Published reports citing anonymous sources said that Donald Trump’s luxury hotel near the White House, which attracted lobbyists and diplomats seeking favor from the former president as well as criticism as a symbol of his moral struggles, is being sold to an investment group in Miami.
CGI Merchant Group has agreed to pay $375 million to the Trump Organization for the rights to the 263-room hotel and has plans to rename it the Waldorf Astoria, according to the Wall Street Journal and The New York Times, citing sources familiar with the matter. .
Neither the Trump Organization nor CGI responded to numerous 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 struck by CGI, according to the newspaper. The Waldorf Astoria business is owned by Hilton Worldwide Holdings.
The hotel has been a big loser for the Trump family since it acquired the rights to convert a stately federal building called the Old Post Office from the federal government under a lease that, with an extension, could run for nearly 100 years.
The Trump Organization spent $200 million turning it into a luxury hotel, and it opened its doors in late 2016, shortly before Trump took office. It then proceeded to lose more than $70 million over four years, according to audited reports obtained by a House committee investigating Trump’s conflicts of interest with the company. The losses came even before the pandemic shut down the hotel sector, hitting the hotel industry.
Ethics experts urged Trump to sell the hotel and other commercial property before he took office, but Trump refused and the hotel quickly became a magnet for the powerful and power seekers: lobbyists for industries trying to shape policy, Republican politicians looking for presidential authorization, and diplomats from Azerbaijan, the Philippines, Kuwait and other countries .
The question looming above all the hype in his glittering lobby was: How many decisions Trump made a few blocks away in the Oval Office are shaped by his financial interests, and even if not, why would he risk sullying US politics even as the emergence of conflict?
Trump dismissed those concerns, saying he was too busy with governance work to bother making money from his office. The Trump Organization promised to send a check to the US Treasury each year equivalent to earnings from foreign government sponsors, in response to criticism that it was in violation of the emoluments clause in the US Constitution that prohibits foreign government gifts.
“The Trump Hotel in D.C. stood as a bright neon sign telling foreign nations and financial interests how to bribe the president and a stark reminder to Americans that his decisions as president were as likely to be in his ultimate interest as they were ours,” Trump said. Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington, a watchdog group. “Selling it now that he has left his post and the sand has dried is, to say the least, too little, too late.”
It is not clear how much money the Trump family is making from the sale given that the terms of the deal have not been disclosed. Hotel sales sometimes include “gains” in which the seller does not deliver all the money promised unless the buyer achieves certain financial goals in the years following the closing of the deal.
The Trump family had originally hoped to get $500 million for the hotel when it first came to market in the fall of 2019. It was pulled off the market, then relaunched this year.
Few hotel experts were surprised by the reported bargain price given the few businessmen, tourists and lobbyists who come to Washington.
Bill Collins, executive vice president of commercial real estate broker Cushman Wakefield, said the $1 million per room rate is the “highest dollar” in the industry. With this rough valuation, the Trump Hotel would be worth no more than $263 million, about $100 million less than what was reported.
“They invested a lot of money in it and they haven’t been able to increase occupancy,” he told The Associated Press last month. “Can someone manage it better? Maybe, but only marginally.”