Donald Trump’s grand hotel near the White House, which attracted lobbyists and diplomats for the former president, is being sold to Miami Investment Group
WASHINGTON — Donald Trump’s lavish hotel near the White House, which has drawn lobbyists and diplomats in favor of the former president, as well as criticism as a symbol of his moral struggles, is being sold to a Miami investment group, published According to reports citing anonymous sources.
According to The Wall Street Journal and The New York Times, CGI Merchant Group has agreed to pay the Trump Organization $375 million for the rights to the 263-room hotel and plans to rebrand it as the Waldorf Astoria, Citing sources with knowledge of the matter. ,
Neither the Trump Organization nor CGI responded to multiple requests for comment.
The deal is expected to close early next year after which the hotel will be managed by Waldorf Astoria under a separate deal made by CGI, according to the Journal. The Waldorf Astoria business is owned by Hilton Worldwide Holdings.
The hotel has been a big money loser for the Trump family as it won the right from the federal government to replace a stately federal building called the Old Post Office under a lease that, with extensions, could last nearly 100 years.
The federal agency that owns the property, the U.S. General Services Administration, must sign any sale.
The Trump Organization invested $200 million to convert it into a luxury hotel, opening its doors in late 2016, shortly before Trump became president. It lost more than $70 million over four years, according to audited reports obtained by a House committee investigating Trump’s conflicts of interest with the business. The losses occurred even before the pandemic closed, affecting the hotel industry.
Ethics experts urged Trump to sell the hotel and other business holdings before taking office, but Trump refused, and the hotel soon became a magnet for the powerful and power-seekers: those trying to shape policy. Lobbyists for industries, Republican politicians are looking for a president. and diplomats from Azerbaijan, Philippines, Kuwait and other countries.
Amidst the commotion in his gleaming lobby was the question: How many decisions did Trump make based on his financial interests, and even if not at all, at the risk of sabotaging American policy, walking away in the Oval Office. presence of conflict?
Trump shrugged off such concerns, saying he was too busy in the business of governing to bother to earn money from his office. The Trump Organization promised to send a check each year to the US Treasury equal to profits from foreign government patrons, in response to criticism it was violating the emoluments clause in the US Constitution forbidding foreign government gifts.
“The Trump Hotel DC stood as a bright neon sign telling the interests of foreign countries and money how to bribe the president and giving a stern reminder to Americans that his decisions as president were about our interests. I was likely to be about their bottom line,” he said. Noah Bookbinder, president of the Citizens for Responsibility and Ethics in Washington, a watchdog group. “Sell it now that he’s out of the office and the gift has dried up, at least, it’s too little, too late.”
The purchaser, CGI, manages $325 million from wealthy families, entertainers and sports figures, investing in office buildings and hotels, among other types of property, according to its website. In addition, the firm partnered with baseball star Alex Rodriguez and another investment firm late last year to launch a $650 million fund to buy hotels and turn them into Hilton brands.
CGI has also launched a chain of “socially conscious” hotels that donate to local charities, support local businesses and buy eco-friendly products. In September, it announced that it would open a hotel in Miami with a glass-bottom pool overlooking the Atlantic Ocean called Gabriel South Beach as part of its more socially conscious offerings. The Hotel Curio Collection will be part of a Hilton chain.
It is unclear how much money the Trump family is making from the sale, as the terms of the deal have not been disclosed. Hotel sales sometimes involve an “earn out” in which the seller is handed over all of the promised money only if the buyer meets certain financial goals in the years after the deal is closed.
The Trump family was originally hoping to receive $500 million for the hotel when it first put it on the market in the fall of 2019. It was taken off the market, then put back this year.
With some businessmen, tourists and lobbyists flocking to Washington, some hoteliers were surprised by the price of the alleged deal.
Bill Collins, executive vice president of commercial real estate broker Cushman Wakefield, said the par value of $1 million for each room is “top dollar” in the industry. From that rough valuation, the Trump hotel would be worth no more than $263 million, reportedly about $100 million less than that.
“They put a lot of money into it and couldn’t increase the occupancy,” he told the last month. “Can someone manage this better? Maybe, but only marginally.”