One of Montréal's best-known upscale hotel properties, Omni Hotels & Resorts' 299-room Hotel Omni Mont-Royal Montréal in the Golden Square Mile district, is being offered for sale.

Located at 1050 Sherbrooke St. W., it's expected to appeal to investors looking to acquire a heritage hotel, or seeking a luxury residential or mixed-use conversion opportunity in a prime downtown Montréal location.

“There's no distress or motivation outside of the recycling of capital and how they look at their portfolio,” executive vice-president of CBRE’s national hotels investment sales Luke Scheer said.

He spoke to RENX in an interview that also included Scott Speirs, vice-chairman and practice lead for CBRE Montreal’s national investment team.

The hotel’s attractive location in the Golden Square Mile district puts it close to restaurants, museums, galleries, boutiques, consulates, corporate headquarters and McGill University.

What the hotel offers

The 32-storey, 323,790-square-foot hotel, which opened in 1976, sits on 0.41 acres of land at the intersection of Sherbrooke and Peel streets. 

In addition to 272 guest rooms, seven parlour rooms and 20 suites, it offers:

• 14 meeting rooms encompassing 23,000 square feet, including the 4,410-square-foot Salon des Saisons ballroom;
• the 1,500-square-foot Le Petit Opus Café;
• the 1,057-square-foot Alice Bar;
• a 2,400-square-foot fitness centre;
• the 3,600-square-foot EQLIB Medispa;
• an outdoor swimming pool;
• a business centre; and
• off-site valet parking.

The property initially opened 49 years ago as L’Hotel Quatre Saisons. It was one of Montreal’s premier hotels and established a reputation for luxury and sophistication that attracted celebrity guests including Celine Dion, Luciano Pavarotti and Madonna.

The hotel was sold in 1999 to Omni, marking the brand’s entry into the Canadian market, which was followed by significant investments in the property.

“There's an opportunity, through capital expenditures, to reposition the hotel,” Scheer observed. “There's been renovations over time on different components, but it would benefit from a more comprehensive renovation.”

By enacting a comprehensive renovation program of all guest-facing areas, a new owner could restore the property and position it to Omni brand standards or align it with another lifestyle or luxury brand and enable it to compete with the best hotels in the market.

The Montreal hotel market

“The Montreal hotel market is performing well,” Scheer said. “Occupancy levels remain strong and average daily rates continue to rise. We anticipate strong RevPAR (revenue per available room) performance through the balance of the year throughout the city.”

Scheer said there are no other Montreal hotels for sale at the moment, which should help garner a lot of interest in Hotel Omni Mont-Royal Montréal.

“There's stability across the country,” Scheer said of the asset class. “Operating fundamentals remain strong. It's a very resilient asset class right now, and that's holding true in Montreal.”

Conversion opportunities

The property is zoned mixed-use so it also provides an exceptional redevelopment opportunity for conversion to high-end rental, or a combination of luxury hotel and residential condominiums. Its efficient floor plates, exceptional fenestration and views of Mount-Royal and downtown Montreal make it a viable choice for either option.

“The area immediately surrounding the building is already very high-end and is gentrifying even further with numerous large-scale renovation projects,” Speirs said. “Holt Renfrew has been repositioned as a luxury mixed-use asset.

“The former Manulife building on Sherbrooke Street is in the process of conversion to high-end residential. There’s what’s known as the Escada building, which is two blocks away on the corner of Drummond Street, which is another former office building being converted to residential. 

“And then you’ve got the Sofitel, which is about a block away, that's also undergoing a massive renovation to bring that up to an even higher standard. You've got tremendous investment in this immediate area, and this asset is kitty corner to McGill, so it’s very well-positioned for a mix of students and young professionals.”

Luxury hotel brands such as The Ritz-Carlton and Four Seasons have previously adopted mixed-use concepts, with luxury residential suites benefitting from hotel services and achieving record pricing with premiums over stand-alone residential developments.

“Conversion would require a significant amount of capital,” Speirs said, “but it could also be a very valuable asset at the end of the day. The numbers could pencil for that type of redevelopment.”

Luxury condo projects in the Golden Square Mile and the broader downtown area, such as MAA Condominiums & Penthouses and 1 Square Phillips, are also progressing and signalling continued investment in the core.

Attracting attention from varied investors

CBRE has been marketing Hotel Omni Mont-Royal Montréal since mid-May. 

“There's an overall flight to quality in the marketplace from investors in the hotel space,” Scheer said. “We'll see strong domestic hotel equity interests and we’ll see interest from U.S. and international as well for an asset like this, just given its position in a major Canadian market, the facilities and the opportunity.”

Speirs said Montreal-based developers have expressed “a good level of interest out of the gate” when it comes to potentially converting the building, and he expects that to continue over the coming weeks.

No bid deadline has yet been set for the property.