- CGI Merchant Group defaulted on a $285M loan in 2023, leading to the foreclosure auction.
- BDT & MSD Partners, the merchant bank behind the loan, now holds property rights, with Hilton (HLT) continuing to manage the hotel.
- Despite losing the property, CGI is actively seeking financing to regain control of the long-term lease.
CGI Merchant Group, the investment firm that acquired the luxury Waldorf Astoria in D.C. from the Trump family for $375M, lost the hotel in a foreclosure auction.
According to WSJ, this marks a significant development for the historic hotel, which is housed in the landmark Old Post Office building.
Auction Action
CGI Merchant Group defaulted on its $285M loan from BDT & MSD Partners last year. After extending the foreclosure auction date by 45 days, BDT & MSD proceeded with the auction when CGI failed to resolve the default. On Monday, the merchant bank took over the property.
“We have actively engaged with CGI in a constructive manner, allowing ample time for them to explore financing and alternative options,” a spokeswoman for BDT & MSD said. “We have now taken control of the Waldorf Astoria Washington D.C. via foreclosure.” The merchant bank intends to retain the hotel property rights, with Hilton continuing its management role.
Despite the foreclosure, CGI Merchant Group is determined to reclaim the landmark property. A spokeswoman for CGI stated, “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.”
Historical Context
The Trumps secured the lease for the Old Post Office building in D.C. back in 2012, outbidding major competitors like Marriott (MAR) and Hilton (HLT).
The hotel, which became a central meeting spot for Republicans during Trump’s presidency, was sold to CGI Merchant Group in 2022 for $375M. CGI then rebranded the property as a Waldorf Astoria.
A Hilton spokesman confirmed, “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.”
