05:11 PM EDT, 03/11/2024 (MT Newswires) -- Allied Properties Real Estate Investment Trust (AP-UN.TO) after trade Monday announced that it will acquire an ownership interest in 400 West Georgia Street in Vancouver and increase its ownership interest in 19 Duncan Street in Toronto.

According to a statement, 400 West Georgia is comprised of 345,034 square feet of office GLA, 5,525 square feet of retail GLA and 163 underground parking stalls. The property is 82% leased to Deloitte, Apple, Northeastern University, Spaces, RBC, a local cafe and a local restaurant, all with a weighted-average lease term of just over 11 years. The property was designed to a LEED Platinum standard. Westbank developed and currently owns the property. Allied provided a $198 million secured mezzanine loan to Westbank in connection with the development. The property is subject to secured financing in the amount of $250 million.

Monday's statement noted 19 Duncan is comprised of 154,074 square feet of office GLA, 15,411 square feet of retail GLA, 464 rental-residential units, related common areas and facilities, 25 underground commercial parking stalls and 106 underground residential parking stalls. The property was designed to a LEED Gold standard. The office component is fully leased to Thomson Reuters with a weighted-average lease term of 9.4 years. The rental-residential component is expected to be leased over the remainder of 2024. Allied and Westbank currently own the property in equal shares. The property is subject to construction financing of up to $295 million.

Allied said it will convert $130.5 million of the mezzanine loan to equity in exchange for a 90% undivided interest in 400 West Georgia. The transaction will be based on a total property value of $395 million. Allied intends to reduce the secured financing over the course of 2024 and into 2025 by selling less-strategic properties in Toronto (primarily in response to unsolicited offers to purchase). Allied will manage the property from January 1, 2025, onward.

Allied will lift its ownership in 19 Duncan to a 95% undivided interest by converting the remaining $67.5 million of the mezzanine loan to equity and making a cash payment to Westbank of $36.3 million. The amount payable in cash will be funded in part with proceeds from the TELUS Sky reorganization and in part through a sale of less-strategic assets in Montreal (primarily in response to unsolicited offers to buy). The transaction will be based on a total property value of $525.7 million.

Allied expects to complete the transactions in relation to 400 West Georgia and 19 Duncan in early April, subject only to Competition Act approval and customary closing conditions. And Allied expects to complete the previously announced reorganization of ownership of TELUS Sky before the end of the second quarter.