Allied Properties Reit has entered into an agreement to purchase the Lougheed Building in downtown Calgary for CAD31m.

Allied has also entered into an agreement to purchase 49 Front Street East and 252-264 Adelaide Street East in downtown Toronto for CAD19m.

"The acquisition of the Lougheed Building will be a big step forward for Allied Properties Reit," says Michael Emory, president and chief executive. "By adding Calgary to our current target markets, we'll move our urban office platform ever closer to a national scale, something we believe will benefit both our tenants and unitholders going forward. The Toronto acquisitions strengthen our position in Downtown East, increasing our market share to nearly 45 per cent."

Located at the corner of 6th Avenue SW and 1st Street SW in the Downtown Core of Calgary, the Lougheed Building is a class I office property with 86,478 square feet of gross leasable area. It has a weighted average lease term of over eight years and is historically designated.

Located on the south side of Front Street and one building east of Allied's Beardmore and Perkins/Dixon buildings, 49 Front Street East is a class I office property with 19,936 square feet of gross leasable area.

Located on the north side of Adelaide Street East, just east of Jarvis Street, 252-264 Adelaide Street East is a class I office property with 50,217 square feet of gross leasable area.

The Adelaide property comes with the right to purchase 20 underground parking spaces at CAD25,000 per space upon completion of the adjacent condominium project and the right to use 20 surface parking spaces in the interim.

The acquisitions are expected to close in October 2010, subject to customary conditions.

The CAD50m purchase price for the three properties represents a capitalization rate in excess of eight per cent applied to the annual net operating income from the properties.

On closing, the Lougheed Building will be subject to a first mortgage in the approximate principal amount of CAD22m, having a term of ten years, bearing interest at approximately 4.75 per cent per year and being payable in blended instalments of principal and interest based on a 25-year amortisation.

On closing, the two Toronto properties will be subject to a first mortgage in the principal amount of CAD10.14m, having a term expiring on 1 August 2011, and payable as to interest only at floating rate equal to the One-Month CDOR Interbank Bid BA Rate plus 2.2 per cent.

Allied will fund the balance of the CAD50m purchase price initially from its acquisition line of credit and ultimately by placing conventional first mortgages on unencumbered properties in its portfolio.