Donald Trump and his daughter Ivanka said they are reviewing whether Colony Capital, the Los Angeles-based private equity firm with which they teamed on a winning bid for the Old Post Office Pavilion, will remain their financial partner on the project.
The Trump Organization, based in New York, and Colony were selected by the General Services Administration from a competitive field of developers in February of last year.
The companies issued a joint statement after the selection in which Thomas J. Barrack Jr., chairman and chief executive of Colony, said he was “delighted to team with the Trump Organization to redevelop this historic American landmark while preserving its grandeur and elegance.”
Last week, after appearing at a Washington Post event where they talked about their plans to turn the Old Post Office into a 275-room luxury hotel, the Trumps said in an interview that they are reconsidering whether or not Colony will be their financial partner.
“We’re considering Colony and others,” Donald Trump said. Neither he or Ivanka expressed concern about a possible change. Indeed, Donald Trump said on stage during the event that “every bank wants to do the deal.”
“We don’t even need financing,” he told the crowd. “We could do it in cash.”
Commercial real estate experts expected Colony to provide a heavy majority of the $200 million the team committed to the project. In 2012 PERE, a real estate news service, ranked it fifth globally based on the money it had raised. Colony says that since its founding in 1991, it has invested $45 billion in more than 14,000 assets.
Colony spokeswoman Jennifer Hurson declined to comment.
Few luxury hotel projects across the country have received financing in recent years — only six are expected to open this year, down from 23 three years ago, according to Lodging Econometrics data reported by Bloomberg.
But local development experts said they expect the Trumps to have little problem finding partners.
Norman Jemal, the D.C. developer who remade much of the Penn Quarter neighborhood and whose family is friendly with the Trumps, said “I don’t think they’ll have trouble finding a partner for that.”
Replacing Colony with another financial partner “doesn’t affect the negotiations” as it relates to the GSA, said agency spokesman Daniel Cruz, in an e-mail. He said negotiations are ongoing. “GSA is committed to efficiently managing federal real estate assets to get the best value for the taxpayer,” he said.