Allied Properties spends $110 million to buy Calgary office property

TORONTO – Allied Properties REIT says it’s expanding its portfolio in Calgary by purchasing an office property for $110 million, funded from issuing 3.2 million units to a syndicate of underwriters led by Scotiabank.

The Toronto-based trust said the Vintage I and II property on 11th Avenue includes two buildings with 19,000 square metres of space. The complex increases Allied’s Calgary portfolio to 15 properties and nearly 70,000 square metres of space.

The underwriters were also given an option to purchase up to 481,500 more Allied units on the same terms for 30 days after the acquisition closes.

CEO Michael Emory said Vintage is one of the best Class I office complexes in Alberta’s financial capital.

“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,” he said in an news release.

The occupancy of the property will decline to 76.6 per cent on May 1, but Allied said the space over four floors is very leasible given the desirability of the space and the strength of the Calgary office leasing market.

Allied (TSX:AP.UN) said it is considering placing a $66 million, 10-year first mortgage on the property.

The real estate trust also announced Tuesday that it declared February’s distribution worth 11.33 cents per unit, payable March 15 to unitholders of record as at Feb. 28, 2013.

Allied Properties holds office buildings in Quebec City, Montreal, Ottawa, Toronto, Kitchener, Ont., Winnipeg, Calgary, Edmonton, Vancouver and Victoria

Units in the trust closed up 26 cents to $35.35 in Tuesday trading on the Toronto Stock Exchange.