Donald Trump’s struggling Washington, D.C., hotel may soon be somebody else’s problem.
Miami-based investment firm CGI Merchant Group is close to striking a deal with the Trump Organization to acquire the lease on the Trump International Hotel Washington, D.C., for more than $370 million, according to the Wall Street Journal.
The deal could ultimately fetch closer to $400 million, according to one source, twice the estimated $200 million the Trump Org spent renovating the former federal office building into a luxury hotel since leasing it from the General Services Administration in 2012.
CGI is already in discussions with hotel operators about dropping the Trump name from the hotel, according to the Journal. One operator reportedly involved in those talks is Hilton’s Waldorf Astoria luxury brand.
The Trump Organization was said to be in “advanced talks” about selling the hotel lease last month. Newmark, which was marketing the property, was seeking offers in excess of $400 million after earlier attempts by the Trump Org to sell the lease for $500 million fell flat. JLL had previously been marketing the hotel’s lease, but backed out in the immediate wake of the Jan. 6 attack on the U.S. Capitol.
The Trump Org nabbed the hotel lease in 2012 — prior to Trump’s second foray into national politics — beating out the likes of Marriott and Hilton for the site.
The hotel has become a site of controversy, though, since its 2016 opening, including concerns about how foresign and domestic interests could attempt to curry favor with the Trump administration by utilizing the hotel. When Trump took office, he put his assets into a trust to be run by his sons, allowing him to continue benefiting financially.
News of an impending deal comes days after the House Oversight Committee released documents showing that the hotel incurred more than $70 million in losses during Trump’s presidency, per the House Oversight Committee.
Trump reported in financial disclosures that the hotel earned more than $150 million in revenue during his presidency, but documents released by the Democrat-led committee show that the hotel needed a loan of more than $27 million from one of the president’s holding companies. The hotel also received a favorable $170 million loan from Deutsche Bank, which allowed the Trump Org to delay principal payments for six years, according to the committee.
It’s not immediately clear when a transaction for the hotel’s lease could close. Last year, CGI announced plans for a $500 million fund to invest in distressed or value-add hotels that could be branded as Hilton properties, aiming to acquire about 20 properties.
[WSJ] — Holden Walter-Warner