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Morguard announces strategic sale of hotel portfolio
Morguard Corporation has announced an unconditional agreement to sell a portfolio of 14 hotels. Morguard says it aims to optimize its real estate portfolio, focusing on core real estate investments, including office, industrial, retail, and multi-suite residential properties.
"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,” says K. Rai Sahi, chairman and chief executive officer. "Morguard has strategically divested our hotel portfolio to align with our objectives of strengthening the company's balance sheet while owning a high-quality portfolio of income-producing real estate."
The transaction will result in gross proceeds of $410.0 million, before customary adjustments and closing costs. Upon completion of the transaction, Morguard will repay first-mortgage debt totalling $48.7 million, providing the company with net proceeds of $361.3 million.
The portfolio of hotels, featuring Marriott, Hilton, IHG and independent hotels, is located in major urban centers across Canada, including the Greater Toronto Area (specifically Toronto, Mississauga, Markham, Vaughan), Ottawa, Halifax, and Sudbury.
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.
"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.
The transaction is subject to customary closing conditions and is expected to close in the first quarter of 2024.
