Morguard is selling a portfolio of 14 hotels to better focus on its core real estate investments, including office, industrial, retail, and multi-suite residential properties.
The Marriott, Hilton, IHG and independent hotels are located across the Greater Toronto Area, and in Ottawa, Sudbury and Halifax.
“It is an opportune moment to divest these properties given the current market demand for a hotel portfolio of this size and quality, as well as their enhanced market value.” said K. Rai Sahi, chairman and chief executive officer.
The transaction is expected to close in the first quarter of 2024, with gross proceeds of $410 million before adjustments and closing costs. Morguard will repay first-mortgage debt totaling $48.7 million, gaining net proceeds of $361.3 million. “The heightened level of financial flexibility provided by this transaction will empower us to strategically deleverage, which is important given the current interest rate environment, said Paul Miatello, chief financial officer.
Morguard will retain ownership of two hotels: the dual-brand Hilton Garden Inn and Homewood Suites in Ottawa, Ontario, and Inn at the Quay in New Westminster, British Columbia.