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Slate Retail REIT, an owner and operator of U.S. grocery-anchored real estate, has completed nine dispositions as part of the REIT’s capital recycling program. The nine dispositions will generate gross proceeds of $45.9 million, implying a weighed average 5.6% capitalization rate on trailing twelve-month net operating income.
On a year-to-date basis, the REIT has completed fourteen dispositions for $81.5 million at a weighted average cap rate of 6.4% on trailing twelve-month net operating income. The REIT will seek to reinvest net proceeds into new accretive investment opportunities that will strengthen the quality of the REIT’s portfolio and drive growth in net operating income.
“The team has done an excellent job executing on our disposition pipeline and we are on track to exceed our pricing targets set out at the end of 2018,” said Greg Stevenson, the REIT’s Chief Executive Officer. “Our current acquisition pipeline presents an attractive opportunity to redeploy these proceeds very accretively into new opportunities.”
The dispositions completed in the third quarter of 2019 are comprised of the following:
Sale of three fully-stabilized properties at 93.9% occupancy for $28.4 million in gross proceeds at a weighted average cap rate of 6.2%. The disposition of these fully-stabilized properties demonstrates the REIT’s ability to execute on its asset management strategy and deliver attractive mid-teen internal rates of return for unitholders.
Sale of four non-core single tenant outparcel buildings at 100% occupancy for gross proceeds of $9.8 million at a weighted average cap rate of 5.3%. The disposition of these outparcels highlight the REIT’s ability to take advantage of the strong demand for single-tenant buildings.
Sale of one redevelopment property at 40.7% occupancy to lead grocery-anchored tenant for $7.2 million in gross proceeds at a weighted average cap rate of 4.0%. The disposition of this redevelopment property will allow the REIT to achieve its projected returns much earlier than anticipated without having to invest the capital to see it through to completion. This disposition also solves for one of four remaining vacancies over 10,000 square feet in the portfolio. Management anticipates that one of the remaining vacancies greater than 10,000 square feet will be leased up in the fourth quarter of 2019 driving further occupancy gains.
Sale of a non-strategic vacant land parcel for $0.5 million in gross proceeds.