Sunray Group has acquired the 108,000-square-foot podium of a downtown Toronto mixed-use development that was originally intended for office space and will convert it into a 164-key AC by Marriott Hotel.

The four-tower, 1.05-million-square-foot complex also includes two towers which are already completed and occupied: rental apartment units owned by Fitzrovia and condominium units developed and sold by St. Thomas Development Inc.

The hotel will have separate entrances from the residences.

Colliers' Hotels team was the exclusive advisor to vendor St. Thomas for the six-storey podium, located at 80 Queen St. E., which sold for an undisclosed sum.

Sunray Group president and chief operating officer Kenny Gibson told RENX the deal took a year to close, but was worth it since the price should be below the replacement cost for a new hotel. 

Podium was a good conversion candidate

“It was already zoned, but they didn't have all of the agreements in place with regard to the condo association and some of the cost-sharing, so we were able to get in and negotiate that on our behalf,” Gibson said.

“Anytime you look at something non-traditional, obviously you have to be creative and it does cost more,” Sunray Group president of hotels Sandeep Gupta told RENX in the same interview.

The podium’s floor plates, however, will allow for less wasted space than is often encountered during office building to hotel conversions.

“Because of the way the offices were set up, we were able to gain a lot more suites in the hotel than a general downtown hotel would provide,” Gupta said. 

Financing for the podium acquisition was arranged by Markham, Ont.-based CFO Capital.

“They sourced the first mortgage debt when we closed and they also got the line for the renovations,” Gibson said. “We had a number of institutions that were interested in doing this, but ultimately it was syndicated by Roynat and we got north of 75 per cent financing.”

Sunray's second downtown Toronto Marriott

Earlier this year, Sunray acquired the Bisha Hotel at 80 Blue Jays Way in downtown Toronto from Lifetime Developments and INK Entertainment Group and converted it into the first Canadian location for Marriott’s The Luxury Collection brand.

The 80 Queen East property will give Sunray Group a second high-end Marriott property in Toronto’s core.

Gupta believes the AC by Marriott Hotel will “appeal to all types of individuals, from millennials up to corporate.”

Toronto’s Hariri Pontarini Architects, the architect for the overall project, has been retained to aid in the conversion. 

Toronto-based but internationally recognized Yabu Pushelberg has been hired to curate the hotel’s interior design.

The hotel will feature a sophisticated lobby lounge, additional lounge spaces, a wellness floor with a fitness centre, and a high-end destination restaurant. 

The hotel is expected to open in the first quarter of 2027.

Construction set for Wasaga Beach resort hotel

Sunray Group, which was founded in 2006 and is owned by the Gupta family, owns and operates more than 70 hotels with over 10,000 rooms across Canada.

After acquiring a 1.5-acre parcel of beachfront land in Wasaga Beach, Ont. earlier this year, Sunray Group will develop a full-service Marriott-branded resort hotel on the site with: 120 to 150 guest rooms; a rooftop restaurant; convention and wedding facilities; a spa and shops.

Yabu Pushelberg will be responsible for the interior design. Groundbreaking is anticipated in the late spring or early summer of 2026. 

Gibson said Sunray Group will be strategic and likely hold off on more hotel acquisitions and new developments in 2026 as it moves its current projects forward. 

“You probably won’t see us as active on smaller assets,” Gibson said. “We've shifted the focus of our company to look at more full-service urban assets.”

Sunray Group will also be putting a bigger emphasis on growing MyLife Retirement, its seniors living residence brand that currently has five properties in its portfolio. More information on that expansion is expected to be available in the next three to four months.