Slate Grocery REIT (SGRUN) Earnings Call Transcript
August 7, 2026
Earnings Call Speaker Segments
Good morning, ladies and gentlemen, and welcome to the Slate Grocery REIT Second Quarter 2020 Financial Results Conference Call. [Operator Instructions] This call is being recorded on Friday, August 7, 2026. And I would now like to turn the conference over to [indiscernible]. Please go ahead.
Thank you, operator, and good morning, everyone. Welcome to the Q2 2026 Conference Call for Slate Grocery REIT. I am joined this morning by Blair Welch, Chief Executive Officer; Joe Pleckaitis, Chief Financial Officer; and Allen Gordon, Senior Vice President. Before getting started, I would like to remind participants that our discussion today may contain forward-looking statements, and therefore, we ask you to review the disclaimers regarding forward-looking statements as well as non-IFRS measures, both of which can be found in management discussion analysis. You can visit Slate Grocery REIT's website to access all of the REIT's financial disclosure, including our Q2 2026 investor update, which is available now. I will now hand over the call to Blair Welch for opening remarks.
Thank you, [ Sana ], and hello, everyone. We are pleased to report Slate Grocery REIT's second quarter financial and operating results. The REIT completed over 569,000 square feet of total leasing throughout the quarter, achieving strong rent growth on new and renewed leases. Renewal spreads were completed at 16.7% above expiring rents and new deals were completed at 41% above comparable average in-place rent. Adjusting for completed redevelopments same property net operating income increased by $3.8 million or 2.3% on a trailing 12-month basis. Portfolio occupancy was 93.6% and our portfolio's average in place rent of $13.10 per square foot remains well below the market average. The REIT has a weighted average interest rate of 5%, with over 90% of its debt having fixed interest rate. This provides a stable outlook for the REIT's near-term financing costs, and the REIT's weighted average capitalization rate remains well above the REIT's weighted average interest rate for outstanding debt, allowing the REIT to maintain positive leverage. We continue to believe in the resilience of grocery-anchored real estate. Fundamentals in the grocery sector remain favorable with elevated construction costs and tight lending conditions continuing to limit new retail development and overall retail availability. This dynamic continues to give [indiscernible] meaningful pricing power supporting tenant retention and driving continued rent increases as leases expire. On behalf of the grocery team and the Board, I'd like to thank the investor community for their continued confidence and support. I will now hand it over for questions.
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] And your first question comes from the line of Sam Damiani from TD Cowen.
So I didn't see -- was there an update on the strategic review at this point? I think it's been a couple of months now.
Yes, there's no date at this time. And when there is we'll come out quickly, but the special committee is still continue in their process.
Okay. And just to be clear, look like some costs were incurred, but added back to FFO. Was there any net costs that actually flowed through to FFO this quarter related to the review?
No, that would have all been flushed out. Nothing that went through FFO.
And just on the vacancy. I guess, a couple of tenants vacated in some smaller market properties. Can you talk about the prior tenants were and the prospects to backfill those 2 vacancies at this point.
Yes. This is Allen Gordon. We had roughly 260,000 square foot of a cakes this quarter. Most of those vacates we were aware of and have begun already leasing up. We have already leased 4 of the 10 of the largest [ daycase ] that we have. And we already have prospects or several of those and letters of attempt ongoing for some larger notable vacates as well.
Okay. And just on dispositions, any sort of continued focus on that? I didn't see any new ones announced this quarter?
Yes. There's 1 property that's held for sale right now at the end of Q2, which is [ Heritage Heidelberg ]. We're looking to close that in the next couple of weeks. So we can report that in Q3. But just going through normal due diligence and looking to close that shortly.
[Operator Instructions] No further questions at this time. I will now hand the call back to [ Sana Bisha ] for any closing remarks.
Thank you, everyone, for joining the Q2 2026 conference call for Slate Grocery REIT. Have a great day.
This concludes today's call. Thank you for participating. You may all disconnect.
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