Slate Office REIT Completes Acquisition of Seven Asset Portfolio for $191.4 Million and Conversion of Subscription Receipts

TORONTO, March 27, 2018 (GLOBE NEWSWIRE) -- Slate Office REIT (TSX:SOT.UN) (the “REIT”) is pleased to announce the closing of its previously announced acquisition of seven properties located in the Greater Toronto Area and Atlantic Canada (the “Acquisition Properties”) for an aggregate purchase price of approximately $191.4 million (the “Acquisitions”) representing $192 per square foot.

The Acquisition Properties are part of a portfolio of real estate assets sold by Cominar Real Estate Investment Trust (“Cominar”) and which were the subject of a sale contract among Slate Acquisitions Inc. (on behalf of Slate Canadian Real Estate Opportunity Fund I L.P. (“SCREO”)) and Cominar. The purchase price was partially satisfied from the proceeds of the sale of 12,778,800 subscription receipts of the REIT (the “Subscription Receipts”) at a price of $8.10 per Subscription Receipt for gross proceeds of approximately $103.5 million, which closed on January 26, 2018.

The Acquisition Properties are strategically located in markets where the REIT has an existing presence and total 995,091 square feet of gross leasable area (“GLA”), increasing the REIT’s total GLA to 7.4 million square feet. The Acquisition Properties are 93% occupied, including a vendor lease from Cominar, and have a weighted average lease term of 4.8 years.

“The purchase of the Acquisition Properties is an off-market transaction that provides a number of benefits to unitholders, including attractive economics at $192 per square foot and immediate earnings accretion,” said Scott Antoniak, the REIT’s Chief Executive Officer. “This acquisition further strengthens and diversifies the REIT’s tenant credit profile with significant high quality tenants, including Canadian governments and multinational corporations.”

Summary of the Acquisitions

AssetLocationGLA (square feet)Occupancy(1)
81 Albert StreetMoncton, NB64,954100%
84-86 Chain Lake DriveHalifax, NS77,66697%
570 Queen StreetFredericton, NB69,70887%
225 Duncan Mill RoadToronto, ON155,87289%
105 MoatfieldToronto, ON248,981100%
95 MoatfieldToronto, ON156,426100%
5500 North Service RoadBurlington, ON221,48480%
Total/weighted average 995,09193%

(1) Includes the impact of a head-lease arrangement for 109,930 square feet of GLA at 225 Duncan Mill Road

Subscription Receipts

As a result of the completion of the Acquisitions, each of the 12,778,800 outstanding Subscription Receipts will automatically be exchanged for one Unit and a cash distribution equivalent payment of $0.125 (being equal to the aggregate amount of distributions paid by the REIT per Unit for which record dates have occurred since the closing of the Subscription Receipt offering), less any applicable withholding taxes. Trading in the Subscription Receipts has been halted on the Toronto Stock Exchange and the REIT expects that the Subscription Receipts will be delisted from the Toronto Stock Exchange after the close of markets today and that the Units issued in exchange for the Subscription Receipts will immediately commence trading on the Toronto Stock Exchange.

The REIT further expects that in the upcoming days, holders of Subscription Receipts will receive the Units and the distribution equivalent payment to which they are entitled.

Forward-Looking Statements

Certain information herein constitutes “forward-looking information” as defined under Canadian securities laws which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words “plans”, “expects”, “does not expect”, “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes”, or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved”, or “continue” and similar expressions identify forward-looking statements. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward-looking statements. Additional information about risks and uncertainties is contained in the filings of the REIT with securities regulators, including the REIT’s annual information form dated February 28, 2018.

About Slate Office REIT (TSX:SOT.UN)

Slate Office REIT is an open-ended real estate investment trust. The REIT's portfolio currently comprises 45 strategic and well-located real estate assets located primarily across Canada's major population centres including one downtown asset 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. (“Slate”) is a leading real estate investment platform with over $5 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 proven ability to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.

For Further Information

Investor Relations
Slate Office REIT
+1 416 644 4264
ir@slateam.com

Source:Slate Office REIT L.P.