An investment fund called CGI Merchant Group has reportedly reached an agreement with Trump’s family business to buy the lease of its marquee hotel in Pennsylvania Avenue in Washington, D.C. A person familiar with the matter told the Wall Street Journal that the deal would cost the group $375 million.
The source also told the Journal that CGI was planning to remove the Trump name from the iconic hotel which is located at a short distance away from the White House. The group had already reached a deal with another leading hotel franchise, Hilton Worldwide Inc. which would brand the hotel. After the finalization of the deal, the Hilton group would manage the hotel under its Waldorf Astoria group.
The deal between the Miami based group and the Trump Organization is subject to approval by the General Services Administration (GSA). The GSA will conduct a 60-day review on the deal as the property is owned by the federal government.
According to a report in the New York Times, three people with knowledge about the matter say that the deal may not happen until the beginning of 2022. The deal is also called a purchase and sale agreement which means that a final sale has not as yet taken place.
The property, which opened its doors to customers such as Republicans, Trump supporters, foreign government officials and others since its opening in 2016, drew a lot of criticism from many and lawsuits were also filed.
The controversies affected the bottom line of the property and it was said to have incurred losses. Audits showed that the total loss from 2016 to 2020 was close to $74 million. The pandemic exacerbated these losses and the Trump Organization was looking for a buyer from 2019.
The reported purchase price by the CGI group is higher than the investment made by the Trump family for renovating and opening the hotel. If the deal goes through they will gain considerably from the sale.
Several news outlets have contacted the both the CGI Group in Florida as well as the Trump Organization for comment but have received no response as yet.
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