Ravelin Properties REIT, a Toronto-based office landlord with about 50 commercial properties in Canada, the U.S. and Ireland, is beefing up its board to help direct a turnaround as its unit share price has dropped to less than $1.
Formerly known as Slate Office, the real estate investment trust has been trying to rebound from several rough quarters and a wider loss with the support of activist investor and Chair George Armoyan.
The REIT recently appointed Calvin Younger to the board. He is the retired vice chair of real estate finance at CIBC, where he worked for more than two decades. Jane Rafuse, a former chief financial officer of Holloway Lodging Corp., also joined its board, Ravelin said.
Slate Office rebranded as Ravelin in December and named Shant Poladian as CEO. He previously served as CEO of Fam REIT when Slate Asset Management took control of that real estate investment trust and rebranded it as Slate Office.
Armoyan has a stake of about 20% in the REIT that now has a stock market value of less than $50 million. He became chair of the REIT in 2024 after calling for Slate Office to terminate its management deal with Slate Asset, an investor that owns less than 10% of its units.
Ravelin said this week in a report on its fourth-quarter results that it is in discussions with its lenders to resolve current defaults and to amend, renew or consider alternate arrangements on its debt to reach amendable terms on conditions acceptable to the REIT.
Seeking cost savings
With the Slate Asset Management deal no longer in place, Ravelin said bringing its management in-house should result in savings of at least $10 million in 2025. The savings will be realized, Ravelin said, because it will eliminate fees it used to pay to have an outside company provide the service and be able to have a "greater focus" on overhead expense management.
However, it faces major challenges. "If the REIT is unsuccessful in negotiating a potential recapitalization plan and raising additional capital in the near term, the REIT will be unable to continue as a going concern," TREIT management said in its quarterly filing.
In the fourth quarter, the REIT saw its portfolio occupancy drop to 76.8% from 79% a year earlier. It reported a net loss of $101.8 million for the quarter compared to a loss of $61.36 million a year earlier.
Ravelin said its total assets were valued at just over $1.2 billion at the end of 2024, and that its total debt was nearly $1.1 billion.
The REIT also said it revalued its property portfolio, resulting in a $97.2 million negative fair value adjustment in the fourth quarter due to recent property sales.
Ravelin completed $114.1 million in dispositions in 2024, including the sale of the Woodbine Corporate Centre in Toronto for a gross purchase price of approximately $39 million for the REIT's 75% co-ownership share.
Ravelin said it is working to complete the sale of another property in Oshawa, just east of Toronto, to an institutional purchaser. The gross purchase price of that asset is set at $16.5 million, and the REIT anticipates that the sale will close during the second quarter.