Luxury Condos In Toronto
Toronto is beset by luxury hotels eager to expand their brand to condos and cater to the rich with perks like butlers, room service and valet parking
August 16, 2008
Rita Zekas,
Special to The Star
The rich are always with us.
Now they'll be looking down on us from condos atop luxury five-star hotels, which are popping up like celebrity babies.
There's the Shangri-La hotel/condo project at University and Adelaide; The Four Seasons Hotel & Private Residences at Bay and Yorkville; The Ritz-Carlton and The Residences at the Ritz-Carlton in the financial district at Wellington and Simcoe; and the Trump International Hotel & Tower at Bay and Adelaide.
They have due dates in 2010 or 2011 and they all have impressive pedigrees. Hong Kong based Shangri-La has James K.M. Cheng and Young Wright architects. Ritz has Kohn Pederson Fox Associates of New York and Page + Steele of Toronto. Four Seasons has designers Glenn Pushelberg and George Yabu of Yabu Pushelberg. Trump has Zeidler Partnership architects.
They all have bragging rights. All have amenities like luxury spas and fitness centres, lounges, fine dining, concierge, valet parking (so they never have to see their parking space), housekeeping, 24-hour dry cleaning service, room service, doorman, butler service and some have their own elevator lobbies. They all have kitchens with top-of-the-line appliances from Wolf, Miele and Maytag (Why? Hello, room service?); marble and stone finishes; hardwood floors and 10- to 12-foot ceilings.
It's location, location, location.
How do they stack up?
Click here to compare.
The Four Seasons hotel/condo is deep in the Mink Mile, home to high-end boutiques and restos.
The Ritz-Carlton project, on 1.1 acres, is close to the Convention Centre, sports facilities, the entertainment district and overlooks the lake.
The Shangri-La is across the street from the Four Seasons Centre for the Performing Arts .
The Trump Tower is down the street.
Who doesn't want to live in Shangri-La? Who didn't want to be Eloise at the Plaza (which is also a hotel/condo now)?
Who is buying these pies in the skies?
"Mostly the empty nesters," says Bob Rennie, of Rennie Marketing in Vancouver, spokesperson for the Shangri-La project in Toronto.
"They have the most discretionary income," Rennie says. "They give up their homes and need a business address. These units are all in active locales. They are all luxury brands and they could be the finest senior residences on the planet.
"You don't have to admit someone else is looking after you. We've all sat at the edge of the bed in a hotel suite and said, `I could live here.' You think you'd order a $22 cheeseburger in every Saturday afternoon but don't though you know it's there."
"The majority of buyers are downsizing," says Mimi Ng of Menkes, a real estate development company dealing with the Four Seasons project, of which, she says, over 70 per cent of the units have been sold.
"Empty nesters come from family homes and look for a maintenance-free lifestyle where they can lock the suite door and go to the airport," Ng says. "And a fair number of buyers are existing condo buyers but upgrading, moving on up."
Pat Baker, a realtor specializing in selling condo projects for developers, agrees.
"They are not start-up people. But they are not just older people. There are a group of people who don't have children but have careers. They don't want houses and they don't garden so they don't need a backyard. It does require money and maybe they inherited it or made it."
Yes, it's for high rollers. At $500 millions, it's Trump change, not chump change.
"The goal is for Forest Hill and Rosedale to move to Shangri-La," Rennie says. "Shangri-La in Asia has brand recognition like Sony and Coca-Cola."
It's "I'm with the brand."
"Toronto is Canada's business address," Rennie says. "Calgary is probably the most American city, based on oil and gas; Vancouver is the most liveable and Toronto is a vice-president city. These are addresses that can support those brands."
"They know with The Four Seasons what the quality will be," Ng says. "People talk about brand loyalty with cars and clothing and we don't think about it in terms of real estate but people who buy are Four Seasons fans. They don't stay anywhere else when they travel. And the draw is not just local, it is international."
Building a hotel and condominium separately has become improbable due to land restriction.
"You'll not see another five-star hotel built in North America because you need the profit from the condo to build the hotel to show a return," Rennie says. "Today's land and construction costs to run it don't make sense."
"They build up because land is scarce," says Jane Renwick, president of Urbanation, a real estate research company that tracks the highrise residential, condo and industrial market. "There is nowhere to go but up. The GTA is confined by green belt."
"That mansion in the sky on top of regular hotel units didn't exist a few years ago," Baker says. "It flourished in Paris, New York, San Francisco, but not in Toronto. The hotel business started it; it is a very good way to finance hotels and people liked it because you can have all the hotel services at your doorstep. It's an investment with hotel services."
And it appears to be recession proof.
"The number of luxury brands and the number of addresses is capped – look how long it took for Four Seasons to search for a location to replace the tired hotel," Rennie says.
"If I live at Shangri-La, it's a qualifier: life must be good. In addition to instant brand recognition, it's like waterfront property, a brand protects resale."
"Even if the market dips, it will perform well," Ng says. "People still want to live in the best place. There has been an upswing in the market for almost a decade and last year was a peak year for condos."
"These buyers have cash more readily," Baker says. "Most pay cash for high-end condos, there is no mortgage."
And there are the international buyers from Asia, the Middle East and Europe, she points out. Of the 70 per cent of the Ritz units sold, 40 per cent of buyers are from off shore.
"They consider Toronto a pretty safe place to put your money and it is developing into a world-class city," Baker says.
"This is not targeted at the first-time homeowner but the empty nester, the affluent baby boomer," Renwick says. "And there will be more of these boomers than condos to suit them over the years."
So how can these sky-high units top themselves? It's up in the air.
"Fifteen years ago, hotels had a gym," Rennie says. "Now there is a fitness centre and spa. We'll see more evolution but you can only go so far. You can only have three people massage you at once."