Chase Peterson-Withorn and Dan Alexander report in Forbes:
The Trump Organization is looking to sell its long-term lease on the building for more than $500 million—far more than hospitality experts say the place is worth. Industry sources said the 263-room hotel could fetch from $750,000 to $1 million per room on the open market (which) pegged the value of the property at $253 million. A hotel broker, could imagine where the property sold for $1.5 million per room, or $395 million, but $500 million seemed excessive. "I’ll see if I can get that kind of money. Is the Sultan of Kuwait going to buy it? A solid businessperson, I don’t think they’re going to pay $2 million [per room].”
The Trump Organization is considering selling the president’s Washington, D.C., hotel, according to the Wall Street Journal. Donald Trump’s son Eric, who is quoted in the story, framed the move as a response to ethics concerns over the hotel, which is seen as a place for U.S. companies and foreign dignitaries to curry favor with the president of the United States.
It’s unlikely that putting the place up for sale will tamp down ethics concerns, however. According to the Journal, which cited “people familiar with the matter,” the Trump Organization is looking to sell its long-term lease on the building for more than $500 million—far more than hospitality experts say the place is worth.
After speaking with seven industry sources, Forbes pegged the value of the property at an estimated $253 million. The industry sources said the 263-room hotel could fetch anywhere from $750,000 to $1 million per room on the open market.
On Friday, Bill Moyer, a Maryland-based hotel broker, told Forbes he could imagine a scenario where the property sold for $1.5 million per room, or about $395 million, but $500 million seemed excessive. “It’s one thing to say, ‘I’ll float it and see if I can get that kind of money,’” Moyer said. “But is the Sultan of Kuwait going to come and buy it? I don’t know. If you have a solid businessperson, I don’t think they’re going to pay $2 million [per room].”
Because Donald Trump has the largest interest in the hotel, a 77.5% stake, he would be the biggest beneficiary of any sale. Ivanka Trump, who also refused to divest her interest in the property upon moving into the White House, owns an estimated 7.5% of the property. Her two eldest brothers, Eric and Don Jr., also appear to own 7.5% stakes.
Eric and Don Jr., who are managing the affairs of the family business, have sold more than 100 of their father’s properties since he took office, cashing in more than $100 million. Those deals have sparked concerns because they allow anyone to pay the president of the United States, in some cases without disclosing who they are. A sale of the Washington, D.C., hotel would be the biggest transaction by far.
The Trumps have taken a $170 million loan against the place from Deutsche Bank. Even if they have not paid down any of the principal, a $253 million sale would allow the president to clear an estimated $50 million or so after debt and taxes. A $500 million sale would leave him with roughly $200 million. In that scenario, Eric, Don Jr. and Ivanka would each walk away with about $20 million apiece.
A spokesperson for the Trump Organization did not respond to a request for comment.
On Friday, Bill Moyer, a Maryland-based hotel broker, told Forbes he could imagine a scenario where the property sold for $1.5 million per room, or about $395 million, but $500 million seemed excessive. “It’s one thing to say, ‘I’ll float it and see if I can get that kind of money,’” Moyer said. “But is the Sultan of Kuwait going to come and buy it? I don’t know. If you have a solid businessperson, I don’t think they’re going to pay $2 million [per room].”
Because Donald Trump has the largest interest in the hotel, a 77.5% stake, he would be the biggest beneficiary of any sale. Ivanka Trump, who also refused to divest her interest in the property upon moving into the White House, owns an estimated 7.5% of the property. Her two eldest brothers, Eric and Don Jr., also appear to own 7.5% stakes.
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