An anonymous trustee reports

RAVELIN PROPERTIES REIT REPORTS FOURTH QUARTER AND YEAR END 2024 RESULTS

Ravelin Properties REIT has released its financial results for the three months and year ended Dec. 31, 2024.

The REIT's annual audited financial statements, its management's discussion and analysis for the year ended Dec. 31, 2024, and the annual information form for the year ended Dec. 31, 2024, are available under the REIT's issuer profile on SEDAR+ and can also be found on the REIT's website.

Highlights:

• A total of 149,202 square feet of total leasing commenced in the fourth quarter of 2024.
• Sixty-five thousand one hundred sixty-six square feet of new deals and renewals were completed during the fourth quarter of 2024.
• The REIT's current leasing pipeline exceeds 650,000 square feet of renewals and new leases. Tenant demand for space has meaningfully improved from pandemic induced depressed levels.
• Active lease negotiations are either under way or completed across all markets that the REIT operates in, including spaces that have been vacant for a prolonged period of time.
• During 2024, the REIT completed $114.1-million in dispositions. The following dispositions closed in the fourth quarter:
  • In October, 2024, the REIT completed the sale of 114 Garry in Winnipeg, Man., for a gross purchase price of $14.3-million.
  • In November, 2024, the REIT completed the sale of the Woodbine complex in Toronto, Ont., for a gross purchase price of approximately $39.0-million for the REIT's 75-per-cent co-ownership share. The REIT also completed the sale of 365 Hargrave in Winnipeg, Man., for a gross purchase price of $11.0-million.
• Subsequent to Dec. 31, 2024, the REIT is working to complete the sale of a property in Oshawa, Ont., to an institutional purchaser. The gross purchase price is $16.5-million and the REIT anticipates the sale will close during the second quarter of 2025.
• The REIT revalued its property portfolio as at Dec. 31, 2024, which resulted in a $97.2-million negative fair value adjustment in the fourth quarter as a result of the recent property sales and the REIT's own estimates. Leasing activity postyear-end is not captured in the international financial reporting standards (IFRS) valuation and will be reflected in future quarters.
• Unrestricted cash as at Dec. 31, 2024, stood at $13.6-million, compared with $11.3-million as at Dec. 31, 2023. The REIT continues to prudently manage its liquidity while negotiations with its lenders are under way.
• On a trailing-12-month basis, the REIT generated $83.2-million of adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), resulting in a net debt to adjusted EBITDA ratio of 12.9 times, inclusive of the REIT's convertible debentures, or 11.0 times excluding convertible debentures.
• As at Dec. 31, 2024, and as previously reported, the REIT exceeded the financial leverage and debt service coverage covenants on its revolving credit facility and certain other mortgages, resulting in other mortgages being in breach due to cross-default clauses. The REIT's convertible debentures are also in default due to restrictions imposed by default of the debt from senior lenders. The REIT is in active discussions with its lenders to resolve current defaults, and to amend, renew or consider alternative arrangements on its debt to reach amendable terms on conditions that are acceptable to the REIT.
• During the year ended Dec. 31, 2024, and with the assistance of professional restructuring advisers, the REIT continued to seek a restructuring of a majority of its outstanding indebtedness and to raise additional capital (collectively, the recapitalization plan). Although the REIT is currently in discussions with certain of its lenders and related parties regarding the terms of an acceptable potential recapitalization plan, there can be no assurance that the REIT will be successful in negotiating a potential recapitalization plan or in raising the additional financing needed for the REIT to continue as a going concern. 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.
• On Oct. 2, 2024, Slate Management ULC, the former manager of the REIT, provided the REIT with 180 days of notice of termination of its external management agreement with the REIT. On Dec. 24, 2024, the REIT amended the management agreement to, among other things, accelerate the termination of the management agreement and internalize the REIT's management, effective Dec. 31, 2024. In connection with the internalization, the REIT changed its name from Slate Office REIT to Ravelin Properties REIT.
• Management anticipates that the internalization will result in cost savings beginning Jan. 1, 2025, with estimated annualized run-rate cost savings of at least $10-million in 2025, resulting from the elimination of management fees and greater focus on overhead expense management. Further information regarding the various fee and expense recoveries pertaining to the former management agreement are contained in the related party note disclosure in the REIT's audited financial statements.

Restatement of financial information for the year ended Dec. 31, 2023

The financial information for the year ended Dec. 31, 2023, has been restated to correct an error that resulted in a $6.7-million understatement of the change in fair value of investment properties and a corresponding overstatement of assets held for sale. As a result, an additional $105-million of debt has been reclassified to current liabilities as of Dec. 31, 2023, due to a covenant breach. Please refer to note 3 (xvii) of the audited consolidated financial statements for further details.

Investor information

The REIT's financial results and supplemental materials have been filed under the REIT's issuer profile on SEDAR+ and are also available on the REIT's website under the investors page. For any questions related to the REIT's financial results or continuing business initiatives, please contact the REIT's investor relations team at ir@ravelinreit.com or 647-792-6060.

About Ravelin Properties REIT

The REIT owns and operates a portfolio of well-located commercial real estate assets in North America and Europe. The majority of the REIT's portfolio is comprised of government and high-quality credit tenants.

We seek Safe Harbor.