FAM REIT Announces Name Change to Slate Office REIT

 FAM Real Estate Investment Trust announced a planned name change to Slate Office Real Estate Investment Trust ("Slate Office REIT") as well as an update on the REIT's outlook as it enters a transformational year under new management. The REIT also announced its financial results for the three months and full year ended December 31, 2014. 
 
Scott Antoniak, Chief Executive Officer of the REIT, said:
"We are excited to be embarking on a new course for the REIT, having completed the purchase of an attractive portfolio of office buildings in the GTA that we believe will be a solid foundation for our new focus on the office sector. We are currently reviewing further accretive opportunities that are complimentary to this strategy which we believe will create a stronger platform for value creation and will be an attractive alternative for investors.
 "We are also leveraging the significant operational expertise and resources of our new manager, Slate Asset Management LP, to ensure we provide the best value to our investors and tenants," added Mr. Antoniak.
 
2015 Strategy Update
Under its new management by Slate and new leadership team, the REIT has renewed its strategic objectives:
Reposition the REIT as a pure play Office REIT by divesting existing retail and industrial portfolios in a disciplined and orderly fashion to maximize unitholder value. The acquisitions made by the REIT in December 2014 are consistent with this strategy.
Focus growth on high quality, non-core assets including downtown and suburban office properties.
Create an institutional quality investment vehicle leveraging Slate's sophisticated and professional management resources.
As a manager and the largest single unitholder, with an approximate 33.8% interest in the REIT as at December 31, 2014, Slate is highly motivated to increase the value of the portfolio and provide stable, reliable and growing returns to the REIT's unitholders.
In addition, the REIT's repositioning as a pure play on office real estate has created increased institutional ownership. Greystone Managed Investments, a leading pension fund manager, acquired a 13.8% interest in the December 17transaction in which the REIT took ownership of the Acquired Properties. 
 
Operations
Our strong financial position and liquidity allow us to withstand unforeseen short-term challenges while remaining focused on long-term value creation. We are aggressively focused on improving the quality and reliability of our cash flow, and addressing the occupancy issues we faced during the third quarter.
During the fourth quarter of 2014, we continued to work on further de-risking our leasing profile. In particular, we executed a 25-year lease renewal with the Province of Manitoba for 74,000 square feet at 114 Garry Street, Winnipeg. The Province occupies 100% of the property.
The new MTS Data Centre (the "Date Centre") is a fully pre-leased development in Winnipeg. In 2014 the REIT acquired a 50% equity ownership interest in a limited partnership that will own the Data Centre through a $9.5 millioninvestment. The 15-year lease with MTS is on a quadruple net basis and is slated to commence in June 2015. The Data Centre is expected to have a significant positive impact on FAM REIT's financial performance. On an annualized basis, the incremental year one contribution to FFO will be approximately $2.3 million, or $0.12 per unit.
 
Outlook
Management believes that the elevated Adjusted Funds from Operations payout ratio is temporary and the current level of distributions is sustainable, as the newly acquired office properties will generate cash flow growth through near-term leasing opportunities. In addition, several vacancies encountered in 2014 have or are expected to be occupied in 2015.  The Data Centre development is also scheduled for substantial completion in May 2015 with lease commencement in June 2015. The cash required for future capital expenditures and leasing costs will be funded using the REIT's existing revolving credit facility, and from the proceeds arising from the divestment of existing retail and industrial portfolios.
 

on March 13, 2015