JANUARY/FEBRUARY 2015 HOTELIER 3hoteliermagazine.com

LOOKING BACK

The sale of Toronto’s iconic Fairmont Royal York, which is expected to close at the end of January, is set to kick off the new year of hotel transactions on a high note. It follows a year of activity in Canada that is forecast to reach

the $1.25-billion to $1.75-billion range, according to the Toronto-based Colliers International Hotels’ “2014 Canadian Hotel Investment Report.”

The landmark property, owned by Montreal-based Ivanhoé Cambridge, was sold to Mississauga, Ont.-based InnVest REIT and Toronto-based KingSett Capital for $186.5 million in a joint-venture agreement, which sees Ivanhoé retain a 20-per-cent interest. “The Royal York is truly an iconic asset,” says Edward Pitoniak, acting president and CEO of InnVest REIT. “It’s in an absolute fortress location in downtown Toronto ... and the building itself is incredibly attractive and romantic as a hotel property.”

The new parties have acquired 80-per-cent ownership in the 85-year-old hotel. Kingsett will own a 60-per-cent interest in the joint venture and will become the managing partner; InnVest will own a 20-per-cent interest and will become the hotel asset manager, overseeing hotel operations. “We’ll be respon-sible principally on a day-to-day basis for working with Fairmont to develop the business plan for the hotel and oversee performance against those business plans the way any asset manager would,” explains Pitoniak. The other partners were unavailable for comment.

Following the completion of the transaction, the first order of business is to invest an additional $50 million into an ongoing transformation of the meeting facilities, restaurants and guestrooms. “With the right renovations, and with Fairmont’s ongoing management of the asset, we have an opportunity to create amazing value for the guest but also for our owners,” Pitoniak notes.

InnVest owns more than 110 hotels, comprising approximately 14,000 rooms across the country and will continue to strengthen its portfolio. “We’re inter-ested in purchasing any hotels in Canada that have really strong economic outlooks over the next five to 10 years,” Pitoniak says. “We’re very proud to own assets like the Hyatt Vancouver in core big-city markets in Canada, but if there are great hotels to be found in secondary markets, we would be interested in those, too, across the country, from the Maritimes through British Columbia.”

THE LATEST INDUSTRY NEWS FOR HOTEL EXECUTIVES FROM CANADA AND AROUND THE WORLD

Checking InCLEAN SLATE

By the end of January, more than 500

of Toronto’s Fairmont Royal York’s 1,363

guestrooms will be redesigned as part of

a $100-million infrastructure investment.

The modern and streamlined spaces,

designed by Brookline, Mass.-based

Jinnie Kim Design, are juxtaposed to the

hotel’s château-style architecture. Renova-

tions are continuing through this year with

an additional 800 guestrooms due to be

completed by summer. Public spaces,

including the lobby and meeting rooms,

will be addressed before the dust settles.

STATE OF THE UNIONThe extensive renovations to Toronto’s

Front Street and Union Station, plus the

construction of the new Union Pearson

(Airport) Express rail link are scheduled for

completion in early 2015. It’s great news

for The Fairmont Royal York, which will

be connected to one of Canada’s largest

transportation hubs via the underground

PATH pedestrian network. “It’s a location

that has been under great stress the last

couple of years, but as all of that work

comes to a conclusion, the location will

re-establish itself as the best location for

a hotel in Toronto — and frankly one of the

better hotel locations in North America,”

affirms Edward Pitoniak, acting presi-

dent and CEO of InnVest REIT in Missis-

sauga, Ont., whose organization recently

acquired a 20-per-cent interest in the

landmark property for $37.3 million.

A ROYAL SHUFFLE

Toronto’s Fairmont Royal York undergoes a top-tier reorg BY HELEN CATELLIER