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Press release from Marketwire

Allied Properties Real Estate Investment Trust Announces Strategic Acquisitions in Downtown Toronto and Provides Update on QRC West Intensification Project

Thursday, June 30, 2011

Allied Properties Real Estate Investment Trust Announces Strategic Acquisitions in Downtown Toronto and Provides Update on QRC West Intensification Project11:00 EDT Thursday, June 30, 2011TORONTO, ONTARIO--(Marketwire - June 30, 2011) - Allied Properties REIT (TSX:AP.UN) 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.AcquisitionsThe commercial parking facilities are as follows:AddressLevelsParking Spaces388 Richmond Street West, TorontoThree above grade117301 Markham Street, TorontoTwo below grade46Total163The 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. Cautionary StatementsThis press release may contain forward-looking statements with respect to Allied, its operations, strategy, financial performance and condition. These statements generally can be identified by use of forward looking words such as "may", "will", "expect", "estimate", "anticipate", intends", "believe" or "continue" or the negative thereof or similar variations. The actual results and performance of Allied discussed herein could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations, including that the transactions contemplated herein are completed. Important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, changes in government regulations and the factors described under "Risk Factors" in Allied's Annual Information Form, which is available at www.sedar.com. These cautionary statements qualify all forward-looking statements attributable to Allied and persons acting on Allied's behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this press release and the parties have no obligation to update such statements."Capitalization rate" is not a measure recognized under International Financial Reporting Standards ("IFRS") and does not have any standardized meaning prescribed by IFRS. Capitalization rate is presented in this press release because management of Allied believes that this non-IFRS measure is relevant in interpreting the purchase price of the properties being acquired. Capitalization rate, as computed by Allied, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to capitalization rate reported by such organizations. NOI is not a measure recognized under IFRS and does not have any standardized meaning prescribed by IFRS. NOI is presented in this press release because management of Allied believes that this non-IFRS measure is relevant in interpreting the purchase price of the property being acquired. NOI, as computed by Allied, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to NOI reported by such organizations. Allied Properties REIT is a leading owner, manager and developer of urban office environments that enrich experience and enhance profitability for business tenants operating in Canada's major cities. Its objectives are to provide stable and growing cash distributions to unitholders and to maximize unitholder value through effective management and accretive portfolio growth.FOR FURTHER INFORMATION PLEASE CONTACT: Michael R. EmoryAllied Properties REITPresident and Chief Executive Officer(416) 977-0643memory@alliedpropertiesreit.com