Trump Toronto strikes chord with savvy investors
Thriving projects in New York, Chicago and Las Vegas underline potential for capital appreciation
From The Globe and Mail
Almost the moment after The Trump Organization and Talon International Development Inc. announced their plan to build a Trump International Hotel and Tower at Bay and Adelaide streets in Toronto, David Zaikin was on the telephone to clients.
“When this project was announced I instantly became a strong believer that it would be a significant winner,” he said. “It has all the earmarks of a good investment. I have stayed at Trump Hotels and seen how other similar projects went in New York, Chicago and Las Vegas.”
To cut to the chase, Mr. Zaikin called his top five international clients; four out of the five have agreed to proceed with the Trump International Hotel and Tower Toronto development.
“Their decision to buy is easy to understand,” says Val Levitan, president of Talon International. “Whether they plan to live in one of the suites themselves and use it as a primary or secondary residence while in the city or to offer it as a rental property, Trump Toronto has all the elements demanded by sophisticated investors.”
Other Trump developments offer an insight into investment values. In New York, the flagship property on Columbus Circle, the model for all Trump International’s to come, commands some of the highest resale prices in the city, for both condominium hotel suites and residences alike.
In Chicago, suites began selling at about $500 (U.S.) a square foot; they now command about $1,200 a square foot, Toronto prices, with 1,295-square-foot residential suites starting at well under $1-million (Canadian) are a true bargain by comparison.
There are four different aspects to the returns the project is expected to generate, says Mr. Levitan. First there is the prospect of a significant return on an investor’s deposit even before the tower is built. Demand bid up prices in both New York and Chicago; Toronto shows indications of paralleling that experience.
In addition newly released suite designs make units affordable to a broad range of buyers. From upwardly mobile professionals and entrepreneurs to wellheeled and well established couples and individuals.
Second there is the near certainty of capital appreciation over the medium and long term. As Mr. Zaikin points out, Trump Toronto occupies a singular position in this city’s residential market. It is an internationally recognized brand.
“Besides,” he says, “there is nothing else like it. No other project offers the range of suites, the amenities and the luxury and quality of construction.”
Third is the prospect of significant cash flow from rental income. Overall vacancy rates in the city dropped to 4.3% last year and are forecast to slide even further, according to Canada Mortgage and Housing.
“The real shortage is in the luxury, high-end market,” says Mr. Zakin. “Toronto is part of the international circuit for business, sports, entertainment, the arts – you name it. There is tremendous pent-up demand for short-term luxury accommodation in this city and nothing matches what Trump Toronto can offer.”
Robbyn Hayden, a Trump Tower sales executive, agrees. She has clients investing because they can foresee tremendous upside in residential units purchased for investment.
“For many senior international executives, and for many athletes, it makes a great deal more sense to pay anywhere from $5,000 to $8,000 a month renting a magnificent suite in a one-of-a-kind building than spending $4-million or $5-million on a home, knowing they may be traded or transferred within a year or two.”
One of the great advantages of Trump Toronto is international recognition, she adds. “No matter where you live, no matter where you come from, chances are you know the Trump name and what it stands for.”
Finally there is the value inherent in the simple pleasures of owning such a property, Mr. Levitan points out.
“There is no question many of our buyers are drawn by the astounding package of amenities and services,” he says. “It is the only property in the city that comes up to international standards of luxury, quality and exceptional service.”
To Mr. Zaikin, residences at Trump International Hotel and Tower, Toronto are, in fact a bargain.
“Toronto has become a worldclass, international city,” he says. “As such, real estate prices here represent tremendous bargains for international investors. What they are seeing is a chance to acquire an internationally recognized, luxury brand property, managed by one of the world’s leading management companies at a third to half the price of similar properties in New York, Chicago, London, Rome, Paris, you name it.”
Simply put, there is nothing else like it, he says.
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