Allied Properties Real Estate Investment Trust Announces Class I Office Property Acquisitions in Toronto's Downtown West

TORONTO, ONTARIO announced today that it has entered into agreements to purchase the following properties for $28 million:


Properties                                   GLA (Sq. Ft.)  Parking Spaces
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179 John Street, Toronto, Ontario                   67,393              14
96 Spadina Avenue, Toronto, Ontario                 91,215               0
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Total                                              158,608              14
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The acquisitions are expected to close in early March of 2008, subject to customary conditions. Once the acquisitions are closed, the REIT's portfolio will exceed five million square feet of GLA with Toronto representing 52% of the total, Montreal 35%, Winnipeg 8%, Quebec City less than 4% and Kitchener-Waterloo less than 2%.

"The systematic consolidation of our Toronto target market continues at an encouraging pace," said Michael Emory, President and CEO. "We expect the acquisition of 179 John to be accretive immediately, and we are confident that we can work 96 Spadina to the point where it is meaningfully accretive by year-end."

179 John Street is an eight-storey, Class I office building located on the east side of John Street, just north of Queen Street West. It is comprised of 67,393 square feet of GLA and 14 surface parking spaces. The building is a top-tier brick-and-beam structure that was renovated in the 1990s. It is 97.6% leased to tenants consistent in character and quality with the REIT's tenant base.

96 Spadina Avenue is a nine-storey, Class I office building located on the southwest corner of Spadina Avenue and Adelaide Street West in very close proximity to one of the REIT's most important portfolio concentrations in Downtown West. It is comprised of 91,215 square feet of GLA. The building is a high-quality brick-and-concrete structure that was partially renovated in the 1990s. It is now 55% leased to tenants that are partially consistent in character and quality with the REIT's tenant base. Management of the REIT perceives an opportunity to execute a swift and profitable upgrade and lease-up of the building and to achieve a higher than normal return on equity in the process.

The $12 million purchase price for 179 John Street represents a capitalization rate of 8% and a cost of $174 per square foot of GLA, after allocation to the parking spaces. On closing, the property will be subject to a first mortgage in the approximate principal amount of $4 million, having a term ending on June 1, 2013, bearing interest at the rate of 6.6% per year and payable in blended instalments of principal and interest based on a 25-year amortization.

The $16 million purchase price for 96 Spadina Avenue represents a cost of $179 per square foot. Management of the REIT expects to complete the first and largest phase of the upgrade and lease-up before year-end, at which time the REIT will place first mortgage financing on the property.

This press release may contain forward-looking statements with respect to the REIT, 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 the REIT 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 the Annual Information Form of the REIT which is available at www.sedar.com. Material assumptions that were made in formulating the forward-looking statements in this press release are identified above in connection with the estimate of average annual un-levered yield. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on the REIT'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 Canadian generally accepted accounting principles ("GAAP") and does not have any standardized meaning prescribed by GAAP. Capitalization rate is presented in this press release because management of the REIT believes that this non-GAAP measure is relevant in interpreting the purchase price of the properties being acquired. Capitalization rate, as computed by the REIT, may differ from similar computations as reported by other similar organizations and, accordingly, may not be comparable to capitalization rate reported by such organizations.

Allied Properties REIT is the leading owner and manager of Class I office properties in Canada, with portfolio assets in the urban areas of Toronto, Montreal, Winnipeg, Quebec City and Kitchener. The objectives of the REIT are to provide stable and growing cash distributions to unitholders and to maximize unitholder value through effective management and accretive portfolio growth.

Contacts: Allied Properties Real Estate Investment Trust Michael R. Emory President and Chief Executive Officer (416) 977-9002 Email: memory@alliedpropertiesreit.com

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