When Raoul Thomas walked into Donald Trump’s New Jersey country club in the summer of 2021, he had a plan to pay no more than $350M for the Old Post Office building in D.C., occupied at that point by the Trump International Hotel in Washington, D.C.

Thomas ran Miami-based investment firm CGI Merchant Group, which had the year before raised a $650M hotel investment fund, backed by former Yankees superstar Alex Rodriguez. 

Rodriguez, the all-time leader in money earned on the baseball diamond, had made the introduction between Thomas, who had a growing portfolio of Miami real estate, and the 45th president of the United States, said Robert Festinger, CGI’s former senior vice president of asset management.

The deal would be by far the biggest Thomas had ever done, but it turned out to be the beginning of the end for the firm he founded 15 years prior.

By the time Thomas shook hands with Trump, he had agreed to pay $375M for the lease to control the historic property, $25M more than he had been directed to pay by his investment committee and an all-time record for a D.C. hotel. With a $285M loan from Michael Dell's family office, he planned to quickly convert the property into a Waldorf Astoria and eventually add a high-end private club.

“The anticipation was that it was going to be such a famed property that it's just going to book like one, two, three,” Festinger said. “From my experience, it doesn't matter if it's this asset or if it's whatever asset it is.”

“That takes months to years,” he added. “We needed to be prepared for that. And I don't know if, mentally and financially, we were.”

Thomas had methodically built his portfolio in the years before the pandemic but supercharged his ambitions with the fund, which also counted Tyko Capital CEO Adi Chugh as a lead investor. He saw an opportunity to take advantage of distress in the hospitality sector and had Hilton and celebrities signed on as partners.

But shortly after the Old Post Office takeover, the company spiraled under a barrage of rising insurance and interest rates. Thomas lost the crown jewel of his portfolio in August 2024 — 27 months after he bought it — after his lender foreclosed on him. 

Two years later, CGI Merchant is no more. It has either sold or lost all of its assets to foreclosure, shuttered its offices and left its investors saddled with millions in losses, three former employees told Bisnow.

Thomas didn't respond to multiple requests for comment for this story, nor did he answer a detailed list of questions. 

“As with any investment, there was risk, and unfortunately, alongside the other investors, Alex experienced a loss,” a spokesperson for Rodriguez said in a statement. “Alex has no current involvement with CGI, Mr. Thomas or their business dealings.”

Building The Portfolio

Raoul Thomas founded CGI Capital Holdings as an investment banking firm in 2006, advising on debt transactions for others, including arranging a $130M construction loan for developer Foram Group at a Brickell, Miami, office tower in 2011.

He is the son of famed Guayanese economist Clive Thomas, who is listed as CGI's board chairman in an archived version of the company's website. Thomas told the South Florida Business Journal in 2023 that he dreamed of being a banker when he was growing up on the streets of Kingston, Jamaica, reading the signs of international banks adorning buildings.

By 2013, CGI, operating as CGI Merchant Group, with offices in Miami and New York, started buying up commercial real estate across South Florida. 

That year, Thomas bought a five-building office portfolio, mostly in Palm Beach County, paid $21.4M for the 55 Miracle Mile office building in Coral Gables, and, in the largest deal, bought his first hotel.

CGI paid $37M for the 130-room hotel that occupied the first 14 floors of the 64-story Marquis condo tower in Downtown Miami. It was rebranded in 2019 as a Hilton Curio Collection hotel, The Gabriel, named after Thomas' son.

The conversion put CGI on the map — the National Association of Black Hotel Owners named it the deal of the year in 2019 at an event where Hilton CEO Chris Nassetta and Blackstone Managing Director and co-Head of Strategic Partners Verdun Perry showed up to support Thomas.

CGI dipped back into office in June 2019 and spent $54.4M on the 15-story, 162K SF 550 Biltmore Way in Coral Gables — its last investment before the pandemic.

A wave of lockdowns, travel bans and cancelled events hit the country by late March 2020, resulting in the worst year in history for U.S. hotels. At the same time, the Federal Reserve had cut interest rates to near zero to try and support the economy through the pandemic, kicking off a historic surge in real estate investment.

Thomas decided to launch a $500M fund in August 2020, targeting distressed and value-add hotels in North America and the Caribbean, with plans to convert them into Hilton properties. He told The Real Deal at the time that he believed values would be “significantly depressed” and that he planned to acquire up to 20 properties over the next few years.

By the end of the year, he raised $650M with lead investors A-Rod and Chugh and reported participation from boxing great Floyd Mayweather.

“This is a generational opportunity where assets will trade at a discount from 2019 prices,” Thomas told the South Florida Business Journal in March 2021.

CGI jump-started the fund by purchasing the 140-room Park Central Hotel on Ocean Drive in South Beach for $108.6M. Thomas converted the art deco property into The Gabriel South Beach, another Hilton Curio Collection boutique.

It was the largest purchase of Thomas' career to date. But it paled in comparison to what came next.

All In On The Trump Hotel

CGI was on the hunt for a signature asset to slap a Hilton brand on. The search took Thomas and Festinger, who joined CGI in 2021, to places like Chicago and Alpharetta, Georgia, Festinger said.

“It wasn’t elevated enough for him,” Festinger said.

Members of the Hilton development team, who were helping source assets, presented the idea of purchasing the lease with the federal government for the Old Post Office building from The Trump Organization.

The 127-year-old building, sitting between the Capitol and the White House on Pennsylvania Avenue, is the tallest occupied building in the heart of the nation's capital and has been on the National Register of Historic Places since the 1970s.

But it had fallen into disrepair when The Trump Organization signed a 60-year lease with the federal government in 2013 to convert the property into a luxury hotel. The Trump International Hotel opened just a month before the 2016 election.

The historic building quickly became a lightning rod of controversy through Trump’s first term because he retained ownership of his properties, breaking with the historical precedent of presidents divesting their holdings to avoid the appearance of conflicts of interest.

Trump frequently dined and played host at the hotel, which was being run by his adult children Eric and Ivanka Trump. Foreign governments spent more than $750K for room and board when visiting the U.S., and Republican politicians used it as a de facto social club. Multiple state attorneys general sued over it, accusing Trump of violating anticorruption laws by accepting gifts from foreign entities as president.

Eventually the Trump family started listening for offers, seeking $500M for the property.

“People are objecting to us making so much money on the hotel, and therefore we may be willing to sell,” Eric Trump told The Wall Street Journal in a statement in 2019.

An appeals court ruled in Trump's favor on the lawsuits in 2019, but after the pandemic hit and Trump lost to Joe Biden in the 2020 election, the Trump family in 2021 again listed the leasehold for sale.

A CGI team of Thomas, Festinger and an analyst traveled to see the hotel in August of that year. Festinger remembers the moment during the 15-minute drive from the airport that the building came into view.

The first thing that stood out to Festinger was the “amazing service” provided the second they walked through the door, he said, when they were met by 10 people and Trump’s general manager. The second thing Festinger noticed was Thomas’ infatuation with the 263-key hotel.

The lobby’s glass ceiling rose 38 feet, and golden steel trusses held up Swarovski crystal chandeliers that painted the area with a warm glow.

“I remember Raoul's face [as] he looked at the atrium ceiling,” Festinger said.

“I saw it in his eyes that it was very interesting,” he added.

The work to acquire it started immediately. Thomas started making phone calls in the car on the way back to the airport, Festinger said. When they crunched the numbers, they came out with a valuation of between $300M and $350M.

“The former president at that time … they weren’t just going to give it up for a certain dollar amount,” Festinger said.

CGI was expecting it to be smooth sailing from there, but the hiccups started almost immediately. After the fund and Hilton were approved to purchase the lease by the government's real estate arm, they secured the $285M loan from Dell’s MSD Partners, which after a subsequent merger became BDT & MSD Partners.

The deal finally closed on May 11, 2022, but the buyers were hit with a $35M transfer tax from the District of Columbia government — CGI had budgeted for $9M, Festinger said. Hilton was far more involved than CGI expected, ensuring its signature luxury brand would be protected.

“We were too excited in the moment in thinking that this was going to be like, ‘We’re just going to press the buttons,’” Festinger said.

Workers replaced the Trump International signage with a Waldorf Astoria sign the day the deal closed. CGI had a month to reopen it to start generating revenue following the unexpected expense, Festinger said.

“We always knew the hotel was going to be successful, but when you have that type of transfer tax baked in on top of this, you were always behind the eight ball,” he added.

Festinger said he was in charge of the transition, and his team didn't change much. It even caught a break when celebrity chef José Andrés approached CGI once it emerged as the buyer. The Spanish immigrant and activist had signed a deal with Trump to open a restaurant at the property but pulled out before it opened because of Trump’s statements “disparaging immigrants,” Andrés told The Associated Press at the time.

Andrés opened the Bazaar inside the Waldorf in 2023.

“I think that in essence, there was some business that we were going to get that he wasn't getting just by positive attrition of not being able to take it as he was in that role of president,” Festinger said.

When the property reopened on June 1, the only things were missing were pens and papers with the new logo — and Thomas. He didn't even attend the opening, Festinger said. Thomas had taken off following the deal, on which he worked “24/7,” to recuperate.

The Downfall

Bookings at the Waldorf Astoria didn’t take off the way the team had predicted, and bigger problems were emerging.

After two years of interest rates near zero, the Federal Reserve aggressively raised rates by 5 percentage points between May 2022 and July 2023. 

At the same time, CGI’s insurance costs jumped from $250K to nearly $1M, Festinger said. While the company was able to cut its bill down to around $675K, that was still more than a 160% increase.

Charging more at the company's hotels and offices wasn't doing enough to keep up with unexpected expenses and rising costs in utilities and labor, Festinger said.

“Nobody could have really foreseen all of that when they were underwriting all these assets,” he said.

CGI began falling behind on loan payments, first defaulting on the $285M Waldorf loan with BDT & MSD in February 2024. Thomas was reportedly working on lining up $100M in new financing to try and stave off foreclosure as long as possible.

But he also defaulted on the mortgages on his Gabriel hotels in Downtown Miami and South Beach, which were scheduled for foreclosure sales in May 2024.

CGI was adamant about “not walking away from either property,” a spokesperson told The Real Deal.

“One thing about Raoul, he never stopped working, so he was in contingency mode to find new capital and new debt,” Festinger said.

But he never came up with enough money to satisfy his lenders. On Aug. 5, 2024, BDT & MSD took control of the Waldorf Astoria in a foreclosure auction with a $100M bid. Even after the sale, a CGI Merchant spokesperson told Bisnow at the time that the company had lined up enough money to cure the loan default and wasn't “done fighting for the Waldorf Astoria.”

The same day, CGI lost The Gabriel Downtown Miami to Madison Realty Capital, which foreclosed on a $60M loan.

The hits kept coming. In December 2024, a lender filed a UCC foreclosure notice over a $48.7M loan tied to the 550 Biltmore Way office building. Three months later, the building's ownership was transferred to an entity that purchased the loan. In January 2025, 3480 Main Highway in Coconut Grove, which had once held CGI's headquarters, was auctioned off to settle a $32M mortgage.

Rather than lose another property to its lender, CGI sold 65 commercial units in February 2025 at 55 Miracle Mile to Elysee Investments ahead of a looming auction for $28.5M in unpaid debt.

“That was like a proud moment for me to be able to work with the buyer to be able to close that deal,” Festinger said.

Thomas was frantically trying to land fresh capital at this time, which frequently took him to the Middle East, Festinger said. But he was increasingly hard to get hold of, even to assuage existing stakeholders, two former employees said on the condition of anonymity.

In July 2025, the firm lost the first investment it made after raising $650M — The Gabriel South Beach hotel. After giving CGI a $71M loan for the purchase, Deutsche Bank transferred the mortgage to an entity controlled by hotelier Shadi Shomar. Rather than fight the foreclosure, CGI handed the keys over to Shomar. 

The company's last assets were the suburban offices in Palm Beach and Martin County that Thomas bought in 2013. In the years since, CGI turned the buildings into outposts of its Nexus Coworking brand. But in November, the company sold those properties for $32M and had no assets left.

By that point, Festinger said, there was only Festinger and about four accountants left in the office.

Since then, Thomas has reportedly still been trying to get money back to investors.

According to his LinkedIn profile, he has founded a new firm named Alice Group based in Abu Dhabi, the United Arab Emirates, which multiple former employees told Bisnow is an attempt to generate funds to pay back investors that took a loss.

The government has since sold the ground underneath the Old Post Office to BDT & MSD Partners for $80M. Some of CGI's assets have been resold, including one that nearly doubled in price in only a year.

Festinger in March launched his own company, Festinger Advisors, with a focus on tenant representation. 

He credits a lot of his experience to CGI — which his clients still ask about — equating it to an “Ivy League MBA.” His last contact with Thomas was in March, but it was to check in on each other, and “nothing substantive” was discussed.

Nearly a year after CGI went under, Festinger said he learned an important lesson from the ordeal.

“Don’t fall in love with your asset,” he said.