The purchase indicates Musk is setting down roots in the Capitol as President-elect Donald Trump begins his second term in office and the pair start work together.

The hotel is located in the Adams Morgan neighborhood of Washington. There is a public auction in New York City on Jan. 23.

The hotel has 220 rooms and also has sister locations in Austin and San Francisco. It opened in 2017 and is going to public auction because it was foreclosed on. A person involved in the project said the financial performance of the hotel failed to meet expectations. He added that it was a “textbook example of grand ambition coupled with over-improvement, guided by a flawed partnership that was led by brand builders and not investors.”

The hotel is about 2.5 miles away from SpaceX’s Washington offices, where Musk has had a group of employees working on his DOGE initiative as well. Once Trump is inaugurated, Musk will use the Eisenhower Office Building in the White House complex to operate DOGE.

The prime office space gives Musk easy access to Trump, who has encouraged DOGE’s mission of reducing government waste. The unofficial agency has reportedly already gone to work, interviewing employees of departments across the federal government before Trump has gotten into office.

Musk said he will aim to cut $2 trillion but admitted that it seemed like an optimistic number.

“I think we’ll try for $2 trillion. I think that’s like the best-case outcome,” he said. “But I do think that you kind of have to have some overage. I think if we try for $2 trillion, we’ve got a good shot at getting $1 [trillion].”

Musk contributed hundreds of millions to the president-elect’s campaign and took a major role in his victory. Since then, he’s stuck around Trump at public events and has been spotted at his Mar-a-Lago residence.

Musk’s SpaceX and Tesla companies hold billions of dollars in government contracts, which has led critics of the executive to claim he’s growing close to Trump to benefit his companies.