Former U.S. President Donald Trump pocketed a lucrative $127 million when he sold his D.C. hotel in 2022, making a significant profit despite the property’s financial struggles. However, in order for the deal to go through, Trump had to provide a loan to the buyer, which he may never see repaid. The buyer, CGI Merchant Group, financed most of the $375 million purchase with a loan from BDT & MSD Partners, but inherited the original lease signed by Trump with the U.S. General Services Administration.
Trump’s ties to the D.C. hotel date back to 2012 when he won the bid to restore the historic Old Post Office building into a luxury hotel. Despite facing criticism and protests from competitors like Hilton Worldwide, Trump’s bid was ultimately accepted, and the hotel opened in 2016. Throughout Trump’s presidency, the hotel became a popular gathering spot for political and foreign dignitaries, generating significant revenue. However, the property’s financial performance did not meet expectations, with revenue falling short of projections and declining further during the Covid-19 pandemic.
In 2021, Trump found a buyer willing to pay over $370 million for the hotel, but ultimately settled for $375 million with CGI Merchant Group. Trump loaned $28 million to CGI for transfer and mortgage taxes, which the company later failed to repay. The hotel continued to struggle financially under CGI’s ownership, leading to foreclosure proceedings initiated by the main lender, BDT & MSD Partners. The hotel was eventually sold at auction for $100 million, with BDT & MSD taking ownership.
Despite the hotel’s challenges, the new owners express optimism about its future, stating their commitment to the partnership with Hilton and confidence in the asset. Hilton, which lost out on the original bid to operate the hotel, has not commented on the property’s performance under CGI’s ownership. Trump’s lawsuit against CGI for the unpaid loan is ongoing, with pretrial motions scheduled to take place later in the month. The outcome of the legal proceedings and the hotel’s future remain uncertain as the parties involved navigate the fallout from the failed deal.
