TORONTO — The Sheraton Centre Hotel in Toronto’s downtown core has been purchased for $335 million by an arm of Brookfield Asset Management, which says it sees potential for more hospitality acquisitions in Canada.
The landmark deal is the largest-ever single hotel transaction in Canadian history, says CBRE Canada, which acted as the broker for seller Marriott International.
The purchase also marks the Toronto-based alternative asset management conglomerate’s first push into the hospitality sector at home.
Brookfield’s hospitality portfolio has largely been focused on the U.S., but also includes assets in the U.K. and the Atlantis Hotel in the Bahamas, says spokesman Matthew Cherry.
“We’ve been looking to expand in other cities in North America, and given our familiarity with Toronto, we were very excited to have the opportunity to acquire this size and quality,” he said.
Brookfield is not currently looking at other hotel acquisitions in Toronto, but there is potential for other transactions across Canada, Cherry added.
“We don’t view this as a one off… If there is a similar opportunity to acquire an asset of this type of size and quality, we would certainly be looking at it.”
The four-star hotel was purchased by a Brookfield-sponsored private real estate fund, and will continue to be operated by Marriott.
The Sheraton Centre has more than 1,300 guest rooms and is located in Toronto’s financial district. The Sheraton had recently completed roughly $110 million in renovations, CBRE said.
Bill Stone, CBRE’s executive vice-president of its hotel division, says the Sheraton was highly sought-after and had interest from foreign buyers as well.
“It is a rare opportunity where you can buy something of this scale, that also has been renovated to the extent that it was,” Stone said.
Hotels have been a hot commodity in recent years, and hospitality properties in Toronto have been seeing near-record occupancy rates, he added.
The Sheraton deal now makes the 2015 purchase of the 511-room Westin Bayshore hotel in Vancouver for $280 million the second-biggest in Canadian history. The third-most lucrative transaction was the $225 million purchase of the Four Seasons hotel in Toronto in 2016.
Armina Ligaya, The Canadian Press