Reports are that Trump Organization is selling the lease for $375 million. This is more than double the $180 million that they leased it for in 2016. The hotel lost $70 million while he was in office, despite all the people using the hotel in order to suck up to Trump. Why would anyone pay so much for a property that loses money?
The property is probably fine and in a good location. The management, however…
Still, for the price to double in five years? With covid still impacting things? Call me skeptical but something seems off.
You’re overthinking it. It’s a typical Trump playbook. Ask an exorbitant price to make yourself look like a shrewd businessman. Then quietly declare bankruptcy and scurry away.
The $375 million is for establishing the value of the lease when it’s being used as collateral on a loan. The actual value is well south of that. The value of the lease as an asset for tax purposes will probably be pegged by the Trump Organization at around 5 bucks.
At the time Trump took over that property it was a former post office and not a hotel. Trump spent an enormous amount of money turning it into a hotel. It would stand to reason that the value of the property is increased signfiicantly, and whatever his upfront payment was is not the proper point of comparison for the selling price.
I’m also unclear as to whether the $70M loss might also include some revelopment costs, which would then not be true losses either.
Basically, unless we understand more of the financial details, it’s hard to assess the overall profitability of the investment.
The Postal Service left in 1914. Aside from the bottom two floors – food court and various touristy kiosks – and the very top floor – storage – it was all government offices, specifically the National Endowment for the Arts and the National Endowment for the Humanities.
I used to work in the NEA’s mailroom.
So, the $70 million dollar loss might not include the price to convert it to a hotel and just be operating expenses minus income? Roughly $48,000 per day loss for four years? Stable genius, indeed.
Trump would lose money operating a whorehouse next to a mining camp. His Grandfather at least knew how to make money with this operation.
An outstanding comment, Sir.
Hunter really needs to buy this - I would love to see the GOP collective head explosion.
Maybe he could adorn it with his art as well - win win win…
And it would take a lot of money to turn a very nice office building into a hotel. For example, an office building might have 2-8 bathrooms per floor. A hotel might have 20-50 per floor. That’s a lot of plumbing.
Apparently he has a buyer, although the deal is not final. Maybe it is worth it under good management.
Is it Kushner R.E.H.?
The ‘buyer’ is a hedge fund, no experience in operating hotels; I’d guess that some of Trump’s buddies are behind it. Probably a tax dodge on both sides.
And the new owners have hired Hilton to operate it as a Hotel.
You can hire people who have experience operating hotels. Many more people can do this beyond “Trump’s buddies”.
Hedge funds invest in a very broad variety of industries. They don’t necessarily have experience in any of them. Their experience is running hedge funds, and they outsource the actual running of the businesses.