Finance  ·  Distress

Former Trump International Hotel in DC Defaults on $285M Loan [Updated]

Owner plans to recapitalize after a $75M capital infusion 


The buyer of the former Trump International Hotel on Pennsylvania Avenue has defaulted on a $285 million loan backed by the property.

Miami-based CGI Merchant Group, in partnership with Hilton, closed on the Washington, D.C., hotel leasehold for $375 million in 2022, rebranding it to the Waldorf Astoria within a month of the close. 

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Earlier this month, CGI defaulted on a $285 million loan on the property, and is negotiating a $75 million capital infusion from an investor group led by Vik Uppal’s Mavik Capital Management to recapitalize the property, Bloomberg first reported Feb. 22. 

“We have been in recapitalization mode for the last, I would call it, 18 months, on our hospitality portfolio,” CGI Merchant Group founder and CEO Raoul Thomas told Commercial Observer Tuesday. The combination of rapidly rising interest rates and a longer than expected stabilization for the 269-key hotel led to a decline in reserves, he said. 

“We had significant reserves — significant,” Thomas explained. “But those reserves were set against a particular rate environment.” While interest rates had already begun rising in May 2022, there was no way to predict how dramatically they would continue to spike, and no lender would provide a fixed-rate loan for a property that was just restarting its book of business, he said.

CGI purchased the leasehold for the 269-key luxury hotel — which is owned by the federal government — through a hospitality fund launched the previous year in partnership with Hilton, capitalized by the likes of Alex Rodriguez and other former and current professional athletes. 

It was the A-Rod connection that put CGI in the running for the Trump International Hotel, which the former president was looking to offload after ending his presidency in 2021, Thomas told Commercial Observer in a recent interview. Trump had acquired the leasehold for the property, then the Old Post Office, in 2014. 

The hotel reopened in March 2023, slightly later than the planned December 2022 debut, due to construction delays. 

The hotel is one of several assets that featured in a recent real estate fraud case that put Donald Trump on the hook for at least $355 million in court-ordered penalties. Trump won the contract for the hotel because of false information, a New York judge ruled, making him liable for the profits he received from it, which amounts to $126.8 million for Trump, and $4 million each for his three eldest children. 

Some believe CGI overpaid for the property, as its offer was much higher than those of its competitors, per the Wall Street Journal, but Thomas dismissed those concerns. 

“I know what I got,” he said. “I got one of the most luxurious hotels built in the world, by probably a handful of developers that could take a shell and create that level of luxury [despite] major constraints.”

CGI is still finalizing its deal with Mavik, which requires the approval of the General Services Administration, the federal government’s manager of civilian real estate. “We kept shopping away to find a a more ideal partner, and we found that partner,” said Thomas. 

Mavik Capital declined to comment. A spokesperson for Hilton said there would be no changes to operations at the hotel. “The Waldorf Astoria Washington D.C. is an important strategic asset within our portfolio and one we look forward to operating for many years to come,” they wrote. 

Chava Gourarie can be reached at

Update: This story has been updated with comments from Raoul Thomas, and to reflect that the Mavik deal is not finalized.