The hotel in D.C.’s Old Post Office building became a Waldorf Astoria in 2022 after The Trump Organization sold it.
One of D.C.’s most iconic buildings, just blocks from the White House, could be sold at a foreclosure auction next month.
The owner of the Waldorf Astoria, the hotel at the Old Post Office, has defaulted on the mortgage tied to the leasehold at the building and is facing foreclosure, according to an affidavit filed with the D.C. Recorder of Deeds on Monday.
Miami-based CGI Merchant Group acquired the lease to the property at 1100 Pennsylvania Ave. NW from The Trump Organization, which converted the historic building to a Trump International Hotel that opened months before Donald Trump took up residence up the road.
The federal government owns the real estate and leased it in 2012 to Trump, who spent $200M turning the former post office into a luxury hotel.
CGI Merchant Group paid $375M in 2022, tens of millions of dollars more than the next highest bid, The Wall Street Journal reported earlier this year. CGI took on a $285M loan from Michael Dell’s MSD Partners to fund the acquisition but defaulted on that loan in February.
MSD, which merged with another company last year to form BDT & MSD Partners, is now moving to foreclose on that loan, which has $252.7M outstanding, according to deeds records. The filing says an auction is scheduled for June 20 at Alex Cooper Auctioneers. The Washington Business Journal first reported the foreclosure filing.
“CGI is engaged in productive discussions with the property’s manager, Hilton, and several other parties who want to reach a consensual financing solution that reflects the realities of today’s challenging, rising rate environment, MSD’s unilateral decision to file a foreclosure notice is inconsistent with the discussions and possibly invalid,” CGI said in a statement through a spokesperson.
“Although our goal is to continue advancing constructive negotiations with all parties, including MSD, we’re prepared to take all necessary steps to protect the rights of CGI and its partners.”
A person familiar with the property, who declined to be identified because they weren’t authorized to speak publicly, said BDT & MSD Partners continues to work with CGI and Hilton Worldwide, which operates the hotel and owns the Waldorf Astoria brand.
BDT & MSD Partners declined to comment.
CGI founder and CEO Raoul Thomas told the WSJ in February he was looking to raise $100M to inject capital into the hotel, although Hilton would need to approve any new partners.
The filing says the ownership was notified of a forthcoming sale on Friday. In addition to CGI, the General Services Administration, Mayor Muriel Bowser’s office and Hilton Worldwide Holdings were notified of the foreclosure.
The Old Post Office opened as the Trump International Hotel in September 2016 and remained under the ownership of the former president’s organization until CGI purchased it in March 2022. Jose Andres’ 150-seat Bazaar is on the ground floor, as is Michelin-starred Sushi Nakazawa.
A foreclosure sale presents a method for the lender to either offload the property or take control of it while wiping clean any financial issues. The auction could be canceled or postponed if the borrower and lender reach an agreement to resolve the default.
UPDATE, MAY 13, 8:45 P.M. ET: This story has been updated to include a statement from CGI Merchant Group.
