CBRE Limited, a commercial real-estate firm has initiated the sale of the majority of the Trump International Hotel and Tower in Toronto, with a minimum price of for all properties placed at $298 million.
The sale was announced by CBRE on Tuesday. An Ontario Superior Court judge confirmed the sale in November following the company that built the 65-storey property, Talon International Inc., faltered in the payment of its loans. FTI Consulting Canada was employed receiver.
The sale characterizes of 211 hotel units, 74 residential units and the best portion of the property’s commercial and retail space.
The executive vice-president of CBRE Hotels, Bill Stone stated that the firm expects to see “robust demand for this asset from both international and domestic investors.”
“Opportunities to acquire such a prominent trophy asset in Toronto’s financial core are extremely rare,” Stone said in a statement.
“The property also provides the acquirer with substantial unrealized potential in Canada’s biggest and best performing hotel market.”
Data compiled by Ontario’s Ministry of Tourism, Culture and Sport showed that the hotel occupancy rate in downtown Toronto in 2016 was over 79 percent, up a notch from 78.9 percent in 2015.
The average daily rate for a room at a downtown hotel was $226.19, an increase from $212.86 in 2015.
Although Toronto is known for its strong hotel market, the Trump project was affected by delays, cost overruns and several other issues since breaking through in 2007.
According to court documents, since it began, less than half of the property’s residential condos have been sold, and the occupancy rates of the hotel rooms had fallen less than some investors had desired.
The court documents further mentioned that the average daily rate for hotel rooms in the building has declined by 30 percent.
The developers are been sued by investors, who allege that they were misled about its finances and have lost millions due to unfulfilled promises. Talon denies such allegations and is fighting them in court.
JCF Capital ULC, a company that bought about $300 million of the facility’s construction loan, in court, documents claimed that Talon and similar companies have been in default on that loan since July 2015. The sale constitutes JCF’s effort to reacquire its investment.
Both Trump and his companies lack any ownership stake in the building. Talon licensed Trump brand and employed the Trump Organisaton to manage the hotel property. In November, the company said that it expects to continue that work.