Allied Properties Real Estate Investment Trust Announces Continued Expansion in Vancouver and Disposition of Non-Core Asset

Allied Properties REIT (TSX:AP.UN) announced today that it has entered into
agreements to purchase the following properties for $42 million:




                                     Total   Office   Retail                
Address                                GLA      GLA      GLA  Parking Spaces
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1040 Hamilton Street, Vancouver     44,667   37,693    6,974              26
1286 Homer Street, Vancouver        24,723   15,746    8,977               0
----------------------------------------------------------------------------
Total                               69,390   53,439   15,951              26
----------------------------------------------------------------------------



Allied also announced that it has entered into an agreement to sell a non-core
asset in Winnipeg for $725,000.


"These will be solid additions to our Vancouver portfolio, with each property
augmenting an existing holding in Yaletown," said Michael Emory, President &
CEO. "Once the acquisitions are closed, our Vancouver portfolio will be
comprised of five urban office properties with nearly 300,000 square feet of
rentable area." 


1040 Hamilton Street, Vancouver

Located on the south side of Hamilton and extending through to and having
frontage on Mainland Street, this property is comprised of 44,667 square feet of
GLA, all of which is leased to tenants consistent in character and quality with
Allied's tenant base. The property is located in close proximity to Allied's
property at 948-950 Homer. Built in 1920 as for a paper company, the building
was redeveloped for office and retail use in 1988. Management believes that
municipal approval can be obtained to add an additional 20,000 square feet of
GLA to the building and that such an addition is structurally feasible. 


1286 Homer Street, Vancouver

Located on the south side of the Homer and extending through to and having
frontage on Hamilton, this property is comprised of 24,723 square feet of GLA,
all of which is leased to tenants consistent in character and quality with
Allied's tenant base. The property is located in close proximity to Allied's
property at 840 Cambie. Built in 1910 for warehouse purposes, the building was
redeveloped for office and retail use in 1989. Management believes that
municipal approval can be obtained to add an additional 10,000 square feet of
GLA to the building and that such an addition is structurally feasible.


Closing and Financing of Acquisitions

The purchase price of $42 million represents a capitalization rate of 6.2% on
the current NOI. The acquisitions are scheduled to close in November of this
year, subject to normal conditions. 1040 Hamilton will be subject on closing to
a first mortgage in the approximate principal amount of $11.9 million for a
remaining term expiring in December of 2014, bearing interest at approximately
5.4% per year and payable in blended instalments of principal and interest based
on a 25-year amortization. 1286 Homer will be free and clear on closing. Allied
will place additional mortgage financing on the properties following closing.
Allied continues to have a very conservative debt ratio and significant internal
liquidity and acquisition capacity.


Southeast Corner, Hargrave Street and Notre Dame Avenue, Winnipeg

An incidental part of a portfolio acquisition completed in late 2006, this is an
ancillary parking lot with 76 surface parking spaces that is no longer necessary
to meet the parking requirements of the tenants of Allied's core Class I
properties in the Exchange District. After negotiation, Allied accepted an
unsolicited offer, seeing it as a good opportunity to dispose of a non-core
asset. The sale is scheduled to close before the end of the year, subject to
normal conditions.


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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Allied Properties REIT
Michael R. Emory
President and Chief Executive Officer
(416) 977-0643
memory@alliedreit.com
Allied Properties Real E... (TSX:AP.UN)
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