Slate Asset Management L.P. Corporate Overview

Slate Asset Management L.P.
2016 Corporate Overview
EXECUTIVE SUMMARY
Clear Vision. Clear Value.
Delivering outsized returns starts with seeing real
estate from a fresh perspective and having the
determination to go farther for opportunities. That
vision has made us one of Canada’s most active and
innovative investors and operators.
We work with likeminded partners and investors, that
share our unwavering commitment to generating
value.
Investors First
Founded in 2005
Over $3 billion of AUM
Publicly Traded Vehicles
Private Alternative Investments
Over 130 Properties
Over 16 Million Square Feet
Where can our vision take you?
Hands-On Operators
Slate Asset Management L.P. | 2
SLATE TODAY
“Our investment strategies are focused and ‘theme’ oriented. We find niches in the
marketplace where capital is not flowing, where there are opportunities that are
considered too small by large capital or too complex by others that aren't willing to
figure out and unlock value.”
- Brady Welch, Partner & Co-Founder
Vision is seeing overlooked value
Slate Asset Management L.P. | 3
Slate Today
Capital
Partners
Private
institutional investors
Publicly-traded
real estate investment trusts
Investment
Vehicles
Slate
Advisors
Slate Retail REIT
(TSX:SRT.U/SRT.UN)
Slate Office REIT
(TSX:SOT)
Investment
Themes
Core, core plus and
opportunistic real
estate investments
Grocery anchored
U.S. retail properties
Canadian office
properties
> $3.0 billion AUM
Having multiple capital sources allows us to pursue many types of deals, ensuring
the right opportunities are met with the right investors
Slate Asset Management L.P. | 4
SLATE TODAY
NWT
Canada
Total assets
62
Square feet (millions)
8.3
Provinces/Territories
8
AB
SK
MB
NL
ON
NB
NS
ND
MN
WI
United States
Total assets
64
Square feet (millions)
8.2
States
MI
OH
IL
CO
VA
KY
NC
TN
20
PA
NH
CT
MD
WV
SC
TX
AL
GA
FL
Slate Asset Management L.P. | 5
THE SLATE OPPORTUINITY
“Commercial real estate was becoming dominated by investors who had never
owned or operated real estate. Too often, they treated real estate as a cash flow
stream similar to a fixed income security. These investors weren't focused on the
fundamentals like we would focus on the fundamentals. We could be the bridge.”
- Blair Welch, Partner & Co-Founder
Vision is identifying themes others overlook
Slate Asset Management L.P. | 6
BUILDING ON OUR VALUES
The best real estate operators:
1. Are owners too, investing shoulder to shoulder with their
capital partners
2. Put real estate fundamentals first
3. Are entrepreneurial and find opportunities where others
don’t
Slate Asset Management L.P. | 7
BUILDING ON OUR VALUES
How we invest:
1.
Buy assets that we would be comfortable owning forever
2.
Buy at a discount to replacement value
3.
Use leverage prudently
4.
Stay on top of market trends and capital flows
5.
Be well-positioned to respond tactically to new investment opportunities
Slate Asset Management L.P. | 8
WE RELENTLESSLY PURSUE VALUE
As value investors, we look for opportunities to own buildings for less than we could
build them. Our strategyreduces risk, protects capital and increases returns.
Identify an asset
class that is out of
favour
Acquire properties
at below
replacement value
Leverage
operational
expertise to
upgrade the
properties
Re-lease at higher
rents to better
quality tenants
Actively monitor
opportunities to
exit and re-deploy
capital
Slate Asset Management L.P. | 9
WE ARE EXPERIENCED OPERATORS
Though we believe in the fundamental importance of being able to identify
compelling opportunities and buying them correctly, that’s only part of it.
With every asset, Slate works directly with its investment partners and tenants on
property enhancement and leasing strategies, leveraging our expertise in real
estate operations management.
Photos: (left to right) 30 St. Clair Ave W, Toronto, ON; 151 Bloor St W, Toronto, ON
Vision is identifying ways to strengthen assets … and then executing
Slate Asset Management L.P. | 10
REAL ESTATE AND INVESTORS COME
FIRST
• We have a significant equity stake in every investment we make, we don’t like
high-cost management contracts that do not produce results.
• We align ourselves with our partners through performance incentive structures
that reward clear focus and execution.
• Fees never cloud investment decisions. When the time is right to sell an asset or
move on to a new theme, we do it because our first priority is to be a shoulder-toshoulder investor.
Vision is looking at investments as owners
Slate Asset Management L.P. | 11
WE HAVE DEEP BENCH STRENGTH
Our dynamic and highly integrated management platform oversees all stages of the real
estate investment life cycle.
Our team comprises over 40 talented professionals with deep real estate finance, asset
management and brokerage experience.
Investments
Asset
Management
Leasing &
Development
Finance &
Taxation
Investor
Relations
Legal
Experienced and
sophisticated
investments team
Hands on
operators, we
invest in every
entity we manage
Leasing and
development
capabilities across
all platforms
Public company &
institutional
reporting
capabilities
Active investor
relations team
forging strong
relationships with
our partners
Proven fiduciary
for public
companies and
institutional
investors
Slate Asset Management L.P. | 12
WHY INVEST WITH SLATE?
• Because we’re the next great Canadian asset manager with a focus on real
estate
• Because we go further and look deeper for the unexplored value that creates
great risk-adjusted returns
• Because we are seasoned operators with a proven track record of creating
value
• Because we invest alongside our partners—we’re owners, too
That’s clear vision. That’s clear value.
Slate Asset Management L.P. | 13
WHERE CAN OUR VISION TAKE YOU?
Blair Welch
Partner & Co-Founder
Brady Welch
Partner & Co-Founder
Katie Talbot
Associate,
Investor Relations
+1 416 644 4267
+1 416 644 4263
+1 416 583 1785
[email protected]
[email protected]
[email protected]
Slate Asset Management L.P.
121 King St W, Suite 200
Toronto, ON M5H 3T9
slateam.com
Slate Asset Management L.P. |
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APPENDIX A
PRECEDENT INVESTMENT CASE STUDIES
SLATE/BLACKSTONE CANADIAN OFFICE
From 2005 to 2011 Slate, in partnership with The
Blackstone Group


Completed over 21 separate transactions, 60% of which
were “off-market”
Slate completed over 800 lease transactions for 3.2 million
square feet, or approximately 93% of the portfolio
By 2011, our value add initiatives resulted in a portfolio
with significantly higher cash flow generation, increased
occupancy and improved tenant roster

Sold in Q3 2011 to a publicly-traded REIT for $831.8
million—at the time the largest acquisition of a portfolio by
a REIT in Canada

Slate delivered a 3.0x equity multiple, and a levered IRR
of 24.9%
City
Number of
GLA (sq. ft.)
Toronto
17
1,778,018
Ottawa
2
231,575
Calgary
6
624,697
Edmonton
5
806,594
Total
30
3,440,884
Slate Asset Management L.P. | 16
ACQUISITION OF GE CANADIAN
PLATFORM

GE Capital’s Canadian Real Estate Platform was
comprised of 6.2 million square feet of office and
industrial properties

Slate acquired the Portfolio in May 2013 in
partnership with domestic institutional equity
for $995 million

Slate then sold the institutional assets to a
publically traded REIT for $360 million

In December 2014, a portion of the office assets
were sold to seed Slate Office REIT (TSX:
SOT.UN) for $190 million

The remaining 13 office assets have an
appraised value of $583 million as at Q4 2015
Asset Class
Number of Properties
GLA (sq. ft.)
Office
20
2.5 million
Industrial
59
3.7 million
Vision is seeing a way to execute complex transactions
Slate Asset Management L.P. |
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Slate U.S. Grocery Strategy
Strategy

Slate began investing in U.S. Grocery Anchored Shopping
Centres in 2011

The investment was supported by numerous factors

Grocery Retail is necessity based and generally performs
well in periods of economic turbulence

U.S. was in the early stages of emerging from recession

Capital had not started to flow back into real estate,
particularly assets in non-gateway U.S. cities

CAD was strong relative to the USD
Amalgamation

In April 2014, the first 3 funds were amalgamated into
one REIT and listed on the TSX as Slate Retail REIT
(TSX:SRT.UN)

Investors realized significant returns resulting from the
application of Slate’s asset management initiatives and
the appreciation of the USD

In June 2015, SRT acquired SUSO 3 for US$201M

Slate continues to manage SRT


These factors created an opportunity for Canadian investors
to acquire quality real estate at depressed valuations
SRT owns 66 properties spanning over 20 states
and totaling 7.5 million square feet
Investment
Number of Properties
GLA (MM)
Slate GAR
6
0.8
SUSO 1
13
1.3
SUSO 2
10
1.4
SUSO 3
13
1.5
Total
42
5.0
Slate Asset Management L.P. | 18
Huntingdon Privatization
Overview

In November 2014, Slate acquired and privatized Huntingdon Capital
Corp. (“Huntingdon”) for $210MM

Huntingdon was comprised of:

Non-core, undermanaged real estate assets

An external management contract with another publically listed
company, FAM REIT

A sizeable ownership of FAM REIT

A significant cash position

The trading price of Huntingdon allowed Slate to acquire the company
for significantly less than our view of intrinsic value

Slate sold a significant portion of its office portfolio into FAM REIT in
exchange for units of FAM REIT


Created a foundation on which to build a pure-play office REIT

FAM REIT was renamed Slate Office REIT (TSX:SOT.UN)
PORTFOLIO
Slate is in the process of disposing Huntingdon’s real estate assets in
order to redeploy the proceeds into other investments.
Slate Asset Management L.P. | 19
CAUTIONARY STATEMENTS
Forward-Looking Statements
This presentation contains forward-looking information within the meaning of applicable securities laws. These statements include, but are not limited to, statements concerning Slate Asset
Management L.P.’s (“Slate”) objectives, its strategies to achieve those objectives, as well as statements with respect to management’s beliefs, plans, estimates, and intentions, and similar
statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Readers should not place undue reliance on any such forwardlooking statements. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Slate to
be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Actual results and developments are likely to differ, and may
differ materially, from those expressed or implied by the forward-looking statements contained herein. Such forward-looking statements are based on a number of assumptions that may prove to
be incorrect, including, but not limited to, the continued availability of mortgage financing and current interest rates; the extent of competition for properties; assumptions about the markets in
which Slate and its subsidiaries operate; the global and North American economic environment; and changes in governmental regulations or tax laws. Although the forward-looking information
contained in this presentation is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking
statements. Certain statements included in this presentation may be considered “financial outlook” for purposes of applicable securities laws, and such financial outlook may not be appropriate for
purposes other than this presentation. Except as required by applicable law, Slate undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new
information, future events or otherwise.
Non-IFRS Measures
This presentation may contain financial measures that do not have a standardized meaning under International Financial Reporting Standards (“IFRS”) as prescribed by the International
Accounting Standards Board. Slate Retail uses the following non-IFRS financial measures: Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), Net Operating Income
(“NOI”), and Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”). Management believes that in addition to conventional measures prepared in accordance with IFRS,
investors in the real estate industry use these non-IFRS financial measures to evaluate Slate’s performance and financial condition. Accordingly, these non-IFRS financial measures are intended
to provide additional information and should not be considered in isolation or as a substitute for performance measures prepared in accordance with IFRS. In addition, they do not have
standardized meanings and may not be comparable to measures used by other issuers in the real estate industry or other industries.
Use of Estimates
The preparation of Slate’s financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Management’s
estimates are based on historical experience and other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates under different
assumptions.
Slate Asset Management L.P. |
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