Allied Properties Real Estate Investment Trust Announces Continued Expansion in Calgary With Major Class I Office Acquisition...

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UNITED STATES OF AMERICA


Allied Properties REIT (TSX:AP.UN) announced today that it has entered into an
agreement to purchase the following Class I office property for $110 million:




                                            Total   Office   Retail  Parking
Address                                       GLA      GLA      GLA   Spaces
----------------------------------------------------------------------------
Vintage I & II, 322-326 - 11th Avenue                                       
 S.W., Calgary                            210,430  190,237   20,193      210
----------------------------------------------------------------------------



Allied also announced that it has entered into an agreement with a syndicate of
underwriters led by Scotiabank to issue to the public, on a bought-deal basis,
3,210,000 units from treasury at a price of $34.30 per unit for gross proceeds
of approximately $110 million. Allied has granted the underwriters an option to
purchase up to an additional 481,500 units on the same terms and conditions,
exercisable at any time, in whole or in part, for a period of 30 days following
the closing of the offering. The issue will be offered in all provinces of
Canada. The units being offered have not been, and will not be, registered under
the U.S. Securities Act of 1933 and state securities laws. Closing of the
offering is expected to occur on or about March 7, 2013, and is subject to
regulatory approvals. Allied intends to use the net proceeds of the offering to
fund the acquisition of Vintage I & II, with the balance, if any, to be used for
general trust purposes. 


"This is one of the finest Class I office complexes in Calgary," said Michael
Emory, President & CEO. "In addition to being immediately accretive on
acquisition, it will continue our consolidation of ownership in the urban core
of Calgary in a meaningful way." 


The Property

Located on the north side of 11th Avenue S.W., between 4th and 1st Streets, the
property is comprised of 210,430 square feet of GLA and 210 underground parking
spaces. Vintage I was built in 1924 and was renovated and expanded in 1999.
Vintage II was built in 2004 on the eastern portion of the original site. The
two buildings are nearly identical in appearance and are integrated through a
two storey entrance area. With this property, Allied's Calgary portfolio will
increase to 15 properties with a total of approximately 777,660 square feet of
GLA.


Although 98.8% leased to tenants consistent in character and quality with
Allied's tenant base, the occupancy of the property will decline to 76.6% on May
1. Most of the space to be vacated is in Vintage I and is divided among four
floors of 11,700 square feet each, which Allied considers very leasable, given
the desirability of the space and the strength of the Calgary office leasing
market. 


Closing and Financing of the Acquisition

The acquisition is scheduled to close in March of 2013, subject to customary
conditions. The purchase price for the property represents a capitalization rate
of approximately 6.1% applied to the anticipated year-one net operating income
("NOI") and approximately 7.3% applied to the stabilized NOI from year two
onward. The property will be free and clear of mortgage financing at closing.
Allied is evaluating the possibility of placing a first mortgage on the property
after closing in the approximate principal amount of $66 million for a term of
10 years.


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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