The Trump Organization may finally have a buyer for its Washington, D.C., hotel.
Miami-based CGI Merchant Group is in advanced talks to acquire the Trump International Hotel in D.C. for close to $370 million, the Wall Street Journal reports. The acquisition would come in well below the initial $500 million the Trump family originally marketed the hotel at in late 2019.
But the sale would still equate to one of the highest per-room deals in city history, despite the property’s polarizing reputation and performance plummet during the pandemic. Even with the price chop, a $370 million sale comes out to close to $1.4 million per room — besting the all-time record in D.C., currently held by a Rosewood property that traded for $1.3 million per key in 2016.
CGI Merchant Group declined to comment for this story. The Trump Organization did not respond to a request for comment nor did representatives with Newmark, the commercial real estate brokerage firm marketing the property.
Any deal is for a long-term ground lease with the U.S. General Services Administration rather than an outright sale. The Trump Organization beat out buyer groups involved with the likes of Marriott International and Hilton for the lease rights in 2012.
The company went on to pump more than $200 million renovating the building, formerly the Old Post Office — meaning the Trump Organization could still come close to doubling its investment with the deal.
It is almost certain the property won’t remain affiliated with Trump Hotels. CGI Merchant Group has strong ties with Hilton, most recently with the launch of a socially minded collection of hotels to operate under the company’s various soft brand portfolios.
The investment company has reportedly already launched talks with hotel companies about a brand conversion, including to Hilton’s ultra-luxury Waldorf Astoria brand. Hilton has pursued various opportunities to bring the Waldorf brand to D.C. for years, sources told Skift in recent months.
The Trump hotel, criticized for the way lobbyists and foreign governments booked rooms in hopes of wooing the Trump White House, tanked operationally from the pandemic as well as reputationally following the Jan. 6 Capitol Hill insurrection spurred on by Trump supporters.
Revenue at the hotel declined 63 percent from 2019 levels during the pandemic. The Trump Organization more recently came under fire for allegedly falsely reporting how profitable the D.C. hotel was by reporting $40 million in revenue instead of a $74 million operating loss. It is not clear if those financial figures were included in the sales talks.
JLL, the brokerage firm that first marketed the hotel, later dropped its services after the January riot. Competing brokerage firm Newmark began marketing the leasing opportunity this summer.
Industry experts familiar with the D.C. market repeatedly told Skift over the last few months the Trump International Hotel was marketed at an inflated price, even after a roughly $100 million price chop over the summer. But market conditions of many investors waiting on the sidelines with capital to deploy on a limited number of assets kept prices high on properties that went to market.
CGI Merchant Group is reportedly one of close to a dozen organizations, ranging from sovereign wealth funds of foreign governments to pension funds, that expressed interest in the property. But it isn’t likely any of these groups were necessarily drawn to the property due to its ties to the former president.
“If they’re able to have it priced right, then it can be a wonderful deal,” Nicolas Graf, associate dean at New York University’s Jonathan M. Tisch Center of Hospitality, told Skift last month. “The location is great, and the D.C. market pre-pandemic was fantastic.”