Slate Grocery REIT has suspended its monthly cash distributions as an independent special committee continues to examine a potential sale and other strategic alternatives for the trust.

The Toronto-based REIT owns 115 grocery-anchored properties totalling 15.2M SF across 23 U.S. states. The US$2.5B portfolio was 94.4% occupied at the end of the first quarter, with 57% of gross leasable area concentrated in Sunbelt markets. Kroger, Walmart and Publix rank among its five largest tenants.

Slate launched the review in May after receiving an unsolicited proposal from affiliates of Slate Asset Management, its external manager. The committee subsequently opened a formal process to solicit proposals from third parties, with options ranging from maintaining the status quo to selling the entire trust.

The board approved the distribution suspension on the committee’s recommendation, saying the move will increase financial and strategic flexibility while the review is underway. Slate said the decision does not reflect a change in the underlying fundamentals or long-term outlook of its portfolio.

Units of the REIT fell sharply in Thursday trading following the announcement.

The REIT had been paying US$0.072 per unit each month, including its August distribution, which was paid Sept. 15. Slate cautioned there is no assurance the review will produce a transaction or other strategic outcome for unitholders.

Pictured: Riverstone Plaza in Canton, Ga., is part of Slate Grocery REIT’s U.S. grocery-anchored portfolio.