- What Slate Management is ending its management agreement with Slate Office REIT
- Why The REIT is working to internalize management to align with unitholders and lower costs
- What Next The company continues to work on paying down its debt
Slate Office REIT is moving to internalize management.
Trustees Blair Welch and Brady Welch have resigned from the board, and external manager, Slate Management, has provided notice that it is ending its management agreement. The manager provided 180 days’ notice of termination and is working with the company on a transition plan.
“The Trustees believe that internalized management will achieve strong alignment with unitholders and lower costs for the REIT,” said board chair Sam Altman.
The moves come as the REIT attempts to reduce its $1.14bn debt burden via property sales – it defaulted on $158m of debt in June – and faces a battle between board members.
As reported by The Globe and Mail, George Armoyan, activist investor and trustee of the REIT, claims the Welches have profited through the now terminated management agreement while the value of the trust has fallen.
In turn, the brothers have accused Armoyan, who owns 20% of the REIT, of making inappropriate bids for the company’s assets and pushing it toward insolvency in an effort to gain more control.
The price of the REIT’s shares on the TSX were up on the news of the management moves, trading at 74 cents apiece on the afternoon of Oct. 3, up from 55 cents at open.
