Allied Properties Real Estate Investment Trust Announces Acquisition of Upgrade Opportunities in Vancouver and Montreal and Stra

Allied Properties REIT (TSX:AP.UN) announced today that it has entered into
agreements to purchase the following upgrade opportunities for $56.3 million:




                                         Total    Office    Retail   Parking
Address                                    GLA       GLA       GLA    Spaces
----------------------------------------------------------------------------
948 Homer Street, Vancouver             45,321    22,031    23,290         7
5455 Avenue de Gaspe, Montreal         527,395   527,395         0       150
----------------------------------------------------------------------------
Total                                  572,716   549,426    23,290       157
----------------------------------------------------------------------------



Allied also announced that it has entered into an agreement to acquire an
undivided 50% interest in the retail component of Victory Lofts, a condominium
project nearing completion in Toronto's King & Spadina area. This agreement
augments the agreement announced in 2009 to acquire an undivided 50% interest in
the 92-stall underground commercial parking component of Victory Lofts, bringing
the estimated total consideration for the two components to approximately $4.9
million.


"We see an opportunity to add value to the Vancouver and Montreal properties in
the next 36 months through a combination of building and tenant upgrades and
mark-to-market re-leasing opportunities," said Michael Emory, President & CEO.
"The Toronto acquisition will afford a good yield on our capital and will add to
our competitive advantages at King & Spadina."


Thus far in 2011, Allied has completed three acquisitions for total
consideration of $40.7 million. Allied elected during the conditional period not
to proceed with the agreement to acquire 353 Water Street in Vancouver, which
was one of the four agreements announced on March 31, 2011. On closing of the
agreements announced today, Allied's acquisitions for 2011 will total $101.9
million. 


Montreal Upgrade Opportunity

Located on the east side of de Gaspe Avenue in Montreal, in close proximity to
Allied's property at 5505 Saint-Laurent Boulevard, 5455 de Gaspe is a Class I
property with 527,395 square feet of GLA, 150 underground parking spaces and
19,000 square feet of surplus land. It is 85% leased to a large number of small
tenants on shorter-term leases at low rents. While carrying 5455 de Gaspe as a
rental property, Allied plans to upgrade the building and the tenant-base with a
view to boosting the annual net operating income ("NOI") materially over a
36-month period.


Vancouver Upgrade Opportunity

Located in Yaletown on the east side of Homer Street, between Nelson and Smithe
Streets, 948 Homer Street is a Class I property with 45,321 square feet of GLA
and seven surface parking spaces. It is fully leased to tenants consistent in
character and quality with Allied's tenant base. While carrying 948 Homer as a
rental property, Allied plans to upgrade the retail component and take advantage
of a mark-to-market opportunity on the office space, all with a view to boosting
the annual NOI materially over a 36-month period. The opportunity also exists to
add additional office floors to the property.


Toronto Acquisition

In March of 2009, Allied announced that it had entered into an agreement to
purchase an undivided 50% interest the 92-stall underground commercial parking
component of the Victory Lofts, a condominium project at 478 King Street West in
Toronto. Victory Lofts is adjacent to three of Allied's properties, 468 King
Street West, 500-522 King Street West and the King-Brant underground commercial
parking structure. 


Allied has now entered into an agreement to purchase an undivided 50% interest
in the retail component of Victory Lofts, which is comprised of 6,552 square
feet of GLA. On closing, the retail component will be fully leased to tenants
consistent in character and quality with Allied's tenant base. Allied will
manage both the parking and the retail components on behalf of the co-owners.
This will enhance its significant operating control over surface and underground
commercial parking spaces and retail space in the King & Spadina area. 


Closing and Financing of Acquisitions

The acquisitions of the upgrade opportunities in Vancouver and Montreal are
expected to close in June of 2011, subject to customary conditions, and the
acquisition of the interest in the parking and retail components of Victory
Lofts is expected to close in the third quarter of 2011, subject to condominium
registration. The purchase price for the upgrade opportunities represents a
capitalization rate of approximately 6% applied to the current annual NOI. The
purchase price for the parking and retail components of Victory Lofts represents
a capitalization rate of approximately 7% applied to the anticipated annual NOI.
On closing, all three properties will be free and clear of mortgage financing.
Allied will place first mortgage financing on the properties as it deems
advisable.


Cautionary Statements

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. 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.
Allied Properties Real E... (TSX:AP.UN)
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