Trump sells DC hotel that lost $70m over four years for $375m: Will now become a Waldorf Astoria
Donald Trump is selling his Washington Trump International Hotel for $375million - just one month after the former president was criticized for misleading the public about a 'failing business saddled by debt.'
Miami-based investment firm CGI Merchant Group will acquire the five-star hotel’s lease rights from the Trump Organization and rebrand the federally-owned building after striking a deal with Hilton Worldwide Holdings Inc., The Wall Street Journal reported Sunday.
If the deal is finalized, it represents a 25 percent discount from the $500million the Trump Organization previously sought.
The purported sale comes after the Democrat-run House Committee on Oversight and Reform said in October that the former president concealed the fact his hotel incurred $70 million in net loses.
Trump instead boasted that the hotel netted more than $150 million during his presidency.
But far from being a revenue-generator, it was a 'failing business saddled by debt,' according to a letter the Oversight panel wrote to the General Services Administration (GSA), known as the nation's landlord in October.
Miami-based investment firm CGI Merchant Group is reportedly buying the leasing rights to the Trump International Hotel in Washington, DC
The hotel celebrated its grand opening October 26, 2016, about two weeks before Trump won the presidential election (Pictured: Trump family at the grand opening of the DC hotel)
The letter does not charge that Trump necessarily violated the law; the president is officially exempt from criminal conflict-of-interest laws that apply to other federal employees.
Trump family members have refuted suggestions the hotel had become a money pit.
By converting the building to a Waldorf Astoria – a luxury hotel arm of Hilton – the new leasers could break away from association with Trump, sources said.
‘If it becomes affiliated with a luxury brand, that brand can create a new identity for the property,’ Sean Hennessey, chief executive of hospitality consulting firm Lodging Advisors, told the Journal last month.
Talks of the Trump Organization parting with its family gem have been underway for years and were put on hold last November after potential buyers bulked at the then-$500million price tag.
The Trump Organization, which is owned by the former president and run by his children, hired top real estate firm Jones Lang LaSalle in October 2019 to find potential buyers for the building.
It will pay $375million to acquire the lease to the federally-owned hotel, which opened in 2016
The five-star hotel, which is located in a 122-year-old former Post Office building, boasts suites with 18-foot ceilings and some of the largest hotel rooms in the capital city
It features a spacious lobby and bar area, where Trump's allies have reportedly hung out
The company's initial January 2020 deadline to accept bids for the lease came and went, before the real estate industry ground to a near halt when the coronavirus pandemic took hold in March.
The property lease was established in 2013 under a 60-year agreement in which the Trump Organization paid a monthly base rent of $250,000 which was set to increase with inflation.
The hotel celebrated its grand opening October 26, 2016, about two weeks before Trump won the presidential election.
However, as seen with most of Trump's properties, it took significant financial hits after the pandemic began.
When he left office, the Trump International Hotel in Washington D.C. saw a year-over-year revenue decrease of more than 60 percent.
The high-end hotel, located inside in a 122-year-old former Post Office building, includes suites with 18-foot ceilings and some of the largest hotel rooms in the capital city.
Trump forfeiting the hotel will likely be seen by his opponents as a symbolic and favorable feat.
Trump, pictured at the grand opening of the Trump international Hotel, lost about $70 million on the hotel during his presidency, according to a Democrat-run oversight committee
The former president was scrutinized during his presidency for owning the property, facing criticisms over profits and ethics.
The Trump hotel received about $3.7 million – the equivalent of 7,400 nights at the hotel – from foreign governments from 2017 to 2020, the Oversight panel has said.
The GSA’s lease states that no elected federal or DC official can benefit from the hotel.
The GSA, under the Trump administration, ignored subpoenas from the Democrat-led House Committee on Transportation and Infrastructure requesting information on how the agency deems it appropriate that the Trumps remain holding the lease.
There was also an emoluments clause case that worked through the courts over whether Trump violated the Constitution when the hotel was patronized by foreign governments.
The potential conflict of interest vanished after Trump was voted out of office last year.
The Trumps claimed last November that they planned to give the money back to the US government.
'People are objecting to us making so much money on the hotel, and therefore we may be willing to sell,' Eric Trump said in a statement in October 2019, previewing the sale.
The Trump Organization spent about $210million to renovate the property into a hotel, meaning it would turn a $165million profit if the sale goes through.
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