- What Slate Office REIT and a U.S.-based partner sold the five-building complex for $52m
- Why CFO Capital provided financing for the buyer
- What next The move is part of Slate Office’s attempt to pay down debt
Smart Investments has paid $52m for the Woodbine & Steeles Corporate Centre in Markham, Ont.
The sellers were Slate Office REIT, which owned a 75% share in the five-building complex, and a U.S.-based entity, which owned the other 25%. The valuation for the 360,000 sq ft property works out to $144/sq ft.
CFO Capital provided financing for Markham-based Smart Investments. JLL and RBC Capital Markets Real Estate Group had the assignment.
Woodbine & Steeles Corporate Centre comprises three office towers at 7030, 7050 and 7100 Woodbine Avenue, a flex/office building at 55 Idema Road and an industrial asset at 85 Idema Road.
At the corner of Woodbine Avenue and Steeles Avenue East, the complex is close to Highways 401, 404 and 407. Several TTC and YRT bus routes run nearby, and two GO Transit stations are within 5 km.
As of Sept. 30, the property was 80.4% leased to 72 tenants including CheapOair, Jim Zhang Law and Mid-Range. Asking net rents range from $16.50/sq ft to $18/sq ft.
The Class-B office towers were completed from 1982 to 1988. The buildings were renovated in 2011 and share more than 1,100 surface and underground parking spaces.
As reported by Green Street News, Slate had been seeking a buyer for the complex as it worked to lower its debt load. The REIT defaulted on $158m of debt in June. As of Sept. 30, it had total assets of $1.4bn and total debt of $1.14bn.
In October, Slate announced it was moving to internalize management after its external manager, Slate Management, provided 180 days’ notice of termination of its management agreement. At the same time, trustees Blair and Brady Welch resigned from the board.
As reported by The Globe and Mail, the Welch brothers had accused George Armoyan, an activist investor and fellow trustee, of making inappropriate bids for the company’s assets. Armoyan, who owns 20% of the REIT, claimed the Welches had profited through the now-terminated management agreement while the value of the trust declined.
Smart Investments is a real estate investment and management company owned by Tim Gu.
Article updated at 2:40 p.m. ET on Nov. 18, 2024, to include the brokers.
