The seller was Irving, TX-based FelCor Lodging Trust Inc., one of the nation's largest hotel REITs, which has been selling off smaller hotels in secondary markets. FelCor says it intends to use the proceeds to invest in urban hotels located in Canada, in a tax-free exchange transaction. The company still has 24 in strategic hotels for sale.
The new owner and manager is Fortis Properties, the real estate investment subsidiary of Fortis Inc., a St. John's, Newfoundland-based generator and distributor of electricity. The acquisition is Fortis Properties' first outside of Atlantic Canada and increases its hotel portfolio by 50%, from eight to 12 properties.
"The acquisition is a significant step in expanding our hotel portfolio and broadening our geographic market base," says Fortis Properties president/CEO John Walker.
The transaction will be accretive to earnings in the first year of operations, says Walker. Colliers International Hotels acted as the exclusive advisor in the transaction.
Established in 1989, Fortis Properties is Fortis Inc.'s primary vehicle for diversification and growth outside the electric utility business. In addition to hotels, Fortis Properties owns 2.7 million sf of office buildings and shopping centers throughout Atlantic Canada.
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