Besides the four-star hotel and convention center, FPC also acquired 52,000 sf of office space and a parking garage. In announcing the purchase, FPC president Nora Duke called the acquisition "a major milestone" for the company, noting that the deal expands her firm's CRE footprint into an eighth Canadian province.
Not only is Saskatchewan seen as a promising area of economic growth, its capital city now has a population exceeding 180,000. Duke says the property was attractive to FPC for a variety of reasons beyond favorable demographics. "Delta Regina is a premiere, multi-use facility that enhances our portfolio of high-quality hotel and commercial real estate assets," says Duke.
The inn is typically a regional leader in room rates, she notes, feeding off business, convention and tourist lines. Delta Regina will celebrate its 20th anniversary in 2008. Besides the 25-story hotel and conjoined Saskatchewan Trade and Convention Center, the complex also has a water park and is connected via skywalk to a casino and Regina's largest shopping center.
Stan Marshall, president and CEO of Fortis Inc., says he believes the investment will benefit the organization overall. "This acquisition is expected to be immediately accretive to earnings," says Marshall, a positive given the firm's just-released second quarter financials that were dragged down from a utility-related merger that cost $3.7 billion. Even so, earnings were up for the parent firm through mid-year, rising from $74.5 million in 2006 to $83 million halfway through 2007.
The real estate arm of Fortis Inc. posted a decrease in earnings for the second quarter compared to Q2 2006, dipping from $8.1 million to $6 million, but management attributed the decline to a $1.6-million after-tax gain the previous year from the sale of a Days Inn and a $1.6-million tax adjustment in the firm's favor. Save for those elements, earnings would have been up by $1.1 million for the quarter, Fortis officials reported.
FPC now owns and operates 19 hotels in Canada, accounting for more than 3,500 rooms. Among the internationally known brands flying at FPC hotels are Holiday Inn, Ramada, Sheraton and Best Western. The property division also controls 2.8 million sf of office and retail space, mostly in Canada's Atlantic region.
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