TSE:SOT.UN

0.52
0.02 (3.70%) 1d
0

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Investor Insights

This summary was created by AI, based on 2 opinions in the last 12 months.

Slate Office REIT is facing significant financial challenges, highlighted by over $900 million in debt and a cash flow that only reached $37 million over the past year. This situation is exacerbated by interest expenses amounting to $73 million, nearly double the cash flow, raising concerns about the company's financial health. Recent asset sales totaling $41 million may not be sufficient in the current commercial real estate environment, where it is not a seller's market. Furthermore, the company has had to have certain financial covenants waived, indicating potential risks ahead. The office sector is struggling due to changes in work habits and increased vacancy rates, particularly for non-trophy office buildings, leading to occupancy issues and the recent suspension of distributions.

Consensus
Negative
Valuation
Overvalued
Similar
CPT, 2
DON'T BUY
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

It is not looking good, considering more than $900M in debt and cash flow of only $37M in the last 12 months. Interest expenses were $73M, nearly twice cash flow. It does of course have assets, but it is not a seller's market right now, especially in commercial real estate. It sold $41M of assets in the first quarter, but this may not be enough. Some financial covenants were recently waived. Bloomberg default risk is 14.6%. A company sale of course is possible, but otherwise the convertibles might need to be dealt with by issuing stock and causing massive dilution. We would not really expect a turn here. 
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DON'T BUY

Challenged. Office sector is difficult. Secular change of using less office space. Portfolio consists of non-trophy buildings. Struggles to maintain occupancy. Distribution suspended.

DON'T BUY

Disappointing. In Canada, US, and Ireland. Grew with too much leverage and got caught offside. Cut distribution twice. Cashflows under pressure. Small size, high debt profile. Avoid.

DON'T BUY
He's bearish on office REITs, given work-from-home. SOT operates in secondary markets, which can be a good business, but is capital intensive. SOT is doing a fine job, but offices face double-digit vacancies. Money needs to be spend on improving spaces, less to shareholders.
BUY ON WEAKNESS

Unsure on future of office space demand. Management team of company well respected. Does not own stock in company. Well regarded within industry.

DON'T BUY
He is not bull on the office space. They have been growing in sub-markets he is not keen on. 37% is in Atlantic Canada and he is not keen on their holdings.
DON'T BUY
Very competent managers, but he doesn't like this REIT because they are externally managed--hit with external management fees. They manage public and private fees; he prefers internally managed REITs.
DON'T BUY

A small Canadian office focused REIT in North America managed by the Slate Group. They announced a big distribution cut to re-invest the money into the portfolio. He thinks this is a chronic issue in the space and thinks they did the right thing. From here the downside is relatively protected. The discount to NAV can close in the next two years, but he is not sure what the catalyst would be. He would stay on the sidelines.

SELL
Cut distribution. High leverage, over 50%, which is too high for a REIT. Prefers to play the urban market and class A, not class B. Fundamentals are not what she's interested in. Leverage needs to come down significantly. Concern is how do they grow?
COMMENT
The dividend is safe. He is cautious as to what expect from share price appreciation. They are interest sensitive. So good news baked in with language around interest rates. He thinks there is an increasing probability that interest rates may be cut. This is more of a yield play.
BUY ON WEAKNESS
SOT is down because it cut its dividend to re-balance the company and had bought property in Chicago. This has been a pick of his. It's down 30% so it's now an entry point.
COMMENT
It has struggled with some vacancies in Toronto. Honestly, he doesn't know much about this REIT. He prefers SRT.UN-T which focuses on grocers in mid-market US towns and they have reduced their leverage. He likes SRT's American operations and its defensiveness. The only negative is an external managed contract that seems to be going on forever.
COMMENT

Problem is that whenever it gets to $8, like clockwork, they do an equity financing, and the stock gets whacked. Good managers, who own a lot of stock. Long-term, bulking up on acquisitions makes sense. Not a bad stock, but frustrating. Yield above 9%.

BUY

He likes it. Sees strong growth and a positive outlook. He wants a REIT to generate cash flow, and this one is paying nearly 10%--that he feels is sustainable. Has an $8.50 target.

COMMENT

He used to own this, got tired of them constantly raising money whenever the stock price went up. The balance sheet is healthy, the payout ratio is good, and the dividend is very generous (8.3%). He thinks several investors got sick of it recently, and that’s why the price has dropped.

Showing 1 to 15 of 34 entries

Slate Office REIT(SOT.UN-T) Rating

Ranking : 3 out of 5

Bullish - Buy Signals / Votes : 0

Neutral - Hold Signals / Votes : 0

Bearish - Sell Signals / Votes : 2

Total Signals / Votes : 2

Stockchase rating for Slate Office REIT is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

Slate Office REIT(SOT.UN-T) Frequently Asked Questions

What is Slate Office REIT stock symbol?

Slate Office REIT is a Canadian stock, trading under the symbol SOT.UN-T on the Toronto Stock Exchange (SOT.UN-CT). It is usually referred to as TSX:SOT.UN or SOT.UN-T

Is Slate Office REIT a buy or a sell?

In the last year, 2 stock analysts published opinions about SOT.UN-T. 0 analysts recommended to BUY the stock. 2 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Slate Office REIT.

Is Slate Office REIT a good investment or a top pick?

Slate Office REIT was recommended as a Top Pick by on . Read the latest stock experts ratings for Slate Office REIT.

Why is Slate Office REIT stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is Slate Office REIT worth watching?

2 stock analysts on Stockchase covered Slate Office REIT In the last year. It is a trending stock that is worth watching.

What is Slate Office REIT stock price?

On 2025-01-02, Slate Office REIT (SOT.UN-T) stock closed at a price of $0.52.