Donald Trump sells DC hotel to investment firm for $ 375 million: Reports

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CGI Merchant Group has agreed to pay the Trump Organization $ 375 million for rights to the 263-room hotel and has plans to rebrand it as a Waldorf Astoria, according to The Wall Street Journal and The New York Times, citing sources knowledgeable on 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 made by CGI, according to the Journal. The Waldorf Astoria business is owned by Hilton Worldwide Holdings.

The hotel has been a big money for the Trump family since it won the rights to convert a stately federal building called the Old Post Office from the federal government under a lease that, with extensions, can run for nearly 100 years.

The federal agency that owns the property, the U.S. General Services Administration, must sign off on any sale.

The Trump Organization poured $ 200 million to convert it into a luxury hotel, which opened its doors in late 2016, shortly before Trump became president. It then lost more than $ 70 million over four years, according to audited reports obtained by the House committee investigating Trump’s conflicts of interest in the business. The losses came even before the pandemic led to closures, which damaged the hotel industry.

Ethics experts urged Trump to sell the hotel and other business assets before he took office, but Trump refused and the hotel soon became a magnet for the powerful and power seekers: Lobbyists for in industries trying to shape policy, Republican politicians are looking for a presidential imprimatur, and diplomats from Azerbaijan, the Philippines, Kuwait and other countries.

Wrapped in all the noise in his glowing lobby is the question: How many decisions did Trump make a few blocks away in the Oval Office shaped by his financial interests and, even if not, why he threatened to stain policy of the US even the appearance of rivalry?

Trump dismissed such concerns, saying he was too busy with the management business to bother making money from his office. The Trump Organization has promised to send a check to the U.S. Treasury each year equal to revenues from foreign government patrons, a response to criticisms that he violates the emoluments clause in the U.S. Constitution that prohibits foreign government gifts.

“The Trump hotel DC stands as a bright neon sign telling foreign countries and monetary interests how to bribe the president and a stark reminder to Americans that his decisions as president are likely about his bottom line as far as our interests are concerned, ”he said. Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington, a watchdog group. “Selling it now that he’s out of the office and the grift dried up is, to say the least, too little, too late.”

The buyer, CGI, is managing $ 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 company partnered late last year with baseball star Alex Rodriguez and another investment firm to start a $ 650 million fund to buy hotels and convert them into brands. of Hilton.

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 it would open a hotel in Miami with a glass-bottomed pool overlooking the Atlantic Ocean called Gabriel South Beach as part of its socially conscious offerings. The hotel will be part of the Curio Collection, a Hilton chain.

The head of the company, Jamaica-born Raoul Thomas, has donated heavily to Democratic party politicians, including Joe Biden’s campaign. He is a senior board member of the National Association of Black Hotel Owners. His company has invested $ 30 million at Morris Brown College in Atlanta for a hotel and hospitality training program at the historic Black institution in Atlanta.

It’s unclear how much money the Trump family earned from the sale because the terms of the deal were not disclosed. Hotel sales sometimes include “earning profits” where the seller is only given all the promised money if the buyer reaches some specific financial goal in the years after the deal closes.

The Trump family was originally hoping to get $ 500 million for the hotel when it was first put on the market in the fall of 2019. It was removed from the market, then returned this year.

Some hotel experts were surprised at the reported price of the deal because few businessmen, tourists and lobbyists come to Washington.

Bill Collins, an executive vice chair at commercial real estate broker Cushman Wakefield, said the price equivalent of $ 1 million for each room is “top dollar” in the industry. In that rough analysis, the Trump hotel was no more than $ 263 million, nearly $ 100 million less than it reportedly earned.

“They put too much money into it and didn’t increase occupancy,” he told the AP last month. “Can someone manage it better? Maybe, but only slightly.”

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