- What The REIT is in talks to sell the Markham office complex to a private buyer
- Why The valuation works out to $153/sq ft
- What next Slate also is selling an adjacent office property as it attempts to pay down debt
Slate Office REIT is looking to offload Woodbine & Steeles Corporate Centre for $55m, Green Street News can reveal.
The REIT is in talks to sell the five-building office complex, in Markham, Ont., to a private buyer. The valuation for the 360,000 sq ft property works out to $153/sq ft. JLL and RBC have the assignment.
Woodbine & Steeles Corporate Centre comprises three office towers at 7030, 7050 and 7100 Woodbine Avenue, a flex/office building at 55 Idema Road and an industrial asset at 85 Idema Road. The complex spans 12 acres.
As of June 30, the complex had a vacancy rate of 18.6%. Office tenants include Excess Underwriting, Fate Financial and Vernier Canada. Lenovo Canada and Mid-Range occupy space in the industrial and flex/office buildings. According to leasing materials, triple-net rents are $16.50/sq ft.
The Class-B office towers range from four to nine storeys and were completed from 1982 to 1988. The buildings were renovated in 2011 and share over 1,100 surface and underground parking spaces.
At the corner of Woodbine Avenue and Steeles Avenue East, the complex is close to Highways 401, 404 and 407. Several TTC and YRT bus routes run nearby, and two GO Transit stations are within 5 km.
The property is adjacent to the Gateway Centre, which Slate is in talks to sell for $42.5m. The assets are on the block as the distressed REIT attempts to lower its debt load.
The strategy is part of a portfolio realignment plan announced in 2023. Despite the recent sale of some assets, including 84-86 Chain Lake Drive in Halifax, N.S., for $10.4m and 570 Queen Street in Fredericton, N.B., for $5.2m, the REIT defaulted on $158m of debt in early June.
As reported by The Globe and Mail, CEO Brady Welch and his brother, Blair Welch, have accused activist investor George Armoyan of making inappropriate bids for the company’s assets in an effort to gain more control. Armoyan claims the Welches themselves have profited, while the value of the company has declined. All three are trustees of the REIT.
As of June 30, Slate had total assets of $1.55bn and total debt of $1.14bn, according to its Q2 financial report. It has identified 15 investment properties with a total estimated fair value of $377.3m and an outstanding debt principal of $282.4m as held for sale. The Toronto-based REIT owns 50 properties in Canada, the U.S. and Ireland.
Slate Office REIT is managed externally by Slate Asset Management, founded by the Welch brothers.
Correction (8/26/2024): This story was revised to reflect the correct address of Slate’s Chain Lake Drive property.
