Slate Office REIT Announces $85 Million of Acquisitions and $50 Million Public Offering of Units

TORONTO, ONTARIO--(Marketwired - June 6, 2016) -

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Slate Office REIT (TSX:SOT.UN) (the "REIT"), a leading owner of office properties in Canada, announced today that is has agreed to acquire Gateway Centre, a suburban office complex in Markham, Ontario for $57.5 million (the "Gateway Acquisition"). The REIT is also exercising its option to increase its interest in three office properties located in St. John's, Newfoundland (the "Places") from 30% to 49%, with an additional investment of approximately $27.3 million (the "Places Investment", and together with the Gateway Acquisition, the "Acquisitions"). The Acquisitions are expected to close by the end of the second quarter of 2016.

In conjunction with the offering, the REIT also announced today that it has entered into an agreement with a syndicate of underwriters co-led by TD Securities Inc. and BMO Capital Markets (the "Underwriters"), to sell on a bought deal basis, 6,370,000 trust units of the REIT ("Units") at a price of $7.85 per Unit for gross proceeds of $50.0 million (the "Offering"). The Offering consists of a treasury offering by the REIT of 4,531,137 Units for gross proceeds of $35.6 million (the "Treasury Offering") and a secondary offering by Subcore Equities Inc., a private corporation managed by Greystone Managed Investments Inc. on behalf of certain pension fund clients, (the "Selling Unitholder") of 1,838,863 Units for gross proceeds of $14.4 million (the "Secondary Offering"). The REIT has also granted the Underwriters an over-allotment option to purchase up to an additional 15% of the Offering on the same terms and conditions, exercisable at any time, in whole or in part, up to 30 days after the closing of the Offering. The over-allotment option, if exercised, will be satisfied through the sale of Units from Subcore Equities Inc.

The REIT will use the net proceeds of the Treasury Offering to reduce outstanding indebtedness, which may be subsequently redrawn and applied as needed to pay a portion of the purchase price of the Acquisitions and for funding of future acquisitions, and for general trust purposes. The REIT will not receive any proceeds from the Secondary Offering or the over-allotment.

The Units will be offered in all provinces and territories of Canada by way of a short form prospectus. The Offering is subject to the receipt of all necessary regulatory and stock exchange approvals, including the approval of the TSX. Closing of the Offering is expected to occur on or about June 24, 2016.

"Slate Office REIT was created to take advantage of emerging opportunities in the Canadian office market," said Scott Antoniak, the REIT's Chief Executive Officer. "The acquisition of Gateway Centre and increased ownership in the Places demonstrate the REIT's ability to execute on this strategy while taking advantage of the attractive opportunities in today's market."

Highlights of the Acquisitions and Offering

• The Acquisitions are immediately accretive to the REIT's adjusted funds from operations on a per unit basis
• Approximately $5.9 million in annual net operating income to be generated by the Acquisitions
• Aggregate going-in capitalization rate of approximately 6.9%
• Strategic acquisition of assets in markets where the REIT has an existing presence
• Increases total GLA to 4.7 million square feet
• The Acquisitions will increase the occupancy of the REIT's portfolio by 70 basis points
• The acquisition of Gateway Centre will be satisfied through approximately $20 million in cash, the assumption of existing debt and new financing provided by the existing lender
• Following the Offering, Slate Asset Management L.P. will own approximately 17.5% of the units outstanding on a fully diluted basis

Gateway Centre

Gateway Centre is a 235,673 square foot, Class A suburban office complex located at 3000 and 3100 Steeles Avenue East, Markham, Ontario and includes two mid-rise office towers that are connected through a single story commercial corridor. The purchase price of Gateway Centre is approximately $57.5 million, subject to adjustments pursuant to the provisions of the acquisition agreement. The property is 95% occupied and has a prominent corner location with excellent highway connectivity throughout the Greater Toronto Area and is adjacent to the REIT's existing property known as the Woodbine Complex.

Places Investment

The REIT will enter into a second amendment to the strategic co-ownership agreement with St. John's Harbour Properties Ltd. pursuant to which the REIT will increase its interest in the Places from 30% to 49% for an additional investment of approximately $27.3 million. The Places consist of three of Atlantic Canada's highest-quality commercial buildings, located in St. John's, Newfoundland.

Forward-Looking Statements

Certain information herein constitutes "forward-looking information" as defined under Canadian securities laws which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the REIT. The words "plans", "expects", "does not expect", "scheduled", "estimates", "intends", "anticipates", "does not anticipate", "projects", "believes", or variations of such words and phrases or statements to the effect that certain actions, events or results "may", "will", "could", "would", "might", "occur", "be achieved", or "continue" and similar expressions identify forward-looking statements. Some of the specific forward-looking statements contained herein include, but are not limited to statements with respect to the following: the use of the net proceeds of the Treasury Offering; the intention of the REIT to complete the Offering on the terms and conditions described herein; the date on which the closing of the Offering is expected to occur; the intention of the REIT to complete the closing of the Acquisitions on the terms and conditions described herein; and the expected benefits to the REIT of the completion of the Acquisitions. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transactions contemplated herein are completed.

Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward-looking statements.

Additional information about risks and uncertainties is contained in the REIT's annual information form for the year ended December 31, 2015 available on SEDAR at www.sedar.com.

About Slate Office REIT (TSX:SOT.UN)

Slate Office REIT is an open-ended real estate investment trust. The REIT's portfolio currently comprises 34 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 Asset Management L.P. is a leading real estate investment platform with over $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.