Thesis
Slate Office REIT (SLTTF) has been promoted as a value REIT that has been overlooked by the market. On the surface, the company trades at a large NAV discount, has a well-covered and high-yielding dividend, and owns a stable portfolio of office properties. However, a closer look at the details shows that Slate is not nearly as attractive as it appears on paper. Cap rates are higher than management estimates, and adjusted funds from operations ((AFFO)) is not a proper measurement of the company's cash flow. The office sector also faces potential headwinds in