www.colliershotels.

com
 2011 Canadian Hotel Investment Report
Canadian Hotel Real Estate Industry Ripe for
Increased Cross-Border Ownership
Over the past decade the Canadian hotel real estate
sector has been dominated by investment from
domestic sources that totaled 92% of total transaction
volume. Canadian institutional capital sources
acquired the majority of the country’s prized urban
assets largely by way of portfolio transactions, with
foreign investors selectively acquiring key single
assets in major markets.
Of the over 850 hotel sales that occurred between 2001 and
2010, foreign investors participated in a small portion – just
8% – of the decade’s $13.3 billion total deal volume. About
two-thirds of the $1 billion cross-border capital flow occurred
in the first half of the decade, with the appetite by foreigners
tapering in the latter period.
Canada’s hotel landscape is limited in terms of both size and
scope on an international scale, given the relatively scarce
availability of strategic product. Cross-border investors prefer
city-centre hotels that are large enough to represent a significant
investment for their portfolio, and the lack of foreign inflow to
Canada to date reflects the relatively small size of the market.
Of the acquisitions foreigners made in the past decade, about
60% were full service hotels in Canada’s major cities, averaging
over $40 million in deal size. Almost all were branded with
first tier international brands. Notable acquisitions by foreign
capital in the past ten years included the Sheraton Centre
Toronto by US-based Starwood Hotels & Resorts (50%
interest) in 2001 and Hotel Georgia in Vancouver by an
Indonesian development group in 2005. The largest foreign
investment since 2001 was the Four Seasons Hotel Toronto,
acquired by Kingdom Hotel Investments (Middle Eastern),
also in 2005. Significant transactions in the last half of the
decade included: the sale of the Ritz-Carlton Montréal to a
consortium of international joint venture partners in 2006; the
InterContinental Montréal to Pandox AB (Swedish); and the
Hyatt Regency Montréal acquisition by Ashford Hospitality
Trust (US) in 2007, which was subsequently sold to Pandox
AB in 2008. The Hilton Vancouver Metrotown also sold
twice, both times to Korean companies, in 2007 and then
again in 2010.
The Canadian transaction market witnessed significant
portfolio sales, representing 46% of the decade’s total transaction
_ | 2011 Canadian Hotel Investment Report
1
universe. Notwithstanding having placed interest in many of
the largest multi-property transactions that occurred between
2005 and 2007, foreign investors were overshadowed by
Canadian institutional investors and REITs that were eager
to diversify their holdings and snapped up 98% of the total
portfolio volume. Portfolio sales during this time included
the likes of the five-property Hilton Hotels Portfolio (2006),
seven-asset Fairmont Canadian Resort Portfolio (2006) and the
privatization of both Legacy Hotels REIT and CHIP REIT
(2007). More modest portfolios sold through the years, but
for the most part these were a better fit for hands-on, domestic
private investors or regional hotel investment companies that
underwrote higher values to upside potential.
The rising Canadian dollar over the decade (with the exception
of downward volatility during the recent recession) also had an
impact on inbound capital. The Canadian dollar rose some
35% between 2003 and 2010, ending near parity to the US
dollar. This upward shift influenced non-domestic firms from
investing in Canada and in some cases was an impetus for
profit-taking, resulting in the departure of foreign investors
from the market. Asian hotel investors, who were notable
buyers from the late 1980s through the mid-1990s, became net
sellers in the past ten years. Dispositions of key strategic assets
including the Pan Pacific Hotel Vancouver & World Trade
Centre, Delta Bow Valley Calgary and Delta Victoria Ocean
Pointe Resort & Spa, were examples where Asian investors
timed the market, or in some cases sold for non-market related
reasons including corporate restructuring or to concentrate
their efforts in homeland markets.
The ability to attract foreign investment will
be a validation of the appeal of the Canadian
economy and we are starting to see increased
competition from foreign investors as market
conditions in Canada continue to improve.
The industry witnessed a sharply improved transaction
environment in 2010. Several capable US and international
investors took a strong look at Canada and expressed notable
interest, in some cases placing multiple bids on hotel assets. Part
of this was driven by what occurred in the US hotel market,
which underwent profound changes with the formation of
new lodging REITs and IPOs in 2010. With their low cost of
Notable Canadian Acquisitions by Foreigners

Sheraton Centre Toronto Hotel Four Seasons Hotel Toronto Hyatt Regency Montréal InterContinental Montréal Hilton Vancouver Metrotown
1,377-rooms 380-rooms 605-rooms 357-rooms 283-rooms
Sold Apr. 2001 for $75M* Sold Apr. 2005 for $115M Sold Apr. 2007* & May 2008 Sold Jul. 2007 for $49M Sold Mar. 2007 & Oct. 2010
$108,900 per room $302,600 per room $58.5M, $97,900 per room $137,300 per room $41.2M & $44M
Buyer: American Buyer: Saudi Buyers: American & Buyer: Swedish $145,600 & $155,500 per room
*
50% leasehold interest acquired Swedish Buyer: Korean (both)
2007 sale details n/a
*

Ritz-Carlton Montréal Hotel Georgia Vancouver

229-rooms 313-rooms
Sold Dec. 2006 for $50M Sold Sep. 2005 for $62.8M*
$218,300 per room per room n/a
Buyer: American with Buyer: Indonesian
International Partners *
includes significant
*
currently being redeveloped as a 130- development potential
room hotel and 50 residences

Foreign Transaction Volume - 2001 to 2010

$5,000
Total Transaction Volume
4,000 Foreign Volume
MILLIONS

3,000

2,000

1,000

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

capital and aggressive underwriting, paired with an abundance
of private equity raised and now moving off the sidelines,
second tier US hotel companies are finding it difficult to
compete for transactions as the investment environment has
quickly accelerated, and are therefore looking outside of the
country for opportunities.
Foreign ownership will likely accelerate as quality, well
located assets, along with a reemergence of portfolio deals, are
expected to be brought to market in Canada. Sellers, who
were reluctant to put their properties up for sale 12 months
ago, are motivated by increasing buy-side demand that has
vastly improved the bid-ask gap. This is further supported by
investors underwriting a robust recovery in 2011-2013 that will
enhance both top- and bottom-line performance comparing
favourably to past levels.
The country’s healthy fiscal position and solid banking sector,
combined with employment hitting an all-time high and the
economy outperforming other industrialized nations with
amongst the highest GDP growth in 2010, all contribute to
a favourable investment climate. Canada also does not put
restrictions on the repatriation of capital or profit by foreign
investors and corporate tax rates are amongst the lowest of
industrialized nations.
As we enter a new era, Canada’s economic promise and
market dynamics should attract strong interest from foreign
capital sources seeking long-term growth with minimal risk.
The country’s compelling economic backbone, outlook for
continued strength in the Canadian dollar and enviable fiscal
position will offer security to investors.

Colliers International Hotels | _2

 2011 Canadian Hotel Investment Report
Transaction Analysis
Transaction activity in the hotel sector has perked
up since the cyclical lows of 2009. Positive
indicators include the rise in average transaction
size and the balancing of east/west asset pricing and
volume, supported by improving macro-economic
conditions, the return of credit and improvement
in hotel operating fundamentals.
Hotel investment activity demonstrated encouraging year-
over-year progress in 2010. Nationally, 86 hotels were reported
sold, with transaction volume coming in at approximately
$720 million, up 73% from the cyclical lows of 2009. While
the number of trades grew modestly (up from 74 in 2009),
the average deal size increased to $8.3 million, up from $5.6
million the year before, indicating the return of liquidity to
the sector. The growing transaction environment supported
average per room pricing of $83,000, an upward move of 27%
from the $65,500 recorded in 2009.
Approximately 31% of volume was attributed to 15 hotels
selling for redevelopment or conversion to alternate uses,
reflective of the evolving highest and best use of real estate
in markets where assets have reached their economic life as
hotels, or require significant repositioning for a more profitable
use. The year started with the sale of the Clarion Hotel &
Suites Centreville in Montréal ($17.1 million or $64,300 per
room) and Le Meridien King Edward Hotel in Toronto ($48.0
million or $161,000 per room), the former of which has since
been converted to rental apartments and the latter acquired to
rehabilitate three vacant floors into residential condominiums,
among other planned capital projects. This theme continued
in the second quarter with the Courtyard by Marriott in
downtown Montréal ($12.3 million or $68,000 per room) –
Transaction Analysis by Market Segment
Volume number of
($ millions) hotels
FULL SERVICE $493.4 21
LIMITED SERVICE $224.0 65
TOTAL $717.4 86
The majority of trades (76%) were limited
service, although comprised just 31% of
the year’s total transaction volume.
_ | 2011 Canadian Hotel Investment Report
3
conversion to student residences; Hotel Gouverneur Ste-Foy
($17.4 million or $54,400 per room) – sold for redevelopment;
and Pacific Palisades Hotel in Vancouver ($47.0 million or
$201,600 per room) – conversion to rental apartments.
The third quarter represented about one-third of the year’s
volume, with the largest transactions of 2010 occurring
in September, namely the Sheraton Fallsview Hotel &
Conference Centre ($70.0 million or $172,000 per room) and
Marriott Niagara Falls Hotel Fallsview & Spa ($76.4 million
or $176,900 per room). Also transacting that quarter was the
Crowne Plaza Chateau Lacombe in Edmonton selling for
$47.8 million ($155,700 per room) – the first time since 2005
that a single asset had sold in downtown Edmonton over the
$10 million threshold. Significant transactions in the fourth
quarter included the Hilton Vancouver Metrotown in Burnaby
which sold to a Korean based real estate company for $44.0
million ($155,500 per room) and the Four Points by Sheraton
Mississauga Meadowvale selling for $17.2 million ($83,900 per
room).
Full service hotel deal size averaged $23.5 million in value
compared to $3.4 million for limited service hotels and
comprised 69% and 31% of total volume respectively (full
service transactions represented only 19% of total volume
last year). A total of four strategic sales (definition on page
6) occurred during the year, making up 31% of the total
transaction volume and averaging $55 million in deal size
(no strategic trades occurred in 2009). In another context,
15 hotels sold over the $10 million threshold (one more than
2009) and represented 66% of the total transaction market
(vs. 52% in 2009). These key liquidity metrics provide solid
evidence of improved sentiment in the sector.
PRICE PER ROOM AVERAGE DEAL SIZE AVERAGE number
($) ($ MILLIONS) of keys
$111,000 $23.5 200
$55,000 $3.4 62
$83,000 $8.3 96
The average size of a full service hotel trade
increased 194% year-over-year, up from $8.0
million in 2009.
 Regional Analysis
Transaction Volume by Region
An improvement in geographic diversity of transactions
NUMBER Volume PRICE PER
MIX (%) occurred in 2010. Trade volume west of Ontario rose to
OF HOTELS ($ millions) ROOM ($)
comprise 41% of the national total (vs. 24% in 2009), recovering
WESTERN CANADA 30 294.6 41 $105,000
from a hangover that slowed transactions in 2009 as owners
BRITISH COLUMBIA 12 147.7 50 $131,000
were hesitant to sell into lower valuations after the recession
ALBERTA 11 122.6 42 $94,000
set in. This rising activity in the west was most pronounced
Saskatchewan 2 7.7 3 $89,000
in British Columbia (50% of the west’s volume) and Alberta
Manitoba 5 16.6 6 $49,000
(42%). The average price per room in Western Canada was
27% greater than the national average at $105,000, led by
Eastern Canada 56 422.8 59 $74,000
British Columbia ($131,000) and Alberta ($94,000) with an
Ontario 38 318.9 75 $80,000
average deal size of $9.8 million in Western Canada, which
Québec 17 102.7 24 $62,000 was 18% higher than the national average.
New Brunswick 1 1.2 1 $18,500
Results for Eastern Canada were not as robust with average
Total 86 717.4 100% $83,000 price per room 11% below the national average, at $74,000.
Ontario, with three-quarters of the east’s volume, ended
with average per room pricing of $80,000, while Québec was
lower at $62,000. The average deal size in the east was $7.5
million, 10% below the national average. There was only one
hotel transaction reported east of Québec in 2010, a region of
No Data Canada that has only seen 18 trades in the past five years.
Under No
$100Data
million
$100 million to $250
Under $100 million millio
n
$100 million to $250 million
Over $250 million
Over $250 million

Lenders acted to resolve troubled loans in 2010 with an

estimated 12% of the total hotel transaction market comprised Cap Rates for Traditional Hotels
of distressed sales. An uptick in lender-driven trades was
PERIOD CAP RATE TRENDS
predicted in the market as lenders were left with no choice
2010 - 2011F 8.0% - 9.0%
but to liquidate their security position on troubled hotel loans.
2008 - 2009 10.0% - 12.0%
Compared to the early 1990s, however, any recent rise in
2005 - 2007 10.0% - 13.0%
delinquency has not looked anything like the fire sales that
2003 - 2004 12.0% - 14.0%
occurred just under two decades ago.
2001 - 2002 10.0% - 12.0%
Hotel industry fundamentals were supported by a rebounding
economic landscape over the past 12 months. As other
countries struggled to move the unemployment needle,
Canadian employment reached an all time high in 2010. Capitalization Rates
What’s more, the value of the country’s real GDP output
Capitalization (“cap”) rates for traditional hotel sales decreased
reached $1.3 trillion making it the only G8 country to have
to generally range between 8.0% and 9.0% nationally,
regained all employment and economic activity lost during
approximately 200 to 300 basis points lower than the 2008
the recession. Canada’s federal government did not engage in
- 2009 average as increasingly aggressive buyers are applying
hefty stimulus measures in comparison to other industrialized
cap rates on NOI that reflect a view that operating results will
countries and increasing confidence by the international
improve. The spread between transactions in primary and
business community has distinguished the country from the
secondary markets typically averaged around 200 basis points.
likes of the United States, France and Japan.

Colliers International Hotels | _4

 2011 Canadian Hotel Investment Report
Buyer Profile
A cross-section of capital sources acquired assets in 2010.
Hotel investment companies and private investors were the
largest acquirers, each representing 34% of total transaction
volume. Private investors purchased 63 hotels, or 73% of the
hotels sold, while hotel investment companies purchased just
eight hotels or 9% of the total number of hotels sold. Real
estate companies represented 17% of volume with five trades,
for the most part acquiring for redevelopment/alternate use
plays. Government institutions selectively acquired to convert
to alternate use (for example student or social housing) – a
similar trend to last year. REITs were inactive except for
one purchase by a non-hotel REIT as a real estate play for
long-term redevelopment to alternate use. The only cross
border transaction to occur in 2010 was the Hilton Vancouver
Metrotown. There were four portfolio transactions recorded
Transaction Volume by Buyer Profile
2%
5%
7%
Hotel Investment Company
Private Investors
34%
Real Estate Company
17% High Net Worth
Institutional
REIT
34%
in 2010, including a five-property Super 8 portfolio in Québec,
and the two-property Niagara Falls Portfolio consisting of the
full service Marriott and Sheraton. There was a combination
of new private investors entering the hotel sector in 2010 and
existing owner-operators expanding their portfolio in markets
where they see upside potential and asset synergies with their
existing properties.
Financing Environment
Credit returned to the market after a deep freeze in 2009.
Historically low interest rates, supported by the 5-year
Government of Canada bond yield that ranged between 1.9%
and 2.5% in the last quarter of 2010 (all-time low of 1.5%
in January 2009), greatly improved liquidity once lenders
regained their appetite for hotel real estate in early 2010.
_ | 2011 Canadian Hotel Investment Report
5
As a result, debt for hotel acquisitions returned with proven
borrowers able to achieve attractive rates that averaged between
4% and 7%. Colliers’ Canadian Hotel Investment Sentiment
Survey released in January 2011 demonstrates this dichotomy
in the spread in rates with 38% of respondents feeling debt had
become more expensive in the past 12 months while about
Hotel investors are moving “off the sidelines” to
take advantage of cyclical buying opportunities.
the same amount responded the opposite; reflecting a market
where pricing is driven by the quality of the borrower, level of
debt and overall security. Lenders are increasingly focusing on
in-place cashflow, and a debt yield of 12% to 15% to determine
proceeds. In addition to debt service coverage ratios and loan-
to-value metrics, many lenders are taking proactive steps in
underwriting to perform proper upfront due diligence on
the local market, sponsor, brand and management as well as
growth potential in order to measure risk and size the loan
proceeds.
While acquisition financing has returned to the hotel sector,
debt for construction financing remains scarce and likely will
not return for another 12 to 18 months.
Operating Fundamentals and Supply Growth
Operating metrics bottomed in January 2010 and most major
markets have since trended consistently positive, helping
fuel the transaction market. According to PKF Consulting,
occupancy and rates improved in the largest downtown markets:
Vancouver, Toronto and Montréal, with RevPAR advances
strongest in Vancouver (+20%) with heavy lift attributed to
the Olympics related demand in the first quarter. Toronto
(+17%) and Montréal (+15%) bounced back with support from
local events including the G-8/20 meetings in Toronto in
Strongest Supply Growth Markets
LOCATION % CHANGE ‘09-’10
Richmond/Vancouver Airport 10.9%
Vancouver Downtown 5.3%
Montréal Airport 5.2%
Calgary 3.9%
Toronto Airport 3.4%
 2011 Forecast

June and return of the Grand Prix event to Montréal in July. • Strong demand for hotel investment properties will
On a national basis, RevPAR advances averaged 5.5% across intensify competition and more owners will place
the board, with occupancy rates up 3.4% and average rates up their properties on the market; transaction volume
2.1%. should increase 20-30% from 2010 levels.
• As larger assets come to market, private investors
National supply levels are estimated to have increased by will have to compete with capital laden REITs, private
approximately 1.5% in 2010. Notwithstanding the tempered equity funds and hotel investment companies.
level of supply, various cities exhibited above-average growth in • Foreign interest will grow over the next 12 months,
2010 including Richmond/Vancouver Airport and Downtown with international buyers attracted to Canada’s enviable
Vancouver (on the completion of hotel construction projects economic profile as a suitable environment to grow capital.
for the Olympics) and Montréal Airport, Calgary, and Toronto • Compression on cap rates will continue with investors
Airport. Supply is expected to remain constrained in the near- underwriting a robust recovery and attributing values
term, which should further assist in the recovery of RevPAR more in line with stabilized operating results.
across Canada. • Financing availability, along with historically low interest
rates will facilitate growth in the average transaction size.
• Distressed property sales will taper as lenders
have largely acted on bad loans.

Canadian Hotel Investment Trends

Volume Percent Number percent price per percent

Year
($ millions) Change of hotels change room ($) change

TOTAL TRANSACTION VOLUME

2010 $717 73.3% 86 16.2% $83,000 26.7%
2009 414 -61.4 74 -19.6 65,500 -43.8
2008 1,072 -76.6 92 -45.2 116,500 -24.4
2007 4,580 55.3 168 19.1 154,200 -4.8
2006 1 2,950 72.9 141 35.6 162,000 48.9
2005 2 1,706 373.9 104 108.0 108,800 62.4
2004 3 360 -23.2 50 -2.0 67,000 7.7
2003 469 -13.1 51 4.1 62,200 -24.0
2002 4 540 -15.9 49 16.7 81,800 -26.5
2001 642 44.9 42 -14.3 111,300 37.6
2000 443 - 49 - 80,900 -

TRANSACTION VOLUME EXCLUDING STRATEGIC SALES*

2010 $498 20.2% 82 10.8% $69,000 5.3%
2009 414 -27.5 74 -8.6 65,500 -22.3
2008 571 -42.1 81 -19.0 84,300 -13.1
2007 986 -9.7 100 -23.7 97,000 26.0
2006 1 1,092 58.7 131 44.0 77,000 9.7
2005 2 688 100.6 91 85.7 70,200 9.9
2004 3 343 -10.7 49 0.0 63,900 4.2
2003 384 - 49 - 61,300 -

* Strategic transactions typically involve at least two of the following conditions: 1) a pricing premium is paid; 2) the asset is located in a high barrier to entry market or within a geographic hub of an owner’s
principal business; or 3) the opportunity allows for an extension of the company’s brand or portfolio.

1
Excludes the sale of eight hotels owned by Westmont/Whitehall Partnership to Westmont/Kimco for $100 million as well as three hotels owned by Pacrim Hospitality to Holloway Lodging REIT for $28.5 million.
2
Excludes the sale of seven hotels owned by the Westmont/Whitehall Patrnership to InnVest REIT for $85.3 million.
3
Excludes the sale of nine hotels owned by Westmont/Whitehall Partnership to InnVest REIT for a total of $111 million.
4
Excludes the sale of 114 hotels owned by the Westmont/Whitehall Partnership to InnVest REIT for approximately $865 million.

Note: Trends are based on hotel transactions of at least $1 million.

Source: Colliers International Hotels

Colliers International Hotels | _6

 2011 Canadian Hotel Investment Report

Colliers Hotel Value Index

The Colliers Hotel Value Index monitors the
annual rate of change in hotel values, based on the
operating performance of a market and industry
trends, as well as the return expectations of
investors.
Nationally, hotel values grew an estimated 3.0% in 2010, led
by Toronto Downtown (6.3%), Regina/Saskatoon (5.4%) and
Montréal Downtown (5.2%). The overall improvement in the
macro-economy should push national hotel values up by about
5.3% in 2011, primarily represented by major urban cities
including Vancouver Downtown (9.0%), Toronto Downtown
(8.3%) and Montréal Downtown (7.0%).
The Index illustrates the volatility in hotel values due to shifts
in supply and demand, top-line operating performance and
investor attitudes. For select markets, the high and low values
are highlighted for comparison purposes. Canada’s major
urban centres, including Toronto Downtown and Montréal
Downtown have seen the most dramatic shifts, given their
size, influence and underlying dependence on the strength
or weakness of the macroeconomic environment. Many of
Canada’s secondary markets, such as Regina/Saskatoon and
Winnipeg, saw only moderate and steady ebbs and flows over
the decade, a reflection of their stable local economies that
are not impacted as much by global events and enjoy relative
consistency in market fundamentals.

Presented below is a long-run visual for each of the 17 markets

covered in the Colliers Hotel Value Index.

Hotel Value Index Performance Since 2000

550 Toronto Downtown
>

Montréal Downtown
>

500
>

450 Canadian National Average

>

Victoria
Vancouver Downtown
400
Vancouver Airport
Whistler
Calgary
350
Edmonton
Alberta Mountain Resorts
>

300 Regina/Saskatoon
Toronto Airport West
Winnipeg
Canadian National Average
>

Toronto North/Parklands
>

250 Toronto Downtown

Regina/Saskatoon
Toronto Airport West
Niagara Falls
200
Ottawa
>

Montreal Downtown
Winnipeg
150 Montreal Airport

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F

Base Year 1992=100

_ | 2011 Canadian Hotel Investment Report

7
Colliers Hotel Value Index 2000-2011F

Market Area 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010E 2011F

Base Year 1992=100

CPI Index1
Annual % Change 2.7% 2.5% 2.2% 2.8% 1.8% 2.2% 2.0% 2.1% 2.4% 0.3% 2.2% 2.7%
Canadian National Avg. 205.5 199.4 196.0 183.4 193.3 214.4 240.8 271.4 267.7 248.1 255.6 269.3
% Change 1.6% -3.0% -1.7% -6.4% 5.4% 11.0% 12.3% 12.7% -1.4% -7.3% 3.0% 5.3%
Victoria 149.4 136.1 140.5 141.6 148.0 159.5 172.9 188.9 178.7 156.7 159.8 166.5
% Change -6.8% -8.9% 3.2% 0.8% 4.5% 7.8% 8.4% 9.2% -5.4% -12.3% 2.0% 4.2%
Vancouver Downtown 155.1 144.7 147.0 149.9 161.6 184.6 218.2 263.3 268.3 246.3 255.7 278.7
% Change -4.3% -6.7% 1.6% 2.0% 7.8% 14.2% 18.2% 20.7% 1.9% -8.2% 3.8% 9.0%
Vancouver Airport 90.9 83.4 80.6 78.2 81.0 87.0 95.2 104.8 105.8 98.2 100.1 105.9
% Change -17.5% -8.2% -3.4% -3.0% 3.6% 7.4% 9.4% 10.1% 1.0% -7.2% 1.9% 5.8%
Whistler 140.2 143.6 148.1 149.7 153.8 164.2 177.7 191.9 184.2 166.9 167.2 170.4
% Change 6.3% 2.4% 3.1% 1.1% 2.7% 6.8% 8.2% 8.0% -4.0% -9.4% 0.2% 1.9%
Calgary 173.0 167.6 169.7 168.0 176.9 201.7 234.3 274.2 282.7 259.2 261.3 271.0
% Change -2.5% -3.1% 1.3% -1.0% 5.3% 14.0% 16.2% 17.0% 3.1% -8.3% 0.8% 3.7%
Edmonton 140.9 145.5 151.7 147.1 152.0 165.5 186.9 209.3 213.1 198.4 204.7 218.4
% Change 1.0% 3.3% 4.2% -3.0% 3.3% 8.9% 12.9% 12.0% 1.8% -6.9% 3.2% 6.7%
Alberta Mountain Resorts 183.2 188.0 197.5 197.5 201.5 220.0 247.0 284.6 277.8 252.5 250.0 255.0
% Change 3.2% 2.6% 5.1% 0.0% 2.0% 9.2% 12.3% 15.2% -2.4% -9.1% -1.0% 2.0%
Regina/Saskatoon 152.0 149.3 149.1 154.2 156.8 166.5 178.3 193.3 205.3 212.5 224.0 237.6
% Change 0.0% -1.8% -0.1% 3.4% 1.7% 6.2% 7.1% 8.4% 6.2% 3.5% 5.4% 6.1%
Winnipeg 141.3 133.7 127.0 122.2 123.9 128.6 134.3 141.7 146.3 148.7 154.6 163.3
% Change -9.2% -5.4% -5.0% -3.8% 1.4% 3.8% 4.4% 5.5% 3.3% 1.6% 4.0% 5.6%
Toronto North/East 279.3 254.7 223.1 183.8 199.5 225.8 258.1 289.0 282.1 257.0 263.2 278.2
% Change 6.9% -8.8% -12.4% -17.6% 8.5% 13.2% 14.3% 12.0% -2.4% -8.9% 2.4% 5.7%
Toronto Downtown 325.9 312.2 305.3 274.8 309.4 367.2 437.4 536.2 530.9 476.7 506.8 548.8
% Change 1.2% -4.2% -2.2% -10.0% 12.6% 18.7% 19.1% 22.6% -1.0% -10.2% 6.3% 8.3%
Toronto Airport West 300.7 255.0 221.6 181.7 196.6 228.3 267.8 316.0 310.6 264.9 276.8 294.6
% Change 3.0% -15.2% -13.1% -18.0% 8.2% 16.1% 17.3% 18.0% -1.7% -14.7% 4.5% 6.4%
Niagara Falls 199.5 198.5 202.7 168.8 189.3 214.8 245.3 280.4 274.0 254.5 256.8 262.5
% Change 2.6% -0.5% 2.1% -16.7% 12.1% 13.5% 14.2% 14.3% -2.3% -7.1% 0.9% 2.2%
Ottawa 207.5 210.8 197.8 198.0 202.2 219.7 242.8 267.1 270.8 265.4 274.7 287.3
% Change 9.4% 1.6% -6.2% 0.1% 2.1% 8.7% 10.5% 10.0% 1.4% -2.0% 3.5% 4.6%
Montréal Downtown 295.5 307.9 324.2 328.1 345.5 392.8 450.2 504.2 477.0 450.2 473.7 506.8
% Change 6.7% 4.2% 5.3% 1.2% 5.3% 13.7% 14.6% 12.0% -5.4% -5.6% 5.2% 7.0%
Montréal Airport 248.2 261.6 266.3 266.8 275.1 293.8 307.0 319.3 293.1 267.6 271.4 279.8
% Change 8.3% 5.4% 1.8% 0.2% 3.1% 6.8% 4.5% 4.0% -8.2% -8.7% 1.4% 3.1%
Halifax/Dartmouth 197.5 198.3 201.7 208.0 212.5 225.1 239.7 249.3 249.8 242.5 245.2 252.6
% Change 2.4% 0.4% 1.7% 3.1% 2.2% 5.9% 6.5% 4.0% 0.2% -2.9% 1.1% 3.0%

The Hotel Value Index measures the rate of change in hotel values on a year over year basis. Rates of change are influenced by investor yield expectations, market performance, changes to supply and the overall
economic health of the market.

2011F = Forecast
1
CPI Index: Conference Board of Canada

Source: Colliers International Hotels

Colliers International Hotels | _8

 2011 Canadian Hotel Investment Report
2010 Canadian Hotel Transactions

Price/ Cap Rate

Name Location Rooms Date Price ($)
Room ($) (%)
Hotel Royal William Québec City, QC 44 Jan $4,100,000 $93,200 n/a
Quality Champlain Hotel Waterfront Orillia, ON 57 Jan $2,825,000 $49,600 n/a
Super 8 Hotel Swift Current Swift Current, SK 63 Jan $6,500,000 $103,200 13.2
Canada Motel Greenfield Park, QC 52 Feb $3,050,000 $58,700 n/a
Clarion Hotel & Suites Centreville1 Montréal, QC 266 Feb $17,100,000 $64,300 n/a
Riverbend Inn & Vineyard2 ∆ Niagara-on-the-Lake, ON 21 Feb $4,175,000 n/a 6.6
7389 & 7429 Lundy’s Lane (formerly Ramada Niagara Falls)3 ∆ Niagara Falls, ON 202 Mar $2,500,000 $12,400 n/a
Celebrity Hotel & Suites Downtown Montréal Montréal, QC 26 Mar $1,600,000 $61,500 n/a
Gloucester Square Inn Toronto, ON 22 Mar $4,200,000 $190,900 n/a
Hotel of the Rockies4 Canmore, AB 99 Mar $8,150,000 $82,300 n/a
Le Meridien King Edward Hotel*5 Toronto, ON 298 Mar $48,000,000 $161,100 2.6
Maple Ridge Travelodge Maple Ridge, BC 58 Mar $3,650,000 $62,900 n/a
Nita Lake Lodge6 ∆ Whistler, BC 51 Mar $19,000,000 n/a n/a
Okotoks Willingdon Inn Okotoks, AB 15 Mar $1,300,000 $86,700 n/a
Quality Niagara Falls Hotel and Conference Centre Niagara Falls, ON 144 Mar $7,500,000 $52,100 5.3
The York Hotel7 Edmonton, AB 45 Mar $3,039,000 $67,500 7.0
Burrard Inn8 Vancouver, BC 72 Apr $8,200,000 $113,900 3.0
Carriage House Motel Niagara Falls, ON 122 Apr $2,500,000 $20,500 n/a
Comfort Inn Sturgeon Falls Sturgeon Falls, ON 60 Apr $4,000,000 $66,700 n/a
Courtyard by Marriott Montréal9 Montréal, QC 181 Apr $12,300,000 $68,000 n/a
Hotel Gouverneur10 Ste Foy, QC 320 Apr $17,400,000 $54,400 n/a
Innoka Resort11 ∆ Canmore, AB 20 Apr $3,000,000 $150,000 n/a
Lantern Inn & Suites Port Hope, ON 16 Apr $1,300,000 $81,300 n/a
Montréal Hotel Gault Montréal, QC 30 Apr $4,200,000 $140,000 n/a
Traveller's Hotel Parry Sound, ON 20 Apr $1,485,000 $74,300 n/a
Travelodge Toronto North12 Toronto, ON 183 Apr $5,500,000 $30,100 n/a
Motel Rio13 Abbotsford, BC 23 May $1,935,000 $84,100 8.5
Ocean Village Beach Resort14 Tofino, BC 51 May $7,400,000 $145,100 10.0
Pacific Palisades Hotel15 Vancouver, BC 233 May $46,975,000 $201,600 n/a
Super 8 Hotel Lachenaie/Terrebonne16 Terrebonne, QC 81 May $7,300,000 $90,100 n/a
Super 8 Hotel Sainte Agathe16 Sainte-Agathe, QC 74 May $4,219,600 $57,000 n/a
Super 8 Hotel St. Jerome16 St. Jerome, QC 81 May $5,201,000 $64,200 n/a
Super 8 Hotel Ste-Foy16 Sainte-Foy, QC 79 May $5,075,000 $64,200 n/a
Super 8 Hotel Trois Rivieres16 Trois-Rivieres, QC 78 May $5,400,000 $69,200 n/a
Travelodge Silver Bridge Inn Duncan, BC 33 May $6,300,000 $190,900 11.0
8068 & 8128 Mountain Road (former Regency Motor Hotel) ∆ Niagara Falls, ON 23 Jun $1,200,000 $52,200 n/a
Banff Rocky Mountain House Banff, AB 171 Jun Undisclosed n/a n/a
Best Western Country Squire Resort Gananoque, ON 68 Jun $3,500,000 $51,500 n/a
Best Western Europa Downtown17 Montréal, QC 174 Jun $10,000,000 $115,000 n/a
Holiday Inn Express & Suites Woodstock18 ∆ Woodstock, ON 87 Jun Undisclosed n/a n/a
Solara Canmore Resort*19 ∆ Canmore, AB 106 Jun $25,500,000 n/a n/a
Super 8 Athabasca Athabasca, AB 48 Jun $4,900,000 $102,100 11.5
The Advantage Motel Edmonton, AB 50 Jun $3,000,000 $60,000 n/a
The Pointe Inn Calgary, AB 150 Jun $6,750,000 $45,000 n/a
Yorkland Hotel20 ∆ Toronto, ON 290 Jun $12,200,000 $42,100 n/a
Comfort Inn Windsor21 Windsor, ON 100 Jul $6,031,000 $60,300 3.3
Days Inn Winnipeg22 Winnipeg, MB 66 Jul $6,300,000 $95,500 n/a
Fairway Motor Inn Niagara Falls, ON 49 Jul $1,505,000 $30,700 n/a
Forest Golf & Country Hotel23 Forest, ON 75 Jul $1,650,000 $22,000 n/a
The Empress Hotel Chilliwack, BC 50 Jul $1,270,000 $25,400 n/a
Auberge du Mont Orford24 Magog, QC 22 Aug $1,400,000 $63,600 n/a
Crowne Plaza Chateau Lacombe Edmonton25 Edmonton, AB 307 Aug $47,800,000 $155,700 5.7
Howard Johnson Kemptville Kemptville, ON 47 Aug $1,640,000 $34,900 n/a
Park Inn & Suites Miramichi26 Miramichi, NB 65 Aug $1,200,000 $18,500 n/a

_ | 2011 Canadian Hotel Investment Report

9
 Price/ Cap Rate
Name Location Rooms Date Price ($)
Room ($) (%)
Parkway Motel London, ON 29 Aug $1,400,000 $48,000 n/a
Town and Country Motel Woodstock, ON 20 Aug $1,070,000 $53,500 n/a
Travelodge Barrie Barrie, ON 96 Aug $3,800,000 $39,600 5.7
Days Inn Riviere-du-Loup, QC 42 Sep $1,950,000 $46,400 n/a
Hotel Levesque Riviere-du-Loup, QC 83 Sep $1,350,000 $16,300 n/a
Kawartha Lakes Inn Lindsay, ON 38 Sep $1,992,500 $52,400 n/a
Lindsay Inn Lindsay, ON 44 Sep $1,500,000 $34,100 n/a
Marriott Niagara Falls Hotel Fallsview & Spa*27 Niagara Falls, ON 432 Sep $76,400,000 $176,900 7.9
Ramada Guildford Surrey Hotel (now Coast Surrey Guildford Hotel) Surrey, BC 77 Sep Undisclosed n/a n/a
Sheraton Fallsview Hotel & Conference Centre*27 Niagara Falls, ON 407 Sep $70,000,000 $172,000 n/a
Town and Country Motel Burlington, ON 30 Sep $2,130,000 $71,000 n/a
Travelodge Amabassador Bridge Windsor
Windsor, ON 134 Sep $2,600,000 $19,400 n/a
(now Comfort Inn & Suites Ambassador Bridge)
Wander Inn Esterhazy , SK 24 Sep $1,240,000 $51,700 15.6
Best Western St. Jacobs Country Inn28 Waterloo, ON 118 Oct Undisclosed n/a n/a
Days Inn & Suites Strathmore
Strathmore, AB 124 Oct $8,000,000 $64,500 n/a
(Previously Holiday Inn Express & Suites Strathmore)
Destination Inn & Suites 28
Waterloo, ON 104 Oct Undisclosed n/a n/a
Hilton Vancouver Metrotown Burnaby, BC 283 Oct $44,000,000 $155,500 8.5
Minaki on the River ∆ Kenora, ON 120 Oct $1,200,000 $10,000 n/a
Niagara Inn Niagara Falls, ON 40 Oct $1,120,000 $28,000 n/a
Superior Inn & Conference Centre Beausejour, MB 36 Oct $1,200,000 $33,300 n/a
Airliner Hotel ∆ Winnipeg, MB 152 Nov $4,900,000 $32,200 n/a
Lionheads Lakefront Resort29 Georgina, ON 88 Nov $3,100,000 $35,200 n/a
Orangeville Inn30 Orangeville, ON 36 Nov $3,200,000 $88,900 n/a
Sleep Inn Oshawa, ON 25 Nov $1,690,000 $67,600 n/a
The Elora Mill Inn ∆ Elora, ON 32 Nov $1,850,000 $57,800 n/a
Traveller's Inn (Gorge Road)31 ∆ Victoria, BC 64 Nov $3,362,600 $52,500 n/a
Traveller's Inn (Queens Avenue)31 ∆ Victoria, BC 36 Nov $1,887,400 $52,400 n/a
Chalet Hotel Winnipeg Winnipeg, MB 22 Dec $1,650,000 n/a n/a
Four Points by Sheraton Mississauga Meadowvale Mississauga, ON 205 Dec $17,200,000 $83,900 7.0
Lincoln Motor Hotel Winnipeg, MB 26 Dec $2,500,000 n/a n/a
Motel Rimouski Rimouski, QC 27 Dec $1,100,000 $40,700 n/a
Viamede Resort and Conference Centre32 Kawarthas, ON 52 Dec $2,835,000 $54,500 n/a

Footnotes:
1
Purchased for conversion to rental apartments. 19
The sale included 106 units that were unsold from the 214 unit strata-titled
2
The property is located on 16.7 acres and includes a 12 acre vineyard and restaurant. development. The Property includes approximately 38,000 SF of “warm” shell amenity
3
Formerly the 129-room Ramada Coral Inn Resort (Closed Q4, 2008) and 73-room space, which is being used to construct a spa, pools, restaurant among other amenities.
Ramada Suites Niagara & Conference Centre (closed Q1 2009). 20
At the time of sale, 96 units were out of inventory.
4
Included excess land. 21
The property sold by expropriation from the Ontario provincial government.
5
Three vacant floors will be converted to residential uses. 22
Includes two acres of land and has since been closed for redevelopment.
6
Includes 51 of 77 strata lots, train station and land for additional strata lots. Price per 23
Includes a 27 hole golf course.
room not applicable. 24
Purchased for alternate use.
7
Purchased by the City of Edmonton for urban renewal. 25
The Vendor will continue to manage the hotel in the short-term. Alternate use
8
The property was purchased for future re-development. anticipated.
9
Purchased for conversion to student residences. 26
The transaction was structured under a lease agreement with a guaranteed buy-out.
10
The site includes significant excess density. The purchaser plans on developing 27
Part of a two property portfolio. The allocation of price may not be accurate.
299,000 SF of office space. 28
Share sale. Part of a two property portfolio.
11
The Property is improved by a partially completed townhouse complex. 29
The property was vacant at the time of sale. New ownership intends to refurbish and
12
The transaction was structured under a lease agreement with a guaranteed buy-out. reopen as a resort facility.
13
Sold for conversion to non-profit housing. 30
Improvements will be torn down for redevelopment to alternate use.
14
The Resort includes 51 units within 40 strata lots. The Purchaser plans to add 31
Converting to affordable housing. Part of a two property portfolio.
additional units. 32
Includes 33 rooms and 19 cottages.
15
The hotel was previously operated by Kimpton Hotels and was shut down effective April
2010. Converting to rental apartments. ∆
Distress sale sold under power of sale or receivership.
16
Part of a five-property portfolio sale. * Strategic sale.
17
50% share sale.
18
Transfer of security on a new hotel under construction. Source: Colliers International Hotels

Colliers International Hotels | _10

Colliers international hotels

Alam Pirani
+1 416 643 3414
alam.pirani@colliers.com

Tom Andrews
+1 604 661 0846
tom.andrews@colliers.com

Robin McLuskie
+1 416 643 3456
robin.mcluskie@colliers.com

Russell Beaudry
+1 416 643 3761
russell.beaudry@colliers.com

Amy Kwan
+1 416 643 3497
amy.kwan@colliers.com

One Queen Street East

Suite 2200
Toronto, ON M5C 2Z2
Tel +1 416 777 2200
FAX +1 416 777 9232

200 Granville Street

Suite 1900
Vancouver, BC V6C 2R6
Tel +1 604 681 4111
FAX +1 604 661 0849

www.colliershotels.com

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