An investment firm headed by Toronto's Manji family is poised to acquire three Westin hotels in Ottawa, Calgary and Edmonton, Canada.
The family has a majority stake in the Barney River investment company, which already includes a Hilton in downtown Toronto, the Westin Hotels & Resorts’ Harbour Castle on the city’s waterfront and another Hilton in Mississauga. The firm is now looking to expand its footprint with some new acquisitions.
According to Canadian paper The Globe and Mail, the three Westins have been for sale for more than a year, seeking a buyer even as "an unprecedented number" of new hotels opened in Calgary and Edmonton. They are currently owned by Barry Sternlicht’s Starwood Capital Group and were initially expected to sell for as much as $500 million collectively. A source told the paper the final price will be closer to $400 million.
If the deal goes through, it would give the Manji family a global brand in Alberta’s two biggest cities, whic are seeing improved metrics after several years of oversupply and low occupancy.
According to the paper, Canada's hotel market has started to stabilize again after the oil downturn and "ill-timed development" of new hotels. The capital city of Ottawa is Canada's third strongest market for hotels behind Toronto and Vancouver, reaching its highest occupancy level in five years at 75 percent. (Toronto is at 76 percent while Vancouver is at 80 percent.)
Alberta is a different story, and the oil crash five years ago slowed hospitality transactions and development. According to data from commercial realtor CBRE, about 20 hotels each have opened in Calgary and Alberta since 2014, but hotel performance in both cities has been "dismal."
Last year, however, occupancy and revenue per available room (RevPAR) both improved. In Calgary, the occupancy rate rose 1.5 percent to 61.2 percent and RevPAR climbed 3 percent to $88.64, according to hotel research firm STR. In Edmonton, the occupancy rate increased 3 percent to 56.5 percent and RevPAR grew 3 percent to $71.63.