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Allied Properties Real Estate Investment Trust Announces Strategic Acquisitions in Downtown Toronto

Allied Properties REIT announced today that it has entered into an agreement to purchase two commercial parking facilities for $6.95 million. Allied also provided an update on its QRC West intensification project.


The commercial parking facilities are as follows:

        Address                                           Levels      Parking Spaces
        388 Richmond Street West, Toronto      Three above grade                 117
        301 Markham Street, Toronto              Two below grade                  46
        Total                                                                    163

The acquisitions are part of Allied's ongoing effort to provide superior parking solutions to its tenants. The facility at 388 Richmond Street West is part of District Lofts, a condominium located on the north side of Richmond Street, one building west of Allied's QRC West intensification project. It is comprised of three levels above grade and includes 117 parking spaces. The facility will enhance Allied's ability to provide extensive and desirable parking solutions to the tenants of QRC West.

The facility at 301 Markham Street is part of Ideal Lofts, a condominium located on the east side of Markham Street, in relatively close proximity to Allied's property at 555 College Street. It is comprised of two levels below grade and includes 46 parking spaces. The facility will enhance Allied's ability to provide parking solutions to the tenants of 555 College.

The acquisitions are expected to close on July 29, 2011, subject to customary conditions. The purchase price for the facilities represents an initial capitalization rate of approximately 6%. On closing, Allied will assume an existing first mortgage in the approximate principal amount of $2.5 million, having a term expiring in March 31, 2018, bearing interest at 6.04% per year and payable in blended installments of principal and interest based on an initial 20-year amortization period.

QRC West

When it initiated the pre-leasing of the first phase of QRC West in January of 2010, Allied estimated that 12-18 months would be required to secure a lead-tenant. Despite the encouraging level of interest demonstrated by prospective office tenants, Allied is not currently negotiating with a prospective lead-tenant and will require additional time to achieve the level of pre-leasing necessary to commence new construction.

Allied remains fully committed to both phases of the QRC West intensification project. It has decided to proceed with the renovation and retrofit of the existing structure at 134 Peter Street. This work has to be completed in any event, and it will put Allied in a position to complete the new construction within the shortest possible timeframe once an appropriate level of pre-leasing is achieved.
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