NO REST IN THE WEST

OPERATING PERFORMANCE

& TRANSACTION HIGHLIGHTS

FOR WESTERN CANADACARRIE

RUSSELL HVS

SCOTT

DUFFCBRE Hotels

Costa Rican Banana Crop Yield & SK RevPAR

Canada

Source: HVS/STR

RevPAR Change

2016 5.0%

2017F 7.6%

2018F 4.8%

2019F 2.8%

$74

$104

$112

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

RevPAR Growth – YTD 2017

+10.2%+3.7%

-5.9% +10.5%

Canada

RevPAR +7.4% (5.0%)

Source: STR

Supply Growth – YTD 2017

+0.4%+2.7%

+2.3% -0.1%

Canada

RevPAR +7.4% (5.0%)

Supply +0.8% (0.9%)

Source: STR

Pace of Supply Growth is Stable

(100)

400

900

1,400

1,900

2,400

2,900

3,400

3,900

4,400

In Construction Final Planning Planning

Luxury

Upper Upscale

Upscale

Upper Midscale

Economy

Unaffiliated

9,847 Rooms

68 Hotels

7,172 Rooms

60 Hotels

6,077 Rooms

51 Hotels

Source: STR

Growth in Supply has

shifted East

54%46%

West East

1%

z

24% z

Source: STR

Demand Growth – YTD 2017

+3.1%+4.0%

+1.1% +9.4%

Canada

RevPAR +7.4% (5.0%)

Supply +0.8% (0.9%)

Demand +2.9% (1.5%)

Source: STR

ADR Growth – YTD 2017

+7.3%+2.7%

-4.8% +0.9%

Canada

RevPAR +7.4% (5.0%)

Supply +0.8% (0.9%)

Demand +2.9% (1.5%)

ADR +5.2% (4.3%)

Source: STR

Canada / US Comparison – YTD 2017

Canada

RevPAR +7.4%

Supply +0.8%

Demand +2.9%

ADR +5.2%

US

RevPAR +2.6%

Supply +1.8%

Demand +2.5%

ADR +1.8%

67.8%CAD$159

67.4%USD$127

Source: STR

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD Oct2017

Single Asset Transactions Portfolio and Entity Level Transactions

RevPAR Growth GDP Growth (Conference Board)

Source: CBRE Hotels; Conference Board of Canada

Hotel Investment Cycle

CAP RATE SURVEY Q3 – WESTERN CANADA (AND BEYOND)

Source: CBRE Limited

Source: CBRE Hotels

Geographic Distribution of Transaction

Volume

Source: CBRE Hotels

Deal Size by Region YTD October 2017

52% of Western Canada Transactions Had 50 Rooms or Less,

Compared To Only 30% in Central Canada

Average Deal Size Western YTD 2017

72 rooms / $14M ($194,400 / key)

Average Deal Size Western YTD 2016

93 rooms / $14M ($150,500 / key)

Average Deal Size Central YTD 2017

120 rooms / $21M ($175,400 / key)

Average Deal Size Central YTD 2016

120 rooms / $15M ($125,000 / key)

Source: CBRE Hotels

Buyer Profile

$71

$86 $88

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

WinnipegOutlook

• Exceptional economic

growth in 2017

• Economic slowdown

looms in 2018

• Benefiting from new

convention facilities

• New supply on the

horizon for 2019

• No major trades

RevPAR Change

2016 4.2%

2017F 8.0%

2018F 2.2%

2019F -0.4%

Source: HVS/ STR

$95

$105

$75 $75

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

Saskatoon

Outlook

• Market appears to have hit

bottom in 2017

• Positive economic signs for 2018

• New supply to come in 2019

• No major trades

RevPAR Change

2016 -14.8%

2017F -5.3%

2018F 4.0%

2019F -2.9%

Source: HVS/ STR

$79

$99

$67

$72

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

Regina

Outlook

• Nowhere to go but up

• Infrastructure spending and an

uptick in resource prices

improving economic conditions

• Supply pipeline has now cooled

• No major trades

RevPAR Change

2016 -5.8%

2017F -9.7%

2018F 4.0%

2019F 4.0%

Source: HVS/ STR

$80

$93

$70

$73

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

Edmonton

Outlook

• Improvement in the resource

sector should contribute to

demand growth in 2018

• Most significant new supply

growth in the West expected to

continue in 2017 (5.8%), 2018

(2.2%) and 2019 (3.6%)

RevPAR Change

2016 -11.1%

2017F -5.5%

2018F 2.8%

2019F 1.5%

Source: HVS/ STR

EdmontonNew

• Hyatt Place Downtown (255)

• Holiday Inn Express (137)

• Candlewood Suites (77)

• TownePlace Suites (121)

• Hyatt Place (161)

• Wyndham Garden Inn Edmonton

Airport (150)

• Four Points Sherwood Park (135)

Under Construction

• Home2 Suites (120)

• Element Edmonton West (80)

• Four Points Edmonton West (141)

• Holiday Inn South (127)

• Fairfield Suites (135)

• TownePlace Suites Sherwood

Park (105)

Planned

• JW Marriott (346)

• Holiday Inn Express (104)

• Tru by Hilton (92)

• Westin Edmonton Gateway (200)

1,036 rooms 708 rooms 742 rooms

Source: HVS

Edmonton

Matrix Hotel / Metterra Hotel/

Varscona Hotel

Rooms:

Buyer:

Seller:

Price:

Per Room:

Cap Rate:

371

DSDL Investment Canada

Westcorp Inc.

$62.4 million

$173,000

~7.5%

Source: HVS

Edmonton

Holiday Inn Express Sherwood Park

Rooms:

Buyer:

Seller:

Price:

Per Room:

Cap Rate:

90

P&P Park Hotels

Temple Hotels

$9,600,000

$107,000

~5%

Source: HVS

$96

$84

$93

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

CalgaryOutlook

• Robust demand growth in 2017

signals the turn in the cycle

• Fastest growing economy in

Canada in 2017

• Strong demand growth expected

to off-set a number of new hotels

under construction

• Supply growth forecast at 3.5% in

2017, 4.4% in 2018, 4.5% in 2019

RevPAR Change

2016 -15.1%

2017F 0.7%

2018F 3.5%

2019F 5.9%

Source: HVS/ STR

CalgaryNew

• Hilton Garden Inn East Village

(198)

• Homewood Suites East Village

(122)

• Marriott Calgary Airport (318)

Under Construction

• ALT East Village (103)

• Element Calgary Airport (142)

• Holiday Inn Airport North (120)

• Holiday Inn Deerfoot (153)

• Westin Calgary Airport (250)

• Hawthorne Suites (112)

• Hyatt Place Calgary Airport (127)

• Residence Inn Downtown (390)

Planned

• Autograph Downtown (120)

• Courtyard Downtown (180)

• Fairfield Calgary North (100)

• ALT University (127)

• Hyatt Place (150)

638 rooms 1,397 rooms 677 rooms

Source: HVS

Calgary

Hilton Garden Inn Calgary Airport

Rooms:

Buyer:

Seller:

Price:

Per Room:

Cap Rate:

135

1984463 Alberta Ltd. (Jason So)

Goldencare Holdings Ltd.

$20,250,000

$150,000

5.9%

Source: HVS

$98

$180

$196

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

Banff

Outlook

• One of the top growing markets in Canada –

8th year of an upswing

• Benefitting from low Canadian dollar and

desirability of Canada as a leisure and

meeting destination

• Canada 150 was a boost for the market

• Future ADR growth expected to moderate

• No new supply

RevPAR Change

2016 12.9%

2017F 12.4%

2018F 5.0%

2019F 4.0%

Source: HVS/ STR

$55

$81

$87

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

Thompson / OkanaganOutlook

• Demand continues to grow from

a healthy regional economy and

tourism

• Supply growth is in check

• Rates have had two strong years

of growth

• Outlook for growth potential is

positive

RevPAR Change

2016 9.6%

2017F 7.4%

2018F 4.8%

2019F 3.0%

Source: HVS/ STR

Kelowna

Best Western Plus Kelowna Hotel & Suites

Rooms:

Buyer:

Seller:

Price:

Per Room:

Cap Rate:

176

SDP Lodging (Pomeroy Group

Salco Mgmt Ltd.

$23,165,000

$132,000

8% (on adjusted NOI)

Source: HVS

$105

$185

$205

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

Vancouver DowntownOutlook

• Market continues to be strong in 2017 with

no signs of a correction

• 2018 is a stronger convention year

• Risks – economic challenges with

softwood lumber issues on the radar, and

unlikely to see LNG projects proceeding

• More talk about supply growth in mixed

use projects

• Cap rates are at an all time low

RevPAR Change

2016 11.5%

2017F 7.6%

2018F 6.0%

2019F 4.3%

Source: HVS/ STR

Downtown Vancouver

Rosewood Hotel Georgia

Rooms:

Buyer:

Seller:

Price:

Per Room:

Cap Rate:

156

Pacific Reach Properties

Delta Land

$145,000,000

$929,500

4.2%

Source: HVS

Downtown Vancouver

Robsonstrasse Hotel & Suites

Rooms:

Price:

Per Room:

48

$24,780,000

$516,250

Source: HVS

$75

$128

$142

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

Vancouver Airport

Outlook

• ADR increases driving growth in 2017

• Airport traffic up 8% YTD

• No new hotels under construction RevPAR Change

2016 13.1%

2017F 13.9%

2018F 8.6%

2019F 2.7%

Source: HVS/ STR

Langley / Surrey

Ramada Langley / Surrey

Rooms:

Buyer:

Seller:

Price:

Per Room:

Cap Rate:

100

Private Investor

Johnrose Hospitality

$14,900,000

$179,500

5.4%

Source: HVS

$79

$108

$117

$132

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

F

20

18

F

20

19

F

Victoria

Outlook

• Most aggressive RevPAR growth

projections in Western Canada

• Harbour Towers closing – 180 rooms –

November 2017

• Strong US/International Demand

• Improved product with the $60M

renovation to The Fairmont Empress

RevPAR Change

2016 11.5%

2017F 8.1%

2018F 8.7%

2019F 4.0%

Source: HVS/ STR

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