Issues Arising In Hotel Purchase And Sale Transactions

Copyright 2008, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Hospitality & Tourism, May 2008

2007 was a banner year for hotel transactions in Canada, with record sales and values. Blakes was involved in three of the biggest, including Legacy's C$2.5-billion sale to Cadim, Westmont and InnVest; bcIMC's C$1.2-billion purchase of CHIP; and as Alberta counsel on Holloway's C$215-million purchase of 10 properties from Pomeroy. With concerns over the global economy and tighter credit conditions, 2008 may not keep up that pace, but the industry remains solid and transactions will continue.

Hotel transactions involve a transfer of real property, as well as an operating business. The process can be quite different depending on the parties involved, their motivations and their negotiating styles. The parties may or may not be represented by advisers, be they hotel brokers or