Slate Asset Management‘s Calgary buying spree continues, with the company adding four more properties to its portfolio late in 2018, RENX has learned. Two of the acquisitions, combined with its previous purchase of Stephen Avenue Place, give Slate a block-long piece of frontage along Stephen Avenue in the downtown core.
When asked if Slate will continue to look at buying more properties in Calgary, Slate’s chief operating officer Brian Bastable replied: “Absolutely. We would definitely look for more office properties downtown as well as the suburbs and our fund (Slate Canadian Real Estate Opportunity Fund I) will acquire any asset class.
“We will also look at retail and industrial opportunities in the future as well. . . As well as pure development plays.
“We don’t believe Calgary is going anywhere. We believe in the market and we think now is a good time to acquire a strong ownership stake in the market at a very good basis relative to how we can buy in other cities throughout Canada.”
Slate has amassed 25 properties in Calgary with about half in the downtown. The portfolio totals about 2.4 million square feet, which is basically 5.5 per cent of the city’s downtown office inventory, according to Bastable. The properties have been acquired during the past two years.
Slate’s most recent acquisitions
The four properties Slate purchased in November and December are:
* Joffre Place, 708 11th Avenue S.W., a 107,000-square-foot office building in the Beltline neighbourhood just outside the downtown core;
* Life Plaza, 734 7th Avenue S.W. , a 235,000-square-foot office building in the west end of the downtown core;
* Venator Building, 232 8th Avenue S.W., which is home to a Dollarama, a London Drugs Express, the Calforex Currency Exchange and the SAIT Culinary Campus in the downtown; and
* Kraft Building, 222 8th Avenue S.W., beside the Venator. It is home to a McDonald’s restaurant at street level, a small retail store above that and a professional office.
Joffre Place and Life Plaza were acquired in late November from Dream. Slate closed on the Venator Building and the Kraft Building in December, buying the properties from Grosvenor, and a private owner respectively.
Bastable did not disclose financial details of the purchases.
He said Slate bought a number of properties in Calgary in 2006, but had sold everything in 2011 in both Calgary and throughout Canada.
Complementary class-B purchases
Bastable said Joffre Place and Life Plaza are complementary to the company’s existing class-B portfolio which it acquired from Dream in January 2017. At that time, Slate acquired 12 class-B office buildings.
It also acquired 12 properties from Cominar REIT (CUF-UN-T): 11 in the suburbs plus the former Scotia Centre office tower in the heart of downtown. In September, Slate announced it had renamed the 40-storey Scotia Centre tower to Stephen Avenue Place and that it would redevelop the 620,000-square-foot tower.
Slate is partnering with Oliver & Bonacini Hospitality and Concorde Entertainment Group to create three innovative dining destinations in Stephen Avenue Place; what it describes as a world-class restaurant on the top floor, an eclectic food hall, and a high-energy restaurant, bar and patio at street level.
“We’re looking to spend roughly $60 million to reposition certainly the entire retail podium as well as other parts of Stephen Avenue Place,” said Bastable.
The Venator and Kraft buildings are located along Stephen Avenue, a key pedestrian-friendly downtown Calgary street.
Slate owns a block of Stephen Avenue
“When we were walking through (Stephen Avenue Place), we saw the Venator Building and the Kraft Building and realized these buildings were actually contiguous to the property (Stephen Avenue Place),” Bastable explained. “These two acquisitions essentially give us a complete 1.7-acre contiguous block with 300 feet of retail frontage along Stephen Avenue and it also has access into the complex. It really gives us control over access which plays into our repositioning strategy for the complex.
“My expectation would be Kraft may remain the way it looks today whereas the Venator Building might have its facade integrated with the newer podium at the bottom of Stephen Avenue Place.”
Bastable said Slate has no major redevelopment plans for Life Plaza and Joffre Place “other than simple lease-up and improvements. Maybe some light repositioning but it’s pretty complementary to our existing portfolio and it’s really just kind of rolling up your sleeves and getting the properties leased out.”
“It just gives us more control in both areas of the downtown and the Beltline and they were originally considered in our larger portfolio purchase in early 2017,” he said.
Founded in 2005, Slate manages and co-invests in assets exceeding $6 billion via private and publicly traded vehicles. Its portfolio contains 28 million square feet of leasable space in about 300 retail, office and industrial properties. The firm has 78 employees.
From its initial Canadian office holdings, Slate has expanded across North America and Europe with exposure to multiple asset classes, utilizing a variety of investment strategies. It now has offices in Toronto, Calgary, Chicago and Frankfurt.