Mr. Blair Welch reports

SLATE GROCERY REIT REPORTS FOURTH QUARTER AND YEAR END 2023 RESULTS

Slate Grocery REIT has released its financial results and highlights for the three and 12 months ended Dec. 31, 2023.

"In a year that challenged much of the broader real estate industry, our portfolio of grocery-anchored real estate continued to demonstrate exceptional resilience and operational performance," said Blair Welch, chief executive officer of Slate Grocery. "Our team set a new high watermark for annual leasing volume in 2023 at some of our highest rental spreads on record, which we expect to convert to healthy [net operating income] growth in the coming years. Looking ahead, we believe our below-market in-place rents, coupled with favourable supply-demand dynamics in the grocery-anchored sector, present the [real estate investment trust] with significant runway to further grow our revenue and enhance the durability of our income."

Highlights:

• Completed 2.9 million square feet of total leasing in the year at outsized rental spreads:
  • Completed 637,439 square feet of leasing in the fourth quarter; new deals were completed at 30.9 per cent above comparable average in-place rent and non-option renewals at 15.6 per cent above expiring rent. On a year-to-date basis, the REIT's new leasing spread is 23.1 per cent, and total leasing spread is 10.4 per cent;
  • Strong leasing drove a 150-basis-point increase in portfolio occupancy year over year to 94.7 per cent;
  • Adjusting for completed redevelopments, same-property net operating income increased by $2.0-million or 1.5 per cent on a trailing-12-month basis;
• Prudently managed balance sheet to ensure the REIT remains protected in the current interest rate environment:
  • In November, the REIT amended a $137.5-million interest rate swap to remove the existing cancellation option and lock in the maturity date of July, 2027, thereby limiting the REIT's exposure to floating-rate debt;
  • 94.6 per cent of the REIT's total debt is fixed, with a weighted-average interest rate of 4.4 per cent, providing positive leverage and stability to the REIT;
  • At $12.41 per square foot, average rent in the REIT's portfolio remains well below market, providing significant runway for continued rent increases and NOI growth;
• The REIT's units are trading at a discount to net asset value, presenting a compelling investment opportunity for unitholders looking for an attractive total return:
  • As at year-end, the REIT's unit price indicates an implied capitalization rate of 7.9 per cent based on trailing-12-month NOI, representing a 33.5-per-cent discount to net asset value.

Conference call and webcast

Senior management will host a live conference call at 9 a.m. ET on Feb. 14, 2024, to discuss the results and continuing business initiatives of the REIT.

The conference call will be available by dialling 416-764-8658 or 1-888-886-7786. Additionally, the conference call will be available by simultaneous audio. A replay will be available until Feb. 28, 2024, on the REIT's website or by dialling 416-764-8692 or 877-674-7070 (access code 968854 followed by the number sign) approximately two hours after the live event.

About Slate Grocery REIT

Slate Grocery is an owner and operator of U.S. grocery-anchored real estate. The REIT owns and operates approximately $2.4-billion of critical real estate infrastructure across major U.S. metro markets that communities rely upon for their everyday needs. The REIT's resilient grocery-anchored portfolio and strong credit tenants provide unitholders with durable cash flows and the potential for capital appreciation over the longer term.

We seek Safe Harbor.