Trumps selling prized Washington, DC hotel for $375 million
The hotel generated about $150 million in revenue over four years, according to Trump’s financial disclosures
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Donald Trump’s family hotel company has reached an agreement to sell the rights to its glittering Washington, D.C., hotel for $375 million, according to people familiar with the matter.
CGI Merchant Group, a Miami-based investment firm, is in contract to acquire the hotel lease for the Trump International Hotel, which is located a short walk down Pennsylvania Avenue from the White House. CGI intends to remove the Trump name, and it has reached a deal with Hilton Worldwide Holdings Inc. to have the property branded and managed by Hilton’s Waldorf Astoria group, these people said.
The hotel is owned by the federal government, but with extensions the lease runs close to 100 years. It is housed in the former Old Post Office and it features some of the largest guest rooms in the capital.
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The sale, which people briefed on the matter said is expected to close in the first quarter, comes as Democratic-controlled House committees have been investigating and holding hearings on potential conflicts of interest and emoluments issues surrounding former President Trump.
Trump International Hotel Washington, D.C. (Photo: Business Wire) (AP Newsroom)
The Trump Organization has said it didn’t market the hotel to foreign dignitaries and that it writes a check to the U.S. Treasury Department for money made from foreign government guests.
The House Committee on Oversight and Reform has been examining the lease terms between the Trump Organization and the federal government’s General Services Administration for use of the Old Post Office. The deal predates Mr. Trump’s entry into national politics, but the committee is probing how well Mr. Trump managed conflicts of interest while president.
It couldn’t be determined if the proposed sale would have an impact on the hearings, and representatives for the House committee didn’t immediately respond to a request for comment on the matter.
FILE - In this Thursday, Nov. 5, 2020, file photo, President Donald Trump speaks at the White House, in Washington. Although only a few of America's CEOs have made public statements about President Trump's refusal to accept his election loss, many ar
The House committee said the hotel lost more than $70 million between its opening in 2016 and last year, leading the Trumps’ company to inject at least $24 million in aid. The Trumps have disputed those findings.
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The hotel generated about $150 million in revenue over four years, according to Mr. Trump’s financial disclosures while president. His most recent disclosure, which covered all of 2020 and the first few weeks of 2021, showed the hotel’s revenue fell to $15 million, compared with $40 million in 2019, though most hotels in major urban markets suffered significant setbacks during the pandemic.
While the sale will bring a cash infusion to the Trump hotel company, it comes at a price to the company’s ambitions, hotel analysts said. The Washington hotel has been a jewel in the Trump family portfolio. In 2012, the Trumps beat out some of the most-experienced and deepest-pocketed names in the lodging business, including Marriott International Inc. and Hilton, for the rights to the lease.
The family’s pledge to spend about $200 million renovating and converting the 19th-century post office into a modern luxury hotel was the highest offer, say people familiar with the matter.
During Mr. Trump’s years in the White House, the hotel became a favorite Republican meeting spot, attracting fans, lobbyists, lawmakers and others with business before the Trump administration.
The Trump affiliation discouraged other business, hotel analysts say, including from various trade organizations and other groups that didn’t want the association with the president.
President-elect Donald Trump and SoftBank CEO Masayoshi Son, right, walk into the lobby to speak to members of the media at Trump Tower in New York, Tuesday, Dec. 6, 2016. (AP Photo/Andrew Harnik)
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In converting the property to a Waldorf Astoria, the new owners would be aiming to sever the property from its politicized past. "If it becomes affiliated with a luxury brand, that brand can create a new identity for the property," Sean Hennessey, chief executive of Lodging Advisors, a New York hospitality consulting firm, told The Wall Street Journal in October.
CGI, which has partnered with former baseball superstar Alex Rodriguez on its hotel investments, emphasizes more socially conscious investing. The firm has pledged that properties in its Conscious Certified Hotels collection, which includes the Gabriel and Celino South Beach in Miami Beach, will donate 1% of all room revenue to local nonprofit organizations, according to the company’s website.