You know already that President Donald Trump is on a rampage to build hideous oversized structures in Washington, D.C. (the Epstein Ballroom, the Arc de Trump) and to deface existing structures using exorbitant no-bid contracts. We got some good news this past weekend when a judge made Trump take “THE DONALD J. TRUMP AND” off the John F. Kennedy Center for the Performing Arts. I only wish the judge further required the president to hang the removed letters on the clubhouse portico at the Trump National Golf Club Bedminster, rearranged anagrammatically into UNHAT DAMP NJ TODDLER.
What you may not know is that the Trump administration is also on a tear to unload government buildings that it’s judged to be all cost and no value. The General Services Administration, which is the federal government’s real estate arm, is selling off government real estate at fire-sale prices into an historically depressed commercial market. These prices are lousy even within the context of the post-Covid office-space glut, making the GSA look very foolish as it claims thrifty stewardship of the taxpayer dollar.
I’ve been primarily concerned about the fate of the Wilbur J. Cohen Federal Building, which the GSA designated last year for “accelerated disposition.” Gray Brechin, founder of the nonprofit Living New Deal, described the Cohen Building to me last September as “a kind of Sistine Chapel of the New Deal” because of its murals by Philip Guston, Seymour Fogel, Ethel and Jenne Magafan—and most especially Ben Shahn, whose dry frescoes along both sides of a 70-foot lobby corridor, “The Meaning of Social Security,” Shahn judged “the best work I’ve done.” (To read my earlier pieces on the Cohen building and the Shahns click here, here, here, and here. These were followed up in, among other publications, The New York Times, The Washington Post, the Atlantic, and USA Today.)
I won’t tug your lapel too long about the Cohen, which has yet to be sold, because my subject today is those buildings that the Trump administration has sold already, most especially the Old Post Office Building, which Trump leased during his first administration and refurbished as a hotel. The Trump International Hotel became a kleptocratic vortex before Trump sold it at the end of his first term well above market value. Now Trump is poised to re-purchase not just the lease but the entire building at a heavy discount, shredding whatever remains of the Constitution’s emoluments clauses as he uses the presidency to expand his fortune at a rate of $1 billion or more per year.
More on that in a moment. Permit me first to update you about the Cohen building.
Neither Senator Joni Ernst, Republican of Iowa, nor her staff, knew that the Cohen building housed precious New Deal art before she inserted into a January 2025 water resources bill a provision requiring that it be sold off “no later than two years” after being vacated (which has not yet occurred). Such ignorance is astonishing given that the Cohen lies a mere two blocks from the United States Capitol, but I wouldn’t call it atypical of how the Republican congressional majority operates.
After Ernst learned about the art, she said in a written statement: “It speaks volumes that only 2 percent of the folks who were actually paid to work at the Wilbur J. Cohen Federal Building were showing up to see its murals in person.” Ernst here misconstrues a low occupancy rate attributable to GSA misallocation (the main tenants, Voice of America and its parent agency, used only a small part of the building) to be an entirely made-up absentee rate for supposed civil-service malingerers. “Given that fact,” Ernst continued, “let the property’s buyer decide its artwork’s fate.” Which is exactly what the Cohen building’s defenders fear, even though the law requires that New Deal art remain public property even after the building where it resides is sold. These days we can never be sure the executive branch will pay any heed to what the law says.
In recent months, various Democratic members of Congress have walked those two blocks from the Capitol to tour the Cohen building’s artworks, and we’ve seen some murmurings from Rep. Lloyd Doggett of Texas and others, prodded by Alex Lawson, executive director of Social Security Works, and Mary Okin, assistant director of the nonprofit Living New Deal, about introducing legislation to block the Cohen’s sale. On April 21, Rep. Chellie Pingree, Democrat of Maine, offered an amendment to an appropriations bill for financial services, general government, and related agencies requiring public release of a GSA feasibility study, initiated by the Biden administration and buried by the Trump administration, on refurbishing the Cohen building. As I reported previously, the study proposed a $1 billion green renovation of the Cohen building to make it “a flagship in the federal government portfolio,” including restoration of the murals, which “add a sense of cultural identity in the building that remains from tenant to tenant.” Amen.
Pingree’s amendment to make public this taxpayer-funded study failed, as Democratic amendments tend to in the Republican-majority House. But two Republicans, Reps. Ryan Zinke of Montana and Michael Simpson of Idaho, voted with Pingree. “I was glad to see I convinced a couple of my [GOP] colleagues,” Pingree told me afterward. “I got pretty close.” It gave her hope, Pingree said, that Congress would “keep the building off the market.”
I hope soon to have more to report on that. Now let’s move on to those government buildings the GSA has sold already.
Three of them are in Washington, and the first two, like the Cohen, have been designated for “accelerated disposition.” In March the GSA’s own Regional Office Building was sold (to the residential developer Dalian Development) for $24.26 million. That worked out to $26 per square foot, or less than one-tenth its market value. In May the GSA sold the Liberty Loan Building (to Satvik “Vinny” Raj, founder and managing director of Digilent Consulting) for $17 million. That works out to $98 per square foot, which is somewhat better, but still about one-fifth the average sale price for a D.C. office building in the current depressed market. Why the government insists on disposing of these buildings at so inopportune a moment is anybody’s guess. (I’m indebted to the Washington Business Journal for details on these sales, which went unreported in The Washington Post.)
The third building, which is not on the accelerated disposition list, is the Old Post Office Building. It sold earlier this month for $80 million, or $172 per square foot. Which sounds like a big improvement on the GSA Annex and the Liberty Loan building until you remember that the Old Post Office is a gorgeous Romanesque Revival structure completed in 1899; that a mere 10 years ago Trump spent $200 million, or $430 per square foot, to convert the Old Post Office into a luxury hotel; and that Trump sold the hotel five years ago for a reported $375 million—and that was just for the lease, because until last week the GSA retained ownership of the building and the land. In current dollars, Trump got paid for the renovated Old Post Office $452 million, or $972 million per square foot—again, just for the lease.
That means, among other things, that even if Old Post Office Building’s new buyer gets its asking price of $400 million, the building and the land will sell for less in 2026 than just the lease sold for in 2021. And who’s the likeliest buyer? According to The Wall Street Journal, Eric Trump has been in talks to repurchase the Old Post Office Building since mid-January 2025. Trump wants his Kleptorium back, at a discount.
When Trump bought the Old Post Office lease back in 2012, Steven Pearlstein observed in The Washington Post that the likely outcome would be, for Trump, yet another appearance in bankruptcy court. Trump had bad luck with hotels, having previously gone bust with the Taj Mahal in Atlantic City, the Trump Plaza Hotel and Casino in Atlantic City, the storied Plaza Hotel in Midtown Manhattan, and the Trump Hotels and Casino Resorts. Pearlstein thought the GSA was crazy to lease the Old Post Office to a screw-up like Trump. He didn’t know the half of it.
As he’d done many times before, Trump overpaid for the Old Post Office, agreeing to an inflation-adjusted annual lease payment of $3 million plus the $200 million renovation. Pearlstein was quite right that this would compel Trump to charge room rates well above those of his hotel competitors. What Pearlstein couldn’t know was that Trump would become president of the United States shortly after his Trump International Hotel opened on Pennsylvania Avenue, allowing it to become, as I wrote in May 2022, Washington’s premier shakedown venue. Foreign governments spent $3.8 million at the hotel; the Secret Service spent more than $200,000; the Republican National Committee spent $3000 per month; Trump’s inaugural committee spent $1 million (prompting a lawsuit from the D.C. attorney general that Trump later settled for $750,000); and so on.
But Trump had paid so extravagantly for the Old Post Office that even with all this baksheesh pouring in the Trump International still lost about $70 million in operating expenses. Then he lost the 2020 election, which meant he no longer needed a Kleptorium. Trump sold the Trump International Hotel for $375 million, pocketing $100 million in profit. The $375 million price tag was, Jonathan O’Connell reported in The Washington Post, the most anybody had ever paid for a Washington hotel, which was all the more remarkable because
a.) this was a money-losing venture;
and
b.) the building and the land were still owned by the federal government.
(I recount the story up to here, in greater detail, in my May 2022 piece.)
The new owners, who scraped Trump’s name off the hotel and reopened it in 2022 as a Waldorf Astoria hotel, were a Miami-based investment group called CGI Merchant Group. It isn’t clear why CGI Merchant Group got into this, but the trade publication The Real Deal last year called the firm “financially embattled” because of various real estate investments gone sour. To no one’s surprise, CGI Merchant Group in 2024 had to sell the Waldorf Astoria for $100 million at a foreclosure auction.
The purchaser at foreclosure was a private equity firm called MSD Partners (now BDT & MSD Partners). MSD Partners had put up most of the money for CGI Merchant Group to buy Trump’s unprofitable hotel in the first place; of the $375 million purchase price, $285 million came from MSD Partners. After CGI Merchant Group defaulted on that $285 million loan, BDT & MSD Partners decided what the hell, let’s kick in another $100 million and take it off their hands. And so they became the owners of Trump’s unprofitable former hotel—or rather, the owners of a lot of fancy renovations and a lease on same. Now GSA has come along and sold the building itself to BDT & MSD for an additional $80 million.
I don’t know who’s a more generous soul—BDT & MSD for acquiring this dog of an enterprise, or GSA for handing over title at so low a price.
We know why GSA would be charitable; these folks work for President Donald Trump, who wants to repurchase the Old Post Office, this time at a less burdensome price. But why would BDT & MSD Partners be charitable? Because when Trump was trying to unload the Old Post Office back in 2021, MSD Partners’ chief executive was a Palm Beach neighbor named John Phelan. (Phelan left the firm in June 2022, seven months after the sale.) Phelan is one of Trump’s biggest financial supporters. In April, 2024 Phelan threw a Trump fundraiser at his Aspen vacation home, with contribution tiers rising from $25,000 to $500,000. Phelan himself donated $927,000 to Trump’s 2024 campaign.
Shortly after that election, Trump named Phelan to be Secretary of the Navy despite Phelan’s notable lack of armed forces experience in either a military or a civilian capacity. Experts told the Associated Press that Phelan was chosen because he wouldn’t give Trump any pushback. But Defense Secretary Pete Hegseth reportedly grew jealous of Phelan’s closeness to the president, and in April Hegseth fired Phelan, apparently annoyed that Phelan was currying favor with Trump by proposing to create an expensive new “Trump Class” of battleships. This may be the single instance in which a Hegseth fired someone from the Pentagon who was actually unqualified.
BDT & MSD Partners, I’ll wager, would very much like to sell the Waldorf-Astoria at a price that lets them recoup their investment in the property, which (between the unpaid portion of its loan to CGI Merchant Group, its foreclosure purchase, and its purchase from GSA of the building and land) probably isn’t much lower than its $400 million asking price. Indeed, given operating expenses on the less-than-thriving hotel, BDT & MSD may be out even more than $400 million.
If Trump pays $400 million to buy back the Old Post Office, he’ll get it for $52 million less, after inflation, than he sold it for five years ago—and this time he’ll have the building and the land. That’s a pretty good deal! But if I know Trump, he’ll demand a lower price than $400 million, leaning heavily on his knowledge that the GSA sold it to BDT & MSD Partners for a mere $80 million and pretending not to remember MSD Partners’ previous exertions to bail him out. He has no time to delve into such petty details. And anyway, he gave that guy the Navy secretary gig and he blew it. Trump probably doesn’t remember how. He’s a very busy man.
