- What Allied closed deals for 90% stakes in buildings in Vancouver and Toronto
- Why The transactions reduce developer Westbank’s debt to Allied
- What next Allied will sell less strategic properties to reduce indebtedness
Allied Properties REIT has closed its planned acquisitions of two new urban properties from developer Westbank via the conversion of mezzanine debt.
In Vancouver, Allied acquired a 90% ownership interest in the office building at 400 West Georgia Street by converting $130.5m of mezz debt to equity. The deal was based on a total property value of $395m.
Allied had provided a $198m secured mezz loan to Westbank to fund development of the building. The REIT intends to pay down remaining secured financing through 2025 via sales of less-strategic properties in Toronto.
The LEED-platinum property has 345,000 sq ft of office space, a 5,500 sq ft retail component and 163 underground parking spaces. It’s 82% leased, with a weighted average remaining lease term of 9.4 years. Tenants include Apple, Deloitte and RBC.
The company also lifted its stake in 19 Duncan Street, a mixed-used property in Toronto, to 95% from 50%. The REIT converted the remaining $67.5m of mezzanine debt to equity and paid Westbank $36.3m in cash. The deal was based on a total property value of $525.7m.
The property at 19 Duncan Street has 154,000 sq ft of office space that is fully leased to Thomson Reuters plus 15,400 sq ft of retail space. It also has a 464-unit residential component that’s expected to be leased up this year, along with 131 underground parking spaces. The building is designated LEED gold.
Allied announced both deals in March.
