News / Toronto

Trump tower hotel-condo owner to auction suite

A local investor has decided to try to sell off his $1-million-plus hotel-condo suite in Toronto’s Trump hotel like a piece of fine jewelry or aging farm equipment — by auction.

After watching listings for about a dozen similar units in the beleaguered luxury project languish on the MLS for more than a year without a single taker, the owner of the 12th-floor suite — himself a veteran realtor — has turned to Ritchies Auctioneers.

The unusual event, slated for Sept. 22 in the sumptuous ballroom of the Trump International Hotel & Tower, is expected to generate buzz among the world’s wealthy.

And not just over the 950-square-foot hotel suite. Other luxury items on the auction block include a 2013 black Bentley convertible, two Fabergé eggs, rare Patek Philippe watches, and valuable artwork and jewelry, including a five-carat round diamond.

Kashif Khan, managing director of Toronto-based Ritchies, acknowledges that selling the hotel-condo unit will be a challenge but he’s optimistic.

“Everybody knows that if it’s priced right, real estate sells,” says Khan, who will offer possible purchasers tours of the suite on Sept. 19.

The Star has reported in recent months of the investor revolt at the building, that has seen only 50 buyers of 261 hotel-condo units actually take possession well over a year after the landmark project opened.

Owners of 25 units in the 65-storey hotel-condo project at Bay and Adelaide Sts. have launched a lawsuit for more than $40 million against developer Talon International, alleging they were victims of “an investment scheme and conspiracy.”

Many have found themselves unable to get mortgages on units that lenders consider commercial rather than residential real estate. Or they have been crippled by maintenance fees and commercial property taxes averaging thousands of dollars per month.

Talon has launched a countersuit, saying buyers were warned that real estate, and hotels, can be risky investments.

The 11 Trump suites currently listed on MLS don’t include about 20 others that Talon itself is still trying to sell. One of those — a 19th-floor unit similar to the one being auctioned — is listed by Talon at $1.6 million.

Khan wouldn’t disclose the minimum bid that’s been set for the suite up for auction, other than to say it’s about 30 per cent less than what Talon asking for its unit. It’s expected to be a largely online auction, with international interest from China, India and the Middle East

Should the suite actually sell, it could have a major impact on the units up for sale by both Talon and other Trump owners. It would establish, for the first time, a real market value for condo units generally seen as wildly overpriced for the Toronto market.

While auctions are a common method of selling real estate in countries like Australia, they tend to have a stigma in North America. “We look at auctions as a way to get rid of troubled properties,” says York University real estate professor James McKellar.

“For an auction to work, you have to be dealing with something like art or collectibles, where there is limited supply and high demand,” says Toronto realtor Simon Giannini, who has tried auctions in the past. “That’s not the Toronto condo market.”

The unit owner, who runs a mid-sized Toronto real estate brokerage, declined to speak to the Star. He’s recently had a brush with cancer and wants to simplify his assets.

“He knows what he’s good at and he just wants it sold quickly,” says Khan. “He’s getting rid of a lot of his toys.”

While the 12th-floor{+ }suite has the wow factor of a TV built right into mirror in its marble-clad master bathroom, it’s a far cry from home — the only kitchen facilities are the pricey mini-bar offerings.

One window of the tastefully decorated corner unit offers a bird’s-eye view of the Bay-Adelaide Centre construction site. The other looks out on the ventilation system of ScotiaPlaza.

“There will be two kinds of potential buyers for this, and they are likely to be international buyers. It’s either going to be a purely ego thing — somebody who likes the novelty and wants a place to stay when they’re in Toronto on business — or a bargain hunter who’s willing to take the risk of holding it for a few years to see where it goes.”

Ritchies, which plans to launch a real estate auction division in the next few weeks, has also been approached by owners of condos atop the Shangri-La hotel, where more than 50 units are now listed for sale or lease on MLS.

A second Trump owner has also approached Ritchies, which auctioned off a $6-million Bridle Path mansion last fall, only to see two bids collapse and the owner decide to stay put.

More on