May 2018 Digital Issue

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portfolio transaction including
the Hampton Inn and
Homewood Suites and Delta
Hotels Fredericton hotels
sold for a combined price of
$90 million.
NOTABLE 2017
TRANSACTIONS
There were a number of
noteworthy hotel transactions
in 2017. The 25-property
bcIMC/SilverBirch hotel
portfolio sold for $1.1 billion
to Leadon Investment, while
the three-property Westcorp
Edmonton Boutique Portfolio
(Matrix, Metterra, Varscona)
CANADIAN HOTEL TRANSACTION VOLUME
Single-Asset Transactions Portfolio and Entity-Level Transactions Total
was sold to DSOL Canada
Ltd. for $61.15 million.
Pacific Reach Properties
bought the 156-room
Rosewood Hotel Georgia in
Vancouver for $145 million
— setting a new price-perroom
sales record in Canada.
The 1,372-room Sheraton
Centre in Toronto sold
for $335 million to Thayer
Lodging, making it the
largest single-hotel transaction
in Canadian history.
Finally, the 105-room
Thompson Toronto Hotel
was sold to Mohari Canada
Inc. for $77 million.
Although prices were not
disclosed, the sale of two
iconic Toronto hotels — the
Westin Harbour Castle and
the former Trump hotel —
also occurred in 2017.
INDUSTRY
OUTLOOK
Capitalization rates continued
to decline through 2017,
particularly in the southern-
B.C. and central-Canada
markets. Where assets were
available, multiple bidders
pushed returns to historic
lows. Hotel returns still
provide a premium over other
asset classes and the spread
between Bank of Canada
rates and cap rates is still
comparable to historic levels.
In Cushman &
Wakefield’s November 2017
Hospitality Outlook, a review
of leading indicators suggests
continued revenue growth
in the hotel sector through
2018. While growth will be
uneven, results in all areas of
the country are expected to
improve this year. Markets
such as Alberta, Saskatchewan
and Newfoundland will
see growth this year.
Based on transactions in
process and new offerings
in the market in the first
month of 2018, the year is off
to a strong start and we see
a continuation of the strong
investment activity from 2017.
InnVest marketed a portfolio
of 12 hotels in 2017, which
was expected to close in
Q1 2018. Also in Q1, three
smaller portfolios came
to market in Alberta and
Saskatchewan as performance
in those markets begins to
show positive signs. In terms
of larger offerings, expect to
see closings of major assets
in Montreal and Halifax in