Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ US https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Trump DC hotel sales are proud of millions to be made by foreign governments

Trump DC hotel sales are proud of millions to be made by foreign governments

The biggest selling point for the hotel, though according to a copy of the brochure seen by CNN, is the only thing the Trump family insists it has not benefited from: profits from foreign governments.

"Great upside potential exists for a new owner to take full advantage of government business when rebranding an asset," states the 46-page investment opportunity.

The Trump organization insists that its refusal to seek foreign business has cost more than $ 9 million. According to the brochure, these "casualties" include the seizure of 17,100 overnight stays in rooms in 2019, leading to a loss of $ 5.3 million in revenue and $ 3.9 million in revenue from food and beverage revenue.

The investors' pitch is an explicit confirmation of how important foreign businesses are to the luxury hotel with 263 rooms in the Old Post Office buildings of the White House.

Although it includes a specific amount of how much money it has diverted from foreign governments, the terrain does not include figures for how much the hotel has accepted, despite reports showing it has become a magnet for foreign employees. Nor does it provide factual or historical data on the hotel's financial results, which has been cited in numerous cases accusing Trump of using the property to profit illegally from his presidency.

These lawsuits allege that Trump violated the US Constitution's remuneration clause, which prohibits the president from receiving gifts or payments from foreign governments. In her defense, the Trump Organization says it has voluntarily donated more than $ 340,000 in revenue it received from foreign governments to the US Treasury in 201

7 and 2018. The president's attorneys also say that after his assets were placed in trust, he did not directly benefit from the hotel business.

Instead, the materials provide financial projections for the period 2020-2020 based on a sales and marketing strategy directed at foreign governments.

Trump previously reported on his financial disclosure form that the hotel had $ 40.8 million in revenue in 2018 and $ 40.4 million in 2017. The family never disclosed whether the hotel was profitable.

The Trump Organization did not respond to requests from CNN for comment.

Estimated jump in revenue

However, the company is planning a huge 65% jump in revenue from 2018 to 2020. According to the investment step, the hotel is expected to have operating revenues of 67.7 $ 1 million next year and $ 6 million in profit before interest, taxes, depreciation and amortization, minus the cost of keeping the hotel updated.

JLL Hotels & Hospitality, the real estate company hired to sell hotel leasing, estimates that the employment rate at Washington Hotel next year will reach 68.3%. That's below other five-star hotels in the area, which JLL estimates will have 74.5% occupancy, according to the investor.

  Exclusive: Data shows that Trump Hotel in DC was more valuable and less expensive than peers in 2017.

The investment move has begun to circulate in recent weeks after the Trump organization announced last month that it is exploring the sale of its 60-year lease with the administration of common services. Since signing the lease in 2013, Trump has poured millions of dollars into renovating the Old Post Office building and opened in October 2016, less than two weeks before Trump won the election.

"People object to making so much money at the hotel and therefore may be ready to sell," Eric Trump said in a statement last month. When Trump became president, he did not sell his assets like the previous presidents, but put the family business in trust, delegating the family business management to his two sons, Eric and Don Jr. and other executives.

] $ 500 million sale price

A person familiar with the matter told the Wall Street Journal that the company hopes to receive more than $ 500 million for the property or about $ 2 million for the key from the room (the sale price divided by the number of rooms) – which would be one of the highest prices ever paid for a hotel in Washington.

Unlike the Rosewood Hotel, a luxury five-star property in Georgetown, sold for $ 1.3 million a room key in 2016.

"It's an extremely high price, but the location and recent renovation of the hotel will command historic value." for the Washington, D.C. area, said Dan Hawkins, senior director of hotel and hotel management at Berkadia, a commercial real estate firm.

The sale is not without its complications. The buyer will not own the land as it has been leased by GSA, which must also approve the sale. The agreement also gives rise to potential conflicts of interest, as Trump is effective on both sides of the deal, as the seller and the chief of GSA staff are tasked with approving the deal.

Some potential buyers have questioned why Trump would not wait until he left the office to sell the property to avoid debate over whether he sought to take advantage of his office. Others have expressed ethical concerns that it is overpriced and offered to foreign buyers with deep pockets who may be motivated to favor the president.

When Trump established confidence in his business, he also appointed Ethics Advisor Bobby Burchfield, a Washington attorney who would have to approve certain deals, including the sale of the hotel. According to an ethics review, Trump has no right to sell to a state wealth fund or a foreign government. However, a foreign national will not be immediately disqualified from purchasing the hotel.

The transaction must also be determined to be fair market value, without indicating that the counterparty is attempting to influence the Trump administration or to obtain a concession.

Despite claims by the Trump Organization that it has rejected millions of dollars in business from foreign governments, the Washington hotel has done a swift business with them. Delegations from Saudi Arabia, Malaysia and Kuwait have stayed at the hotel or held events there, along with members of Trump's cabinet and GOP fundraisers. Romania's prime minister is reported to have booked a room earlier this year.

Foreign business is not the only selling point the Trump Organization points to potential buyers. They also expect an increase in the hotel market from one company the president loves to hate, Amazon, whose CEO Jeff Bezos also owns the Washington Post.

A full page in a 46-page package promotes the benefits that may come from Amazon's decision to build its second headquarters in Northern Virginia. JLL projects that Amazon could add 880,000 nights in a seven-year room, "further stimulating compression," or full-time employment, "to the Washington housing sector."

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