Slate Retail REIT Announces Solid First Quarter 2015 Results and Overwhelming Unitholder Approval of the Acquisition of Slate U.S. Opportunity (No. 3) Realty Trust

(All dollar amounts in U.S. dollars, unless otherwise stated)

TORONTO, May 13, 2015 /CNW/ - Slate Retail REIT ("Slate Retail" or the "REIT") (TSX: SRT.U / SRT.UN) today announced its financial results for the three months ended March 31, 2015 as well as provided an update on the previously announced proposed acquisition of Slate U.S. Opportunity (No. 3) Realty Trust ("SUSO 3") (the "Acquisition") which unitholders voted overwhelmingly in favour of at the annual and special meeting of unitholders held earlier today.

Highlights for the Quarter

• Acquired two grocery-anchored properties
• Achieved a 96% occupancy rate
• Rental rates for renewed leases less than 10,000 square feet increased 8.7%
• Rental rates for renewed leases greater than 10,000 square feet increased 7.5%
• Completed lease transactions for 113,501 square feet consisting of 6,948 square feet of new shop space leases 35.4% above portfolio wide shop space rent and 106,553 square feet of lease renewals
• AFFO per unit⁽¹⁾ increased by 14.3%  compared with last quarter
• Anchor tenant retention remains 100%

Conference Call

Senior management will host a live conference call at 9:00 a.m. ET on Friday May 15, 2015 to discuss the results and ongoing business initiatives of the REIT.

The conference call can be accessed by dialing [phone] or 1 [phone]. Additionally, the conference call will be available via simultaneous audio webcast on the REIT's website at www.slateretailreit.com. A replay will be available on the REIT's website or by dialing [phone] or 1 [phone], access code 39852782, approximately two hours after the event.

Financial Results Summary

	Three months ended March 31, 2015
Thousands of U.S. dollars excluding ratios, per unit values	Actual		Forecast^(2)
Rental revenue	$	16,347	$	10,995
Net operating income ("NOI")^(1)	$	11,054	$	8,091
Number of units outstanding	20,919		16,000
Funds from operations ("FFO")^(1)	$	7,515	$	4,927
FFO per unit^(1)	$	0.36	$	0.31
Net income and comprehensive income	$	15,542	$	1,457
Adjusted funds from operations ("AFFO")^(1)	$	6,590	$	4,155
AFFO per unit^(1)	$	0.32	$	0.26
	March 31, 2015		December 31, 2014
Total assets	$	690,824	$	648,166
Total debt	$	339,580	$	365,538
Portfolio occupancy	96%		96%
AFFO payout ratio^(1)	62.5%		67.9%
Debt / gross book value ratio	49.2%		56.4%
Interest coverage ratio	3.40x		3.89x

⁽¹⁾ See Non-IFRS Measures below.

⁽²⁾ Forecast as presented in Management Information Circular of the REIT dated February 3, 2014.

• FFO⁽¹⁾ per unit was $0.36, up compared with the Forecast FFO per unit of $0.31
• AFFO⁽¹⁾ per unit was $0.32, up compared with the Forecast AFFO per unit of $0.26
• Balance sheet remains strong with debt to gross book value ratio of 49.2% and 3.4 times interest coverage ratio

Blair Welch, partner and co-founder of Slate Asset Management LP ("Slate Asset Management" or "Slate") and CEO of Slate Retail said:

"The first quarter was an excellent start to 2015. Our financial and operational achievements continue to validate Slate Retail REIT's strategy and management's unwavering commitment to execution."

Operations

During the first quarter, management completed 106,553 square feet of renewals. The weighted average rental rate increase on renewals completed under 10,000 square feet was $1.39 per square foot or 8.7% higher than expiring rent. The weighted average rental rate increase on renewals completed greater than 10,000 square feet was $0.41 per square foot or 7.5% higher than expiring rent.

Management also completed 6,948 square feet of new leasing in the first quarter. There were three new leases executed with complementary uses to the REIT's existing consumer staple and service based tenant mix. The weighted average base rent on all new leases was $14.79 per square foot which compares favorably to the weighted average portfolio in-place rent of $9.86 per square foot.

Management has renewed 100% of all grocery anchor tenants and continues to proactively renew their lease terms well in advance of expiry. Management continues to see an increase in demand for space at its shopping centers. The lack of new supply and the increase in market occupancy is driving rental rate increases. In addition, management remains focused on increasing lease terms and the credit quality of tenants across the portfolio.

Distributions and Distribution Reinvestment Plan

The REIT pays a monthly distribution which was increased by 5% in November 2014 to $0.063 per class U unit of the REIT ("class U units"), representing $0.756 per class U unit on an annualized basis.

Holders of class A units, class U units and class I units of the REIT are eligible to participate in the Distribution Reinvestment Plan (the "DRIP"). In electing to participate in the DRIP, unitholders will have their cash distributions used to purchase class U units and will also receive a "bonus distribution" of units equal in value to 3% of each distribution. Unitholders wishing to participate should contact their investment advisors to enroll. Additional details and information can be found on the REIT's website at www.slateretailreit.com.

The REIT may initially issue up to 620,000 class U units under the DRIP. The REIT may increase the number of class U units available to be issued under the DRIP at any time at its discretion subject to (a) the approval of the Board of Trustees, (b) the approval of any stock exchange upon which the trust units trade, and (c) public disclosure of such an increase.

Equity Offering

On March 19, 2015, the REIT completed a public offering of 4.125 million class U units at a price of C$13.00 per unit for gross proceeds to the REIT of approximately C$53.6 million ($42.2 million). A private placement of 769,000 class U units for C$10.0 million ($7.9 million) was also completed, resulting in a total of 4.894 million class U units for gross proceeds of C$63.6 million ($50.1 million).

Unitholder Approval of the Acquisition of Slate U.S. Opportunity (No. 3) Realty Trust, the Election of Trustees and Other Voting Results

The REIT is pleased to announce that at the annual and special meeting of unitholders (the "Meeting") held earlier today, unitholders overwhelmingly approved an ordinary resolution related to the Acquisition. The ordinary resolution in regards to the Acquisition was approved by 99.94% of the votes cast in person or by proxy at the Meeting by holders of class A units, class I units, class U units and special voting units of the REIT (other than unitholders that were excluded from voting pursuant to Multilateral Instrument 61-101), with such unitholders voting together as a single class.

At a separate special meeting held today, unitholders of SUSO 3 approved all required matters related to the Acquisition.

The Acquisition is expected to close in the second quarter of 2015. In addition to the approval by the unitholders of the REIT and SUSO 3 that was obtained today, the Acquisition is conditional upon satisfaction of other customary closing conditions.

The REIT is also pleased to announce that each of the trustee nominees listed in the management information circular of the REIT dated April 2, 2015 (the "Circular") were elected as trustees of the REIT at the Meeting. Voting results for the individual trustees of the REIT are as follows:

Name of Nominee	Votes For	%	Votes Withheld	%
Samuel Altman	7,290,767	99.93	5,161	0.07
Colum Bastable	7,290,767	99.93	5,161	0.07
Thomas Farley	7,291,767	99.94	4,161	0.06
Patrick Flatley	7,291,767	99.94	4,161	0.06
Peter Tesché	7,291,767	99.94	4,161	0.06
Blair Welch	7,274,567	99.71	21,361	0.29
Brady Welch	6,832,963	93.65	462,965	6.35

All other matters set out in the Circular were adopted by the requisite majority of the unitholders present in person or represented by proxy at the Meeting. Final results on all matters voted at the Meeting will be filed with the Canadian securities regulators and will be available on the REIT's SEDAR profile at www.sedar.com.

Outlook

Slate Retail will continue to focus on identifying and acquiring undervalued grocery-anchored retail properties in the U.S. while maintaining a conservative financial structure. These results demonstrate our commitment to those goals and to continuing to create value for our unitholders.

Supplemental Information

All interested parties can access Slate Retail's Supplemental Information online at www.slateretailreit.com under the Investors section.  These materials are also available on SEDAR or upon request to the REIT at [email protected] or [phone].

Forward-Looking Statements

This news release contains forward-looking information within the meaning of applicable securities laws. These statements include, but are not limited to, concerning the REIT's objectives, its strategies to achieve those objectives, as well as statements with respect to management's beliefs, plans, estimates, 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 forward-looking statements.

Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT 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 the REIT 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 MD&A 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 MD&A may be considered a "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this MD&A. Except as required by applicable law, the REIT 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 news release contains 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") on an aggregate and per unit basis and Net Operating Income ("NOI").  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 the REIT's performance and financial condition. Accordingly, FFO and AFFO are used by real estate industry analysts, investors and management as supplemental measures of operating performance of investment property. Management uses AFFO and FFO in addition to net income to report operating results. FFO is an industry standard for evaluating operating performance. AFFO differs from FFO in that AFFO excludes from its definition certain non-cash revenues and expenses recognized under IFRS, such as straight-line rent and the amortization of finance costs, but also includes capital and leasing costs incurred during the period, but capitalized for IFRS purposes. Management also uses AFFO to evaluate the cash generation performance of the REIT available to fund distributions to unitholders, which is why certain non-cash items are excluded and capital expenditures and leasing costs are deducted. NOI is used by real estate industry analysts, investors and management to measure operating performance of the REIT's properties. NOI represents total property revenues less property operating and maintenance expenses. Accordingly, NOI excludes certain expenses included in the determination of net income such as investment property fair value gains and indirect operating expenses and financing costs. These items are excluded from NOI in order to provide results that are more closely related to a property's results of operations. Certain items, such as interest expense, while included in FFO, AFFO and net income, do not affect the operating performance of a real estate asset and are often incurred at the REIT level as opposed to the property level. As a result, management uses only those income and expense items that are incurred at the property level to evaluate a property's performance.

About Slate Retail REIT

Slate Retail is an open-ended real estate investment trust focused on U.S. grocery-anchored real estate. The REIT's portfolio includes over 40 properties located primarily across the top 50 U.S. metro markets. The REIT is focused on maximizing value through internal organic rental growth and strategic acquisitions. For more information, please visit www.slateretailreit.com.

About Slate Asset Management

Slate Asset Management L.P. is a leading real estate investment platform with over C$2.5 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. More information is available at www.slateam.com.

SOURCE Slate Retail REIT

Blair Welch, Chief Executive Officer, 416 644 4267; Brady Welch, Chief Financial Officer, 416 644 4263