Slate Office REIT Provides Update on Proposed Acquisition of Seven Asset Portfolio for $191.4 Million


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Slate Office REIT Provides Update on Proposed Acquisition of Seven Asset Portfolio for $191.4 Million

Sunday, January 28, 2018



Slate Office REIT (TSX:SOT.UN) (the "REIT"), announced today that, in connection with its previously announced agreement to acquire seven properties located in the Greater Toronto Area and Atlantic Canada (the "Acquisition Properties"), it is proceeding with a special meeting of unitholders of the REIT (the "Unitholders") to be held on March 8, 2018 (the "Unitholder Meeting"), for purposes of considering the Acquisition.

The Acquisition Properties are part of a portfolio of real estate assets to be sold by Cominar Real Estate Investment Trust ("Cominar") and which are 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 REIT will acquire the Acquisition Properties for $191.4 million (the "Acquisition") representing $192 per square foot. The purchase price will be 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 includes proceeds from the full exercise of an over-allotment option to purchase additional Subscription Receipts), which was completed earlier today.

The Acquisition was unanimously recommended by a special committee of the board of trustees of the REIT (the "Board") composed entirely of independent trustees consisting of Pamela Spackman (Chair), Monty Baker, Nora Duke, Thomas Farley and John O'Bryan (the "Special Committee").

The Special Committee retained Blair Franklin Capital Partners Inc. ("Blair Franklin") to prepare and deliver a valuation (the "Formal Valuation") in respect of the Acquisition Properties in accordance with the requirements of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"), and a written opinion (the "Fairness Opinion") as to the fairness to the REIT, from a financial point of view, of the consideration to be paid by the REIT for the Acquisition Properties. The Formal Valuation and the Fairness Opinion indicate that, as of January 17, 2018 and based on and subject to the assumptions, factors considered and limitations described therein, the fair market value range of the Acquisition Properties is $185 million to $205 million, and the consideration of $191.4 million to be paid by the REIT for the Acquisition Properties pursuant to the definitive agreement, is fair, from a financial point of view, to the REIT.

Following its review of the Formal Valuation and the Fairness Opinion and after careful deliberation, the Special Committee confirmed its prior determination that the Acquisition is in the best interests of the REIT and unanimously recommended to the Board that the Board recommend to the Unitholders that they vote in favour of the Acquisition at the Unitholder Meeting. In arriving at its unanimous recommendation in favour of the Acquisition, the Special Committee considered several additional factors, which will be outlined in public filings to be made in connection therewith.

Following receipt of the unanimous recommendation by the Special Committee, the Board (with interested trustees abstaining) has unanimously approved the Acquisition and unanimously resolved to recommend to Unitholders that they vote in favour of the Acquisition at the Unitholder Meeting.

Pursuant to MI 61-101, the Acquisition could be considered a "related party transaction" for the REIT by virtue of the relationship between the REIT and SCREO, and as such, the REIT will seek to obtain minority Unitholder approval of the Acquisition at the Unitholder Meeting.

If minority approval is obtained at the Unitholder Meeting, the Acquisitions are expected to close by the end of March 2018.

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. Some of the specific forward-looking statements contained herein include, but are not limited to statements with respect to the following: the intention of the REIT and the vendor to complete the Acquisitions on the terms and conditions described herein; the expected use of proceeds of the sale of the Subscription Receipts; the date on which the Unitholder Meeting is expected to occur; and the date on which the closings of the Acquisitions is expected to occur. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transactions contemplated herein are completed. 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 March 6, 2017.

About Slate Office REIT (TSX: SOT.UN)

Slate Office REIT is an open-ended real estate investment trust. The REIT's portfolio currently comprises 38 strategic and well-located real estate assets located primarily across Canada's major population centres. The REIT is focused on maximizing value through internal organic rental and occupancy growth and strategic acquisitions. Visit to learn more.

About Slate Asset Management L.P.

Slate Asset Management L.P. is a leading real estate investment platform with over $4.5 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 to learn more.


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