When Donald Trump sold it At its Washington luxury hotel this week, the new owners have decided to shell out a surprising amount of cash. Florida-based CGI Merchant Group will pay a complaint 375 million dollars for the hotel, a price tag of over $ 1 million per guest room, which would set a record in the nation’s capital. But according to a review of the newly filed documents, much of the funding for the purchase will come from two other sources: a New York-based private equity firm with ties to the founder of Dell Computers and a small internet-based bank that is been among the few financial institutions willing to lend to Trump as his faltering business empire faces legal scrutiny.
Trump Hotel has generally been considered well run. But this week’s high selling price raised eyebrows because the property had done it worn out to attract a stable clientele, even before the Covid pandemic decimated the hospitality business. While CGI spoke official press release that the deal was concluded through an investment fund that works in partnership with retired baseball player Alex Rodriguez and several other wealthy individuals, documents filed with the DC Recorder of Deeds reveal that most of the money for the The acquisition was borrowed from two other companies: MSD Partners and Axos Bank, based in New York.
Axos is a small emerging bank best known for its consumer loans, but it has recently made several big deals with the Trump and Kushner families, despite the financial and legal woes currently affecting the Trump empire. Over the past four years, Axos has at least funded three real estate business done by the Kushners. In March, Axos helped refinance Trump Tower for $ 100 million just like its owner, the Trump Organization, did he struggled to win the trust of other lenders while facing legal investigations in New York. With these deals, Axos has extended a lifeline to the former president’s company as it seeks to reestablish itself in the shadow of the pandemic and the toxic political brand of his namesake.
News of the Trump Hotel sale was announced Wednesday evening. The hotel closed its doors quickly and within hours the work crews were removing the Trump signage from the historic building in Washington, DC. (CGI plans to rename it like a Waldorf-Astoria hotel.) On Thursday morning, the deal was legally cemented with a flurry of documents filed with the DC Recorder of Deeds, including a deal showing that the Trumps sold the building’s rent to a company associated with CGI Merchant Group. Other documents show that CGI borrowed $ 285 million to make this purchase. CGI obtained the loan from MSD Partners, an investment firm that manages private equity and real estate funds on behalf of several wealthy investors, including Michael Dell, the founder of Dell Computers. A spokesperson for MSD Partners confirmed that the company provided the $ 285 million funding for the hotel purchase from CGI.
But MSD, it turns out he’s not alone. Other documents filed as part of the sale show that Axos Bank provided part of the loan that MSD granted to the hotel buyer, acquiring what is known as “senior holding interest”. This “interest” is only part of the total loan, but is structured in such a way that Axos has the right to collect the loan before the other lenders involved in financing the hotel purchase. The MSD spokesperson confirmed that MSD had, in turn, borrowed money from Axos, but the spokesperson did not say which part of the loan to CGI came from Axos and which part came from MSD. The spokesperson also said Axos has invested in MSD loans on “several previous occasions”.
Axos Bank representatives did not respond to requests for comment, neither the Trump Organization or the CGI Merchant Group.
This transaction, therefore, reflects the performance of Axos Bank models to facilitate huge transactions that are a financial advantage for the Trump and Kushner families. The hotel’s record selling price will allow Trump to pay back the $ 170 million he has loaned by Deutsche Bank to buy the hotel, while pocketing a capital gain of tens of millions of dollars. And this lucrative gain comes despite the hotel losing up to $ 70 million during the Trump presidency.
Axos is relatively new bank Originally founded in 1999 as Internet Bank, it changed its name to BofI in 2011 and then to Axos Bank in 2018. From September 2021 it had approximately $ 13.4 billion of assetsa fraction of the several trillion dollars of assets that major banks like JPMorgan and Bank of America have.