(The Real Deal) – Donald Trump is set for his second exit from Washington, D.C., as CGI Merchant Group is reportedly in contract to buy the Trump International Hotel lease.
The Miami-based investment firm, helmed by Raoul Thomas is in contract to buy the hotel lease for $375 million, according to the Wall Street Journal.
Under its new ownership, the 263-key hotel will reportedly shed the Trump name. People familiar with the deal told the Journal CGI is working with Hilton Worldwide Holdings and will have the hotel branded and managed by Hilton’s Waldorf Astoria group.
The firm was reported last month to be close to buying the lease for more than $370 million. The deal is expected to close in the first quarter of 2022.
Trump International Hotel in Washington, D.C. (Getty)
CGI’s purchase on Pennsylvania Avenue ends a tumultuous decade for the Old Post Office building. The Trump Organization in 2012 won approval to redevelop the site, beating out Marriott and Hilton. In leasing from the General Services Administration, the company agreed to spend an estimated $200 million renovating the property. Read more below:
- Here’s what tenants pay at Vornado, Trump’s 1290 Sixth Avenue
- Trump’s DC hotel lost $70M during presidency, docs say
- CGI plans $500M fund to acquire distressed hotels, rebrand with Hilton
When Trump took office, he resigned from his companies but put his assets into a trust run by his sons, which allowed him to benefit financially. The hotel’s 2016 opening sparked concerns over domestic and foreign interests using the business to curry favor with the Trump administration.
Though Trump reported in financial disclosures that the hotel generated more than $150 million in revenue, the House Oversight Committee in October released documents detailing losses of more than $70 million at the hotel during Trump’s presidency.
The documents showed the hotel needed a loan of more than $27 million from one of Trump’s holding companies, as well as the existence of a favorable $170 million loan from Deutsche Bank, which was not previously disclosed.
The Trump Organization previously attempted to sell the lease for $500 million. The price dropped down as Newmark began looking for offers in excess of $400 million. JLL was initially tapped to market the property, but bailed after the Jan. 6 attack on the U.S. Capitol.