Who will buy Toronto’s Trump Tower?
By Lucas on Jan 13, 2017
According to a recent article in The Toronto Star, Trump International Hotel Tower at Bay and Adelaide in Toronto’s Financial District will be up for bids starting February 15, 2017. The starting bid? A cool $298 million.
The sale includes 211 hotel suites, 74 condo suites, and retail space, which includes a spa, the Calvin bar, and the America restaurant. CBRE is managing the sale of the Trump Tower, and apparently, groups from Asia, Europe, and the US have shown interest. CBRE has managed other major hotel sales, including the Royal York, Intercontinental, and Four Seasons.
The 65-storey tower opened in 2012 and struggled with delays and slow unit sales. About two years ago, we met with Neil Labatte, President & CEO of Talon International Development & Talon Luxury Collection. During the time of our visit to Trump Tower, there were still more than 50 condo units available. That means only around 20 sold in the first three years of being open.
There was a wide range of units available, ranging from 1,300 to 4,200 square feet. At the time, prices were starting at $1.7 million. Then there was the Super Penthouse, which was 11,000 square feet, priced at $37 million. The Super Penthouse was unfinished when we checked it out.
“The super penthouse is such a unique property that someone will have their own positioning as to how they want to finish it,” Labatte explained while we were on our tour. “It’s a global product, so we don’t know whether it will be a Canadian, American, or Asian, or European, or Middle Eastern buyer – they could come from anywhere around the world, and there are different tastes. For us to preempt what they would actually want doesn’t make sense.”
As Labatte pointed out two years ago and as CBRE mentions, Trump Tower is an international product. There are companies around the world showing interest. One thing that The Toronto Star article doesn’t mention is if there is any domestic interest. Could we see a big name developer from the Greater Toronto Area (GTA) jump in with a bid?
When we think of the largest condo developers in the GTA, a few obvious names come to mind, but Trump Tower is mostly a hotel. Menkes developed the Four Seasons Hotel and Residences in Toronto - perhaps they’re enjoying the hotel game? Cadillac-Fairview seems like another developer that could throw its hat into the ring.
Given all of the controversy with president-elect, Donald Trump, we think it’s pretty safe to assume that the hotel will undergo a rebrand once it is purchased. With Trump not being a popular name north of the border, the branding could have contributed to the slow pace of sales from the get-go.
In the heart of downtown Toronto, near Union Station and the Eaton Centre, the location is perfect for tourists. International business professionals that frequently travel to Toronto may appreciate a secondary home, and it could even be a popular residence for celebrities. Put into the right hands, assuming a complete overhaul of the brand is done, we think this tower could be a success and an asset to downtown Toronto.
