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TORONTO, Oct. 17, 2022 (GLOBE NEWSWIRE) — Slate Office REIT (TSX: SOT.UN) (the “REIT”), an proprietor and operator of high-quality office actual property, introduced right now that it has agreed to purchase a newly retrofitted Class A workplace property positioned in Chicago, Illinois (the “Property”). The Property is valued at US$19.8 million (the “Acquisition”), which represents an 8.4% capitalization fee based mostly on in-place web working revenue (“NOI”). The Property is anchored by a long-term lease with one of many world’s premier progressive biopharmaceutical firms.
Highlights of the Acquisition
- Well-located, Class A workplace property – Newly retrofitted constructing comprising 197,527 rentable sq. toes positioned in a traditionally sturdy and steady workplace node
- Attractive foundation – Purchase value of US$19.8 million represents an 8.4% capitalization fee based mostly on in-place NOI and a 75.0% low cost to the Property’s estimated substitute value
- Long-term lease with funding grade tenant – The Property has a 10-year weighted common lease time period, with the vast majority of revenue secured by a long-term, triple web lease with one of many world’s premier progressive biopharmaceutical firms
- Significant upside potential – Opportunity to lease up 65,197 sq. toes of remaining availability on the Property supplies for long-term worth creation
The REIT has additionally entered into an settlement with a syndicate of underwriters co-led by CIBC Capital Markets, BMO Capital Markets and RBC Capital Markets (collectively, the “Underwriters”) to difficulty C$45 million combination principal quantity of seven.50% convertible unsecured subordinated debentures of the REIT on a “bought deal” foundation (the “Offering”). The web proceeds from the Offering will probably be used to partially fund the Acquisition, scale back the REIT’s secured indebtedness, and for different common company functions, which might embrace execution of the REIT’s regular course issuer bid (“NCIB”) program in accordance with relevant securities legal guidelines.
Steve Hodgson, Chief Executive Officer of the REIT, mentioned: “In pursuing this Acquisition, we are continuing to enhance the quality and scale of our investments, highlighting Slate Office REIT’s long-term strategy of aligning its portfolio with the right credit tenants to provide both stable cash flow and yield to our unitholders. We are pleased with this offering as it proactively strengthens the REIT’s liquidity position, demonstrating our continued momentum and growth.”
Debentures
The REIT has agreed to promote to the Underwriters, on a purchased deal foundation, C$45 million combination principal quantity of seven.50% convertible unsecured subordinated debentures of the REIT (the “Debentures”). The REIT has additionally granted the Underwriters an over-allotment choice to buy up to an extra 15% of the Debentures on the identical phrases and situations, exercisable at any time, in entire or partly, up to 30 days after the closing of the Offering.
The Debentures will bear an rate of interest of seven.50% each year, payable semi-annually in arrears on June 30 and December 31 in every year commencing June 30, 2023. The June 30, 2023 curiosity cost will characterize accrued curiosity for the interval from closing of the Offering to June 30, 2023.
Each Debenture will probably be convertible into freely tradeable belief items of the REIT (“Units”) on the choice of the holder at any time prior to the shut of business on the earliest of (i) the final business day earlier than December 31, 2027 (the “Maturity Date”); or (ii) if referred to as for redemption, the business day instantly previous the date specified by the REIT for redemption of the Debentures, at a conversion value of $5.50 per Unit (the “Conversion Price”), being a ratio of roughly 181.8182 Units per $1,000 principal quantity of Debentures. The conversion proper will probably be topic to normal anti-dilution provisions. Debenture-holders changing their Debentures will, as well as to the relevant variety of Units to be acquired on conversion, obtain accrued and unpaid curiosity, if any, for the interval from the final curiosity cost date on their Debentures to and together with the final report date set by the REIT occurring prior to the date of conversion for figuring out the REIT’s Unitholders entitled to obtain a distribution on the Units. The Debentures is probably not redeemed by the REIT prior to December 31, 2025. On and from December 31, 2025, and prior to December 31, 2026, the Debentures could also be redeemed by the REIT, in entire at any time, or partly from time to time, at a value equal to the principal quantity thereof plus accrued and unpaid curiosity on no more than 60 days’ and never lower than 30 days’ prior written discover, offered that the amount weighted-average buying and selling value of the Units on the Toronto Stock Exchange for the 20 consecutive buying and selling days ending 5 buying and selling days previous the date on which discover of redemption is given is just not lower than 125.0% of the Conversion Price. On and from December 31, 2026, and prior to the Maturity Date, the Debentures could also be redeemed by the REIT, in entire at any time or partly from time to time, at a value equal to the principal quantity thereof plus accrued and unpaid curiosity on no more than 60 days’ and never lower than 30 days’ prior written discover.
The web proceeds from the Offering will probably be used to partially fund the Acquisition, scale back the REIT’s secured indebtedness, and for different common company functions, which might embrace execution of the REIT’s NCIB program in accordance with relevant securities legal guidelines.
The Debentures will probably be supplied by the use of a prospectus complement to the REIT’s brief kind base shelf prospectus dated April 29, 2021, which prospectus complement is anticipated to be filed with the securities commissions and different comparable regulatory authorities in every of the provinces and territories of Canada on or about October 19, 2022. Further data concerning the Offering, together with associated danger elements, will probably be set out within the prospectus complement. The Offering is topic to the receipt of all essential approvals, together with the approval of the Toronto Stock Exchange. Closing of the Offering is anticipated to happen on or about October 24, 2022.
The Debentures haven’t been, nor will they be, registered underneath the United States Securities Act of 1933, as amended, (the “1933 Act”) and is probably not supplied, offered or delivered, straight or not directly, in the United States, or to, or for the account or good thing about, “U.S. persons” (as outlined in Regulation S underneath the 1933 Act), besides pursuant to an exemption from the registration necessities of the 1933 Act. This press launch doesn’t represent a suggestion to promote or a solicitation of a suggestion to purchase any Debentures in the United States or to, or for the account or good thing about, U.S. individuals.
About Slate Office REIT (TSX: SOT.UN)
Slate Office REIT is a worldwide proprietor and operator of high-quality office actual property. The REIT owns pursuits in and operates a portfolio of strategic and well-located actual property property in North America and Europe. A majority of the REIT’s portfolio is comprised of presidency and high-quality credit score tenants. The REIT acquires high quality property at a reduction to substitute value and creates worth for unitholders by making use of hands-on asset administration methods to develop rental income, lengthen lease time period and improve occupancy. Visit slateofficereit.com to study extra.
About Slate Asset Management
Slate Asset Management is a worldwide various funding platform focusing on actual property. We concentrate on fundamentals with the target of making long-term worth for our buyers and companions. Slate’s platform has a spread of actual property and infrastructure funding methods, together with opportunistic, worth add, core plus and debt investments. We are supported by distinctive folks and versatile capital, which allow us to originate and execute on a variety of compelling funding alternatives. Visit slateam.com to study extra.
Forward-Looking Statements
Certain data herein constitutes “forward-looking information” as outlined underneath Canadian securities legal guidelines which replicate administration’s expectations concerning goals, plans, targets, methods, future progress, outcomes of operations, efficiency, business prospects and alternatives of the REIT. The phrases “plans”, “expects”, “does not expect”, “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes”, or variations of such phrases and phrases or statements to the impact that sure actions, occasions or outcomes “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved”, or “continue” and comparable expressions establish forward-looking statements. Forward-looking statements embrace, with out limitation, statements concerning the anticipated final result of the Acquisition on the REIT’s operations and monetary situation, the anticipated timing and completion of the Offering, and the anticipated use of proceeds of the sale of Debentures. Such forward-looking statements are certified of their entirety by the inherent dangers and uncertainties surrounding future expectations.
Forward-looking statements are essentially based mostly on plenty of estimates and assumptions that, whereas thought of affordable by administration as of the date hereof, are inherently topic to important business, financial and aggressive uncertainties and contingencies. When counting on forward-looking statements to make selections, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements contain important dangers and uncertainties and shouldn’t be learn as ensures of future efficiency or outcomes, and won’t essentially be correct indications of whether or not or not the occasions at or by which such efficiency or outcomes will probably be achieved. Plenty of elements might trigger precise outcomes to differ, presumably materially, from the outcomes mentioned within the forward-looking statements. Additional details about dangers and uncertainties is contained within the filings of the REIT with securities regulators.
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