In a surprising turn of events, former president Donald Trump pocketed a hefty $127 million when he sold his money-losing D.C. hotel in 2022. However, in order for the deal to go through, Trump had to provide a loan to the buyer, CGI Merchant Group. The hotel, located in a historic building on Pennsylvania Avenue, was originally won by Trump in a competitive bidding process back in 2012, beating out other major hotel chains like Hilton Worldwide. Despite protests from competitors regarding Trump’s financial projections, the deal was approved by the General Services Agency.
The Trump International Hotel Washington D.C. quickly became a hotspot for Republican political committees and foreign dignitaries during Trump’s presidency, bringing in some revenue. However, the hotel consistently failed to meet revenue projections, even before the Covid-19 pandemic hit in 2020. After failed attempts to sell the property in 2019 and 2020, Trump finally found a buyer willing to pay over $370 million in 2021. CGI Merchant Group, based in Miami, ultimately purchased the hotel for $375 million, with a substantial loan from BDT & MSD Partners financing most of the deal.
Despite the change in ownership and rebranding as a Waldorf Astoria, the financial woes of the property persisted. CGI Merchant Group struggled to make payments on the loan provided by Trump, leading to multiple amendments to the loan agreement. Eventually, CGI defaulted on its principal loan in July 2023, leading to foreclosure proceedings initiated by BDT & MSD in May 2024. With no other bidders stepping up, BDT & MSD acquired the hotel for $100 million at a foreclosure auction in August 2024, effectively wiping out the $28 million that CGI owed to Trump.
The future of the property remains uncertain, with BDT & MSD expressing confidence in their partnership with Hilton to operate the hotel. While a Hilton spokesperson stated that the hotel continues to perform well, questions remain about the viability of the lease and the economic model behind the redevelopment of the Old Post Office. Trump’s civil case against CGI is ongoing, with pretrial motions scheduled for later this month. Despite the challenges faced by the property, there is still optimism about its future, even after the tumultuous events that have unfolded since the sale in 2022.
