Politics

Trump Completes Sale of Washington Hotel to Investor Group

WASHINGTON — The Trump International Hotel in Washington is now officially out of business after the Trump family on Wednesday completed its sale to a Miami investor group, which plans to reopen it as a Waldorf Astoria.

The sale formally ended the Trump family’s business presence in Washington, although the family company still owns a golf course in Northern Virginia. The deal with the investor group, CGI Merchant Group, for a reported price of $375 million covers only the operation of the hotel, which is housed in a building leased from the federal government.

Hotel industry executives have said the hotel underperformed compared with other luxury hotels in the city, particularly since President Donald J. Trump left office, in part because some companies and travelers were reluctant to book rooms or hold events at the hotel given the controversies surrounding Mr. Trump. Those factors most likely contributed to the decision to sell the lease, they said.

But the 263-room hotel still pulled in an exceptionally high sale price, given its location on Pennsylvania Avenue, between the White House and the Capitol, and its presence inside a Washington landmark, the Old Post Office Building, whose clock tower makes it one of the tallest buildings in the capital.

The average sales price for hotels in Washington in 2020 was $354,000 per room, according to a survey by JLL, a real estate firm. The reported price for the Trump hotel deal suggested a per-room price of more than $1 million, a level that surprised some veteran real estate executives in Washington.

The hotel, which opened just a few weeks before Mr. Trump was elected president in 2016 after a $200 million renovation of the once-decrepit building, became a gathering place for his supporters, members of his cabinet, lobbyists, Republicans in Congress and foreign leaders, some of whom were on their way to see Mr. Trump.

“We took a dilapidated and underutilized building and transformed it into one of the most iconic hotels in the world,” Eric Trump, Mr. Trump’s son and an executive vice president of the Trump Organization, said in a statement on Wednesday announcing the closing of the sale.

A spokesman for CGI did not respond to a request for comment.

But since 2020, the hotel has generally seen sparse crowds in its sprawling lobby, including late last week, several days before the closing, when just a few tables were occupied at the lobby bar.

“It is a beautiful property,” said David Lentz of Placentia, Calif., who visited the lobby last week. “Good for him, if Trump is making more money on it.”

But some would-be guests expressed frustration after they received calls telling them their reservations had been canceled. “They are just stiffing everyone,” said Jayson Woodbridge, a California winemaker who had a reservation for a weeklong stay at the hotel to attend his daughter’s graduation in the area.

Last week, Mickael Damelincourt, the longtime manager of the hotel, moved from table to table to greet some of the regulars at the lobby bar, pausing to take photos with several of them in advance of the hotel’s sale. The BLT Prime restaurant at the property had already closed permanently, as had the Ivanka Trump spa, and the hotel itself was no longer taking room reservations.

Just days before the sale closed, the Trump Organization and Mr. Trump’s 2017 inaugural committee agreed to settle a lawsuit filed by Karl A. Racine, the attorney general for the District of Columbia, who had claimed that the hotel had illegally received excessive payments from the inaugural committee, totaling more than $1 million.

The settlement in the civil suit came with no admission of wrongdoing by the Trump Organization, the former president or the inaugural committee.

Those claims were among the many allegations in various lawsuits that Mr. Trump improperly profited from the presidency through payments made to the hotel by, among others, lobbyists and foreign governments. Suits from the State of Maryland and Democratic members of Congress cited the emoluments clauses of the Constitution, which prohibit federal officials from accepting financial benefits from foreign governments without congressional approval.

The Trump family has paid the federal government a base rent of $3 million a year for the Old Post Office Building, according to its 2013 lease. The sale will generate a profit of about $100 million for the family, once a loan taken out to pay for the renovations is paid off, according to estimates by House Democrats.

The contract with the federal government that the Trump Organization signed called for the company to share some of its profits with the government if the hotel were sold. But a Trump Organization executive said the way the lease was written — allowing the Trump family to earn a 20 percent annual rate of return on equity put into the hotel project — meant there was not likely to be a large amount of such profit-sharing.

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