Slate Office REIT, a Toronto-based office landlord with assets in Canada, the United States and Ireland, said it has secured contracts to sell another 12% of its portfolio based on leasable area, in a move designed to bolster its balance sheet.

The real estate investment trust, which has seen its share price tumble after eliminating its distribution, said as of last week that approximately $109.1 million of its assets as valued in Canadian currency are under contract or a letter of intent to buy. The value of the properties is based on the REIT's expected share of the proceeds from the sales.

"We continue to make progress on the REIT's portfolio realignment plan, completing $40.6 million of dispositions to date across Canada and Ireland, the proceeds of which are being used to pay down the REIT's debt and strengthen the REIT's balance sheet," Slate Office interim CEO Brady Welch said in a statement.

The REIT cut its distribution in November, and this year unitholders passed a special resolution approving an amendment to its declaration of trust to temporarily remove the restriction imposed not to exceed financial leverage of 65% of gross book value.

In February, the REIT completed the sale of The Sheridan Exchange in Mississauga, with its share generating a gross purchase price of $19.2 million. The sale of units 7 and 8 Airways in Dublin, Ireland, generated $11 million, or 7.5 million euros.

After the quarter ended, the REIT completed the sale of 84-86 Chain Lake in Halifax, Nova Scotia, for $10.4 million.

"We continue to have conviction in the value of our office portfolio and believe the actions the REIT has taken to retain cash, pay down debt, and proactively create value within our portfolio and capital structure will ultimately position us for long-term success," Welch said in a letter to unitholders.

Slate Office units closed out the week near a 52-week low of 67 cents. The units traded above $5 before the pandemic.

Sumayya Syed, an analyst with CIBC World Markets, lowered his 12-month target price on Slate Office units to 75 cents from $1 and said the REIT's future was uncertain.

"Slate has obtained temporary flexibility on certain debt covenants, and continues to work with lenders to modify or obtain waivers for other covenants. As of quarter-end, about $562 million of loans are considered in default, including debt on assets held for sale, and are due on demand," Syed said.

He also said that under one downside scenario, Slate units would drop to zero, resulting in the REIT being "no longer a going concern."

Slate Office owns 52 properties mostly in Canada and Ireland. It also owns three buildings in the Chicago area.