TORONTO, Sept. 24, 2015 /CNW/ - Slate Office REIT ("Slate
Office" or the "REIT") (TSX: SOT.UN) announced today that it is
investing approximately $46 million
to revitalize two key properties in Mississauga's Sheridan
Park, which will house SNC-Lavalin's nuclear sector, a major
long-term tenant in the park that is committing to extend its lease
on a long term basis in the newly refurbished, contemporary
facilities.
In connection with the revitalization project, Slate Office
announced that it has entered into a binding agreement (the
"Agreement") with SNC-Lavalin (the "Tenant"), whereby SNC-Lavalin
will lease from Slate Office approximately 215,000 square feet of
research, development and office space in Sheridan Park for an
initial term of 10 years.
"This announcement is a perfect example of Slate Office's
strategy in action: the identification of overlooked, yet quality
commercial properties such as these buildings in Sheridan Park,
which we can then re-purpose and modernize while offering rents
significantly below new construction cost – allowing us to attract
and maintain high-quality tenants like SNC-Lavalin," said
Scott Antoniak, Chief Executive
Officer of Slate Office. "We're extremely pleased to have
strengthened our relationship with SNC-Lavalin over the long term
in a deal that represents tremendous value for both sides, and in
doing so helped to re-invigorate an important business centre such
as Mississauga's Sheridan Park."
Mississauga City Councillor, Karen
Ras, said:
"As City Councillor for Ward 2, the City of Mississauga, businesses and residents
eagerly anticipate the much needed revitalization of Sheridan Park
with announcements such as this. I believe the City's vision
is closely aligned with both Slate Asset Management and SNC-Lavalin
which encompasses goals of sustainability, innovation,
collaboration and growth. We look forward to working with both
parties to ensure a seamless rejuvenation of Sheridan Park."
Reimagined Sheridan Park
Under the terms of the Agreement, Slate will transform 2251 and
2285 Speakman Drive for SNC-Lavalin, reimagining them and fully
retrofitting them to create highly functional, contemporary
facilities with modern amenities.
The REIT anticipates total development costs of approximately
$46 million for the revitalization
project including (a) its obligations under the Agreement with
SNC-Lavalin, (b) the acquisition of 2251 Speakman Drive from Slate
Asset Management L.P. and (c) related value-add expenses in
connection with the overall revitalization of its presence within
Sheridan Park. The development costs
will be funded using the REIT's existing available resources.
Sheridan Park provides
SNC-Lavalin with a unique opportunity to consolidate around the
backbone of its organization: its owned manufacturing facility
located at 2233 Speakman Drive. The project will incorporate
leading engineering and design best practices to deliver optimum
energy and environmental efficiency.
SNC-Lavalin's Nuclear team provides leading nuclear technology
products and full-service solutions to nuclear utilities around the
globe including customized operations, maintenance and plant life
management services, including waste management and decommissioning
for BWR, PWR and CANDU-type reactors. Their experts in nuclear
steam plant and balance of plant engineering carry out life
extension projects, and design and deliver state-of-the-art CANDU®
reactors, which are capable of operating on many types of fuel
including natural uranium, mixed oxide (MOX) fuel, recycled uranium
(RU) and thorium.
Sheridan Park is one of
North America's first corporate
research parks. SNC-Lavalin's neighbours include a wide range of
applied research and product development corporations, each
dedicated to supporting research activities spanning across energy,
electronics, nucleonics, chemicals, petroleum, pharmaceuticals,
engineering and moviemaking sectors. In total, more than 2,700
scientists, technicians, engineers and support staff are employed
within Sheridan Park's
boundaries.
Sheridan Park offers excellent
accessibility to major arterial roadways including Erin Mills
Parkway, Winston Churchill Boulevard, and highways including the
Queen Elizabeth Expressway, 401, 403 and 407 ETR. In addition,
being on the Mississauga-Oakville border means Sheridan Park is serviced at various locations
by the routes of two transit commissions with connections to GO
Transit and the TTC subway.
Transaction Background
SNC-Lavalin will lease from Slate Office approximately 215,000
square feet of research, development and office space in Sheridan
Park in Mississauga, Ontario. The
Lease will have an initial term of 10 years and include an option
to lease an additional 28,000 square feet increasing the total area
to approximately 243,000 square feet.
SNC-Lavalin is an existing key tenant of the REIT, currently
with approximately 222,000 square feet under lease, representing
approximately 5% of net operating income on an annual basis. Under
a corporate reorganization mandate by the Tenant in early 2015, the
Tenant committed to consolidating its various office and research
premises into a campus-style facility in order to better reflect
the Tenant's image as a global leader in nuclear research and
development.
The REIT is able to meet SNC-Lavalin's requirement on the basis
of its (a) existing tenancy and relationship with SNC-Lavalin and
position as the largest property owner in Sheridan Park (b) ability
to deliver sound leasing economics by retrofitting an existing
property with innovative and contemporary building systems and (c)
ability to provide the tenant with a strategic location for its
global headquarters proximate to major infrastructure, transit and
amenities.
About Slate Office REIT
Slate Office REIT is an
open-ended real estate investment trust. The REIT's portfolio
currently comprises 47 strategic and well-located real estate
assets located primarily across Canada's major population centres. The REIT is
focused on maximizing value through internal organic rental and
occupancy growth and strategic acquisitions. Visit slateam.com/SOT
to learn more.
About Slate Asset Management L.P.
Slate is a leading real estate investment platform with
$3 billion in assets under
management. Slate is a value-oriented company and a significant
sponsor of all its private and publicly-traded investment vehicles,
which are tailored to the unique goals and objectives of its
investors. The firm's careful and selective investment approach
creates long term value with an emphasis on capital preservation
and outsized returns. Slate is supported by exceptional people,
flexible capital and a proven ability to originate and execute on a
wide range of compelling investment opportunities. Visit
slateam.com to learn more.
About SNC-Lavalin
Founded in 1911, SNC-Lavalin is one
of the leading engineering and construction groups in the world and
a major player in the ownership of infrastructure. From offices in
over 50 countries, SNC-Lavalin's employees are proud to build what
matters. Our teams provide EPC and EPCM services to clients in a
variety of industry sectors, including oil and gas, mining and
metallurgy, infrastructure and power. SNC-Lavalin can also combine
these services with its financing and operations and maintenance
capabilities to provide complete end-to-end project solutions.
www.snclavalin.com
SOURCE Slate Office REIT