Donald Trump to Sell D.C. Hotel After Records Show Millions in Revenue Loss

Former President Donald Trump's company is discussing the sale of the lease to its luxury Washington D.C. hotel in a transaction potentially worth more than $370 million, The Wall Street Journal reported this week.

Miami-based investment firm CGI Merchant Group, which describes itself as a "mindful" investment firm, is reportedly in talks with the Trump Organization to acquire its lease on the federally-owned Old Post Office building which currently houses the Trump International Hotel Washington, D.C.

The Wall Street Journal reports that if it acquires the lease from the Trump Organization, CGI reportedly plans to remove the Trump name from the hotel and replace it with that of another hotel operator. According to the Journal, CGI is reportedly in talks with other hotel companies, including Hilton Worldwide Holdings over the prospect of operating the hotel under Hilton's Waldorf Astoria luxury brand.

According to CNBC, the federal government owns the building, with the initial lease on the hotel running for 60 years with a payment of $3 million per year over the life of the lease. The Wall Street Journal reported that there are extensions that make the lease's term close to 100 years.

US-POLITICS-TRUMP-VALUE-VOTER-SUMMIT
Former President Donald Trump's company is reportedly in talks to sell the rights to its Washington D.C. hotel, which served as a Republican meeting place during his presidency. Here, he speaks at the Values Voter Summit at the Omni Shoreham Hotel on October 12, 2019 in Washington, DC. Photo by ERIC BARADAT/AFP via Getty Images

The Wall Street Journal reported that the sale of the hotel lease could potentially go as high as $400 million, if that figure held, the Trump Organization would double the approximately $200 million it spent when it converted the building into a hotel.

In 2012, Trump beat out Hilton and Marriot International to earn the rights to operate a hotel in the building. When the hotel eventually opened in October 2016, Trump declared it as a sign of his ability to work with the federal government.

"A project like this demonstrates what is possible when a team works together for a totally common purpose," he said at the time. "It also shows how to work with our government and to get things done."

Following its opening and Trump's election, the hotel became a popular meeting site for Republicans. Cabinet officials, top donors, lobbyists, politicians and Trump family members all were seen at the hotel during Trump's term.

Lease For Trump's DC Hotel Put Up
The Trump Organization has reportedly been in talks to sell the lease for the Trump International Hotel in Washington D.C. According to reports, the company started to look to sell the lease after the hotel was hit hard during the pandemic. Pictured, the Trump International Hotel is seen on June 2, 2021 in Washington, DC. Photo by Kevin Dietsch/Getty Images

The news of the potential sale of the hotel lease followed a report from the House Committee on Oversight and Reform that said the hotel reported losses of over $70 million during the four years of Trump's presidency even though the former president claimed it had netted him $150 million in income.

The House report also said the hotel entered an agreement with Deutsche Bank Trust Company Americas, a branch of German-owned Deutsche Bank AG, that provided the maximum amount of funding at $170 million. Trump was supposed to make payments on this loan by 2018, yet the bank allowed them to defer payments for six years.

Congressional Democrats have argued that this perceived preferential treatment could be in violation of the Constitution's emoluments clause, which says no person holding office can receive gifts from foreign governments without the consent of Congress and some Democrats have said the loan could fall under that provision.

"While in office, President Trump received preferential treatment potentially worth millions from a foreign bank," a statement by the Oversight Committee said. "Without this deferral, the hotel may have needed to pay tens of millions of additional dollars to Deutsche Bank at a time when it was already facing steep losses. Mr. Trump did not publicly disclose this significant benefit from a foreign bank while he was President."