A luxury hotel in Wasington, D.C., that was once owned by the family firm of Donald Trump was sold to its lender during a foreclosure auction this week.
The hotel, which was turned into a property owned by Waldorf Astoria, was sold for $100 million at auction.
An investment firm called CGI Merchant Group, based in Miami, purchased the leasehold interest just two years ago from Trump for $375 million. But, they’ve already lost that property because they defaulted on the loan, which was for $285 million.
The loan was issued by BDT & MSD Partners, which said that CGI initially defaulted on repayments last year. The merchant bank extended the deadline for the foreclosure proceedings by 45 days, but CGI Merchant Group still wasn’t able to resolve its debt, according to media outlet Bisnow.
That led to BDT & MSD Partners deciding to take over the property earlier this week.
In a statement, a spokeswoman for BDT & MSD Partners said:
“We have actively engaged with CGI in a constructive manner, allowing ample time for them to explore financing and alternative options. We have now taken control of the Waldorf Astoria Washington D.C. via foreclosure.”
CGI partnered with Alex Rodriguez, a former star in Major League Baseball. The company said this week that they were still hopeful that they could somehow retain control of the property.
As a spokeswoman for the company said this week:
“We are not done fighting for the Waldorf Astoria. Even though the auction has occurred, we remain in intense discussions with BDT & MSD Partners and still have a finalized capital solution on the table to cure the loan default and recapitalize the asset.”
BDT & MSD Partners will retain the ownership rights to the property in Washington, D.C. The property will continue to be operated by the Hilton hotel group, which manages the Waldorf Astoria brand.
A spokesman for Hilton commented:
“Hilton has a long-term agreement to manage the hotel, and that agreement will continue. It remains business as usual at the Waldorf Astoria Washington D.C.”
The property is located only a few steps from the White House in the city’s historic Old Post Office building. The building has been a focal point in many political and real estate circles for years.
The Trump family never owned the property outright, but they did hold a lease that was for almost 100 years. They acquired those leaseholder rights back in 2012, after outbidding some other large hotel chains including HIlton and Marriott.
The hotel was transformed into a hotspot for members of the Republican Party while Trump was in the White House, with many lobbyists and politicians staying there, hoping to gain the attention of the president.
The Trump family then sold the leaseholder rights to CGI at a premium price in 2022. However, since that time, rising interest rates posed significant challenges for the company’s investment.
