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CGI Merchant collapses after Old Post Office hotel lease deal falls apart
CGI Merchant agreed to pay $375M for the Old Post Office lease and later lost the property in August 2024 after its lender foreclosed.
CGI Merchant Group, a Miami-based hotel investor backed by a $650M fund raised the year before, unraveled after its acquisition plans for Washington, D.C.'s Old Post Office hotel property went into failure, according to a report by Bisnow. The firm founder, Raoul Thomas, had planned to cap the deal at no more than $350M for the historic building, which was then occupied by the Trump International Hotel in Washington, D.C. By the time Thomas reached an agreement with Donald Trump in summer 2021, he had agreed to pay $375M for a lease to control the property, $25M above what his investment committee had directed.
To finance the purchase, Thomas relied on a $285M loan from Michael Dell's family office, with a plan to convert the property into a Waldorf Astoria and eventually add a high-end private club. Festinger, CGI's former senior vice president of asset management, said the expectation was that the famed property would book quickly, but also noted that it can take months to years to reach that outcome, and that preparation was needed for that timeline.
Bisnow reports that shortly after the takeover, CGI Merchant spiraled amid rising insurance and interest rates, and Thomas lost the crown jewel in August 2024, 27 months after buying the lease, after the lender foreclosed. Two years later, CGI Merchant shut down and either sold or lost all assets to foreclosure, leaving investors with losses described as running into the millions.