G2S2 Capital Inc., a major investor in Ravelin Properties REIT (RPR-UN-T), is providing the trust a further lifeline by extending forbearance on loans of almost $600 million. Included in the announcement is G2S2 assuming an additional US$84 million in debt related to 120 South LaSalle, an office building Ravelin owns in Chicago.

The new financial arrangements come after CEO Shant Poladian had expressed optimism in Ravelin’s Q3 results that the trust was turning a corner, and making progress in getting its finances in order. However, in this most recent release, Ravelin notes it remains in “serious financial difficulty.”

G2S2 Capital is controlled by the family of George Armoyan, who is also executive chair of Ravelin after wresting management of the trust from its former manager Slate Asset Management and internalizing it. Ravelin had previously been known as Slate Office REIT.

Thus, manoeuvres to restructure Ravelin’s debt and improve its financial position are considered a “related party transaction” under securities laws. 

Poladian had been installed as CEO as part of that transition.

The latest forbearance involves $528.3 million of its Canadian debt and $45.5 million in U.S. debt, and is extended until March 31, 2026. It was granted after a request from an independent committee of Ravelin’s board of trustees.

The transfer of debt for Ravelin’s 120 South LaSalle office property in Chicago has already been completed, in a separate transaction. The additional forbearance for this loan will also expire on March 31, 2026.

Forbearance buys the REIT more time

The arrangement “allows the REIT to continue to explore available alternatives to address its financial difficulties, including the current defaults on its existing indebtedness and its ongoing capital requirements, including to potentially raise additional debt or equity financing or to seek a restructuring of all or a portion of the REIT's outstanding indebtedness . . ." the announcement states.

Negotiations are continuing with G2S2 Capital and other lenders regarding the terms of a potential recapitalization plan. 

In connection with defaults on loans and the extended forbearance period, the REIT has agreed to an increased interest rate of 10 per cent (up from a weighted average 6.44 per cent), with a cash interest rate of six per cent and payment-in-kind interest at a rate of four per cent, effective as of Oct. 1.

The purpose and business reason for the interest amendment is for the rate to reflect, “the REIT's current financial condition and market environment, while at the same time incorporating a payment-in-kind component which allows the REIT to preserve the capital necessary for its ongoing operations.” 

Trustees also extended the time limit during which Ravelin’s debt can exceed 65 per cent of its gross book value. The exemption had been granted in 2024, and has been extended until the end of 2026, another factor in allowing Ravelin additional time to attempt to improve its financial situation.

About Ravelin REIT

The REIT owns and operates a portfolio of commercial real estate assets in North America and Europe, with a value of approximately $1.25 billion as of the end of Q3. It's debt-to-gross-book-value ratio remained elevated at 90.7 per cent as of that financial report.

Ravelin's Q3 2025 same-property NOI (before lease termination fees) was $21.1 million, compared to $21.3 million for Q3 2024.

Poladian told RENX in an interview the REIT has experienced an increase in leasing momentum, which should be reflected in NOI results over future quarters. 

“It's a bumpy recovery, but there’s a recovery underway,” Poladian told RENX.

Ravelin’s net Q3 2025 loss was $17.38 million on rental revenue of $47.54 million, down from a net loss of $182.07 million on rental revenue of $50.16 million a year earlier.