In the latest chapter during a year of upheaval, financially troubled Slate Office REIT (SOT.UN-T) has a new chair of its board of trustees, with George Armoyan taking over from Sam Altman, and Shant Poladian also joining the board of a trust he knows well. 

Armoyan steps into the chair’s role from his previous position as trustee. Poladian, who was the CEO of FAM REIT (the predecessor to Slate Office REIT) moves onto the board into Altman’s former seat as Altman also resigns as a trustee. 

"It has been a busy year for the REIT, and it has become clear that a successful turnaround requires a new strategic direction. As chair, I will be working closely with the board on the restructuring of the REIT and internalization of management," Armoyan stated in Monday’s announcement.

Armoyan is the executive chairman of G2S2 Capital, the largest shareholder in Slate Office REIT which has been at the forefront of an activist campaign in light of what it considers years of underperformance by the REIT’s former management team.

Poladian former CEO of REIT's predecessor

Poladian will assist the REIT in internalizing its management following an October decision to terminate the REIT's management agreement with its external manager, Slate Management ULC. That agreement will end in early 2025.

Poladian has over two decades of experience as a real estate and capital markets professional, having served on the Killam Apartment REIT board since 2023. He is the managing director of Springhurst Capital Corp., a real estate advisory firm, and CEO/co-founder of Junction Realty Partners Inc., a boutique developer of rental apartments in Toronto.

Poladian holds a bachelor of commerce degree from the University of Toronto and is a professional accountant in both Canada and the United States.

"I look forward to working with George and the board to re-imagine and execute a brighter future for the REIT. As an internally managed REIT, we expect that the REIT will be better aligned to drive value going forward," Poladian said in the announcement.

Slate’s recent troubles

Slate Office REIT announced a major portfolio realignment plan in late 2023 to try to deal with a deteriorating financial situation. At that time it suspended dividends, said it would sell up to 40 per cent of its portfolio and asked its investors for the right (subsequently granted) to raise its debt ceiling.

However, it has continued to face challenges from a languishing office market, higher interest rates and tighter financing markets, and lower values for its properties.

The trust announced in June it had gone into default on a credit facility, and it continues to deal with defaults in several areas.

In October, in conjunction with the termination of its management agreement with Slate Management SLC, the REIT also announced brothers Blair and Brady Welch had resigned from its board of trustees. The Welch brothers were co-founders of the REIT, and also control Slate Management.

Slate Office REIT reported a $182-million net loss in Q3 of 2024, mainly due to a $174-million fair value loss on its assets which was recorded in the quarter.

The trust has divested about $103 million in properties so far in 2024, but that has not helped its debt situation. The trust’s loan-to-value ratio ballooned 15 per cent during the past 12 months, to 83.2 per cent from 67.8 per cent at the end of Q3 2023.

Its portfolio and assets were valued at $1.376 billion at the end of the most recent quarter, down from $1.749 billion at the end of Q3 2023, due to value declines and asset sales.