The new fund is aimed at commercial property fixer-uppers
Toronto-based real-estate investment firm Slate Asset Management is starting a new fund focused on reviving commercial properties across Canada.
Sources close to the company say the new private fund is called Slate Real Estate Opportunities fund, according to the Globe and Mail. For its first acquisition, it has obtained a $200-million portfolio of 12 Calgary office buildings from Dream Office REIT. The deal was announced previously by Dream, but the buyer was not disclosed at the time.
The fund is said to be opportunistic, which in real-estate parlance means that it targets properties that need work like renovations or new leases, fixes them, then gets back its investment by selling or refinancing them. In this case, the Alberta portfolio Slate acquired from Dream is 82% occupied, so the priority will be to get the vacancies filled.
The acquisition in Alberta, where multiple industries are suffering from the fallout of the oil and gas sector downturn, is a contrarian investment that is typical of Slate. Founded by brothers Blair and Brady Welch, the firm oversees $3.5 billion in real-estate investments. It manages two publicly traded REITs, one concentrating on office buildings and the other on shopping malls.
The Slate Real Estate Opportunities fund is the firm’s second private fund. It is backed by institutional investors such as pension plans and insurance companies. While Slate did not disclose details such as the fund’s target size, sources said it will be a “significant” real-estate venture.
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