International PE Firm Buys 25-Property Hotel Portfolio in Canada for US$853 Million

SilverBirch Hotels & Resorts Sold to Leadon Investment of Hong Kong

An unidentified international private equity firm and its Hong Kong/Canadian subsidiary, Leadon Investment Inc., acquired SilverBirch Hotels & Resorts, a portfolio of 25 upscale hotel properties across Canada. British Columbia Investment Management Corp. (BCIM) sold the hotels in a US$843.2 million (CAD $1.1 billion) all-cash transaction.

SilverBirch Hotels & Resorts is a 25-property portfolio with 6,757 rooms across Canada’s 20 largest cities. The company manages hotels operating under major franchise brands, including Marriott, Hilton and Radisson, among others. The hotels include Delta hotels in Toronto, Calgary, Victoria and Halifax.

The hotels sold at an average value of US$124,782/room (CAD $162,794/room).

BCIM is one of Canada’s largest institutional investors with CAD $121.9 billion in assets. Real estate makes up 14.4% of its holdings.

International PE firm buys 25-property hotel portfolio in Canada for $853 Million.
It decided to sell at a time when international capital, especially from mainland China, has shown keen interest in hotel properties as well as trophy office space across North America.

Last year, China's total overseas investment into commercial real estate set a new record of US$38.3 billion, up 49% from 2015, according to China Outbound Investment Capital Watch Q4 2016, released by DTZ/Cushman & Wakefield in Shanghai.

The U.S. was the top overseas destination for Chinese investors, recording a more than fourfold increase from 2015 to US$18.3 billion. Hotel deals surged 13 percentage points over 2015 to capture a 27% share of investment at US$10.3 billion.

Chinese investment also increased in Canada up to about US$2 billion.

Loeb & Loeb LLP, together with Toronto-based Goodmans LLP, provided legal counsel to the undisclosed PE firm in connection with the acquisition, with a cross-border team of attorneys led by regulatory and transactional partner Stephen H. Cohen from Loeb & Loeb and real estate transactional partner Bram Green from Goodmans.