In the big news on the hotel front, two of Canada’s most historic hotels—the Royal York Hotel in Toronto and Hotel Vancouver—were listed. The seller, Quebec pension fund Caisse de dépôt et placement du Québec, is scaling back its hotel business. Both properties are managed by Fairmont Hotels and Resorts. The Royal York was built in 1929, the Hotel Vancouver was built in 1939. (If those walls could talk they'd tell you there's a lot of people stealing hotel towels.) Hotel industry analyst Monique Rosszell from HVS says both properties will have plenty of suitors.

The probable buyers will emerge from private investment funds, a REIT, or an ownership group looking to supplement its national portfolio, or looking to enter the Canadian marketplace. (Or just someone who clicks the wrong button on Priceline.) Given the strength of the market, this is a good time for Ivanhoe Cambridge (which manages the pension fund’s retail assets) to sell, she says.

Not a surprise, she adds, since the company has been divesting its hotel portfolio outside of Quebec, recently selling a portfolio of 19 hotels in Europe. “The performance of these two hotels could both benefit from major capital upgrading, however, unless an owner is planning a long-term hold, such an investment may not be financially justified,” Monique says. As new, more quality hotels enter both these markets, she says, existing hotels will be forced to upgrade their product in order to remain competitive.