Trump's 'money-losing' DC hotel continued to cost him millions even after he sold: report
Donald Trump opened his Washington, D.C. hotel weeks before the 2016 election and it quickly became a gathering place for Republicans, lobbyists and foreign leaders visiting the president.
Still, he lost money on the project — and Forbes reported Tuesday that the losses continued even after he sold it.
The "money-losing" hotel was sold in 2022 for a hefty $127 million, but it required Trump to issue a loan to the new owners.
"So when the lease’s new owner got into trouble financially, he took a hit too," the Forbes report stated.
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Trump spent $200 million to restore the U.S. capital's Old Post Office building into the luxury hotel and agreed to "make monthly rent payments of at least $250,000 for 60 years," Forbes reported.
Before the 2020 COVID crash, Trump was already trying to unload the property for $500 million, CNBC reported in 2019. But he didn't get a single bite close to that price, with most coming under $250 million. After leaving office, still in the pandemic, Trump tried to sell it again, this time getting a bid, he claimed, for $370 million.
One D.C. real estate developer, who himself had made a $170 million bid, said at the time he didn't believe it.
“Oh, my god. I don’t believe it at all, but that would be amazing," Brian Friedman said, according to Forbes. "There’s probably some stupid South American, Florida group, or there’s probably some seller financing or something — or side letter that we’ll never know about, because the asset loses money.”
He was spot on. Trump loaned $28 million to the CGI Merchant Group, based in Florida.
"Trump, for his part, walked away from his nonviable hotel with a $127 million payout, according to evidence in the New York attorney general’s civil fraud case," the report revealed.
Nothing much has changed at the building other than removing all of the Trump branding. What has changed is the clientele. Democrats and Democratic groups are now happy to hold events at the Waldorf Astoria.
The problem, however, is nothing could "make up for poor financials underscoring the lease CGI assumed from the Trump Organization," said Forbes.
The company defaulted on the loan for the first time in July 2023, and by May 2024, investors initiated foreclosure proceedings. On Aug. 5, it went up for auction.
"When the gavel came down, BDT & MSD owned the hotel for $100 million. No one else even bid on it, according to Paul Cooper of Alex Cooper Auctioneers, which oversaw the foreclosure auction," Forbes revealed.
Cooper said, “No sane person would have done this investment.”
Trump lost the $28 million that he loaned.
Hilton is the partner now, but the company previously attacked the property as "an unrealistic economic model."