TORONTO, June 1, 2015 /CNW/ - Slate Retail REIT (the "REIT") (TSX:SRT.U/SRT.UN) and Slate U.S. Opportunity (No. 3) Realty Trust ("SUSO 3") are pleased to announce the closing of the acquisition by the REIT of the assets of SUSO 3 (the "Transaction").
As previously announced, at the annual and special meetings of the unitholders of the REIT and SUSO 3 held on May 13, 2015, the Transaction was overwhelmingly approved by 99.94% of the votes cast in person or by proxy by unitholders of the REIT and by 100% of the votes cast in person or by proxy by unitholders of SUSO 3 (other than in each case unitholders that were excluded from voting pursuant to Multilateral Instrument 61-101).
As a result of the Transaction, the REIT's portfolio now comprises 57 grocery anchored assets with over 6.7 million square feet of gross leasable area ("GLA") across 20 states with approximately 66% of GLA occupied by either grocery or national tenants. The REIT's portfolio is diversified by tenant and geography with no tenant comprising more than 7% of revenues and no state comprising more than 12% of GLA.
In anticipation of the Transaction, SUSO 3 has made a special cash distribution to its unitholders of SUSO 3's remaining cash balance. Following the final calculation of the working capital adjustment at closing, 7,760,798 Class U units (the "REIT Units") of the REIT and 225,251 exchangeable Class B limited partnership units of certain subsidiaries of the REIT were issued in consideration for the acquisition of the SUSO 3 assets.
Upon tendering their SUSO 3 units for redemption, the number of REIT Units and the amount of the special cash distribution that SUSO 3 unitholders receive for each SUSO 3 unit is as follows:
- each Class A unit of SUSO 3 is redeemed for 1.004390 REIT Units and each holder thereof will have received a special cash distribution of the Canadian dollar equivalent of US$0.776;
- each Class F unit of SUSO 3 is redeemed for 1.036560 REIT Units and each holder thereof will have received a special cash distribution of the Canadian dollar equivalent of US$0.801;
- each Class I unit of SUSO 3 is redeemed for 1.099125 REIT Units and each holder thereof will have received a special cash distribution of US$0.849; and
- each Class U unit of SUSO 3 is redeemed for 1.041202 REIT Units and each holder thereof will have received a special cash distribution of US$0.804.
Related Financing Arrangements
In connection with the Transaction, the REIT also announced its intention to retire SUSO 3's U.S.$114.5 million secured credit facility that it entered into in November 2013 (the "SUSO 3 Facility"). The 13 assets of SUSO 3 acquired by the REIT will subsequently be financed under the revolving component of the REIT's existing corporate credit facility (the "REIT Financing Arrangements"). In comparison to the SUSO 3 Facility, the REIT Financing Arrangements carry lower interest costs, longer term, greater flexibility for converting to a fixed rate structure, and strengthen the overall borrowing base of the REIT's corporate credit facility. There are no penalties, fees or commissions in connection with retiring the SUSO 3 Facility or implementing the REIT Financing Arrangements with respect to the assets formally owned by SUSO 3, which are scheduled to take effect in June 2015.
New Rate Lock Agreement
In addition to the REIT Financing Arrangements, the REIT has also entered into a rate lock agreement for a 10-year U.S.$59.5 million mortgage at 4.14% (the "Rate Lock Agreement"), secured by six of the REIT's existing properties, also scheduled to take effect in June 2015.
About Slate Retail REIT
Slate Retail REIT is an open-ended real estate investment trust focused on U.S. grocery-anchored real estate. The REIT's portfolio includes over 50 properties located primarily across the top 50 U.S. metro markets. The REIT is focused on maximizing value through internal organic rental growth and strategic acquisitions. For more information, please visit www.slateretailreit.com.
About Slate U.S. Opportunity (No. 3) Realty Trust
Slate U.S. Opportunity (No. 3) Realty Trust was established for the primary purpose of indirectly acquiring, owning and leasing a portfolio of diversified revenue-producing commercial real estate properties in the U.S. with a focus on grocery-anchored retail properties.
About Slate Asset Management
Slate Asset Management L.P. is a leading real estate investment platform with over $2.5 billion in assets under management. Slate is a value-oriented company and a significant sponsor of all 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. More information is available at www.slateam.com.
This press release contains forward-looking statements with respect to the SUSO 3 Facility, the REIT Financing Arrangements, and the Rate Lock Agreement. These statements generally can be identified by the use of forward-looking words such as "intend", "will", "scheduled" or similar variations thereof. Some of the specific forward-looking statements in this press release include statements with respect to the intention to retire the SUSO 3 Facility, the financing of certain SUSO 3 assets acquired by the REIT being financing under the REIT Financing Arrangements, the Rate Lock Agreement and the scheduled completion of the foregoing. The actual results discussed herein could differ materially from those expressed or implied by such statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. See the risk factors in the public filings of the REIT. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. The cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. The assumptions made in making forward-looking statements are referred to in the public filings of the REIT. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release. Except as required by applicable law, the REIT specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Additional information about these assumptions and risks and uncertainties is contained in the REIT's filings with securities regulators, including its latest financial statements and management information circular, copies of which may be obtained on the SEDAR website at www.sedar.com.
SOURCE Slate Retail REIT
For further information: Blair Welch, CEO, 416 644 4267; Brady Welch, CFO, 416 644 4263