The owner of Donald Trump’s former Washington, D.C. hotel may be able to sympathize with the former president after defaulting on a loan at the property.
This month, Miami-based CGI Merchant Group defaulted on a $285 million loan connected to the Old Post Office site, which is now branded as a Waldorf Astoria, according to the Wall Street Journal. MSD Partners, which manages money for tech billionaire Michael Dell and other investors, provided the acquisition loan to CGI nearly two years ago, when Raoul Thomas’ company acquired the leasehold of the property for $375 million.
Thomas has been scrambling to cure the default, lining up $100 million in fresh financing for the property. Vik Uppal’s Mavik Capital Management, a real estate debt and investment fund, is leading a $75 million recapitalization, according to Bloomberg. The money may also support the opening of a new restaurant and club at the property.
Hilton, which serves as property manager, would need to approve any new partner at the hotel. MSD would also need to approve new creditors or partners.
CGI does not appear to have commented to any publications about the Waldorf Astoria default.
When the Trump Organization took over the Old Post Office in 2012, it agreed to spend $200 million to renovate the Pennsylvania Avenue property. The Trump International Hotel generated controversy during the developer’s presidency, though, due to fears about conflicts of interest and the perception that people would frequent the hotel to curry favor with the administration.
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The Trump Organization initially asked for $500 million for the hotel’s leasehold — the General Services Administration owns the property — before coming down on its ask, in part due to a brokerage change prompted by the Jan. 6 insurrection.
A disclosure made to the Office of Government Ethics last year revealed that the limited liability company that owned the hotel’s leasehold reaped nearly $285 million on its sale. During the Trump presidency, the hotel lost more than $70 million, according to the House Oversight Committee.