bloomberg.
The conflicts of interest that surround the hotel are complex. The building itself is rented from the federal government, which would put Trump on both sides of the lease if he doesn’t sell. However, if he were to sell the property, he could face criticism that higher bids were made to curry favor with the next president, according to the publication. Trump has also toyed with having his eldest three children — who each own a 7 percent stake in the property — take over the business.
Trump is facing mounting pressure from ethics specialists and lawyers to separate himself from his myriad of business interests. Members of Congress are required to avoid policy issues that will impact their own financial interests, however those rules apparently do not apply to the president. Trump has also toyed with having his eldest three children — who each own a 7 percent stake in the property — take over the business, though ethicists say it’s not enough to quash fears of financial gain.
The president-elect was due discuss his various conflicts of interest at a press conference last week, but the presser — which would have been his first since July — was canceled and has not been rescheduled. [Bloomberg] — Miriam Hall