Canada hotels record first occupancy decline in three months
After three consecutive months of year-over-year increases, Canada’s hotel industry recorded a decline in occupancy, according to CoStar’s July 2024 data.
First Capital has completed the acquisition of the 77-key The Hazelton Hotel Toronto to a private investment firm. Colliers Hotels acted as the exclusive advisor.
The Hazelton was Canada’s first and only Forbes Five Star independent luxury boutique hotel. Furthermore, the property is part of First Capital’s $184 million four-property deal of Toronto and Montreal hotels–including 5051 Yonge St., a residential condominium development site located in the north end of Toronto at Hillcrest Avenue, to an undisclosed buyer. In Montreal, it will sell a residential development site for the final phase of the intensification at Wilderton Shopping Centre and 5146-5164 Queen Mary Road.
Having an aggregate gross sales price of $184 million, these transactions aim to collectively advance FCR's Enhanced Capital Allocation and Portfolio Optimization Plan, which was announced in September 2022. Collectively, these assets generated $6.1 million of 2022 or "run-rate" Net Operating Income representing a 3.3 per cent yield on the aggregate sales price, and they are expected to generate comparable NOI in 2023. The sale of these lower-yielding assets in which First Capital's value-enhancing objectives have been achieved is consistent with the objectives of the Optimization Plan.
Upon completion of these separate transactions, First Capital will have monetized approximately $360 million of the more than $1 billion of assets targeted for disposition by year-end 2024, where value-enhancing goals have been achieved, congruent with the objectives of the Plan. The weighted-average run-rate NOI yield on announced asset sales to date is less than 3.0 per cent.
Adam Paul, President and CEO of First Capital said, "The successful continuation of our Portfolio Optimization Plan first outlined [in September 2022] remains a top priority. Our Plan remains well on track ... bringing total dispositions to approximately 36 per cent of the two-year target and demonstrating significant incremental value and future potential for First Capital's unitholders."
The transactions include divesting The Hazelton Hotel in Toronto’s Yorkville neighbourhood, along with its 50 per cent interest in ONE Restaurant, to Hennick & Company for $110 million.
After three consecutive months of year-over-year increases, Canada’s hotel industry recorded a decline in occupancy, according to CoStar’s July 2024 data.
Opened in 2019 as the largest Residence Inn in the world, the 390-suite Residence Inn Calgary is a 33-storey property located in the Beltline District in downtown Calgary.
Ottawa’s hotel landscape is poised for a significant transformation over the next three years with the introduction of four major international hotel brands: AC Marriott, Moxy, Renaissance, and Hard Rock Hotel.
In January 2025, STAY Magazine will host this new and exclusive event that will bring together Canada’s top hotel property-level leaders to share industry knowledge and look to the future on topics of the greatest…