TORONTO--(BUSINESS WIRE)--Slate Retail REIT (TSX: SRT.U) (TSX: SRT.UN) (the "REIT"), an owner and operator of U.S. grocery-anchored real estate, announced today that it has entered into a binding agreement to acquire a portfolio of seven grocery-anchored assets for US$106.5 million at a capitalization rate of 7.6% (US$171 per square foot).
“We are focused on growth and are excited to build on the foundation we spent the last two years creating,” said David Dunn, the REIT’s incoming Chief Executive Officer. “These properties are high-quality, stabilized grocery-anchored assets, which at US$106.5 million is the REIT’s largest acquisition to date. The acquisition hits several key investment criteria including adding scale in growth markets, expanding our relationship with top grocers and improving the overall quality of our portfolio.”
Acquisition Highlights
- Seven properties comprising 623,770 square feet of gross leasable area.
- Existing occupancy of 92% with leasing upside.
- Immediately accretive to funds from operations per unit and adjusted funds from operations per unit.
- Anchored by market dominant high-credit grocers including Harris Teeter (Kroger), Food Lion (Ahold Delhaize) and Weis Markets.
- Well-located in markets where the REIT has an established presence, will benefit from increased scale.
- The Southeastern and Mid-Atlantic states offer attractive demographics, including strong population growth, a competitive cost of living, large and well-educated work forces and favourable tax environments.
- Redeploying capital from completed dispositions of lower tier assets totaling US$168.0 million into higher quality grocery-anchored assets for US$106.5 million with stronger grocers, improved credit and superior locations.
The acquisition is expected to be completed in the second quarter of 2020 and is being financed with existing balance sheet capital. The transaction remains subject to customary closing conditions.
The following is a summary of the acquisition properties:
Property |
Metropolitan Statistical Area |
Anchor |
Square Feet |
Alexander Pointe |
Charlotte, NC |
Harris Teeter |
57,710 |
Bermuda Crossroads |
Richmond, VA |
Food Lion |
122,570 |
Gainsborough Square |
Virginia Beach – Norfolk – Newport News, VA |
Food Lion |
88,862 |
Harper Hill Commons |
Winston – Salem, NC |
Harris Teeter |
96,914 |
Indian Lakes Crossing |
Virginia Beach – Norfolk – Newport News, VA |
Harris Teeter |
64,973 |
Renaissance Square |
Charlotte, NC |
Harris Teeter |
80,467 |
Stone House Square |
Washington – Baltimore, MD |
Weis Markets |
112,274 |
Total/Weighted Average |
|
623,770 |
|
About Slate Retail REIT (TSX: SRT.U / SRT.UN)
Slate Retail REIT is a real estate investment trust focused on U.S. grocery-anchored real estate. The REIT owns and operates approximately US$1.3 billion of assets located across the top 50 U.S. metro markets that are visited regularly by consumers for their everyday needs. The REIT’s diversified portfolio and quality tenant covenants provide a strong basis to continue to grow unitholder distributions and the flexibility to capitalize on opportunities that drive value appreciation. Visit slateretailreit.com to learn more about the REIT.
About Slate Asset Management
Slate Asset Management is a leading real estate focused alternative investment platform with over $6.5 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 demonstrated ability to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.
