Deerhurst Resort in Huntsville is being sold by Skyline Investments to Freed Corp. (Courtesy Skyline)
Freed Corp. will pay $210 million to acquire Ontario’s Deerhurst Resort, Horseshoe Valley Resort and development lands at Blue Mountain Resort from Skyline Investments Inc., the firms announced Monday morning.
The transaction involves the creation of a new subsidiary by Toronto-based Freed, to be called Resort Communities LP. Skyline will take a 29 per cent equity stake in Resort LP, which represents about $33 million of the purchase price.
The transaction is expected to close on or about Oct. 31.
“This is a milestone for Skyline that provides significant new liquidity to capitalize on our stated strategy to redeploy our investment and operational focus from resorts and development lands into hotels,” Skyline CEO Blake Lyon said in the announcement.
“This transaction represents one of the largest resort sales in Canada in the last 15 years, according to Beechwood Real Estate Advisors who advised Skyline on the transaction, and we are excited to be a 29 per cent partner in Resort LP along with Freed, who will now own an expanded portfolio of premier, drive-to resorts in Ontario, Canada.”
Well-known Ontario resorts
The properties are among the best-known resorts in Ontario, all located in prime vacation regions; Blue Mountain is at Collingwood; Deerhurst in Huntsville; and Horseshoe Valley is just outside Barrie.
“This transaction allows us to realize the full net asset value of our Canadian resorts, while still participating in the value creation that Freed’s proven development team can produce,” Lyon said in the release.
“Skyline’s investment partner in Blue Mountain, Serruya Private Equity, also expressed their satisfaction and support for this transaction.”
As part of the transaction, Freed will roll its existing interest in Muskoka Bay resort into Resort LP, at a $90 million valuation.
Muskoka Bay is an 869-acre four-season luxury resort community in Gravenhurst, between Horseshoe and Deerhurst. Muskoka Bay has 65 hotel rooms and villas owned or managed by Freed and one of Canada’s top-10 golf courses, as ranked by ScoreGolf.
“The acquisition of these iconic resort properties will allow us to execute our strategy of modernizing the traditional resort community market to the highest and best use through design-driven development and benefits of world-class amenities with all season access,” said Freed’s founder and CEO, Peter Freed, in the release.
“In addition, the acquisition of these resorts further stimulates the growth in the hotel and resort sectors for Freed.”
Financial details of the transaction
Other financial details of the transaction involve several components in addition to the equity stake in Resort Communities LP.
Upon closing, Skyline will receive a cash payment of approximately $109 million, and after debt and bond repayments, taxes and minority interest payouts, is expected to have approximately $30-$35 million.
A further $80 million in payments (including approximately $12 million in interest) is expected to follow over the ensuing 24 to 48 months. Net income before tax relating to the transaction on closing is expected to be $35-$45 million.
After tax, net income is expected to be $25-$35 million and the net impact on the company’s equity is expected to be $15-$25 million.
The deal also includes options for Resort LP to acquire Skyline’s 29 per cent interest in December 2022, and put and call options for Skyline and Freed at the end of years four and five following the transaction.
Skyline will host an investor call to discuss the transaction on Sept. 30 at 9:30 a.m. (Israel time).
About Skyline, Freed and Serruya
Skyline is a Canadian company that specializes in hospitality real estate investments in the U.S. and Canada. It owns 18 income-producing assets with 3,266 hotel rooms and 85,238 square feet of commercial space and development lands with rights for approximately 2,315 residential units located in three main areas north of Toronto.
The company is traded on the Tel Aviv Stock Exchange (SKLN) and is a reporting issuer in Canada.
Freed Developments was founded over 25 years ago and has grown to become one of the largest private developers operating in the City of Toronto.
Freed has completed over 30 projects and has expanded to include vertical operating divisions in construction management, real estate and Freed Hospitality, a lifestyle-experience hotel, resort, restaurant and nightlife portfolio.
Serruya Private Equity is a global private equity firm in a broad range of asset classes with an emphasis on retail and consumer packaged goods.
SPE’s principals have developed brands including Weight Watchers, Tropicana, Godiva Ice Cream, Cold Stone Creamery, Round Table Pizza, Great American Cookies, Marble Slab Creamery, Hot Dog on a Stick, Taco Time, Blimpie Subs, and Pretzelmaker.
SPE’s platform currently includes global brands Yogen Früz, Pinkberry and Swensens with over 1,300 stores across 40 countries.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
