Slate Office REIT

SOT.UN-T

Analysis and Opinions about SOT.UN-T

Signal
Opinion
Expert
DON'T BUY
DON'T BUY
July 9, 2019

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.

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.

Joshua Varghese
Portfolio manager, Signature Global Asset Management, CI Investments
Price
$5.900
Owned
No
SELL
SELL
May 30, 2019
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?
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?
Michelle Wearing
Portfolio Manager, Starlight Capital
Price
$6.020
Owned
No
COMMENT
COMMENT
May 28, 2019
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.
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.
Kash Pashootan
CEO & Chief Investment Officer, First Avenue Investment Counsel
Price
$6.080
Owned
No
BUY WEAKNESS
BUY WEAKNESS
March 27, 2019
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.
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.
Gavin Graham
Trustee, Pointbreak ETFs
Price
$6.160
Owned
Unknown
COMMENT
COMMENT
March 20, 2019
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.
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.
Paul Gardner, CFA
Partner and Portfolio Manager, Avenue Investment Management
Price
$6.160
Owned
No
COMMENT
COMMENT
September 7, 2018

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%.

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%.

Fabrice Taylor
Publisher, The President's Club Newsletter
Price
$7.850
Owned
Unknown
BUY
BUY
August 14, 2018

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.

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.

Jaime Carrasco
Portfolio Manager, Canaccord Genuity
Price
$7.880
Owned
Unknown
COMMENT
COMMENT
May 8, 2018

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.

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.

Fabrice Taylor
Publisher, The President's Club Newsletter
Price
$7.530
Owned
No
COMMENT
COMMENT
July 18, 2017

As a group, REITs trade a lot like the bond market. The selloff in the Canadian bond market in the last 6 weeks, puts pressure on utilities, REITs and consumer staples. In general, he is Short the REIT sector. This has a 9.4% dividend yield while the peer group is less than 5%.

As a group, REITs trade a lot like the bond market. The selloff in the Canadian bond market in the last 6 weeks, puts pressure on utilities, REITs and consumer staples. In general, he is Short the REIT sector. This has a 9.4% dividend yield while the peer group is less than 5%.

David Burrows
President & Chief Investment Strategist, Barometer Capital Management
Price
$7.920
Owned
Unknown
COMMENT
COMMENT
April 18, 2017

A suburban office REIT with properties in the Maritimes as well as some in the GTA, but always in the suburban setting. Good management. He is not a big fan of suburban office. The dividend of 7%+ is safe.

A suburban office REIT with properties in the Maritimes as well as some in the GTA, but always in the suburban setting. Good management. He is not a big fan of suburban office. The dividend of 7%+ is safe.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$8.230
Owned
No
BUY
BUY
April 10, 2017

They are in an area that is a little more economically sensitive than retail or industrial. If you are comfortable with the yield and the sector then this is perfectly fine.

They are in an area that is a little more economically sensitive than retail or industrial. If you are comfortable with the yield and the sector then this is perfectly fine.

Gavin Graham
Trustee, Pointbreak ETFs
Price
$8.120
Owned
Unknown
COMMENT
COMMENT
February 3, 2017

A suburban office REIT. He is a little hesitant to be investing in the suburban office market. There is so much pressure to be downtown and so many buildings are continuing to be constructed. A lot of the demand is coming from the suburbs. Management of this REIT is really smart, and they have recently launched an opportunity fund for office. There will not be a lot of gain in price, but you will get your income. There is easier yield elsewhere. Yield of 9.5%.

A suburban office REIT. He is a little hesitant to be investing in the suburban office market. There is so much pressure to be downtown and so many buildings are continuing to be constructed. A lot of the demand is coming from the suburbs. Management of this REIT is really smart, and they have recently launched an opportunity fund for office. There will not be a lot of gain in price, but you will get your income. There is easier yield elsewhere. Yield of 9.5%.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$7.820
Owned
Unknown
COMMENT
COMMENT
November 17, 2016

Suburban office buildings. They have a balanced portfolio. As an operator, the company is fantastic. They know how to make money in suburban offices, but he is concerned about the trends as there are a lot of moving pieces, especially with where the Canadian economy is right now.

Suburban office buildings. They have a balanced portfolio. As an operator, the company is fantastic. They know how to make money in suburban offices, but he is concerned about the trends as there are a lot of moving pieces, especially with where the Canadian economy is right now.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$8.020
Owned
No
COMMENT
COMMENT
October 18, 2016

(Market Call Minute.) A good company in a bad sector. The office space is going to be tough for some time to come, but this is one of the winners within that space.

(Market Call Minute.) A good company in a bad sector. The office space is going to be tough for some time to come, but this is one of the winners within that space.

Steve DiGregorio
Portfolio Manager, Canoe Financial
Price
$8.470
Owned
Unknown
COMMENT
COMMENT
September 2, 2016

This is secondary (suburban) office. There is going to be a really interesting play in suburban office at some point. You’ll have to watch for GDP numbers for small business growth in Canada. There is quite a large spread in what people are willing to pay, for class A buildings versus suburban office. These guys know how to get in with their hands dirty and get buildings cheap, work with tenants, etc. It is too early in the cycle, but it is definitely one to watch.

This is secondary (suburban) office. There is going to be a really interesting play in suburban office at some point. You’ll have to watch for GDP numbers for small business growth in Canada. There is quite a large spread in what people are willing to pay, for class A buildings versus suburban office. These guys know how to get in with their hands dirty and get buildings cheap, work with tenants, etc. It is too early in the cycle, but it is definitely one to watch.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$8.440
Owned
No
WATCH
WATCH
July 8, 2016

He likes the Slate team which are doing a lot of really interesting things across the board. This is more secondary office, suburban office buildings. It will be an interesting vehicle in the future, but we are not there yet, as he expects more pressure of people leaving older buildings in the suburbs and coming towards downtown cores. There will be a rebound at some point, and that is what they are going to profit from. These guys are masters at repositioning, and he is looking for them to dip their toes into Calgary, while it is cheap, and that is when you really want to take advantage of this REIT.

He likes the Slate team which are doing a lot of really interesting things across the board. This is more secondary office, suburban office buildings. It will be an interesting vehicle in the future, but we are not there yet, as he expects more pressure of people leaving older buildings in the suburbs and coming towards downtown cores. There will be a rebound at some point, and that is what they are going to profit from. These guys are masters at repositioning, and he is looking for them to dip their toes into Calgary, while it is cheap, and that is when you really want to take advantage of this REIT.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$7.840
Owned
No
COMMENT
COMMENT
April 27, 2016

This has started to recover in the last year. Pays a slightly better than 10% yield. There are 2 issues. A slowing economy hurts all REITs, but you also have an added premium on quality dividends, which is a tailwind. As long as management can continue to keep occupancy relatively high and run the business well, he thinks the dividend is fine, and that sentiment towards the business is going to improve.

This has started to recover in the last year. Pays a slightly better than 10% yield. There are 2 issues. A slowing economy hurts all REITs, but you also have an added premium on quality dividends, which is a tailwind. As long as management can continue to keep occupancy relatively high and run the business well, he thinks the dividend is fine, and that sentiment towards the business is going to improve.

Fabrice Taylor
Publisher, The President's Club Newsletter
Price
$7.900
Owned
Yes
COMMENT
COMMENT
December 18, 2015

A REIT that has gone through a couple of transitions and is in transition now. He tries not to own companies in transition, but wants to make sure they find their way properly. Their final destination is to be a suburban office REIT in Canada. A play that is early, but has potential. They have to manage very carefully. 10.95% distribution, which is high out of neglect, not weakness.

A REIT that has gone through a couple of transitions and is in transition now. He tries not to own companies in transition, but wants to make sure they find their way properly. Their final destination is to be a suburban office REIT in Canada. A play that is early, but has potential. They have to manage very carefully. 10.95% distribution, which is high out of neglect, not weakness.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$6.820
Owned
No
PAST TOP PICK
PAST TOP PICK
December 4, 2015

(A Top Pick Jan 28/15. Down 4.02%.) People are concerned about interest rates. They had a problem when the management contract was bought. New management had a private REIT and were moving assets from that into Slate at prices that were too high. However, the numbers they put out are pretty good. Yield is 10% which he thinks is pretty safe.

(A Top Pick Jan 28/15. Down 4.02%.) People are concerned about interest rates. They had a problem when the management contract was bought. New management had a private REIT and were moving assets from that into Slate at prices that were too high. However, the numbers they put out are pretty good. Yield is 10% which he thinks is pretty safe.

Fabrice Taylor
Publisher, The President's Club Newsletter
Price
$7.360
Owned
Yes
PAST TOP PICK
PAST TOP PICK
November 16, 2015

(Top Pick Jan 28/15, Down 6.49%) The management contract for this company was taken over and there were concerns. He is getting a decent coupon. Payout is about 80%. The discount on the stock is from skepticism about the relationship between the private and public companies.

(Top Pick Jan 28/15, Down 6.49%) The management contract for this company was taken over and there were concerns. He is getting a decent coupon. Payout is about 80%. The discount on the stock is from skepticism about the relationship between the private and public companies.

Fabrice Taylor
Publisher, The President's Club Newsletter
Price
$7.330
Owned
Yes
COMMENT
COMMENT
August 12, 2015

He recommended it to his subscribers, it has not done well. The yield has been very nice and has protected against capital losses. There has been an issue with the new management team . There is a view that they might not have shareholders interest best at heart. Management owns a bunch of stock privately. So they have to prove that they can deliver. The last numbers were very good. They have to subdue the worries from the investors. If they can do this, the stock should trade above 10. They do have some attractive assets (Data Centre in Winnipeg), just a credibility problem.

He recommended it to his subscribers, it has not done well. The yield has been very nice and has protected against capital losses. There has been an issue with the new management team . There is a view that they might not have shareholders interest best at heart. Management owns a bunch of stock privately. So they have to prove that they can deliver. The last numbers were very good. They have to subdue the worries from the investors. If they can do this, the stock should trade above 10. They do have some attractive assets (Data Centre in Winnipeg), just a credibility problem.

Fabrice Taylor
Publisher, The President's Club Newsletter
Price
$7.020
Owned
Yes
DON'T BUY
DON'T BUY
May 15, 2015

Their methodology is looking at the suburban office market, and continuing to grow on that. He is not a huge fan of office right now. It will be interesting to watch as the office market progresses, and once it stabilizes, it could provide some interesting opportunities.

Their methodology is looking at the suburban office market, and continuing to grow on that. He is not a huge fan of office right now. It will be interesting to watch as the office market progresses, and once it stabilizes, it could provide some interesting opportunities.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$7.900
Owned
No
TOP PICK
TOP PICK
January 28, 2015

All of the REITs took a beating about 1.5 years ago when investor started worrying about higher interest rates. Then they had a bit of controversy about the sale of the management contracts. A lot of investors, institutional especially, bailed out and drove the stock price down. Doesn’t think interest rates are going to go up a lot. This yields 9.29%, and he thinks you will get this plus a little bit of capital gain as people accept this new management team. Balance sheet is very, very conservative. Not a lot of debt. He can see 20% gain in the next year.

All of the REITs took a beating about 1.5 years ago when investor started worrying about higher interest rates. Then they had a bit of controversy about the sale of the management contracts. A lot of investors, institutional especially, bailed out and drove the stock price down. Doesn’t think interest rates are going to go up a lot. This yields 9.29%, and he thinks you will get this plus a little bit of capital gain as people accept this new management team. Balance sheet is very, very conservative. Not a lot of debt. He can see 20% gain in the next year.

Fabrice Taylor
Publisher, The President's Club Newsletter
Price
$8.400
Owned
Yes
DON'T BUY
DON'T BUY
November 13, 2014

Huntington Corporation spun this out. They were then purchased by the Slate Group. Because Huntington had the controlling interest in this REIT, the Slate Group decided they were going to turn it into a secondary office REIT and transition it. You now have 3 different groups shuffling around and it is in a transition situation that costs a lot. He doesn't like stocks in transition.

Huntington Corporation spun this out. They were then purchased by the Slate Group. Because Huntington had the controlling interest in this REIT, the Slate Group decided they were going to turn it into a secondary office REIT and transition it. You now have 3 different groups shuffling around and it is in a transition situation that costs a lot. He doesn't like stocks in transition.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$7.620
Owned
No
WAIT
WAIT
September 5, 2014

A little small for him. There is a transition happening. He would not be in it at all at this point. Buy it at the right price.

A little small for him. There is a transition happening. He would not be in it at all at this point. Buy it at the right price.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$8.370
Owned
No
BUY
BUY
September 24, 2013

They are trying, from humble beginnings, to become a blue chip REIT. They want to maintain proper debt levels, proper governance, proper structure and proper payout. Disadvantage is that they are very small right now and in order to grow through acquisitions, they are somewhat stuck while they wait for the equity markets to recover. Until then, you’re getting a safe yield. Good management team. 8.6% yield.

Slate Office REIT (SOT.UN-T)
September 24, 2013

They are trying, from humble beginnings, to become a blue chip REIT. They want to maintain proper debt levels, proper governance, proper structure and proper payout. Disadvantage is that they are very small right now and in order to grow through acquisitions, they are somewhat stuck while they wait for the equity markets to recover. Until then, you’re getting a safe yield. Good management team. 8.6% yield.

Derek Warren
Asst Vice President, Lincluden Investment Mgmnt
Price
$8.710
Owned
Unknown
BUY
BUY
July 26, 2013

Why have REITs pulled back is much as they have and is there a favourite one that you like? REITs have pulled back because people are starting to price in higher interest rate. This is one that he finds intriguing because it is small and it is new. Doesn’t have any coverage, which he always finds attractive because when coverage does come, and if you own, it is going to go up. A controlling shareholder did a private placement at $9.40, which is encouraging. Pays a nice dividend of 8.3%. Payout ratio is very reasonable.

Why have REITs pulled back is much as they have and is there a favourite one that you like? REITs have pulled back because people are starting to price in higher interest rate. This is one that he finds intriguing because it is small and it is new. Doesn’t have any coverage, which he always finds attractive because when coverage does come, and if you own, it is going to go up. A controlling shareholder did a private placement at $9.40, which is encouraging. Pays a nice dividend of 8.3%. Payout ratio is very reasonable.

Fabrice Taylor
Publisher, The President's Club Newsletter
Price
$9.000
Owned
Yes
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