Slate Grocery REIT Reports Strong Q3 and Year-End 2024 Results, Driven by Leasing Volumes and Debt Refinancing

Slate Grocery REIT (TSX: SGR.U) (TSX: SGR.UN) reported its financial results and highlights for the three and nine months ended September 30, 2024, demonstrating strong performance driven by leasing volumes and successful debt refinancing. The REIT's Chief Executive Officer, Blair Welch, highlighted the impact of several consecutive quarters of strong leasing volumes at high spreads on the company's same-property net operating income (NOI), which increased by 6.2% year-over-year, including the impact of redevelopments. Additionally, the REIT worked with both existing and new institutional lenders to refinance its revolving credit facility and term loan, securing interest rate spreads similar to the maturing debt and reducing the risk to its balance sheet.

Key highlights from the Q3 2024 Results include:

* Achieved 6.2% or $2.4 million same-property NOI growth year-over-year, adjusting for completed developments, driven by strong leasing volumes at attractive spreads
* Completed 850,455 square feet of total leasing in the quarter; new deals were completed at 24.8% above comparable average in-place rent, and non-option renewals at 14.1% above expiring rents
* Portfolio occupancy remained stable at 94.6% as at quarter end
* The REIT's average in-place rent of $12.61 per square foot remains well below the market average of $23.58, providing significant runway for continued rent increases and NOI growth
* Refinanced $500.0 million of debt subsequent to quarter end, addressing a significant portion of upcoming debt maturities
* Entered into a new credit facility agreement for an aggregate principal amount of up to $500.0 million, comprising a $275.0 million revolving credit facility and a $225.0 million term loan facility, at interest rate spreads similar to the maturing debt facility
* The REIT is also in advanced stages with lenders to refinance another $138.0 million of upcoming debt maturities, which are expected to be completed during the fourth quarter
* Subsequent to these refinancings, the REIT's forecasted weighted average interest rate will be 4.8% when accounting for in-place interest rate swap contracts, providing significant positive leverage and stability for the REIT
* The REIT's units continue to trade at a discount to Net Asset Value ("NAV"), presenting a compelling investment opportunity for unitholders looking for an attractive total return
* As at September 30, 2024, the REIT's unit price represents a 24.5% discount to NAV

Slate Grocery REIT's strong performance in the third quarter and year-end 2024 is a testament to the company's ability to capitalize on favorable market conditions and maintain a healthy portfolio. The REIT's focus on leasing volumes, debt refinancing, and maintaining a stable portfolio occupancy has driven its growth in same-property NOI and overall financial stability. As the REIT continues to execute on its strategic initiatives, investors can expect to see further improvements in its financial performance and overall value.