Slate Office REIT 9 00 Convertible Unsecured Subordinated Debentures Exp 28 Feb 2026 T.SOT.DB

RE:RE:RE:Occupancy rates and main tenants

[Roxy27]

LuckyInvestor,  
- Pg 2 of the MDA has the quarterly occupancy rates.
- Pg's. 4-6 of the MDA goes into great detail on the portfolio occupancy, leasing changes, existing and forward rolling rental rates, etc. 
- Pg. 10-11 of the slide presentation breaks out the current Q leasing (sf, in-place vs. new rate) and also forward years % expiring anf in-place/market rent profile. 
- The transcript specifically addresses the change in occupancy, expected occupancy increase and run-rate leasing when Scott replies to the occupancy from TD securities. 
- historical tenant retention is 85% (typically 75% is assumed for office but their portoflio has a high % of gov't tenants which have a higher renewal probability). 
- the tenant rollover in the next 5yrs is quite low at 6%-13% per year. mgm't works with local brokerages to lease available vacant space and they work to negotiate and retain existing tenants and they heve been quite successful in this regard.
- the occupancy reduction is largely from tenants they expected to lose at the time they acquired the Fortis portfolio and they've addressed this in previous mgm't calls.
- Investment grade is a very high bench market for tenant quality. There's plenty of strong local/regional and provincial tenants that aren't rated but make money (rated just means they issue unsecured debt). 
- If anything I think the biggest risk is that some of their largest (rated) tenants downsize, potentially leaving large florplate vacancies is some buildings. Still, there's no single lease that would reduce AFFO enough to impair the current payout. 
- Slate specializes in negotiating deals to extend leases with their core tenants. The SNC Lavelin deal in Mississauga is an example; https://renx.ca/slate-office-reit-revitalizing-sheridan-park-facilities/
- Ultimately I believe mgm't has the ability and motivation to keep their buildings at market occupancy/rates or better. While their office properties are not immune to economic cycles, keeep in mind they have no exposure to Alberta which has both a demand and supply issue. The markets they are in don't have large exposures to supply increases so they can compete for general office demand.
- tenants can't "just go" at any time. They are contractually obligated to meet the terms of their leasings. Smaller tenants often have large deposits and sometimes personal guarantees on the leases. Unless you believe in wholesale bankruptcies among all the law firms, accounting firms, IT firms, marketing, dr's, insurance companies, etc. most leases are going to pay out until the terms matures. Most of those are going to renew, because that is typical for commercial properties of this nature.

Good luck