Allied Properties Real Estate Investment Trust Announces Strong Fourth-Quarter and Year-End Results for 2008

Allied Properties REIT (TSX:AP.UN) today announced results for the fourth
quarter and year ended December 31, 2008. The financial results for the fourth
quarter are summarized below and compared to the same quarter in 2007:




(In thousands except for per
unit and % amounts)           Q4 2008  Q4 2007  Change  % Change
-----------------------------------------------------------------
-----------------------------------------------------------------
Net income                      3,296      975   2,321     238.1%
Funds from operations ("FFO")  13,023   10,551   2,472      23.4%
FFO per unit (diluted)          $0.42    $0.42   $0.00       0.0%
FFO pay-out ratio                78.7%    74.6%    4.1%
Adjusted FFO ("AFFO")          10,603    9,383   1,220      13.0%
AFFO per unit (diluted)         $0.34    $0.37  ($0.03)     (8.1%)
AFFO pay-out ratio               96.7%    83.8%   12.9%
-----------------------------------------------------------------



The financial results for 2008 are summarized below and compared to 2007:



(In thousands except for per
unit and % amounts)            2008    2007  Change  % Change
--------------------------------------------------------------
--------------------------------------------------------------
Net income                   12,512   5,810   6,702     115.4%
FFO                          49,818  39,350  10,468      26.6%
FFO per unit (diluted)        $1.68   $1.66   $0.02       1.2%
FFO pay-out ratio              77.6%   75.6%    2.0%
AFFO                         44,660  35,323   9,337      26.4%
AFFO per unit (diluted)       $1.51   $1.49   $0.02       1.3%
AFFO pay-out ratio             86.6%   84.3%    2.3%
--------------------------------------------------------------



"We continued to strengthen our urban-office franchise in 2008," said Michael
Emory, President & CEO. "We expanded our portfolios in Toronto and Montreal,
improved our financial performance measures despite having de-levered our
business and bolstered our balance sheet in a very timely way given the current
economic environment."


Allied completed $152 million in acquisitions in 2008, bringing its portfolio to
81 predominantly Class I office properties with 5.6 million square feet of
leasable area. As in prior years, Allied's portfolio expansion was part of a
focused consolidation strategy that has enabled it to become the leading
provider of Class I office space in each of its target markets.


Allied maintained a high level of leased area through 2008, finishing the year
at 97.3%. Despite de-levering its business over the course of the year, Allied
increased its FFO and AFFO per unit and maintained FFO and AFFO pay-out ratios
well below the average for Canadian REITs.


Allied raised over $120 million in equity in 2008 and secured another $60
million in first-mortgage financing, reducing its debt ratio by year-end to a
conservative 49.4% and leaving it in a strong liquidity position. Aside from $3
million drawn on its $70 million line of credit, Allied had no variable rate
debt at the end of the year. On its mortgage debt, Allied had a weighted-average
interest rate of 5.6%. Finally, Allied had a very moderate mortgage maturity
schedule going forward, with approximately $15 million in mortgages maturing in
2009 (3% of its total mortgage debt), $6 million in 2010 (1%) and $15 million in
2011 (3%).


Allied's Trustees review distribution levels upon receipt of audited financial
statements for each completed fiscal year. Following the most recent review, the
Trustees decided to maintain monthly cash distributions at the current level of
$0.11 per unit ($1.32 per unit annualized). At this distribution level, Allied
expects to maintain conservative FFO and AFFO pay-out ratios, ones that will
remain well below the average for Canadian REITs.


"Although a moderate slowdown in demand for office space in our target markets
is apparent, we expect our property portfolio to continue to perform well in
2009, in large part because of our exceptional market penetration, significantly
lower operating costs and highly sought- after building attributes," said Mr.
Emory. "Our management team is dedicated to remaining within our normal range of
leased area of 96% to 99%."


FFO and AFFO are not financial measures defined by Canadian GAAP. Please see
Allied's MD&A for a description of these measures and their reconciliation to
net income or cash flow from operations, as presented in Allied's consolidated
financial statements for the year ended December 31, 2008. These statements,
together with accompanying notes and MD&A, have been filed with SEDAR,
www.sedar.com, and are also available on Allied's web-site,
www.alliedpropertiesreit.com.


This 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. Allied's actual
results and performance 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. 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 Allied's Annual Information Form which is
available at www.sedar.com. The cautionary statements qualify all
forward-looking statements attributable to Allied and persons acting on its
behalf. Unless otherwise stated, all forward-looking statements speak only as of
the date of this press release, and Allied has no obligation to update such
statements.


Allied Properties REIT is the leading provider of Class I office space in
Canada, with portfolio assets in the urban areas of Toronto, Montreal, Winnipeg,
Quebec City and Kitchener. Its objectives are to provide stable and growing cash
distributions to unitholders and to maximize unitholder value through effective
management and accretive portfolio growth.
Allied Properties Real E... (TSX:AP.UN)
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