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Toronto airport hotels key to InnVest portfolio acquisition

Company plans $80M renovation program at 10 hotels bought from Morguard

Jeff Hyslop, senior vice-president, asset management and investments at InnVest Hotels. (Courtesy Innvest / Hill Peppard Photography)
Jeff Hyslop, senior vice-president, asset management and investments at InnVest Hotels. (Courtesy Innvest / Hill Peppard Photography)

InnVest Hotels' largest acquisition since 2007 provides the company with a presence in strategic locations where it previously lacked a strong foothold, says Jeff Hyslop, the company’s senior vice-president, asset management and investments.

Earlier this month, InnVest acquired for an undisclosed price 10 of the 14 eastern Canadian hotels in a portfolio sold by Morguard for $410 million. InnVest’s newly purchased hotels are located near Pearson International Airport and other areas of the Greater Toronto Area, as well as in Halifax and Sudbury, Ont.

“We had a lack of presence at Toronto airport, the GTA and Halifax, so they check a lot of boxes for us,” Hyslop says.

InnVest has acquired the Marriott Toronto Airport, Courtyard Toronto Airport, Residence Inn Toronto Airport, Hotel Carlingview, Courtyard Vaughan, Courtyard Markham, Residence Inn Markham, Townplace Suites Sudbury, Cambridge Suites Halifax and The Prince George Halifax.

The portfolio includes a mix of focus-service, extended-stay and full-service hotels with 1,737 guestrooms and 40,000 square feet of meeting and convention space.

The four properties InnVest did not acquire in the portfolio sold by Morguard are the Holiday Inn Express in Ottawa, the Courtyard Marriott Mississauga, Hilton Garden Inn Toronto Airport West and Cambridge Suites Mississauga.

Pearson Airport properties a key for InnVest

Hyslop says InnVest went ahead with the acquisition because over the years it has grown to become a vertically integrated organization with management, project and construction capabilities which “gives us more confidence in our team and in our ability to execute on large projects.”

The company also has confidence in hotels “which have been a very good asset class over the last few years,” he says. “If you look at all real estate classes, hotels have been best at keeping pace with inflation.”

He notes the hotel market near Pearson Airport is solid and renovations to properties like the Marriott  Toronto Airport - which “has always been a strong performer” - will only add to the opportunities there.

As for the Halifax acquisitions, the hotels add to InnVest’s already large presence in Atlantic Canada, which includes major assets in locations such as Prince Edward Island and Moncton.

In addition, he says the Halifax hotel market and economy have been strong over the last few years.

Hyslop says there is a renovation budget of “north of $80 million” for the 10 hotels, which will undergo “selective renovations” since some of the properties were already renovated by the vendor.

Renovations, primarily to properties at Pearson Airport and Halifax, will start in about a year, as “the planning and procurement process takes a long time with hotels." It will occur over a period of several years.

InnVest rapidly growing its hotel, resorts portfolio

Post-pandemic, people are looking for travel experiences “more than ever,” Hyslop says, noting InnVest has been very active on the acquisition front of late.

Last June, for example, InnVest acquired the iconic 233-room Algonquin Resort St. Andrews by-the-Sea in St. Andrews by-the-Sea, N.B., and the 72-hole The Algonquin Golf Course, the company’s first golf course. The hotel will undergo a multi-faceted renovation.

In May 2023, InnVest made its first acquisition in the U.S., the 189-room Kimpton Hotel Monaco in downtown Seattle. The hotel continues to be managed by Kimpton Hotels & Restaurants, part of IHG Hotels & Resorts’ luxury and lifestyle portfolio. It will be transformed with redesigned guestrooms, revitalized common areas and enhanced amenities.

In 2022, InnVest Hotels acquired the 99-room Royal Canadian Lodge and 65-room Charltons Banff, in Banff, Alta.

Aside from the Marriott Toronto Airport, which will continue to be managed by Marriott Hotels, the hotel portfolio will be managed by iHotels.

The acquisition increases InnVest’s Marriott-branded franchise and managed portfolio to 14 hotels, making InnVest one of the largest owners of the brand in Canada.

With a portfolio of more than 90 hotels, InnVest says it is the largest owner and operator of hotels in Canada, with brands that include Sheraton, Fairmont, Hyatt, and Holiday Inn.

InnVest’s management team oversees the operations of 85 owned and third-party owned hotels,

Among its other holdings, InnVest owns the Fairmont Palliser in Calgary, Fairmont Vancouver Airport and the Hilton Quebec City.

InnVest has a 20 per cent stake in the Fairmont Royal York Toronto and in 2017 bought the 65-storey St. Regis Hotel in downtown Toronto, formerly the Trump International Hotel and Tower Toronto.

InnVest, formerly InnVest REIT, was taken private in 2016 by Hong Kong capital-backed Bluesky Hotels and Resorts Inc. as part of a friendly $2.1 billion takeover.

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