Slate Grocery REIT (SGR-UN) has fallen 30% since suspending its distribution, which does appear to be stretched on an AFFO basis…

… with a pretty heavy refinancing obligation coming over the next two years…

… though the debt should be rollable, given the portfolio has high occupancy and generates consistent income. With its external manager making a bid for the REIT in May, the timing is odd for a complete suspension…

… so we’ll see if it influences where the bid ends up (the H&R deal sets a good precedent). Retail remains an attractive asset class, with valuations across the group expanding after Choice’s $5B First Capital deal…

… and with the group still trading at a sizeable discount to reported NAV, we could see more consolidation in the future.

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