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Slate Office REIT Completes JV Arrangement

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Slate Office REIT has closed on its previously announced sale of a 25% interest in six properties in the Greater Toronto Area (to an investment fund advised by Wafra Inc. for a sale price of $131.8 million. The REIT will use the net proceeds from the sale to reduce outstanding debt.

“We are very pleased to announce the completion of this transaction with a sophisticated, global alternative asset investor such as Wafra,” said Scott Antoniak, Chief Executive Officer of the REIT. “The transaction validates 28% of the REIT’s net asset value and demonstrates our ability to execute on our previously announced capital recycling program while delivering a 19% internal rate of return.”

“This transaction is a win for all stakeholders, including our investors, and represents the kind of mutually beneficial partnership that Wafra is known for,” said Yvonne Compitello, Senior Managing Director and head of real estate for Wafra. “Toronto is a key economic and population hub, and we’re excited to have a stake in these well-positioned office properties.”

Highlights

  • The sale price for the 25% interest in the GTA JV Portfolio implies a 100% value of $527.2 million or $269 per square foot. This pricing represents an attractive levered internal rate of return of 19%.
  • The REIT received incremental debt on five of the six properties, resulting in $31.5 million of additional proceeds to the REIT at its share and extends the weighted average maturity by 1.5 years on this debt. These refinancings have increased the amount of fixed rate debt by $100.9 million.
  • Following the sale and the refinancings, the REIT now has approximately $50 million of available liquidity.
  • The REIT has completed the sale of whole or partial interests in 12 properties for aggregrate gross proceeds of $237.2 million since announcing its capital recycling program in the first quarter of 2018. These sales have generated in aggregate $34.3 million of profit or $0.45 per unit.