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Slate Office REIT (SOT.UN-T) has completed the acquisition of three office properties in Toronto and Fredericton for a total purchase price of $165 million.
Two of the three buildings at the West Metro Corporate Centre in Toronto. (Google Streetview image)
Among the properties is the three-building West Metro Corporate Centre in Etobicoke along the Highway 427 corridor.
The acquisitions are funded primarily with the proceeds of a $120-million public offering of subscription receipts of the REIT which closed on March 15.
Additional funding came from a $10-million private placement of units of the REIT to the vendor in the Toronto property.
All three properties were previously owned by Dream Office REIT (D.UN-T).
The West Metro Corporate Centre, at 616,364 square feet, becomes the largest property in Slate’s portfolio.
Located at 185, 191 and 195 The West Mall, the complex is 93 per cent occupied by multiple tenants, with SNC-Lavalin and The Bank of Nova Scotia being among the largest. SNC-Lavalin also becomes Slate’s largest single tenant.
The highly visible site is easily accessed by transit from both the Toronto and Mississauga bus systems.
Government tenant in Fredericton
Both properties purchased in Fredericton are 100 per cent occupied by the Province of New Brunswick. They include 250 King Street, an 80,162-square-foot property built in 2000 which is located downtown; and 460 Two Nations Crossing, a 50,945-square-foot property built in 2008 which is located in suburban Fredericton.
Together, they provide a long-term government covenant, and “further strengthen the REIT’s presence in Atlantic Canada,” says a release announcing the closure of the deal.
Slate says the acquisitions strengthen it in several areas, including:
* Market capitalization will exceed $500 million;
* Gross leasable area will be 5.7 million square feet, with 43% in the GTA;
* The occupancy rate of the REIT’s portfolio improves by approximately 100 basis points;
* It increases the overall credit quality of Slate’s tenants;
* The weighted average lease term increases to 5.5 years.
Future purchases planned
Slate’s release says the company has a “robust pipeline” of potential future acquisitions which it is pursuing.
Slate Office REIT’s portfolio comprises 35 assets located primarily in Canada’s major population centres. The REIT is focused on maximizing value through internal organic rental and occupancy growth as well as strategic acquisitions.
Slate Asset Management LP is a real estate investment platform with more than $4 billion in assets under management.
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