TORONTO - Slate Office REIT (TSX: SOT.UN) (the 'REIT'), an owner and operator of high-quality workplace real estate, reported today financial results for the three and nine months ended September 30, 2022.
'Our transaction activity during and just after the third quarter further enhances the stability of the REIT's portfolio and highlights the REIT's ability to source attractive opportunities globally,' said Steve Hodgson, Chief Executive Officer of Slate Office REIT. 'At the same time, we recognize that broader market headwinds continue to weigh on the valuations of publicly-traded REITs, creating a divergence between asset values and unit price. Our objective has always been to create long-term value for our unitholders, and we look forward to identifying additional opportunities to unlock the value in our portfolio through the Board's ongoing strategic review.'
Highlights
Tactical transaction activity advanced the REIT's repositioning strategy to align its portfolio with high-quality, modern assets with strong credit tenants, long lease terms, and cash flow yield
On September 23, 2022, the REIT strategically disposed of an older, higher risk property at 95-105 Moatfield Drive in Toronto, Ontario at a 12.0% premium to purchase price and a 5.0% premium to the REIT's June 30, 2022 IFRS value
After quarter end, the REIT announced the acquisition of a higher-yielding, newer office property in Chicago, Illinois anchored by a 10-year lease with Pfizer, Inc. at an attractive 8.4% capitalization rate or $100 per square foot, with significant upside on occupancy
Strong operational performance further enhanced the resiliency of the REIT's portfolio
The REIT completed 109,060 square feet of total leasing in the quarter at a weighted average rental rate spread of 11.9%
Same property net operating income in the third quarter of 2022 increased by $0.5 million or 2.1% over the prior quarter
The weighted average lease term in the REIT's portfolio is 5.6 years and 65.1% of tenants are government or high-quality credit tenants
Financial stability continues to contribute to the REIT's well-covered distribution yield
The REIT provided investors a distribution yield of 9.2% in the third quarter, which was well covered with an AFFO payout ratio of 75.9%
After quarter end, the REIT amended and extended its credit facility at the same rate spread and with modifications that preserve liquidity
After quarter end, the REIT launched and closed a $45.0 million convertible debenture offering that was used to fund the accretive Chicago acquisition, strengthen the REIT's balance sheet, and proactively pay down secured mortgage debt
After period end, the REIT announced that it has launched a comprehensive review of strategic alternatives with a focus on maximizing value for unitholders
After period end, the REIT commenced the repurchase of units under the normal course issuer bid ('NCIB') it renewed in June; under the NCIB, the REIT may purchase up to 6,252,619 units, subject to certain restrictions
About Slate Office REIT (TSX: SOT.UN)
Slate Office REIT is a global owner and operator of high-quality workplace real estate. The REIT owns interests in and operates a portfolio of strategic and well-located real estate assets in North America and Europe. The majority of the REIT's portfolio is comprised of government and high-quality credit tenants. The REIT acquires quality assets at a discount to replacement cost and creates value for unitholders by applying hands-on asset management strategies to grow rental revenue, extend lease term and increase occupancy.
About Slate Asset Management
Slate Asset Management is a global alternative investment platform targeting real assets. We focus on fundamentals with the objective of creating long-term value for our investors and partners. Slate's platform has a range of real estate and infrastructure investment strategies, including opportunistic, value add, core plus, and debt investments. We are supported by exceptional people and flexible capital, which enable us to originate and execute on a wide range of compelling investment opportunities.
Contact:
Tel: +1 416 644 4264
Email: ir@slateam.com
SLATE OFFICE REIT 
