Trump-branded Toronto hotel and condo tower up for sale

Commercial real-estate firm CBRE Limited has launched the sale of the bulk of the Trump International Hotel and Tower in Toronto, with a minimum price for all assets set at $298 million.

CBRE announced the sale Tuesday. An Ontario Superior Court judge approved the sale in November after the company that built the 65-storey property, Talon International Inc., failed to make payments on its loans. FTI Consulting Canada was appointed receiver.

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The sale includes 211 hotel units, 74 residential units and most of the property's commercial and retail space.

Bill Stone, executive vice-president of CBRE Hotels, said 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."

According to data compiled by Ontario's Ministry of Tourism, Culture and Sport, the hotel occupancy rate in downtown Toronto in 2016 (up to October) was just over 79 per cent, up a touch from 78.9 per cent in 2015. The average daily rate for a room at a downtown hotel was $226.19, up from $212.86 in 2015.

Despite Toronto's robust hotel market, the Trump project was plagued by delays, cost overruns and other issues since breaking ground in 2007.

Investors unhappy

Since it launched, fewer than half of the property's residential condos have been sold, and the occupancy rates of the hotel rooms have been lower than some investors had wanted, according to court documents.

The average daily rate for hotel rooms in the building has declined by about 30 per cent, court documents suggest.

Investors are suing the developers, saying they were misled about itsfinances, and have lost millions because of promises made that have never come to pass. Talon disputes those allegations and is fighting them in court.

JCF Capital ULC, which bought about $300 million owed on the facility's construction loan, alleged in court documents that Talon and related companies have been in default on that loan since at least July of 2015. The sale is part of JCF's effort to recoup its investment.

Neither Trump nor his companies have any ownership stake in the building. Talon licensed the Trump brand and hired the Trump Organization to manage the hotel property. The company said in November that it expects to continue that work.