Slate Office REIT (SOT-UN.TO) (the "REIT") announced today that it has entered into an agreement to sell 5500 North Service Road in Burlington, Ontario for $52.2 million. The REIT expects to use the net proceeds to reduce outstanding debt and to fund future investment opportunities.
“5500 North Service Road is an excellent example of the REIT’s strategy and ability to create value for unitholders. In 18 months, we took an asset that was acquired as part of a portfolio, increased occupancy, stabilized the income and are now disposing of the asset at a significant premium to our acquisition price,” said Scott Antoniak, the REIT’s Chief Executive Officer. “The disposition proceeds are expected to be reinvested in future accretive investment opportunities.”
- Acquired as part of a portfolio from Cominar REIT in March 2018.
- Completed 80,000 square feet of leasing increasing occupancy to 87%.
- Sale price represents a 21% or $9.1 million premium to the REIT’s purchase price.
- Represents a 14% increase to the REIT’s IFRS value at June 30, 2019, further validating the net asset value of the REIT. This disposition, along with previously completed transactions, has validated over 60% of the REIT’s net asset value.
- Enables the REIT to exit a non-strategic market and provides unitholders with a compelling levered internal rate of return of 13%.
- In total the REIT has completed $311 million of dispositions since July 2018 at a 17% ($46 million) premium to purchase price and an average levered internal rate of return of 15%.
- Closing is expected in the fourth quarter of 2019.
About Slate Office REIT (SOT-UN.TO)
Slate Office REIT is an open-ended real estate investment trust. The REIT's portfolio comprises 38 strategic and well-located real estate assets located primarily across Canada's major population centres and includes two downtown assets in Chicago, Illinois. The REIT is focused on maximizing value through internal organic rental and occupancy growth and strategic acquisitions. Visit slateofficereit.com to learn more.
About Slate Asset Management L.P.
Slate Asset Management L.P. is a leading real-estate focused alternative investment platform with over $6 billion in assets under management. Slate is a value-oriented manager and a significant sponsor of all of its private and publicly-traded investment vehicles, which are tailored to the unique goals and objectives of its investors. The firm's careful and selective investment approach creates long-term value with an emphasis on capital preservation and outsized returns. Slate is supported by exceptional people, flexible capital and a demonstrated ability to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.