Colliers International Hotels
2014 Canadian Hotel
Investment Report
www.colliershotels.com
2014 Canadian Hotel Investment Report
Investment
Rotations &
Motives
A glimpse at broad buyer/seller investment flows in
Canadian hotel ownership over the past decade
Institutional
Net sellers of $2.4 billion
• Institutional investors acquired just over 40% of total volume over
the last decade, the majority of which was purchased during the
2005-2008 period with two public company takeovers and other
large portfolio and strategic single asset purchases.
• In 2013, institutional buyers returned with 42% of volume for the
year, given the availability of prime, urban full-service assets.
• Key Characteristics: Buyers of prime hotels in Canada’s key
markets. Pension funds tend to hold assets and are very selective
in the hotel space. This differs from opportunity funds/ private
equity groups who tend to not have an attachment to assets; they
are driven by their fund’s objectives, which is typically a 5-7 year
hold/payout/redeploy model.
Net buyers of $493 million
• RECs have averaged the lowest activity by
volume on both the buy and sell side over
the past decade. They were noticeable
in the downturn with select purchases in
2009 (2nd largest buyer category), and
again in 2012, with purchases in Calgary,
Toronto and Montreal for conversion to
other uses including residential, retail and
student housing.
• In 2013 these investors represented 17%
of the total year volume, although their
primary motive switched to acquiring
hotel real estate given premium on yield
vs. other asset classes.
• Key Characteristics: Generally divided
into two types of RECs - those that
purchase hotel assets for alternate use
(e.g. developers) and those buying for
yield (e.g. diversified real estate owner).
2
Colliers International Hotels
s the industry progresses through its current up-cycle, Canadian
hotel transaction volume witnessed another impressive year in
2013, nearly double that of the $1 billion annual average during the
previous five-year period.
At a macro-level, cumulative hotel transaction volume has totaled
some $16 billion in Canada over the past decade, compared to $6.2
billion in aggregate volume in the decade prior (1994–2003). Much
of this increased liquidity entering the hotel market is due to the entry
of institutional capital such as pension funds, opportunity funds and
private equity vehicles, bringing with them massive amounts of capital
and legitimizing the hotel asset class within the Canadian commercial
real estate realm.
Public Companies
Net buyers of $2.9 billion
Real Estate Cos (REC)
A
• Public companies were the largest net sellers over the decade
(29% of total sales), most notably due to the 2007 delisting of two
REITs. They were also the third largest acquirer over the period,
particularly in 2007 with InnVest REIT’s purchase of a portion of
the Legacy Hotels REIT Portfolio.
• Overall activity in this category slowed in recent years, with public
companies as the least significant buyer and seller. The exception
here was Temple Hotels Inc., the most significant purchaser of
lodging product in 2012 and 2013.
• Key Characteristics: Buy for yield and sell non-core and underperforming assets.
Private Investors
Net sellers of $213 million
• Private investors have been the most
consistent buyers and sellers throughout
the past decade in both annual volume and
number of deals. They dominated as buyers
in both 2004 and 2009 (62% and 60% of
volume, respectively), given the challenged
economies in those years and value
opportunities available for smaller assets.
• Of the 1,037 hotel transactions since 2004,
593 or 57% were sold by private capital.
• Key Characteristics:
Generally hold
assets for a longer period and create value
by having a more hands-on approach
operationally. Can be opportunistic in
timing a sale, with significant opportunities
for repositioning and then selling to REITs
or institutional buyers. Typical deal size
is significantly below the decade’s average
($4.7 million vs. $15.3 million), given
greater ease at sourcing debt.
Hotel Investment
Companies (HIC)
Net sellers of $828 million
• HICs were the second largest net sellers,
largely driven by cross-border sellers who
in many situations benefited from a much
appreciated Canadian dollar or groups that
reached their defined investment horizons.
• On the buy side, this group was most active
in 2010 and 2011 at 41% of total acquisitions
in those years, taking advantage of strategic
product that became available as the
market began to improve.
• Key Characteristics: Generally divided
into two types of HICs – those funded by
private equity/investment funds tend to
be 5-7 year holds, and those capitalized by
High Net Worth investors/families who
do not have a specific hold period and are
more opportunistic.
Special Feature
Buyer & Seller Rotation
2004-2013
INSTITUTIONAL (INST)
HOTEL INVESTMENT COMPANIES (HIC)
PRIVATE INVESTORS (PI)
REAL ESTATE COMPANIES (REC)
PUBLIC COMPANIES (PC)
Buyer Share %
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
10Y TOTAL
(INST)
$6.70B
(PI)
$2.94B
(PC)
$2.22B
(HIC)
$2.18B
(REC)
$1.80B
Vol.
$354M
$1.49B
$2.91B
$4.58B
$1.07B
$414M
$717M
$1.10B
$1.17B
$2.02B
$15.85M
48
102
138
168
92
71
86
99
116
115
1,035
$/Rm $64K
$96K
$79K
$154K
$103K
$66K
$86K
$108K
$84K
$133K
$104K
Avg.
$7.4M
Deal
$14.6M
$21.1M
$27.3M
$11.7M
$5.8M
$8.3M
$11.1M
$10.1M
$17.6M
$15.3M
2011
2012
2013
Deals
Seller Share %
2004
2005
2006
2007
2008
2009
2010
10Y TOTAL
(PC)
$4.60B
(INST)
$3.79B
(PI)
$3.15B
(HIC)
$3.01B
(REC)
$1.30B
INST: Opportunity and Pension Funds, Private Equity, Financial Institutions, Government.
PI: Owns <5 hotels.
PC: Any publicly listed company, including REITs.
HIC: Owns >5 hotels, principally engaged as a hotel ownership vehicle, non-public.
REC: Diversified non-public real estate company.
Source: Colliers International Hotels
Colliers International Hotels
3
2014 Canadian Hotel Investment Report
2013: Year
in Review
Hotel transaction volume climbed to over
$2 billion in 2013, up 72% year-over-year and
taking place as the third highest year on record
after 2006 and 2007. The market was flush with
capital and the strong and diverse rotation of
buyers and sellers saw an opportune time in the
cycle to take advantage of current conditions.
T
here were 115 transactions reported for the year with a healthy mix
of activity across the country. This included six strategic assets
valued at approximately $885 million, with several noteworthy singleasset and portfolio trades increasing volume significantly. When
strategic acquisitions are excluded, traditional transaction volume
remained in-line with 2012 volume, a year in which there were no
strategic trades. Optimism abounds and demand for hotel properties
is increasing with little signs of slowing, aided by the overall strength
in the marketplace which includes growing operating fundamentals
and a solid underlying economic foundation.
Robust Trading Environment
• Thoughts of the global financial crisis were in investors’ rear view
mirrors in 2013 as exhibited by the strong demand for a variety of
assets. This bullishness was welcomed by a healthy list of Canadian,
US and international lenders eager to fund prime, institutionalgrade hotel assets brought to market.
• Building off momentum gained in the prior two years, investors
continued to gain access to a wide variety of capital sources across
debt, equity, public and private platforms.
• Four portfolio transactions were completed in 2013 totaling close to
$930 million, accounting for 46% of total volume and 28% of total
rooms sold. This is significantly above 2012 figures of almost $60
million in volume from two limited-service portfolios.
• Foreign investment in Canada grew to the highest levels since 2007
with close to $857 million in volume from nine hotel transactions.
The most notable was the five-property Westin Canadian Hotel
Portfolio, comprising 89% of foreign activity. Purchased by an
affiliate of US-based Starwood Capital Group and backed by Middle
Eastern investors, this transaction had a significant impact on
overall pricing and metrics for the year given its size and scope.
Top Single Asset Transactions in 2013
Number
of Keys
Price
($M)
Price Per
Room
Cap Rate
(%)
Buyer
Origin
Ivanhoé Cambridge
600
$140.0
$233,300
7.6
Canadian
Capital Hotel Ltd.
Partnership
Ivanhoé Cambridge
429
$120.0
$279,700
6.2
Canadian
Courtyard by Marriott
Toronto Downtown
Groupe Jesta
Highgate Hotels
575
$76.3
$133,000
7.7
Canadian
Delta Centre-Ville Montreal1
Beaumont Partners JV
Campus Crest
InnVest REIT
711
$51.3
N/A
N/A
USA
Acclaim Hotel
Calgary Airport 2
Temple Hotels Inc.
Private Investor
225
$42.0
$186,700
12.7
Canadian
Metropolitan Hotel Toronto 3
Bayview Hospitality Group
Liverton Hotels
International Inc.
428
$40.0
$92,800
N/A
Canadian
2,925
$765.0
$261,500
7.6
Middle
Eastern
Property
Buyer
Seller
Hilton Toronto
Barney River Investments
The Fairmont
Chateau Laurier*
Top Portfolio Transactions in 2013
The Westin Canadian
Portfolio4,7*
Starwood Capital
Group Global, L.P.
PSP Investments
Centennial Atlantic
Canada Portfolio5,7
Temple Hotels Inc.
Centennial Hotels Limited
549
$87.5
$159,400
6.7
Canadian
Toronto Area Marriott
Select-Service Portfolio6,7
Morguard Corporation
Concord Hospitality Enterprises
632
$70.6
$111,600
7.5
Canadian
The hotel has closed and will be converted to student residences.
Leasehold Interest. The property originally had 123 rooms and an additional 102 rooms were
added in mid-2013.
3 The
hotel has undergone a substantial renovation and branded as DoubleTree by Hilton.
4 Five
property portfolio with hotels in Toronto, Ottawa, Edmonton, Calgary and Vancouver.
5 Three
property portfolio with two hotels in Halifax and one in Sydney, Nova Scotia.
6 Five property portfolio with hotels across the Greater Toronto Area.
1
2
4
Colliers International Hotels
Cap rate calculated as an average for the entire portfolio.
*S trategic transactions typically involve at least two of the following conditions: 1) a pricing
premium is paid; 2) the asset is located in a high barrier to entry market or within a geographic hub
of an owner’s principal business; or 3) the opportunity allows for an extension of the company’s
brand or portfolio.
7
Source: Colliers International Hotels
Year In Review
Significant Growth in Deal Metrics
• Elevating in line with transaction volume, average price per room
was $133,000 in 2013, a 59% increase year-over-year. When strategic
acquisitions are removed, traditional price per room still improved,
growing 28% from the prior year to $106,900.
• The market saw a trend in growing transaction size represented by
deals over the $10 million threshold, accounting for approximately
86% ($1.74 billion ) of full-year volume.
• Average deal size grew 73% from 2012 to $17.6 million.
• Muted distressed sales and high quality lodging assets assisted in
healthy pricing.
Limited and Select-Service Opportunities
• There continued to be untapped value-add opportunities in
primary and secondary/tertiary markets for new owners looking
to reposition older properties. This was particularly prevalent
with institutionally owned assets acquired by private owner/
operators who recapitalized and made these assets competitive.
• Despite the decreased activity year-over-year in the focusedservice segment ($236 million vs. $325 million in 2012) and
limited-service segment ($323 million vs. $368 million in 2012)
these assets remained highly sought after given small average
deal sizes and higher operating margins associated with these
segments.
2010-2013 Volume Over/Under $10M
$1,738
2013
2012
$888
2011
$475
2010
Years
$285
2013 Volume by Segment
72%
$291
Full Service
72%
$242
Limited Service
16%
$214 $200
Focused Service
12%
$
$500
$1,000
Under $10M
Over $10M
$1,500
$2,500
Source: Colliers International Hotels
Banner Year for Full-Service Assets
• Full-service hotel trades accounted for 72% of total transaction
volume, up over 200% year-over-year ($1.46 billion vs. $485 million
in 2012) as increased market liquidity facilitated larger deals.
• Average price per room increased significantly in this category,
growing 89% from 2012 to $182,100.
• The increased trading and improvement in pricing within the
full-service segment was attributable to a variety of factors,
namely improved access to debt and strong recovery in operating
performance post-recession.
16%
12%
Source: Colliers International Hotels
Quarterly Performance
• A strong start for hotel investment in the first half of the year
contributed $840 million in volume, split roughly evenly between
the first and second quarters.
• Robust performance in the second half of the year with over
$1.18 billion in transaction activity, largely attributed to the third
quarter sale of the $765 million Westin Canadian Hotel Portfolio.
Price Per Room by Segment
2013 Quarterly Volume
LIMITED SERVICE
FIRST HALF
$57,800
SECOND HALF
$1,200
$59,700
Q4
$255.5
$1,000
FOCUSED SERVICE
$800
$109,900
Q2
$408.8
$114,700
$600
Q3
$927.7
$400
FULL SERVICE
Q1
$431.1
$182,100
$200
$0
$96,100
VOLUME ($M)
2013
2012
Source: Colliers International Hotels
Source: Colliers International Hotels
Colliers International Hotels
5
2014 Canadian Hotel Investment Report
• Regional transaction volume was led by Eastern Canada for
the year, accounting for 59% of transaction activity. The most
active provinces were Ontario (50%), Alberta (24%) and British
Columbia (15%), reflective of product availability in these
markets and resulting in significant investor interest.
• While Eastern Canada led the country in volume, Western Canada
was the leader in price per room metrics with British Columbia
and Alberta reaching $164,400 and $156,300, respectively, a 70%
and 40% growth year-over-year. The East ended some 8% below
the national average while the West ended 16% above.
• The Greater Toronto Area (GTA) was by far the most active
market with transaction volume growing 125% year-over-year
to $647 million as compared to $289 million in 2012 and $243
million in 2011. The GTA accounted for almost one-third of
national volume.
• Other active markets included Ottawa, Calgary and the Greater
Vancouver Area, with reported transaction volume of $279
million, $264 million and $226 million, respectively.
Transaction Volume by Region
No. of
Hotels
No. of $ Volume
Rooms
($M)
%
Volume
Price Per
Room
West
47
5,558
$826
41%
$154,700
Alberta
24
3,189
$494
24%
$156,300
British Columbia
18
1,985
$310
15%
$164,400
Manitoba
3
293
$15
1%
$52,300
Yukon
2
91
N/A
N/A
N/A
East
68
10,802
$1,197
59%
$122,500
Ontario
51
8,499
$1,009
50%
$125,100
Quebec
12
1,531
$90
4%
$50,900
Nova Scotia
3
548
$84
4%
$153,200
Newfoundland
1
127
$9
0%
N/A
New Brunswick
1
97
$3
0%
$35,100
115
16,360
$2,023
100%
$133,000
Limited Distress
• There were only four lender-driven sales in 2013 representing 3%
of volume, much lower than the 11 trades in the prior year (4% of
volume) and down from a peak of 13 distressed sales in 2011, which
represented 12% of volume.
• The continued decline of distressed sales not only demonstrates
the steady recovery of the Canadian economy and healthy hotel
operating dynamics, but was a testament to the conservative lending
environment Canada has always been known for. This is in contrast
to the US where outstanding distressed assets represented US$16.2
billion at the end of 2013, according to Real Capital Analytics.
Distressed Sales
14%
12%
Percentage of Volume
East Leads on Volume; West on Pricing
10%
8%
6%
4%
2%
0%
2010
2011
2012
2013
Source: Colliers International Hotels
Continued Compression on Cap Rates
Cap rates continued their broad compression downward since
2008/2009. Where they typically ranged 10% to 12% five-years ago,
rates have generally been in the 8-9% band since 2010. Transactions
that reported cap rates in 2013 averaged 8.5% nationally, 100 basis
points lower than the average that was reported in 2012. Focusedservice properties averaged 8.3%, a roughly 170 basis point spread
lower than the year prior but in-line with national figures. The fullservice segment also witnessed compression by 150 basis points from
2012 to 7.4%, while the limited-service segment increased 60 basis
points to 9.5%.
Year-over-Year Cap Rates by Segment
Total
10.0%
9.5%
8.9%
8.9%
8.3%
9.5%
8.5%
7.4%
Note: We have excluded redevelopment transactions from price per room
figures as these trades were not completed using traditional hotel metrics,
but rather those related to the alternate use.
Source: Colliers International Hotels
Full Service
2012
6
Colliers International Hotels
2013
Focused Service
Limited Service
Overall
Source: Colliers International Hotels
Year In Review
Taps Open Wider in the Debt Markets
• Improvements in the lending environment were exhibited
throughout the year. This was aided principally by the all-time
low cost of credit and an expanding universe of lenders attracted
to the Canadian lodging industry.
• The availability of high-quality assets that were brought to
market encouraged a range of US and international lenders to
participate in Canadian hospitality financing.
• The year also saw a financing first: The Westin Portfolio was
financed via a $400 million hotel specific CMBS securitization
originating in Canada.
This transaction represented
approximately one-third of the entire CMBS market in Canada
for the year and was the single largest CMBS issuance to occur in
the country since 2007.
• With the overnight rate set by the Bank of Canada holding steady
at 1.00% since 2010, financing costs remained attractive in 2013
and lenders actively priced deals on quality assets across the
country.
Shifting Buyer Composition
• The year saw the reemergence of buy-side demand from
institutional capital (42% of total volume) as compared to just 2%
and 15% from these groups in 2012 and 2011, respectively. This
was largely due to the Westin Canadian Hotel Portfolio but also
represented some conversion opportunities in Eastern Canada
from hotel to student housing.
• The second largest group of buyers were real estate companies at
17% of total volume, with the majority of these groups purchasing
focused-service hotels for the attractive yield vs other commercial
real estate investments.
• Hotel investment companies also represented 17% of volume,
followed closely by private investors (16%) and public companies
(8%).
• The most active buyer by number of hotels acquired was Temple
Hotels Inc., purchasing eight assets in five separate transactions
for a total of $172.1 million. Temple was also the most active
buyer in 2012 with $159.8 million.
Economic and Operating Environment
• The economic picture in Canada was stable throughout 2013
with the national employment market continuing to strengthen,
reaching a five-year low unemployment rate of 7.1%, according to
the Conference Board of Canada. Positive improvements were
seen in the housing market and trades sector, with consumer and
business confidence picking up as the US economy continued to
gain traction.
• Solid economic growth in the U.S. coupled with the Canadian
dollar’s modest depreciation aided the trades sector, largely led
by natural resource exports.
• According to Statistics Canada for 2013, overnight trips to Canada
by non-residents from the US increased 1.0% year-over-year, with
overnight trips from key overseas markets including Africa and
Asia growing 7.8% and 8.1%, respectively. China remained one
of Canada’s top emerging tourism markets with overnight trips
growing 22.6% year-over-year.
• The large majority of markets trended positively in 2013,
providing operating leverage to hoteliers and helping fuel the
transaction market. National RevPAR grew 3.8% in 2013, with the
strongest growth in Western Canada at 5.4% according to PKF
Consulting. Eight markets saw double-digit RevPAR growth,
with Calgary Northwest (18.4%), Downtown Edmonton (12.3%)
and Prince George (11.5%) as the top three.
2013 Buyer Composition % of Volume
17%
Real Estate Company
12 Deals
Hotel Investment Com.
19 Deals
16%
Institutional & Other
9 Deals
42%
8%
Public Company
8 Deals
Source: Colliers International Hotels
Major Market Hotel Supply Growth in Canada
2010
2.8%
2009
2.2%
Tempered Supply of New Hotel Rooms
• Colliers estimates new hotel room supply in Canada’s 17 major
markets grew at 1.1% for the year, advancing from 0.8% the year
prior (the lowest reading in a decade), but still well below the
long-term average for the past 10 years of 1.7%.
• Markets with the most annualized supply increases in 2013
included Regina/Saskatoon at 5.1%, Winnipeg at 2.3% and
Edmonton at 2.1%. Vancouver Airport/Richmond, Niagara Falls
and Montreal Airport all had no new hotel openings in 2013.
• National supply is expected to increase by 1.5% in 2014, led by
Winnipeg at 7.9%, which is largely due to new product being
constructed in the Airport corridor of the city. This is followed by
Halifax, which is estimated to expand by 5.3% and Calgary at 3.9%.
• Downtown Montreal saw a reduction of 1.6% in hotel rooms in
2013 and is expected to see a further 7.8% reduction in 2014.
Private Investor
67 Deals
17%
2012
0.8%
2011
1.4%
2014E
1.5%
2013E
1.1%
2010
2009
2011
2012
2013E
2014E
Source: Colliers International Hotels
Colliers International Hotels
7
Looking
Forward
1
Robust Transaction Environment
Colliers International Hotels’ Top Ten reasons
to be optimistic about the Canadian hotel
real estate market in 2014.
2
$1.25 - $1.75 billion estimated for
the year given favourable market
conditions and deal pipeline
channel checks.
Growing Operating Metrics
4.1
RevPAR is forecast to grow by 4.1% in
Canada for the year, according to PKF
Consulting, significantly higher than
the 10-year running average of 2.9%.
PERCENT
3
Favourable Debt Conditions
Borrowers will continue to be
pleased with the ample supply
of mortgage capital available
for hotels, which forces lenders
to be more aggressive on both
underwriting standards and pricing.
5
New Supply Remains at All Time Lows
4
Canada has benefited from a
significantly smaller amount of
lender-driven scenarios than the US.
This trend will continue into 2014 as
we expect to see even less distress
than last year’s meagre $65.0
million in dollar volume.
6
New supply of guest rooms will remain below historical
norms (2.0%-2.5%) and should average 1.5-2.0% in 2014.
Activity should pick up stream into 2015/2016.
7
Acquisitions for Alternate Use
This theme peaked in 2011 as optimism
in the Canadian housing market was
high. Although this has decreased,
there are select opportunities where
the asset has reached the end of
its lifecycle as a hotel. Appetite for
conversion to student residence and
redevelopment to residential exist.
9
Interest Rates & FX
The Bank of Canada is reported to keep
its prime rate at 1.0% through 2014 and
perhaps much of 2015. Coupled with
a Canadian Dollar, which is forecasted
at 90 cents U.S. for the year (per BMO
Capital Markets), this should generate
continued interest from cross-border
capital.
Default Risk is Low
Institutional Capital is Checking In
The availability of rarely offered
prime city centre hotels in
Canadian gateway cities will
continue to attract institutional
capital.
8
Cap Rate Stability (& Compression)
It is tempting to say cap rates should trend upwards, but
we see the market being stable overall with continued
compression in gateway markets (more capital, more
competition = great outlook).
10
Action Behind the Scenes
We have witnessed a substantial
market for partnership buy-outs,
refinancings and new joint ventures.
These efforts do not register as market
transactions but will be significant
and further representative of a healthy
market.
Colliers International Hotels
S
Hotel Value Index
2014 Hotel
Value Index
The value of Canadian hotel
real estate, which we derive
from 17 major markets, grew
an estimated 4.8% in 2013
The Colliers Hotel Value Index monitors the
following the 4.0% growth
annual rate of change in hotel values, based
seen in 2012. While all
markets exhibited positive
on the operating performance of a market
results last year, the most
and industry trends, as well as the return
significant growth in hotel
expectations of investors.
value was seen in urban
markets such as Calgary
(9.1%), Edmonton (8.4%), downtown Toronto
The index illustrates the volatility in hotel values
(7.6%) and downtown Vancouver (6.4%).
due to shifts in supply and demand, top-line
With continued improvements in
operating performance and investor attitudes.
Canada’s economic and hotel industry
Victoria
2012 2.3%
Vancouver Downtown
10Y
2012 3.2%
10Y
performance alongside muted levels of
new supply, overall values are expected to
increase at a more robust rate of 5.6% in
2014, well above the ten year average of 4.9%.
Hotel value growth projections continue to
demonstrate strength in Canada’s urban
centres with downtown Calgary (10.8%),
downtown Toronto (10.2%) and Edmonton
(9.2%) leading the charge as strong local
economies drive increased demand
prospects. Winnipeg is expected to realize
the weakest value growth in 2014 at 1.9%,
impacted by notable increases in supply,
followed closely by Halifax/Dartmouth and
Whistler at 2.9% each.
Vancouver Airport
2012 3.3%
2013 3.5%
2013 6.4%
2013 4.3%
2014F 3.7%
2014F 8.6%
2014F 4.5%
Whistler
Calgary
Edmonton
2012 1.9%
10Y
2012 7.8%
10Y
2012 5.7%
2013 3.0%
2013 9.1%
2013 8.4%
2014F 2.9%
2014F10.8%
2014F 9.2%
Alberta Mountain Resorts
Regina/Saskatoon
Winnipeg
2012 3.3%
10Y
2012 5.5%
10Y
2012 4.2%
10Y
10Y
10Y
2013 4.5%
2013 3.8%
2013 1.7%
2014F 4.9%
2014F 4.5%
2014F 1.9%
Toronto North/East
Toronto Downtown
Toronto Airport West
2012 2.6%
10Y
2012 5.2%
10Y
2012 2.8%
10Y
2013 3.3%
2013 7.6%
2013 3.3%
2014F 3.5%
2014F10.2%
2014F 4.2%
Niagara Falls
Ottawa
Montréal Downtown
2012 4.0%
10Y
2012 3.9%
10Y
2012 3.4%
10Y
2013 2.8%
2013 5.4%
2013 3.8%
2014F 3.7%
2014F 4.0%
2014F 4.3%
Montréal Airport
Halifax/Dartmouth
Canadian National Average
2012 3.4%
10Y
2012 4.1%
10Y
2012 4.0%
2013 3.5%
2013 3.1%
2013 4.8%
2014F 3.7%
2014F 2.9%
2014F 5.6%
10Y
The Hotel Value Index measures the rate of change in hotel values on a year over year basis. Rates of change are influenced by investor yield expectations, market performance, changes to supply and the
overall economic health of the market. 2014F = Forecast. Source: Colliers International Hotels
Colliers International Hotels
9
C
I
S
2013 Canadian Hotel Transactions
Name
City
Province
Rooms
Date
Super 8 Fort Saskatchewan
Fort Saskatchewan
AB
85
Super 8 Red Deer
Red Deer
AB
72
Hotel Elan
Calgary
AB
62
1
Cap Rate
(%)
Price ($)
Price/Room ($)
Jan-13
$8,713,000
$102,500
Jan-13
$1,650,000
$22,900
N/A
Jan-13
$11,422,000
$184,200
N/A
12.7
N/A
Super 8 Innisfail
Innisfail
AB
50
Jan-13
$4,900,000
$98,000
Travelodge Edmonton West
Edmonton
AB
220
Feb-13
$13,000,000
$59,100
6.0
Rockyview Hotel
Cochrane
AB
15
Feb-13
$1,660,000
$110,700
N/A
N/A
Quality Hotel & Conference Centre
Grande Prairie
AB
102
Mar-13
$5,500,000
$53,900
Travelodge Brooks
Brooks
AB
61
Mar-13
$2,800,000
$45,900
6.0
Road Runner Motel
Edmonton
AB
46
Apr-13
$3,720,000
$80,900
N/A
Edmonton
AB
307
May-13
$27,500,000
$89,600
N/A
Medicine Hat
AB
128
Jun-13
$3,570,000
$27,900
7.9
Sherwood Park
AB
90
Jun-13
$15,150,000
$168,300
9.0
Crowne Plaza Chateau Lacombe∆
2
Travelodge Medicine Hat/ Circle T Motel
3
Holiday Inn Express Hotel & Suites Sherwood Park
Clarion Hotel & Conf. Centre (Former Radisson Airport)
Calgary
AB
184
Jul-13
$18,100,000
$98,400
7.4
Silver Crest Lodge
Grande Prairie
AB
95
Jul-13
$3,400,000
$35,800
14.6
N/A
4
Edmonton
AB
112
Aug-13
$17,725,000
$158,300
Hospitality Inn & Suites
Four Points by Sheraton Edmonton Int’l Airport
Fort Saskatchewan
AB
100
Aug-13
$12,000,000
$120,000
N/A
Ritz Café and Motor Inn
Whitecourt
AB
62
Aug-13
$5,500,000
$88,700
13.3
Western Valley Inn
Valleyview
AB
50
Aug-13
$6,750,000
$135,000
12.2
Calgary
AB
525
Sep-13
$192,100,000
$366,000
8.8
Edmonton
AB
416
Sep-13
$86,200,000
$207,000
7.7
Medicine Hat
AB
61
Sep-13
$4,100,000
$67,200
N/A
Edmonton
AB
71
Oct-13
$5,200,000
$73,200
N/A
Calgary
AB
225
Nov-13
$42,000,000
$186,700
12.7
Edmonton
AB
50
Nov-13
$2,100,000
$42,000
N/A
The Westin Calgary*
5
6
The Westin Edmonton*
6
Quality Inn Medicine Hat
The Grand Hotel Edmonton
Acclaim Hotel Calgary Airport
Advantage Motel
7
8
Alberta - 24 Trades
Canada's Best Value Inn (formerly Super 8 Langley/
Glover Road)
Coast Vancouver Airport 9
Langley
BC
46
Jan-13
$2,400,000
$52,200
11.0
Richmond
BC
133
Feb-13
$15,000,000
$112,800
N/A
Best Western Plus Abercorn Inn
Richmond
BC
98
Feb-13
$14,250,000
$145,400
5.0
Victoria
Harrison Hot
Springs
Richmond
BC
126
Mar-13
$23,000,000
N/A
N/A
BC
337
Apr-13
$32,300,000
$95,800
9.2
BC
81
May-13
$4,175,000
N/A
N/A
Langley
BC
80
May-13
$5,700,000
$71,300
7.0
Vernon
BC
62
May-13
$4,350,000
$63,145
9.1
Kamloops
BC
45
May-13
$3,200,000
$71,000
9.3
Langley
BC
50
Jun-13
$2,581,000
$51,600
N/A
Richmond
BC
129
Jul-13
$16,000,000
N/A
N/A
Vancouver
BC
511
Sep-13
$150,800,000
$295,000
5.0
Abbotsford
BC
99
Sep-13
$12,050,000
N/A
N/A
Comfort Inn Chilliwack
Chilliwack
BC
83
Sep-13
$4,500,000
$54,200
8.9
King George Place
Surrey
BC
29
Sep-13
$1,420,000
$49,000
N/A
Surrey Central Inn
Surrey
BC
28
Sep-13
$1,420,000
$50,700
N/A
Corporate Inn
New Westminster
BC
15
Sep-13
$2,850,000
$190,000
N/A
Victoria
BC
33
Nov-13
$13,998,000
N/A
N/A
10.0
Parkside Victoria Resort and Spa∆
Harrison Hot Springs Resort & Spa
Executive Inn Express
10
11
12
Super 8 Langley
Super 8 Vernon
4
Econo Lodge Inn & Suites
4
Quality Hotel & Suites Langley
Comfort Inn Vancouver Airport
The Westin Bayshore*
Super 8 Abbotsford ∆
12
6
13
Brentwood Bay Resort & Spa
14
3,189
British Columbia - 18 Trades
Holiday Inn Winnipeg-South
St. Regis Hotel
1,985
15
12
Lincoln Hotel
$309,994,000
Winnipeg
MB
170
Jan-13
$5,500,000
$64,700
Winnipeg
MB
100
Jan-13
N/A
N/A
N/A
Winnipeg
MB
23
Nov-13
$4,600,000
N/A
15.0
Fredericton
NB
$35,100
n/a
N/A
N/A
Manitoba - 3 Trades
293
Lakeview Inns & Suites
New Brunswick - 1 Trades
12
St. John's
NF
Newfoundland - 1 Trade
$10,100,000
Dec-13
127
16
Cambridge Suites Hotel Sydney
16
16
Mar-13
NS
203
Mar-13
$35,000,000
$171,600
6.9
Halifax
NS
200
Mar-13
$35,000,000
$175,000
6.7
Sydney
NS
145
Mar-13
$13,950,000
$96,200
6.6
548
17
Residence Inn London Downtown
18
$9,500,000
$9,500,000
Halifax
Nova Scota - 3 Trades
Metropolitan Hotel Toronto
$3,400,000
$3,400,000
127
Cambridge Suites Hotel Halifax
Quality Hotel Burlington
97
97
Battery Hotel & Conference Centre
Prince George Hotel
$494,760,000
$83,950,000
Toronto
ON
428
Jan-13
$39,700,000
$92,800
N/A
London
ON
116
Jan-13
$6,000,000
$103,500
10.0
Burlington
ON
110
Jan-13
$9,750,000
$88,600
8.2
Hampton Inn Napanee
Napanee
ON
58
Jan-13
$6,500,000
$112,100
N/A
Hilton Toronto
Toronto
ON
600
Feb-13
$140,000,000
$233,300
7.6
Holiday Inn Express Hotel & Suites Brampton
Brampton
ON
84
Feb-13
$8,050,000
$95,800
8.1
19
Comfort Motel
East Gwillimbury
ON
18
Feb-13
$1,420,000
$78,900
N/A
Econo Lodge London
London
ON
86
Mar-13
$2,800,000
$32,600
N/A
Microtel Inn & Suites
Woodstock
ON
74
Mar-13
$3,347,000
$45,200
N/A
Econo Lodge Fort Erie
Fort Erie
ON
70
Apr-13
$1,850,000
$26,400
N/A
10
Colliers International Hotels
2013 Canadian Hotel Transactions
Name
City
Province
Travelodge Hotel Huntsville
Huntsville
ON
37
Apr-13
$1,440,000
$38,900
Courtyard by Marriott Toronto Downtown
Toronto
ON
575
May-13
$76,250,000
$133,000
7.7
Hilton Toronto Airport Hotel & Suites
Toronto
ON
419
May-13
$25,000,000
$59,700
8.6
Windsor
ON
512
May-13
$10,250,000
$20,000
N/A
Toronto
ON
299
May-13
$11,000,000
$36,800
3.8
Guelph
ON
65
May-13
$3,500,000
$53,800
N/A
N/A
Hilton Windsor & Windsor Riverside Inn
20
Holiday Inn Hotel & Suites Toronto-Markham
21
Royal Inn & Suites
Rooms
Date
Price ($)
Price/Room ($)
Cap Rate (%)
N/A
Harbour Inn & Resort
Brechin
ON
43
May-13
$1,400,000
$32,600
Park Villa Motel
Midland
ON
41
May-13
$1,670,000
$40,700
N/A
Diamond Motor Inn
Owen Sound
ON
22
May-13
$1,025,000
$46,600
N/A
Quality Inn & Suites Mississauga Airport
Mississauga
ON
197
Jun-13
$9,750,000
$49,500
N/A
Fairfield Inn & Suites Toronto Airport
Toronto
ON
170
Jun-13
$16,000,000
$94,100
N/A
Toronto
ON
144
Jun-13
$14,650,000
$101,700
7.7
Markham
ON
144
Jun-13
$14,700,000
$102,100
8.2
Vaughan
ON
144
Jun-13
$17,250,000
$119,800
7.3
Mississauga
ON
100
Jun-13
$13,250,000
$132,500
7.3
Markham
ON
100
Jun-13
$10,700,000
$107,000
7.2
Travelodge Oshawa
Oshawa
ON
120
Jun-13
$8,150,000
$67,900
9.0
Days Inn Guelph
Guelph
ON
87
Jun-13
$3,400,000
$39,100
N/A
Super 8 Sudbury
Sudbury
ON
85
Jun-13
$4,050,000
$47,600
5.4
Sudbury Inn
Sudbury
ON
35
Jun-13
$1,000,000
$28,600
N/A
Courtyard by Marriott Toronto/Meadowvale
Courtyard by Marriott Toronto Markham
22
Courtyard by Marriott Toronto Vaughan
22
22
Residence Inn by Marriott Toronto/Meadowvale
Residence Inn by Marriott Toronto Markham
22
22
Motel 6 Peterborough
Peterborough
ON
85
Jul-13
$4,350,000
$51,200
N/A
Comfort Inn Kingston Midtown
Kingston
ON
57
Jul-13
$2,300,000
$40,400
N/A
N/A
Mississauga
ON
224
Aug-13
$13,800,000
$61,600
Holiday Inn Express Hotel & Suites Clarington
Stage West All-Suite Hotel & Theatre Restaurant
Clarington
ON
95
Aug-13
$8,377,300
$88,200
8.2
Former Best Days Hotel∆
Niagara Falls
ON
92
Aug-13
$2,250,000
$24,500
N/A
Toronto
ON
977
Sep-13
$196,900,000
$202,000
8.1
Ottawa
ON
496
Sep-13
$139,000,000
$280,000
8.3
Comfort Inn Burlington
Burlington
ON
99
Sep-13
$4,500,000
$45,500
7.8
The Walper Hotel
Kitchener
ON
82
Sep-13
$4,650,000
N/A
N/A
24
The Westin Harbour Castle*
The Westin Ottawa*
23
6
6, 25
Comfort Inn London
London
ON
79
Sep-13
$2,700,000
$34,000
8.9
Red Carpet Inn & Suites
Sudbury
ON
37
Sep-13
$1,608,000
$43,500
N/A
The Fairmont Chateau Laurier*
Ottawa
ON
429
Oct-13
$120,000,000
$279,700
6.2
Delawana Inn & Conference Centre∆
Holiday Inn Express Hotel & Suites Ottawa West Nepean
Holiday Inn Express Toronto North York
Honey Harbour
ON
148
Oct-13
$3,100,000
$20,900
N/A
Ottawa
ON
115
Oct-13
$19,500,000
$170,000
10.2
Toronto
ON
163
Nov-13
$7,500,000
$46,000
6.7
Days Inn Barrie
Barrie
ON
78
Nov-13
$4,815,000
$61,700
N/A
N/A
Muskoka Riverside Inn
Bracebridge
ON
54
Nov-13
$2,050,000
$38,000
Howard Johnson Inn
Sarnia
ON
50
Nov-13
$1,485,000
$29,700
N/A
Universal Inn & Suites
Niagara Falls
ON
80
Dec-13
$4,450,000
$55,600
N/A
Travelodge North Bay
North Bay
ON
76
Dec-13
$2,604,000
$34,300
N/A
N/A
Ontario - 51 Trades
8,499
$1,009,791,000
Motel Rustik
Chateauguay
QC
23
Jan-13
$1,725,000
$75,000
Comfort Inn & Suites Shawinigan
Shawinigan
QC
71
Feb-13
$3,550,000
$50,000
N/A
Hotel Chateau Roberval
Roberval
QC
124
May-13
$3,800,000
$31,000
N/A
Motel Au Doc
Repentigny
QC
24
May-13
$1,895,000
$79,000
N/A
Motel Aubin
Montreal
QC
20
May-13
$1,700,000
$85,000
N/A
Montreal
QC
711
Jun-13
$51,250,000
N/A
N/A
Trois-Rivieres
QC
128
Sep-13
$7,900,000
$62,000
N/A
4
Delta Centre-Ville Montreal
26
Hotel Gouverneau Trois Rivieres
Hôtel Lord Berri
Montreal
QC
154
Nov-13
N/A
N/A
N/A
Hotel Le Voyageur
Quebec City
QC
64
Nov-13
$3,817,000
$59,600
N/A
Montreal
QC
140
Dec-13
$12,500,000
N/A
N/A
Motel Dufferin
Beauport
QC
55
Dec-13
$1,200,000
$21,800
N/A
Hotel Chateau Fleur-de-Lys
Quebec City
QC
17
Dec-13
$1,200,000
$70,600
N/A
Quality Hotel Downtown Montreal
26
Quebec - 12 Trades
1,531
$90,537,000
Edgewater Hotel
Whitehorse
YK
32
Apr-13
N/A
N/A
N/A
Downtown Hotel
Dawson City
YK
59
Jul-13
N/A
N/A
N/A
Yukon - 2 Trades
1 Former apartment building that opened as a hotel mid 2013.
2 Includes a 663 space parkade that generates significant
income for the overall property.
3 Includes a 90-room Travelodge Hotel as well as a 38-room
Circle T Motel for a total of 128 rooms.
4 Share sale.
5 New build with no operating history.
6 Part of a five property portfolio valued at $765.0 million.
7 Leasehold interest. The property originally had 123 rooms and
an additional 102 rooms were added in mid-2013.
8 Vacant at date of sale. Purchaser plans to renovate and reopen.
9 Includes a liquor store license and approved development
permit for a new residential/mixed use project on a 1.0 acre site.
10 The property was structured with various fractional interests
91
and sold under receivership. Price per room is not applicable.
11 Includes a nine-hole golf course, municipal swimming pool
and 23,000 SF of meeting space.
12 Sold for alternate use.
13 Includes three free-standing restaurants. Price per room is
not applicable.
14 Includes excess land suitable for future development.
15 5
0% interest transferred. The purchaser acquired the other
50% interest in December 2012. The price per room has
been adjusted to reflect 100% interest.
16 Part of a three hotel portfolio.
17 Now DoubleTree by Hilton.
18 5
0% interest transferred. The purchaser plans to acquire the
remaining interest. Price per room reflects 100% interest.
19 Includes stand alone restaurant.
20 Part of a two property hotel portfolio.
21 W ill undergo redevelopment to dual brand focused-service
hotel.
22 Part of a five property hotel portfolio.
23 Will undergo redevelopment to Sandman Hotel, Denny’s
Restaurant and Shark Club.
24 The property was closed at the time of sale.
25 Leasehold interest.
26 Converted to student residence.
∆ indicates a lender driven sale.
* indicates a strategic purchase - see page 6 for the definition.
Source: Colliers International Hotels
Colliers International Hotels
11
Colliers International Hotels
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Toronto
One Queen Street East
Suite 2200
Toronto, Ontario
Vancouver
200 Granville Street
Suite 1900
Vancouver, British Columbia
Montreal
1800 Avenue McGill College
Suite 2900
Montréal, Québec
T: +1 416 777 2200
F: +1 416 777 9232
T: +1 604 681 4111
F: +1 604 661 0849
T:+1 514 866 1900
F: +1 514 866 1903
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