SOT.UN Slate Office REIT

Slate Office REIT (the “REIT”) (TSX: SOT.UN), an owner and operator of high-quality workplace real estate, announced today that it has closed its previously announced bought deal public offering (the “Offering”) by way of its short form base shelf prospectus dated April 29, 2021, as supplemented by a prospectus supplement dated October 19, 2022 (collectively, the “Prospectus”). CIBC Capital Markets, BMO Capital Markets and RBC Capital Markets acted as joint bookrunners for the Offering on behalf of a syndicate of underwriters which also included TD Securities Inc., Scotia Capital Inc., National Bank Financial Inc., Raymond James Ltd., Canaccord Genuity Corp., iA Private Wealth Inc., Cormark Securities Inc. and Laurentian Bank Securities Inc. (collectively, the “Underwriters”), whereby the Underwriters purchased $45 million aggregate principal amount of 7.50% convertible unsecured subordinated debentures of the REIT (the “Initial Debentures”). The REIT has also granted the Underwriters an option (the “Over-Allotment Option”) to purchase up to an additional $6.75 million of 7.50% convertible unsecured subordinated debentures of the REIT (the “Additional Debentures”, and together with the Initial Debentures, the “Debentures”) on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Offering. The REIT has received conditional approval from the Toronto Stock Exchange (the “TSX”) to list the Debentures on the TSX.

The net proceeds from the Offering will be used to partially fund the REIT’s previously announced US$19.8 million acquisition of a newly retrofitted Class A office property located in Chicago, Illinois (the “Acquisition”), reduce the REIT’s secured indebtedness, and for other general corporate purposes, which could include execution of the REIT’s normal course issuer bid in accordance with applicable securities laws.

The Debentures bear an interest rate of 7.50% per annum, payable semi-annually in arrears on June 30 and December 31 in each year commencing June 30, 2023. The June 30, 2023 interest payment will represent accrued interest for the period from, and including, October 24, 2022 to, but excluding, June 30, 2023.

Each Debenture is convertible into freely tradeable trust units of the REIT (“Units”) at the option of the holder at any time following closing of the Offering and prior to the close of business on the earliest of (i) the last business day before December 31, 2027 (the “Maturity Date”); or (ii) if called for redemption, the business day immediately preceding the date specified by the REIT for redemption of the Debentures, at a conversion price of $5.50 per Unit (the “Conversion Price”), being a ratio of approximately 181.8182 Units per $1,000 principal amount of Debentures. The conversion right is subject to standard anti-dilution provisions. Debenture-holders converting their Debentures will, in addition to the applicable number of Units to be received on conversion, receive accrued and unpaid interest, if any, for the period from the last interest payment date on their Debentures to and including the last record date set by the REIT occurring prior to the date of conversion for determining the REIT’s Unitholders entitled to receive a distribution on the Units. The Debentures may not be redeemed by the REIT prior to December 31, 2025. On and from December 31, 2025, and prior to December 31, 2026, the Debentures may be redeemed by the REIT, in whole at any time, or in part from time to time, at a price equal to the principal amount thereof plus accrued and unpaid interest on not more than 60 days’ and not less than 30 days’ prior written notice, provided that the volume weighted-average trading price of the Units on the TSX for the 20 consecutive trading days ending five trading days preceding the date on which notice of redemption is given is not less than 125% of the Conversion Price. On and from December 31, 2026, and prior to the Maturity Date, the Debentures may be redeemed by the REIT, in whole at any time or in part from time to time, at a price equal to the principal amount thereof plus accrued and unpaid interest on not more than 60 days’ and not less than 30 days’ prior written notice.

In connection with the Offering, the Underwriters are entitled to a cash commission equal to 3.75% of the gross proceeds of the Offering, including any Additional Debentures sold pursuant to the exercise of the Over-Allotment Option.

The Debentures have not been and will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”), or any state securities laws. Accordingly, the Debentures may not be offered or sold within the United States, its territories or possessions, any state of the United States or the District of Columbia (collectively, the “United States”) except in transactions exempt from the registration requirements of the 1933 Act and applicable state securities laws. This press release does not constitute an offer to sell or a solicitation of an offer to buy any Debentures within the United States.

About Slate Office REIT (TSX: SOT.UN)

Slate Office REIT is a global owner and operator of high-quality workplace real estate. The REIT owns interests in and operates a portfolio of strategic and well-located real estate assets in North America and Europe. The majority of the REIT’s portfolio is comprised of government and high-quality credit tenants. The REIT acquires quality assets at a discount to replacement cost and creates value for unitholders by applying hands-on asset management strategies to grow rental revenue, extend lease term and increase occupancy. Visit slateofficereit.com to learn more.

About Slate Asset Management

Slate Asset Management is a global alternative investment platform targeting real assets. We focus on fundamentals with the objective of creating long-term value for our investors and partners. Slate’s platform has a range of real estate and infrastructure investment strategies, including opportunistic, value add, core plus and debt investments. We are supported by exceptional people and flexible capital, which enable us to originate and execute on a wide range of compelling investment opportunities. Visit slateam.com to learn more.

Forward-Looking Statements

Certain information herein constitutes “forward-looking information” as defined under Canadian securities laws which reflect management’s expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words “plans”, “expects”, “does not expect”, “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes”, or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved”, or “continue” and similar expressions identify forward-looking statements. Forward-looking statements include, without limitation, statements regarding, any expected exercise of the Over-Allotment Option by the Underwriters and the anticipated use of proceeds of the Offering. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward-looking statements. Additional information about risks and uncertainties is contained in the filings of the REIT with securities regulators, including the Prospectus.

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For Further Information

Investor Relations+1 416 644 4264ir@slateam.com