Members of the Toronto business community will soon have the chance to be “puttin' on the Ritz” in new Triple A office space, with Cadillac Fairview Corp. revealing plans in late September for a $400-million, 48-storey office tower, right next door to the proposed Ritz-Carlton hotel and condominium complex announced in April of 2004.
With the vacancy rate for prime office space in the downtown Toronto core hovering around a three-year low of between 5% and 6%, Peter Sharpe, CEO of Toronto-based Cadillac Fairview, says there's a “healthy” market for a new office project, which will be built in two stages and create a total of 1.2 million square feet of new commercial space. The location for the office complex is ideal, Sharpe says. Right beside the CBC's Toronto headquarters at Wellington and John streets, the new tower will be adjacent to both Toronto's financial and entertainment districts. As well, Sharpe says that out-of-town business people visiting tenants of the Cadillac office tower will also provide a “built-in client base” for the hotel. Construction is expected to start in 2006 and is scheduled for completion in 2009. No tenants for the office building have yet been announced.
The Ontario Teachers' Pension Plan Board owns Cadillac Fairview, which manages an $11-billion portfolio of more than 80 properties, including the Toronto Eaton Centre, Toronto-Dominion Centre and Vancouver's Pacific Centre.
As for the 53-storey Ritz-Carlton Hotel and Residences, it will be the first five-star hotel in Toronto and only the second Ritz-Carlton in Canada (the other is in Montreal). It will be jointly owned by Cadillac Fairview, Ritz-Carlton Hotel Co. of Chevy Chase, Md., and Toronto-based Graywood Developments Ltd. Ritz-Carlton president Simon Cooper says the Ritz will contribute 20% towards the $325-million investment in the hotel and condo project, while Graywood and Cadillac will split the rest. Originally, Ritz-Carlton only intended to invest in the hotel component of the development, Cooper says, pointing out “this is the first time we have ever chosen to be an investor in a downtown (residential) location.” However, he says the Ritz??which currently operates 59 hotels around the world??is pursuing a strategy of combining more luxury residential condominiums at its hotels and resorts, with the aim of having 40 such developments by 2008.
Construction of the Toronto hotel and condo project is expected to start at the end of 2006, and take about 30 months to complete. The expected 135 condos, taking up storeys 22 to 52, will range in size from 2,000 square feet to 3,000 square feet, and will be priced from $1 million to more than $3 million. The hotel component, on storeys six to 20, will feature 267 luxury rooms, while the first five stories will contain conference and meeting facilities, restaurants and a full-service spa.
Cooper says the demand for luxury hotels “is tremendous right now, and is especially strong in cosmopolitan areas, financial centres and gateway cities like Toronto.” Even though there have been other announcements for luxury hotel and condo projects in Toronto??including one by the Four Seasons and another by a group that includes New York real estate mogul Donald Trump??Cooper says the additional luxury rooms likely won't create an oversupply in the city, adding perhaps about 500 rooms to an existing overall hotel inventory of about 6,000. While there are still some issues, including the high Canadian dollar and its impact on leisure travel, Cooper notes the situation is certainly a whole lot brighter than after the attack on the World Trade Center in New York four years ago and the SARS outbreak two years ago, the latter of which hit Toronto particularly hard. With the growing popularity and star wattage (power) associated with high-profile events like the Toronto International Film Festival, Cooper says “we certainly see room for a five-star hotel in Toronto.”