On Christmas Eve, Toronto-based Slate Office REIT (TSX: SOT.UN) announced that it will be accelerating the timeline for its plan to internalize the REIT's management.
In early-October, Slate Office REIT announced that it would be ceasing its external management agreement with Slate Asset Management in 180 days. The termination date was set for March 30, 2025, but has now been moved up to December 31, 2024.
In its announcement last week, the REIT said it will be making a $2 million termination payment to Slate Asset Management, which it says "represents the approximate net present value of the amounts owing" to Slate Asset Management had the management agreement been terminated in March.
"The Board is eager to enter a new chapter for the REIT, which begins with an internalized management team," said Chair of the Board of Trustees George Armoyan in a press release. "We believe that the Internalization will significantly reduce costs for the REIT by eliminating the fees payable under the Management Agreement and better align the interests of management with the REIT's unitholders to drive long-term value."
The REIT will also be entering this "new chapter" with a new name: Ravelin Properties REIT (TSX: RPR.UN).
The rebrand will also come into effect on December 31. There will no change in capitalization of the REIT and no action will be required by existing unitholders, the REIT said, adding that holders of unit certificates can request a replacement certificate if desired, but that they are not required.
Additionally, the REIT will also have a new leader to begin its new chapter. After being appointed to the Board of Trustees on November 18, Springhurst Capital Corp Managing Director Shant Poladian is expected to be appointed Chief Executive Officer of Ravelin Properties REIT effective on or about January 1, 2025. He will continue to serve on the Board and also serves on the Board of Killam Apartment REIT (TSX: KMP.UN).
Co-Founder of Slate Asset Management Brady Welch was previously serving as CEO. Both he and his brother Blair resigned from the Board of Trustees when the management change was announced in October.
"Since joining the Board, Shant has been actively involved in guiding the REIT through the management internalization process," said Armoyan. "This has allowed us to reduce the original 180-day internalization timeline from March 30, 2025 to December 31, 2024. While there is important work ahead of us, we are confident that Shant is well suited to lead the internal team going forward, and execute on the REIT's new strategic direction."
According to the REIT's press release, the acceleration of the management internalization plan also allows "employment offers to be made by the REIT to certain employees of the Manager, and terminating the Manager's trustee nomination rights."
The management change and rebrand caps off an eventful 12 months for the REIT. In June, the REIT revealed that it had received Notices of Default from its senior lenders. It has also been undergoing a "Portfolio Realignment Plan" that has seen it sell several of its properties. Most recently, in November, the REIT sold its stake in the Woodbine Corporate Centre in Markham.
