A spokesperson for Slate Asset Management told the Bay Observer that the financial and boardroom challenges currently facing Slate Office REIT (Real Estate Investment Trust) will have no bearing on their two proposed projects in Hamilton. In response to a query, Slate spokesperson Karolina Kmiecik wrote, “Slate Office REIT has no impact on Slate Asset Management’s portfolio of investments, including our Hamilton projects. Slate Office REIT is separate from Slate Asset Management; it is a publicly traded trust that Slate Asset Management manages on behalf of a majority independent Board of Trustees.”
A Globe and Mail article published Friday noted Slate Office REIT has more than $1.1-billion in debt and has been attempting a turnaround by selling off properties, but it defaulted on $158-million worth of its debt in June. They are also in a boardroom conflict with activist investor George Armoyan who owns 20 percent of the REIT, and who wants to replace the current board which includes Slate principals Brady and Blair Welch.
Slate Office REIT, like many owners of office buildings has been hit hard by the COVID-driven switch to work-from-home. Last year, Slate proposed to lower its REIT’s $1.175-billion debt burden by selling 40 per cent of its assets. The REIT owns 54 office properties. However, the demand for office buildings remains weak as high office vacancy rates continue and interest rates are still high. The office vacancy rate in Canada has been 17.5 per cent for four consecutive quarters. In contrast, Slate’s REIT reported a first-quarter vacancy rate of 22.3 per cent.
Slate Asset Management has two major projects in the works for Hamilton. The company plans an 800-acre industrial commercial project on the former Stelco lands. Steven Dejonckheere, Senior Vice President, Development for Slate Asset Management, said the long-term project will provide up to 12 million square feet of space for advanced manufacturing, logistics and creative industries. The company also plans a 27-storey residential tower on John Street South at the former Corktown Plaza.