Affordable Groceries with Lucrative Monthly Returns: Exploring the Enhanced REIT Offer at Slate Grocery Store

Slate Grocery REIT, a prominent player in the real estate industry, has recently refinanced a four-property portfolio for $39.3 million and secured a $17.4 million credit facility at attractive spreads. This move comes following an amendment to a $137.5 million interest rate swap with a fixed pay rate of 2.4%, maturing on July 22, 2027. This indicates that average refinancing interest rates are hovering around that level.

The current yield for Slate Grocery REIT stands at a robust 8.4%, while the FFO per share generation has remained stable at $0.26 per share. However, it's worth noting that the difference between FFO and AFFO for Slate Grocery REIT is significant, with AFFO per share standing at $0.21 per share. Most of this difference can be attributed to improved CapEx and leasing costs.

Slate Grocery REIT's refinancings and interest rate hedge adjustments have resulted in a blended weighted average interest rate of 5%. These improvements, coupled with double-digit leasing spreads achieved on over 423,000 square feet of space in Q2 2025, serve as the engine for incremental NOI growth (and FFO).

Despite these positive developments, Slate Grocery REIT has barely exceeded the index on a price-return basis. This could be due to the fact that only 5% of the total return for Slate Grocery REIT has come from price appreciation. However, the REIT's undervalued status is largely due to the quality of its fundamentals, proven cash flow stability, and the huge embedded value from the difference between in-place and market-level rents.

Slate Grocery REIT (OTC: SRRTF) currently boasts a market cap of approximately $600 million. The new lease contracts for Slate Grocery REIT come with double-digit spreads, providing a strong foundation for future growth. It's also worth mentioning that Slate Grocery REIT ended Q2 2025 with a robust occupancy level of 94%.

Slate Grocery REIT's in-place rents stand at $12.77 per square foot, while the market average is closer to $24. This significant gap presents a potential for rental income growth. The REIT's FFO payout stands at approximately 82%, while the P/FFO is just below 10x.

Slate Grocery REIT has outperformed the overall REIT market (VNQ) on a total returns basis. With $172 million of debt maturing through the end of 2026, accounting for only 12% of the total debt, the future looks promising for this undervalued REIT.

Affordable Groceries with Lucrative Monthly Returns: Exploring the Enhanced REIT Offer at Slate Grocery Store