Toronto’s Fairmont Royal York Hotel has new owners
Toronto’s famous Fairmont Royal York Hotel is being bought by InnVest Real Estate Investment Trust and KingSett Real Estate Growth LP. The two companies are purchasing an 80% stake in the downtown hotel for C$186.5 million ($166.53 million).
Global real estate company Ivanhoé Cambridge is relinquishing control but says it will hold on to 20% of the hotel.
The ‘Royal York’ is currently undergoing a C$100 renovation. The new owners say they plan to invest over C$50 million for further renovations after the takeover transaction is completed early in 2015.
More than 500 guest rooms are expected to have been completely renovated by the end of January 2015. The Royal York has 1,363 guest rooms, including 92 suites and 82 Fairmont Gold Rooms. It also offers more than 65,00 sq mts of meeting space, 30,000 sq ft of retail space, as well as six food and drink outlets.
KingSett will own 60% and InnVest REIT 20%, making KingSett the managing partner and the InnVest the hotel asset manager and hospitality overseer.
In 1930, the Fairmont Royal York Hotel was the tallest building in Toronto and the British Empire.
KingSett plans to finance the transaction with conventional mortgage financing. InnVest will purchase its stake with available cash and capacity under its existing credit facilities.
Managing Director of InnVest, Ed Pitoniak, said:
“We are delighted to partner with KingSett and Ivanhoé Cambridge on what we believe is one of Canada’s most prestigious hotel properties. We are also looking forward to extending our relationship with Fairmont. With the nearing completion of the Union Station enhancements, as well as the introduction of the Pearson Airport Rail Link, the Fairmont Royal York’s location places it at the commercial, cultural and transportation crossroads of Toronto.”
“With the extensive renovations to the Royal York Hotel’s infrastructure and guestrooms, this asset is poised to deliver strong earnings growth and benefit from its irreplaceable location in Toronto’s city center.”
About KingSett Capital
KingSett Capital is the leading private equity real estate investment firm in Canada. It co-invests with high net worth individuals and institutions. The company has more than $5 billion of assets under management.
About InnVest Real Estate Investment Trust
InnVest Real Estate Investment Trust has a portfolio of more than 110 hotels across Canada, with a total of c.14,000 guest rooms under several well-known brands.
It also has a 50% stake in Choice Hotels Canada Inc.