Plans to sell the Trump International Hotel in Washington D.C. have been shelved after bids came in at less than half the asking price.
JLL, which the Trump Organization hired last spring to market the property, told CNBC that plans to sell the property were on “indefinite hold.” The Trump Organization sought $500 million for the asset, which like other of the company’s hotels and resorts benefited from those seeking favors from President Donald Trump’s administration over the last four years.
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Deadline is set for bids on Trump’s DC hotel
The property made $40.5 million in revenue in 2019, according to the Office of Government Ethics. Now, like the rest of the hotel industry, the asset is struggling — and is saddled with a $100 million loan that Deutsche Bank provided for renovations.
“At this point, they could either just turn over the keys, or keep it and make it part of whatever media company the President decides to create,” said Brian Friedman of Friedman Capital, which bid on the hotel and owns several properties in the area. “I just don’t think they’re going to get the price they expected.”
A spokesperson for the Trump Organization said the company had no plans to default on the loan, and that it had received bids over $350 million, “which would have been the most expensive price ever paid for a hotel” in D.C.
Other factors that may have turned some would-be buyers away include the requirement to maintain the Trump name on the hotel, and the 60-year leasehold on the former post office site with the General Services Administration.
The Trump Organization far outbid competitors for the leasehold in 2011, paying $3 million a year — a figure which rises with inflation. Experts told CNBC that as a result, any bid for the property would have to be around $150 million or $175 million.
Overall, the developer invested $200 million in the property. In 2012, Trump told the Washington Post he had paid “too much for the Old Post Office.”
[CNBC] — Georgia Kromrei