G2S2 Capital has agreed to extend the forbearance period on a significant portion of Ravelin Properties REIT’s debt until March 31, 2026.

The Toronto-based REIT said the extension applies to loans with an aggregate principal amount of approximately $528.3 million, along with an additional US$45.5 million, following a request from an independent committee of its board of trustees. G2S2, which controls Ravelin, has also agreed to align the forbearance period on the US$84-million loan secured by the REIT’s 120 South LaSalle office property in Chicago, after acquiring that debt from the previous lender.

Ravelin said the extended forbearance will allow it to continue exploring options to address its financial challenges, including defaults on existing indebtedness and ongoing capital requirements. These options include raising new debt or equity financing or pursuing a broader restructuring of some or all of its outstanding obligations.

As part of the arrangement, the REIT agreed to amend the interest terms on the loans, increasing the rate to 10% from a weighted average of about 6.4%. The revised structure includes a 6% cash interest component and 4% payment-in-kind interest, effective October 1, 2025. The change was approved as a related-party transaction, as G2S2 is controlled by George Armoyan, a major Ravelin investor and board member, and his immediate family.

Ravelin also announced an extension of its waiver from trust restrictions that limit total indebtedness to 65% of gross book value. The waiver, originally set to expire at the end of 2025, has been extended to December 31, 2026, to provide additional time to negotiate a potential recapitalization plan.

The revised debt arrangement came after Ravelin warned earlier this year that its future as a going concern is in jeopardy, citing ongoing debt-covenant breaches and uncertainty around a potential recapitalization plan.

As of March 31, the REIT remained in breach of financial-leverage and debt-service coverage covenants on its revolving credit facility and multiple mortgages, which triggered cross-default clauses. Its convertible debentures are also in default due to related senior debt restrictions. Armoyan heads Halifax-based G2S2, which is owned by his family, also holds a 20% stake in Ravelin. He chaired the REIT before being replaced by Calvin Younger and then remained as a board member.

In 2024, Armoyan led a boardroom battle that resulted in Slate Asset Management surrendering its role as Slate Office REIT’s external asset manager. The REIT was subsequently rebranded as Ravelin.

Ravelin portfolio holds commercial properties located across North America and Europe. The assets are leased primarily to government and high-credit tenants.

G2S2 is a commercial real estate investor and developer with projects largely geared towards the redevelopment of struggling properties.

Without a successful restructuring and additional funding, Ravelin wouldl be unable to continue operations, the REIT stated previously.

Pictured: Ravelin property in Moncton, N.B.

Photo: Ravelin Properties REIT