MISSISSAUGA, ONT. — Morguard Corporation recently announced the strategic sale of its hotel portfolio, which includes 14 hotels.
The move aligns with Morguard’s commitment to optimize its real estate portfolio, focusing on core real estate investments, including office, industrial, retail, and multi-suite residential properties, states a release.
The transaction will result in gross proceeds of $410 million, before customary adjustments and closing costs. Upon completion of the transaction, Morguard will repay its 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 in Toronto, Mississauga, Markham, Vaughan and also in Ottawa, Halifax and Sudbury.
Morguard will retain ownership of two hotels: the dual-brand Hilton Garden Inn and Homewood Suites in Ottawa and Inn at the Quay in New Westminster, B.C.
“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 CEO, in a statement. “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 heightened level of financial flexibility provided by this transaction will empower us to strategically deleverage, which is important given the current interest rate environment,” added Paul Miatello, Chief Financial Officer.
The transaction is expected to close in the first quarter of 2024.
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