Ownership of Toronto’s Royal York Hotel to Change Hands

Toronto’s Fairmont Royal York Hotel is being sold to InnVest Real Estate Investment Trust and KingSett Real Estate Growth LP No. 5 for $186.5-million. Both the parties have struck a definitive agreement with the Ivanhoé Cambridge, i.e. the Caisse de dépôt et placement du Québec’s real estate arm, in order to acquire a total of 80-per-cent stake in the prestigious hotel.

Consequently, Ivanhoé Cambridge plans to keep a 20-per-cent interest in the property that was built in 1929 by Canadian Pacific Railway across from Union Station in the heart of the city’s downtown. The deal anticipated to finalize in January will leave KingSett with 60 per cent interest in the 1,363-room hotel and the role of managing partner in the joint venture. Whereas, InnVest’s share will be 20 per cent and it will become the hotel’s asset manager and oversee the property’s hospitality operations in tandem with Fairmont Hotels and Resorts.

Both the partners have devised a plan to further invest a total of $50-million for additional renovations over a two-year period following closing of the deal. Meanwhile, the hotel is currently undergoing $100-million in renovation work. According to a statement issued by the managing director of InnVest, Ed Pitoniak, “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.”

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