The 63-storey Trump International Hotel and Tower Vancouver is scheduled for completion in mid-2016.
Celebrity billionaire Donald Trump announced yesterday that he is bringing a 63-storey hotel-condo tower to Vancouver, but will a famous name move buyers?
To be completed in mid-2016, a new 63-storey building will be Canada's second Trump-branded hotel-and-condominium development, and the second incarnation of Arthur Erickson's ultra-luxury twisting tower.
Construction at the site on Georgia Street between Bute and Thurlow was halted in 2009 when the original project, a Ritz-Carlton-branded building, ran up against "world economic turmoil," according to Holborn International. The 123 Ritz-Carlton condos were priced from $1.4 million to $28 million, but only half had sold before the project was canceled. Now under Trump's name, the building is set to have 218 condos and 147 hotel rooms—presumably with lower prices and smaller square footage than had been intended for the original development.
The 63-storey tower is being developed by Holborn Group and TA Global BHd, a Malaysian developer, at an estimated cost of $360 million. Holborn did not disclose how much Trump International will receive in licensing fees for the project, but according to the Wall Street Journal, he typically sells developers the right to use his name for an upfront fee of between $5 million and $10 million, in addition to a portion of future sales.
Canadian investors will approach these properties with their wallets, and not the brand, in mind, says Don Campbell, a senior analyst at Real Estate Investment Network. Campbell believes that foreign investors will be important to this project, just as they are in many luxury builds in North America. "Trump has a reputation around the world for attracting foreign investors," says Campbell.
"It will resonate with some Canadian purchasers, not necessarily investors," says Michael Ferreira, principal at Urban Analytics Inc. The majority of buyers will be offshore, but the ratio between foreign and local buyers will be more balanced than people may think, says Ferreira.
Trump's first Canadian project, the Trump International Hotel and Tower in Toronto has faced troubles since it opened last year. Lower than expected room rates and hotel occupancy have led some buyers to sue the developer, Talon Internationl Development Inc., and Trump International, which also licensed its brand on the Toronto tower. But both Campbell and Ferreira believe that Trump's Toronto troubles will have little impact on foreign investors.
However, Trump Tower's troubles in Toronto will definitely have an impact on the sales to Canadian investors, says Campbell.While Trump's brand may not seem like a natural fit with Vancouver, the reactivation of this project is important for the city, says Brent Toderian, principal at Toderian UrbanWorks and Vancouver's former chief planner. He believes that Trump's brand may turn off some in Vancouver, but that it won't make or break the project.
"The project has an excellent location, and exceptional and iconic design, the benefit of the Vancouver brand and views so good that if you cant sell them, you may be in the wrong business," says Toderian.
But Trump's brand definitely attracts attention. "If the press conference yesterday had been for Four Seasons or a Ritz Carlton, I don't think they would have gotten nearly the attention or turnout," says Ferreira.