Allied Properties Real Estate Investment Trust Annual Report 2022

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FY2022 Annual Report · Allied Properties Real Estate Investment Trust

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Annual Report
December 31,
2022

Urban environments for
creativity and connectivity

01. 31.23

Annual Report

December 31, 2022

Contents

LETTER TO UNITHOLDERS . . . . . . . . . . . . . . . 5

MANAGEMENT’S DISCUSSION AND
ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION AS AT
DECEMBER 31, 2022 . . . . . . . . . . . . . . . . . . . . 8

SECTION I—Overview . . . . . . . . . . . . . . . . . . . . 9

Q4 2022 Operating and
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . 10

Summary of Key Operating and
Financial Performance Measures . . . . . . . . . . . . . . 12

Summary of Rental Properties . . . . . . . . . . . . . . . . 14

Business Overview and Strategy . . . . . . . . . . . . . . 15

Environmental, Social and Governance (“ESG”) . . 18

Business Environment and Outlook . . . . . . . . . . . .20

Non-IFRS Measures . . . . . . . . . . . . . . . . . . . . . . . . . 21

Forward-Looking Statements . . . . . . . . . . . . . . . . . 25

SECTION II—Operations . . . . . . . . . . . . . . . . . 27

Net Income and Comprehensive Income . . . . . . . . 28

Net Operating Income . . . . . . . . . . . . . . . . . . . . . . . 32

Same Asset NOI . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

General and Administrative Expenses . . . . . . . . . . 38

Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Other Financial Performance Measures . . . . . . . . .40

SECTION III—Leasing . . . . . . . . . . . . . . . . . . . 48

SECTION IX—Risks and Uncertainties . . . . . . . 93

Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Operating Risks and Risk Management . . . . . . . . .94

Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

Financial Risks and Risk Management . . . . . . . . . .96

User Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

Other Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99

Lease Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

SECTION IV—Historical Performance . . . . . . . . 56

SECTION V—Asset Profile . . . . . . . . . . . . . . . . 59

Rental Properties . . . . . . . . . . . . . . . . . . . . . . . . . . .64

Development Properties . . . . . . . . . . . . . . . . . . . . . 70

SECTION X—Property Table . . . . . . . . . . . . . 104

CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 2022 AND 2021 . . . . . . . . . . 113

Management’s Statement of Responsibility
for Financial Reporting . . . . . . . . . . . . . . . . . . . . . 114

Residential Inventory . . . . . . . . . . . . . . . . . . . . . . . . 72

Independent Auditor’s Report . . . . . . . . . . . . . . . 115

Development Completions . . . . . . . . . . . . . . . . . . . 73

Consolidated Balance Sheets . . . . . . . . . . . . . . . . 119

Consolidated Statements of Income
and Comprehensive Income . . . . . . . . . . . . . . . . . 120

Consolidated Statements of Equity . . . . . . . . . . . 121

Consolidated Statements of Cash Flows . . . . . . . 122

Notes to the Consolidated
Financial Statements . . . . . . . . . . . . . . . . . . . . . . 124

Loans Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

SECTION VI—Liquidity and
Capital Resources . . . . . . . . . . . . . . . . . . . . . . 75

Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

Credit Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 83

Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

SECTION VII—Accounting Estimates
and Assumptions . . . . . . . . . . . . . . . . . . . . . . . 91

SECTION VIII—Disclosure Controls
and Internal Controls . . . . . . . . . . . . . . . . . . . 92

ALLIED 2022 ANNUAL REPORTLetter to Unitholders

Dear Fellow Unitholder:

Allied’s operating performance in 2022 was strong . Our AFFO per unit was up 4% from the prior year,

underpinning our 11th consecutive annual distribution increase and providing a take-off point for our 2023

outlook of low-to-mid-single-digit growth in same asset NOI, FFO per unit and AFFO per unit .

Our total return to unitholders, on the other hand, was negative, though equivalent to, or better than,

other leading office issuers in North America . We weathered an extended storm in 2022, one that began as

pronounced concern about the future of office space and morphed into deep fear of recession . The storm is

not over, but it will pass, as all storms do .

RESILIENCE

Allied has proven from inception to be resilient, and we have every reason to be confident that this will

continue . In the past three years,

• we deepened, strengthened and integrated the numerous and diverse members of the Allied Team

across the country,

• we continued the renewal and diversification of our Board of Trustees,

• we implemented a long-standing succession plan for senior leaders,

• we made significant and measurable strides in improving our ESG practices and

• we took decisive steps toward reaffirming our mission and maintaining our commitment to the

balance sheet .

These elements of resilience signal our strategic and tactical direction going forward and establish a solid

foundation for our future .

ALLIED 2022 ANNUAL REPORTSALE OF UDC PORTFOLIO

Our UDC portfolio is comprised of freehold interests in 151 Front Street West and 905 King Street West and

a leasehold interest in 250 Front Street West . The portfolio is unencumbered and does not include 20 York

Street, the site for Union Centre .

We acquired 151 Front in 2009 and have driven significant earnings and value growth since then, both

organically and through the addition of 905 King and 250 Front . Since 2013, we have achieved a 9 .6%

compound annual growth rate in NOI from the portfolio and a 10% compound annual growth rate in the

IFRS value of the portfolio .

Having propelled the portfolio materially closer to the point of earnings and value optimization, we have

recently concluded that selling it now is in Allied’s best interest, operationally and financially . Our principal

motivation is two-fold . First, we want to reaffirm our mission and pursue it over the next few years with low-

cost capital . Second, we want to supercharge our balance sheet and reduce our dependence on the capital

markets going forward .

Our UDC portfolio was connected to our mission from the beginning, but it is not core to our mission in

the way urban workspace is . As a stabilized asset in a currently favoured sector, the portfolio represents

a promising and timely monetization opportunity, one that could enable us to grow our business going

forward in the most flexible and prudent manner .

We plan to use a significant portion of the sale proceeds to retire debt and the balance to fund current

development activity . We may elect to use a portion of the sale proceeds to buy back units under our NCIB .

We do not expect to use any of the proceeds to fund acquisitions, nor do we expect to engage in material

acquisition activity in 2023 .

The comprehensive sale process started earlier this month . We will not be able to comment further on the

process until it is complete, but we will advise you once the outcome is known .

ALLIED 2022 ANNUAL REPORT* * *

Allied has been evolving rapidly and successfully for nearly 20 years . In 2023 and beyond, this will continue

while reaffirming our vision and mission as an operator of distinctive urban workspace in Canada’s major

cities .

If you have any questions or comments, please don’t hesitate to call me at (416) 977-0643 or e-mail me at

memory@alliedreit.com .

Yours truly,

Michael Emory

PRESIDENT AND CHIEF EXECUTIVE OFFICER

ALLIED 2022 ANNUAL REPORTManagement’s Discussion and
Analysis of Results of Operations
and Financial Condition as at
December 31, 2022

ALLIED 2022 ANNUAL REPORTSection I
—Overview

Allied is an unincorporated closed-end real estate investment trust created pursuant to the Declaration of

Trust (“Declaration of Trust”) dated October 25, 2002, as amended and restated from time to time, most

recently on May 3, 2022 . Allied is governed by the laws of Ontario . Allied’s units (“Units”) are publicly traded

on the Toronto Stock Exchange under the symbol “AP .UN” . Additional information on Allied, including its

annual information form, is available on SEDAR at www.sedar.com .

This Management’s Discussion and Analysis (“MD&A”) of results of operations and financial condition relates

to the year ended December 31, 2022 . Unless the context indicates otherwise, all references to “Allied”,

“we”, “us” and “our” in this MD&A refer to Allied Properties Real Estate Investment Trust . The Board of

Trustees of Allied, upon the recommendation of its Audit Committee, approved the contents of this MD&A .

This MD&A has been prepared with an effective date of January 31, 2023, and should be read in conjunction

with the consolidated financial statements and notes thereto for the year ended December 31, 2022 .

Historical results and percentage relationships contained in this MD&A, including trends that might appear,

should not be taken as indicative of future results, operations or performance . Unless otherwise indicated,

all amounts in this MD&A are in thousands of Canadian dollars .

This section includes certain terms that do not have a standardized meaning prescribed under International

Financial Reporting Standards (“IFRS”) and includes certain forward-looking statements within the meaning

of applicable securities law . Refer to Non-IFRS Measures and Forward-Looking Statements on pages 21 and

25, respectively .

ALLIED 2022 ANNUAL REPORTQ4 2022 Operating and
Financial Highlights

Above all, Allied is an operator . For Allied, neither acquisition activity nor development activity is an end

in itself . Rather, both are a means of providing knowledge-based organizations with distinctive urban

workspace and UDC space effectively and profitably .

ALLIED 2022 ANNUAL REPORTQ4 Operating Results

LEASED AREA (1)

90.8%

OCCUPIED AREA (1)

89.6%

Q4 Financial Results

SAME ASSET NOI - RENTAL
PORTFOLIO AND ASSETS
HELD FOR SALE (2)

0.2%

from Q4 2021

AVERAGE IN-PLACE NET
RENT PER OCCUPIED
SQUARE FOOT (1)

$23.10

2021: $21.98

2020: $21.35

5.1%

from Q4 2021

RENT GROWTH ON
RENEWING SPACE (1)

Total rental portfolio

WEIGHTED AVERAGE
REMAINING LEASE TERM
IN YEARS (1)

6.1%

Excluding Calgary

8.6%

Rental portfolio

5.5

FFO PER UNIT (2)(3)

$0.618
3.0%

AFFO PER UNIT (2)(3)

$0.548
5.8%

from Q4 2021

Year-to-Date Capital Allocation
$971.5M

$263.5M

Allocated to acquisitions

Allocated to development

End of Q4

(4)

Liquidity
$166.7M

Q4 Balance Sheet

NET DEBT AS A MULTIPLE OF
ANNUALIZED
ADJUSTED EBITDA (2)

TOTAL INDEBTEDNESS
RATIO (2)

INTEREST COVERAGE
RATIO (2)(5)

9.8x

35.6%

2.8x

UNENCUMBERED
INVESTMENT
PROPERTIES (2)

$8.3B

85.2% of investment properties
on a proportionate basis (2)

ESG Results (6)

2022 GRESB SCORE
FOR STANDING
INVESTMENTS

86/100

Up from 80/100 in 2021

2021 ENERGY USE
INTENSITY (EUI)

15.4%

2021 GREENHOUSE
GAS INTENSITY
(GHGI)

12.4%

2021 WATER USE
INTENSITY (WUI)

2021 WASTE
DIVERSION

43.3%

from our 2019 baseline

in average waste
diversion from our
2019 baseline

(1) The operating results exclude the assets held for sale.
(2) This is a non-IFRS measure, refer to page 21. These non-IFRS measures (except for unencumbered investment properties) include the results of the continuing

operations and the discontinued operations. Unencumbered investment properties exclude the assets held for sale.

(3) Excluding condominium related items, financing prepayment costs, and the mark-to-market adjustment on unit-based compensation on a diluted basis.
(4) Liquidity is the sum of cash and cash equivalents on a proportionate basis and the undrawn portion of Allied’s unsecured revolving operating facility as at

December 31, 2022.
Including interest capitalized and excluding financing prepayment costs.

(5)
(6) For more information, refer to Allied’s 2021 Environmental, Social and Governance Report published on June 27, 2022, available on www.alliedreit.com.

ALLIED 2022 ANNUAL REPORTSUMMARY OF KEY OPERATING AND FINANCIAL PERFORMANCE MEASURES

The following table summarizes the key operating and financial performance measures for the periods

listed below:

($000’s except per-square foot,
per-unit and financial ratios)

DECEMBER 31,
2022

DECEMBER 31,
2021

DECEMBER 31,
2022

DECEMBER 31,
2021

DECEMBER 31,
2020

THREE MONTHS ENDED

YEAR ENDED

Leased area (1)

Occupied area (1)

90.8%

89.6%

90 .4%

89 .9%

90.8%

89.6%

90 .4%

89 .9%

92 .5%

92 .1%

Average in-place net rent per occupied
square foot (1)

Average in-place net rent per occupied
square foot - excluding UDC in all
periods

Leased rate for leases maturing in the
period (1)

Increase in net rent on renewing leases -
total rental portfolio (1)

Increase in net rent on renewing leases -
excluding Calgary (1)

23.10

24 .64

23.10

24 .64

23 .88

23.10

21 .98

23.10

21 .98

21 .35

45.6%

30 .9%

57.9%

57 .0%

78 .3%

6.1%

8.6%

5 .0%

6 .0%

5.6%

7.8%

7 .9%

9 .8%

14 .5%

16 .6%

Investment properties (1)(2)(5)

9,669,005

9,527,105

9,669,005

9,527,105

8,687,375

Unencumbered investment properties (1)(3)

8,345,530

9,064,010

8,345,530

9,064,010

6,463,680

Total assets (2)(5)

11,906,350

10,384,691

11,906,350

10,384,691

9,400,768

Cost of PUD as % of GBV (3)

NAV per unit (7)

Debt (2)

Total indebtedness ratio (3)

Annualized Adjusted EBITDA (3)

Net debt as a multiple of Annualized
Adjusted EBITDA (3)

Interest-coverage ratio - including
interest capitalized and excluding
financing prepayment costs (3)(4)

12.6%

50.96

11 .2%

50 .30

12.6%

50.96

11 .2%

50 .30

9 .0%

48 .54

4,211,185

3,453,284

4,211,185

3,453,284

2,725,462

35.6%

426,520

33 .5%

363,372

35.6%

403,119

33 .5%

29 .2%

365,050

349,023

9.8x

9 .4x

10.4x

9 .4x

7 .7x

2.8x

3 .4x

3.0x

3 .4x

Rental revenue (2)(5)(8)

135,924

Net income and comprehensive income (2)

41,392

122,534

159,921

519,468

375,363

472,799

443,151

470,236

500,729

Net income attributable to
Unitholders (2)

Net income attributable to Unitholders
per unit (basic and diluted) (2)

Net income from continuing
operations (2)(8)

Net income from continuing operations
attributable to Unitholders (2)(8)

39,223

159,921

368,855

443,151

500,729

0.28

1 .25

2.69

3 .48

4 .02

20,178

113,518

174,669

331,381

404,570

18,009

113,518

168,161

331,381

404,570

ALLIED 2022 ANNUAL REPORT
($000’s except per-square foot,
per-unit and financial ratios)

DECEMBER 31,
2022

DECEMBER 31,
2021

DECEMBER 31,
2022

DECEMBER 31,
2021

DECEMBER 31,
2020

THREE MONTHS ENDED

YEAR ENDED

Net income from continuing operations
attributable to Unitholders per unit
(basic and diluted) (2)(8)

Net income from continuing operations
excluding fair value adjustments,
financing prepayment costs and
impairment (3)(4)(6)(8)

Adjusted EBITDA (3)

Same Asset NOI - rental portfolio (3)(8)

Same Asset NOI - rental portfolio and
assets held for sale (3)

Same Asset NOI - total portfolio (3)

FFO (3)

FFO per unit (diluted) (3)

FFO pay-out ratio (3)

All amounts below are excluding
condominium related items,
financing prepayment costs and
the mark-to-market adjustment on
unit-based compensation (3)(4):

FFO

FFO per unit (diluted)

FFO payout-ratio

AFFO

AFFO per unit (diluted)

AFFO payout-ratio

0.13

0 .89

1.23

2 .60

3 .25

60,814

106,630

67,326

84,146

88,186

86,755

0.621

70.5%

86,325

0.618

70.8%

76,553

0.548

79.9%

50,672

90,843

68,499

83,979

86,669

75,691

0 .593

71 .6%

76,520

0 .600

70 .9%

66,076

0 .518

82 .1%

225,118

403,119

268,443

333,774

342,496

334,477

2.443

71.6%

206,419

365,050

270,441

332,450

341,964

253,376

1 .988

85 .5%

169,384

349,023

N/A

313,554

284,732

2 .286

72 .1%

333,392

306,559

285,784

2.435

71.8%

297,579

2.174

80.4%

2 .405

70 .6%

2 .295

71 .9%

266,517

248,003

2 .091

81 .2%

1 .991

82 .8%

(1) This metric excludes the assets held for sale based on the assets held for sale classification at the end of each period.
(2) This measure is presented on an IFRS basis.
(3) This is a non-IFRS measure, refer to page 21. These non-IFRS measures include the results of the continuing operations and the discontinued
operations (except for unencumbered investment properties, net income from continuing operations excluding fair value adjustments,
financing prepayments costs and impairment, and same asset NOI - rental portfolio, which only include continuing operations).

(4) For the three months and year ended December 31, 2022, Allied incurred $(564) and $(564), respectively, (December 31, 2021 - $721 and

$52,610, respectively, and for the year ended December 31, 2020 - $nil and $nil, respectively) of financing prepayment costs in connection with
the favourable refinancing of unsecured debentures and first mortgages.

(5) Prior to Q4 2021, the comparative figures for investment properties, total assets and rental revenue were reported in this section on a

proportionate share basis. The comparative figures for all prior periods have been revised to an IFRS basis.

(6) Prior to Q4 2021, the comparative figures for net income from continuing operations excluding fair value adjustments, financing prepayment
costs and impairment were calculated on a proportionate share basis. The comparative figures for all prior periods have been revised to be
calculated on an IFRS basis.

(7) Net asset value per unit (“NAV per unit”) is calculated as follows: total equity as at the corresponding period ended, (per the consolidated
balance sheets) divided by the actual number of Units and class B limited partnership units of Allied Properties Exchangeable Limited
Partnership (“Exchangeable LP Units”) outstanding at period end.

(8) For the three months and years ended December 31, 2022 and December 31, 2021, this metric includes only the results of the continuing

operations.

ALLIED 2022 ANNUAL REPORT
SUMMARY OF RENTAL PROPERTIES

199 Rental Properties
valued at $8.2B (3)

(Not including Assets Held for Sale valued at $1 .4B and

Properties Under Development valued at $1 .5B) (3)

TOTAL RENTAL
PORTFOLIO GLA

14.3M SF

VANCOUVER

1.0M

ALLIED OCCUPANCY

93 .2%

MARKET OCCUPANCY (1)

90 .2%

PROPERTIES

EMPLOYEES

KITCHENER

TORONTO

562K

5.0M

MONTRÉAL

6.3M

ALLIED OCCUPANCY

89 .2%

MARKET OCCUPANCY (1)

84 .0%

ALLIED OCCUPANCY

94 .4%

ALLIED OCCUPANCY

89 .1%

PROPERTIES

MARKET OCCUPANCY (1)(2)

77 .2%

MARKET OCCUPANCY (1)

86 .4%

EMPLOYEES

CALGARY

PROPERTIES

1.3M

EMPLOYEES

PROPERTIES

ANCILLARY PARKING
FACILITIES

EMPLOYEES

107

232

ALLIED OCCUPANCY

87 .2%

MARKET OCCUPANCY (1)

67 .4%

PROPERTIES

EMPLOYEES

(1) Source: cbre.ca, CBRE Canada Office Figures Q4 2022 Report.
(2) Kitchener market occupancy is based on the city of Waterloo market occupancy.
(3) The rental properties and properties under development values are on a proportionate basis.

OTTAWA

231K

ALLIED OCCUPANCY

99 .0%

MARKET OCCUPANCY (1)

87 .8%

PROPERTIES

EMPLOYEES

ALLIED 2022 ANNUAL REPORTBUSINESS OVERVIEW AND STRATEGY

Allied is a leading operator of distinctive urban workspace in Canada’s major cities and network-dense urban

data centres in Toronto . Allied’s business is providing knowledge-based organizations with distinctive urban

environments for creativity and connectivity .

DISTINCTIVE URBAN WORKSPACE

Allied was known initially for its leading role in the emergence of Class I workspace in Toronto, a format

created through the adaptive re-use of light industrial structures in the Downtown East and Downtown West

submarkets . This format typically features high ceilings, abundant natural light, exposed structural frames,

interior brick and hardwood floors . When restored and retrofitted to high standards, Class I workspace

can satisfy the needs of the most demanding office and retail users . When operated in a coordinated

manner, this workspace becomes a vital part of the urban fabric and contributes meaningfully to a sense

of community .

Allied went public in 2003 for the express purpose of consolidating Class I workspace that was centrally

located, distinctive and cost-effective . The consolidation that ensued was continuous, enabling Allied to

evolve into a leading owner operator of distinctive urban workspace in Canada’s major cities .

URBAN DATA CENTRE (“UDC”) SPACE

In addition to providing urban workspace, Allied provides network-dense UDC space in Downtown Toronto .

Allied established this capability in 2009 through the acquisition of 151 Front W, the largest internet

exchange point in Canada and the third largest in North America . Allied has since expanded this capability

by retrofitting a portion of 905 King W and a portion of 250 Front W . Just as Allied’s workspace does,

this space provides knowledge-based businesses with distinctive urban environments for creativity and

connectivity . Allied’s deep expertise in adaptively re-using urban structures has contributed meaningfully to

its success in operating network-dense data centre space in Downtown Toronto .

On January 16, 2023, Allied announced the completion of the initial phase of its exploration of the sale

of its UDC portfolio, which consists of freehold interests in 151 Front W and 905 King W and a leasehold

interest in 250 Front Street W (the “Portfolio”) . The Portfolio is unencumbered and does not include 20

York Street, the site for Union Centre . The sale of the Portfolio will enable Allied to reaffirm its mission

to serve knowledge-based organizations and to propel continued growth with low-cost capital over the

next few years . The Portfolio was connected to Allied’s mission from the beginning, but it is not core to

Allied’s mission in the way urban workspace is . If successful in selling the Portfolio, Allied expects to use

a significant portion of the sale proceeds to retire debt and the balance to fund its current development

activity .

As a result of the recent implementation of a comprehensive sales process, the UDC segment is classified as

a discontinued operation and asset held for sale for the three months and year ended December 31, 2022 .

It is classified as assets held for sale on the consolidated balance sheets as at December 31, 2022, and the

comparative period is not revised . It is classified as a discontinued operation on the consolidated statements

of income and comprehensive income for the three months and years ended December 31, 2022, and

December 31, 2021 .

ALLIED 2022 ANNUAL REPORTWORKSPACE INNOVATION

Allied’s experience informed its approach to workspace innovation . Office users today value light, air and an

open-plan . Abundant natural light and fresh air contribute enormously to human wellness and productivity .

An open-plan improves collaboration and creativity . When people can move around and freely connect with

one another, communication is improved, along with mutual understanding, and sparks of ingenuity occur .

Technology has contributed to workspace innovation . Light harvesting has made great strides, as has

fresh air delivery . Raised-floor systems have made aesthetic and practical contributions in recent years .

Aesthetically, they declutter the workspace and obviate the need for drop-ceilings . Practically, they improve

air circulation by pressurizing the underfloor area and de-pressurizing the actual work environment . All this

can be delivered to workspace users in an environmentally sustainable manner .

Workspace amenities have made an equivalent contribution to workspace innovation . While achievable

to an extent within a single building, amenity-richness is best achieved within a surrounding urban

neighbourhood . This in turn places a premium on clustering buildings within an amenity-rich urban

neighbourhood . Clustering also allows Allied to accommodate needs for expansion and contraction within

the neighbourhood .

Allied’s experience with Class I workspace also increased its sensitivity to design . When people migrated to

the suburbs in the 1950s, the sensitivity to design in the inner-cities seemed to diminish, if not disappear

altogether . Heritage properties were destroyed to make way for non-descript, inward-looking buildings, and

synthetic materials seemed to cover everything everywhere . Fortunately, design now matters, and design

now pays . The workspace Allied created at QRC West in Toronto is an excellent example . Allied’s architects

came up with a creative and beautiful way to build a new office tower above two fully-restored heritage

buildings . Although the design entailed additional cost, the ultimate economic and social return on the

investment was exceptional . The design paid off in every conceivable way .

Finally, Allied’s experience with Class I workspace put it at the forefront of creating workspace for the

knowledge-based economy . This led Allied to place ever-greater emphasis on the ongoing relationship

between the user and provider of workspace . Put differently, it led Allied to understand the need for a

partnership-like relationship between itself and workspace users .

FOCUS AND DEFINITION

From the outset, Allied adhered to a clear investment and operating focus . It focused initially on the Class I

format and continues to do so on a large scale in major urban centres in Canada . More recently, Allied

expanded its focus to include hybrid structures like QRC West and King Portland Centre in Toronto and

425 Viger in Montréal, where heritage buildings were integrated with new structures in a way that resonated

meaningfully with the knowledge-based organizations Allied serves . Allied will continue to do so on a large

scale in major urban centres in Canada .

As Allied’s business grew and evolved, it was defined not by the specific workspace format Allied owns,

operates and develops, but rather by the workspace users Allied serves . If a particular format enables

Allied to serve knowledge-based organizations better and more profitably, Allied will invest in it . The Well

in Toronto is a good example . The workspace component is a high-rise tower for the most part with no

ALLIED 2022 ANNUAL REPORTheritage element at all . However, because of its architecture, performance attributes and location within a

vibrant and amenity-rich neighbourhood, it has attracted outstanding knowledge-based organizations .

When Allied’s business is defined by the workspace users it serves, the actual format becomes less

important and the specific building attributes and neighbourhood amenities take on paramount importance .

Accordingly, if a conventional office tower can be transformed to provide the specific attributes and

amenities favoured by knowledge-based organizations, it falls squarely within Allied’s investment and

operating focus . This expands Allied’s opportunity-set materially .

VISION AND MISSION

Allied’s vision statement is as follows: To make a continuous contribution to cities and culture that elevates

and inspires the humanity in all people . In isolation, this could be seen as somewhat extravagant and

nebulous, but it is fully grounded and informed by Allied’s mission statement, which is as follows: To provide

knowledge-based organizations with distinctive urban workspace in a manner that is sustainable and conducive

to human wellness, creativity, connectivity and diversity . Like all such statements, Allied’s vision and mission

statements need elaboration .

From inception, Allied’s approach to workspace was both humanistic and technical . Allied sees workspace

from the vantage point of people who use it rather than people who invest in it . Allied sees workspace

as optimal light and air, a flexible and open floorplan and a collaborative rather than feudal relationship

between owner and user . Allied sees workspace as a product of aesthetic and technical design . Finally,

Allied sees workspace as part of a large, amenity-rich, urban ecosystem rather than as an instance of the

monumental isolation that characterizes so many conventional office towers .

Real estate is no longer a passive investment or a static tolling business . It is a profoundly human business

that needs to keep pace with demographic and technological change, as well as the ongoing change in

human attitudes and values . It needs to be run with future generations in mind . This means we have to run

commercial real estate to save the global environment, not destroy it . It means we have to foster human

wellness, not undermine it . It means we have to promote diversity, not impose uniformity . It means we

have to facilitate creativity, not encourage conformity . Finally, it means we have to build and operate as

city builders .

City builders see commercial real estate as an integral part of a much larger ecosystem of infrastructure,

buildings and people . The ecosystem, of course, is the city . We can only build cities well if they endure,

if they stand the test of time . This means cities have to be sustainable and conducive to human wellness,

creativity, connectivity and diversity . Put differently, it means they have to elevate and inspire the humanity

in all of us .

City building requires commitment, innovation and imagination, something Allied strives for on an ongoing

basis . In an era of remarkable and continuous urban intensification, city building is essential to sustained

profitability in real estate . Sporadic profitability is achievable without reference to the principles of city

building . Merchant development of commoditized structures in a boom market illustrates this perfectly .

Sustained profitability, on the other hand, requires adherence to the principles of city building . It follows

that Allied’s vision and mission statements are the aspirational context within which Allied pursues

sustained profitability for the benefit of its Unitholders .

ALLIED 2022 ANNUAL REPORTENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”)

Environmental, social and governance sensitivities are an integral part of Allied . They flow from its evolution

as an organization focused on the provision of distinctive urban workspace and network-dense UDC space in

Canada’s major cities .

Long before going public, Allied focused on the adaptive re-use of older structures built over a century

ago for light-industrial purposes . The goal at the time was not to minimize the impact on the environment .

Rather, it was to meet what was rightly perceived to be a growing need on the part of users of workspace

for environments that would assist them in attracting, motivating and retaining knowledge workers .

Nevertheless, by re-cycling buildings rather than re-building them, Allied minimized the impact on the

environment . This evolved into greater sensitivity as to the environmental impact of its activity .

Again, long before its initial public offering (IPO), Allied concentrated its properties in specific urban

areas . The goal at the time was not to make a social contribution . Rather, it was to meet what was rightly

perceived to be the need on the part of users of workspace to grow in amenity-rich, mixed-use urban

communities . Nevertheless, by aggregating buildings in this way, Allied became sensitized to the impact on

the surrounding communities in which it operates . Allied began to see its buildings as part of a larger urban

ecosystem and to acknowledge its responsibility to the surrounding community as a whole .

Finally, the launch of Allied’s IPO in 2003 increased its sensitivity to governance . The sensitivities at the time

were predominantly financial and operational, but as Allied evolved and attracted Unitholders globally, the

sensitivity to a broader conception of governance increased . Allied’s Board and Management began to see

governance as something that could strengthen the business significantly .

ESG OVERSIGHT & REPORTING

Allied’s Board and Management are committed to making its inherent approach to ESG more manifest,

deliberate and measurable . They have always believed that submitting to informed scrutiny will make Allied

a better business, and formally submitting to ESG scrutiny is no exception in this regard . The Trustees are

responsible for the oversight of the ESG Strategy and ESG initiatives developed by Management . The Board’s

Governance, Compensation and Nomination Committee oversees and monitors Allied’s ESG performance

and reviews Allied’s ESG Report, ESG Policy and other governance policies and practices annually . Allied

established an Executive ESG Committee to assist Management and the Board in defining, designing,

implementing, expanding and evaluating Allied’s ESG Strategy and ESG initiatives . The Committee reports

and makes recommendations to Management and the Board at least once annually .

On the recommendation of the Governance, Compensation and Nomination Committee, in 2021, the

Board established four ESG Accountability Corporate Targets, the achievement of which the Governance,

Compensation and Nomination Committee and the Board analyzed as part of its assessment of incentive

bonus awards for the executive officers .

In June 2022, Allied published its third Annual ESG Report in accordance with the Global Reporting Initiative

(GRI) 2021 Universal Standards, the Sustainability Accounting Standards Board (SASB) Real Estate Standard

and for the first time, the United Nations Sustainable Development Goals (UN SDGs) and the Task Force on

Climate-related Financial Disclosures (TCFD) recommendations .

ALLIED 2022 ANNUAL REPORTESG HIGHLIGHTS

Outperformed 2024
Targets

In 2021, Allied exceeded its 2024
reduction targets for Energy Use
Intensity (EUI), Greenhouse Gas
Intensity (GHGI) and Water Use
Intensity (WUI) .

Reduced Energy Use by
15.4% & GHG Emissions
by 12.4%

In 2021, Allied reduced its energy
use and greenhouse gas emissions
by 15 .4% and 12 .4%, respectively,
compared to the 2019 baseline,
surpassing its 2024 reduction
targets .

Reduced Water Use
by 43.3%

In 2021, Allied reduced its water use
from 67 L/ft2 in 2019 to 38 L/ft2 .
This represents a 43 .3% reduction
compared to the 2019 baseline and
exceeds its 2024 target .

Improved our GRESB
Score by Six Points

Issued $1.1 Billion of
Green Bonds

Initiated Allied’s Net
Zero Carbon Plan

In its 2022 GRESB assessment,
Allied scored 86/100 for its standing
investments, a six-point improvement
from 2021 and scored 82/100 for its
development portfolio, a seven-point
improvement from 2021 .

Recognized as a
Canadian “Best
Employer”

Since 2020, Allied engaged Kincentric
to conduct an annual third-party
employee engagement survey . In
2020 and 2021, Allied was recognized
by Kincentric as a “Best Employer” .

In 2021, Allied announced its Green
Financing Framework . In February
2021, Allied issued its first green
bond for $600 million and in August
2021, it issued its second green bond
for $500 million . In December 2021
and June 2022, Allied published
Green Bond Reports on the full
allocation of the respective net
proceeds for its February 2021 and
August 2021 green bond issuances .

Outperformed Peers
in User Experience
Assessment Ratings

In November 2022, Allied completed
its third annual third-party User
Experience Assessment Survey .
Results demonstrated year over year
improvements . 2022 scores exceeded
the benchmark of the Kingsley Index
in key areas .

In early 2022, Allied committed
to developing a Net Zero Carbon
(NZC) Plan which will identify a clear
pathway for Allied to reach net zero
in alignment with the Science Based
Targets Initiative’s (SBTi) Corporate
Net-Zero Standard v1 .0 .

Piloted HOME Initiative

In 2021, in partnership with
WoodGreen Community Services,
a local social service agency, Allied
provided two families with housing
and social supports .

ALLIED 2022 ANNUAL REPORTBUSINESS ENVIRONMENT AND OUTLOOK

Allied’s internal forecast for 2023 calls for low-to-mid-single-digit percentage growth in each of same asset

NOI, FFO per unit and AFFO per unit . Allied does not forecast NAV per unit growth in any given time period .

Allied continues to have deep confidence in, and commitment to, its strategy of consolidating and

intensifying distinctive urban workspace in Canada’s major cities . Allied firmly believes that its strategy is

underpinned by the most important secular trends in Canadian and global real estate . Allied also firmly

believes that it has the properties, the financial strength, the people and the platform necessary to execute

its strategy for the ongoing benefit of its Unitholders and other constituents .

The foregoing sections contain non-IFRS measures and forward-looking statements . Where it is not explicitly

stated, the measures include the results of both continuing and discontinued operations . Management

believes these combined results provide a more meaningful measure of financial performance for the

periods presented . Refer to Non-IFRS Measures and Forward Looking Statements below .

ALLIED 2022 ANNUAL REPORTNON-IFRS MEASURES

Readers are cautioned that certain terms used in the MD&A listed below, including any related per unit

amounts, used by Management of Allied to measure, compare and explain the operating results and

financial performance of Allied do not have any standardized meaning prescribed under IFRS and,

therefore, should not be construed as alternatives to net income, cash flow from operating activities, or any

other measure prescribed under IFRS . These terms are defined in the following table and reconciliations

to the most comparable IFRS measure are referenced, as applicable . The following terms do not have a

standardized meaning prescribed by IFRS and may not be comparable to similarly titled measures presented

by other publicly traded entities .

NON-IFRS MEASURE

DEFINITION

RECONCILIATION

Allied’s proportionate share
or proportionate basis

All references to “proportionate share” or “proportionate basis” refer to
a non-IFRS financial measure representing Allied’s proportionate share
of equity accounted investments. Allied applies the equity method of
accounting to its joint venture, TELUS Sky, as prescribed under IFRS.
Management presents the proportionate share of its interests in joint
arrangements that are accounted for using the equity method as it is
viewed as relevant in demonstrating Allied’s performance and is the basis
of many of Allied’s key performance measures.

Section II -
Operations,
Section V -
Asset Profile,
Section VI -
Liquidity and
Capital Resources

Section II -
Operations -
Other Financial
Performance Measures

Funds from Operations
(“FFO”)

and

FFO excluding condominium
costs, financing prepayment
costs and the mark-to-
market adjustment on
unit-based compensation

FFO is a non-IFRS financial measure used by most Canadian real estate
investment trusts based on a standardized definition established by
REALPAC in its January 2022 White Paper (“White Paper”). FFO is defined
as net income and comprehensive income from continuing operations
less certain adjustments, on a proportionate basis, including fair value
changes in investment properties, investment properties held for sale and
derivative instruments, impairment, incremental leasing costs, net income
and comprehensive income from discontinued operations, amortization of
improvement allowances and amortization of property, plant and equipment
which relates to owner-occupied property. FFO is reconciled to net income
and comprehensive income from continuing operations, which is the most
directly comparable IFRS measure. Management believes FFO is a key
measure of operating performance.

FFO excluding condominium related items, financing prepayment costs and
the mark-to-market adjustment on unit-based compensation starts with
FFO and removes the effects of condominium revenue, condominium cost
of sales, condominium marketing costs, financing prepayment costs and
the mark-to-market adjustment on unit-based compensation. FFO excluding
condominium related items, financing prepayment costs and the mark-to-
market adjustment on unit-based compensation is reconciled to net income
and comprehensive income from continuing operations, which is the most
directly comparable IFRS measure. Management believes this is a useful
measure as these condominium and financing prepayment items are not
indicative of recurring operating performance, and the mark-to-market
adjustments of unit-based compensation can fluctuate widely with the
market.

ALLIED 2022 ANNUAL REPORT

NON-IFRS MEASURE

DEFINITION

Adjusted Funds from
Operations (“AFFO”)

and

AFFO excluding
condominium related items,
financing prepayment costs
and the mark-to-market
adjustment on unit-based
compensation

AFFO is a non-IFRS financial measure used by most Canadian real estate
investment trusts based on a standardized definition established by
REALPAC in the White Paper. AFFO is defined as FFO less amortization of
straight-line rents, regular leasing expenditures, regular and recoverable
maintenance capital expenditures, and incremental leasing costs (related
to regular leasing expenditures). AFFO is reconciled to net income and
comprehensive income from continuing operations, which is the most
directly comparable IFRS measure. Management considers AFFO to
be a useful measure of recurring economic earnings and relevant in
understanding Allied’s ability to service its debt, fund capital expenditures
and provide distributions to Unitholders.

RECONCILIATION

Section II -
Operations -
Other Financial
Performance Measures

AFFO excluding condominium related items, financing prepayment costs
and the mark-to-market adjustment on unit-based compensation starts
with AFFO and removes the effects of condominium revenue, condominium
cost of sales, condominium marketing costs, financing prepayment costs
and the mark-to-market adjustment on unit-based compensation. AFFO
excluding condominium related items, financing prepayment costs and the
mark-to-market adjustment on unit-based compensation is reconciled to
net income and comprehensive income from continuing operations, which
is the most directly comparable IFRS measure. Management believes this
is a useful measure as these condominium and financing prepayment items
are not indicative of recurring economic earnings, and the mark-to-market
adjustments of unit-based compensation can fluctuate widely with the
market.

Net income from continuing operations excluding fair value adjustments,
financing prepayment costs and impairment is a non-IFRS financial
measure that starts with net income from continuing operations and
removes the effects of fair value gains or losses on investment properties
and investment properties held for sale, or derivative instruments, the
mark-to-market adjustment on unit-based compensation, financing
prepayment costs and impairment on an IFRS basis. Management
considers this to be a useful measure of operating performance, as fair
value adjustments can fluctuate widely with the market, and financing
prepayment costs and impairment are non-recurring in nature.

Section II -
Operations

Net income from continuing
operations excluding
fair value adjustments,
financing prepayment costs
and impairment

Net Rental Income (“NRI”)

NRI is a non-IFRS financial measure defined as rental revenue from
continuing operations less property operating costs from continuing
operations on a proportionate basis. It excludes condominium revenue and
condominium cost of sales. The most directly comparable IFRS measure is
operating income. Management considers NRI to be a useful measure of the
operating performance of its rental properties portfolio.

Section II -
Operations -
Net Operating Income

Net Operating Income
(“NOI”) from continuing
operations

NOI from discontinued
operations

NOI from continuing operations is a non-IFRS financial measure defined
as NRI excluding the impact of non-cash items such as amortization
of improvement allowances and the amortization of straight-line rents
from continuing operations on a proportionate basis. The most directly
comparable IFRS measure to NOI from continuing operations is Operating
Income. Management believes this is a useful measure as it demonstrates
the cash generating operating performance of its income producing
properties.

NOI from discontinued operations is a non-IFRS financial measure defined
as rental revenue from discontinued operations less property operating
costs from discontinued operations on a proportionate basis, excluding the
impact of non-cash items such as amortization of improvement allowances
and the amortization of straight-line rents from discontinued operations
on a proportionate basis. The most directly comparable IFRS measure
to NOI from discontinued operations is Operating Income. Management
believes this is a useful measure as it demonstrates the performance of its
discontinued segment.

Section II -
Operations -
Net Operating Income

ALLIED 2022 ANNUAL REPORT

NON-IFRS MEASURE

DEFINITION

Total NOI is a non-IFRS financial measure defined as the sum of NOI from
continuing operations and NOI from discontinued operations. The most
directly comparable IFRS measure to Total NOI is Operating Income.
Management believes this is a useful measure as it demonstrates the cash
generating operating performance of all its properties.

RECONCILIATION

Section II -
Operations -
Net Operating Income

Total NOI

Same Asset NOI

Same asset NOI is a non-IFRS measure defined as NOI for the properties
that Allied owned and operated for the entire duration of both the current
and comparative period on a proportionate basis. The most directly
comparable IFRS measure to same asset NOI is Operating Income.
Management believes this is a useful measure as NOI growth can be
assessed on its portfolio excluding the impact of acquisition and disposition
activities. Allied uses same asset NOI to evaluate the performance of its
properties.

Section II -
Operations -
Same Asset NOI

Normalized Last Quarter
Annualized (“LQA”) NOI

Normalized LQA NOI is a non-IFRS measure defined as the normalized NOI
from continuing operations for an individual property or portfolio for the
most recently completed quarter multiplied by four on a proportionate
basis. In the calculation of this metric, non-recurring items are excluded
from LQA NOI. The most directly comparable IFRS measure to normalized
LQA NOI is Operating Income. Management considers normalized LQA NOI
relevant in analyzing the operations of its rental properties on a property-
by-property or portfolio basis.

N/A

Gross Book Value (“GBV”)

GBV is a non-IFRS measure defined as the total assets of Allied on a
proportionate basis. The most directly comparable IFRS measure to GBV is
total assets. Management believes GBV is a useful measure to assess the
growth in Allied’s total portfolio of rental and development properties.

Section V -
Asset Profile

Unencumbered investment
properties

Unencumbered investment properties is a non-IFRS measure defined as the
value of investment properties, excluding investment properties held for
sale, which are free and clear of any encumbrances. This is calculated on a
proportionate share basis. Management believes unencumbered investment
properties is a useful measure to assess the borrowing capacity of Allied.

N/A

Cost of Properties Under
Development (“PUD”) as
a percentage of GBV

Cost of PUD as a percentage of GBV is a non-IFRS measure defined as the
book value of Allied’s properties under development, on a proportionate
basis, divided by the GBV at period-end. Management believes this is a
useful metric in assessing development risk. Allied has a limit of 15% as
outlined in its Declaration of Trust.

Section V -
Asset Profile

Adjusted Earnings Before
Interest, Taxes, Depreciation
and Amortization
(“Adjusted EBITDA”)

and

Annualized Adjusted EBITDA

Adjusted EBITDA is a non-IFRS measure calculated on a proportionate basis
comprised of earnings before interest expense, income taxes, depreciation
and amortization expense (including amortization of improvement
allowances), impairment, gains and losses on disposal of investment
properties and the fair value gains or losses associated with investment
properties and investment properties held for sale, financial instruments,
and unit-based compensation.

Section II -
Operations -
Other Financial
Performance Measures

Annualized Adjusted EBITDA is a non-IFRS measure calculated as the
Adjusted EBITDA for the current period annualized.

The most directly comparable IFRS measure to Adjusted EBITDA and
Annualized Adjusted EBITDA is net income and comprehensive income.
Management believes Adjusted EBITDA and Annualized Adjusted EBITDA
are useful metrics to determine Allied’s ability to service its debt, finance
capital expenditures and provide distributions to its Unitholders.

ALLIED 2022 ANNUAL REPORT

NON-IFRS MEASURE

DEFINITION

RECONCILIATION

Net debt

Net debt is a non-IFRS measure, calculated on a proportionate basis, as
debt less cash and cash equivalents. The most directly comparable IFRS
measure to net debt is debt. Management considers net debt a useful
measure for evaluating debt levels and interest coverage.

Section VI -
Liquidity and
Capital Resources -
Debt

Net debt as a multiple of
Annualized Adjusted EBITDA

FFO and AFFO Payout-Ratios

and

FFO and AFFO Payout-Ratios
excluding condominium
related items, financing
prepayment costs and the
mark-to-market adjustment
on unit-based compensation

Interest Coverage Ratio

and

Interest Coverage Ratio -
including interest
capitalized and excluding
financing prepayment costs

Total Indebtedness Ratio

Net debt as a multiple of Annualized Adjusted EBITDA is a non-IFRS
measure of Allied’s financial leverage and is defined as net debt divided by
Annualized Adjusted EBITDA. This measure indicates the number of years
required for Allied’s Annualized Adjusted EBITDA to repay all outstanding
debts, taking into consideration the cash on hand to decrease debt.
Management considers this metric a useful measure for evaluating Allied’s
ability to service its debt.

FFO and AFFO payout-ratios and FFO and AFFO payout-ratios excluding
condominium related items, financing prepayment costs and the mark-to-
market adjustment on unit-based compensation are non-IFRS measures.
These payout ratios are calculated by dividing the actual distributions
declared by FFO, AFFO and FFO and AFFO excluding condominium related
items, financing prepayment costs and the mark-to-market adjustment on
unit-based compensation in a given period. Management considers these
metrics a useful way to evaluate Allied’s distribution paying capacity.

Interest coverage ratio and interest coverage ratio including interest
capitalized and excluding financing prepayment costs are non-IFRS
measures calculated on a trailing three-month basis and twelve-month
basis for the three months ended and the year ended, respectively. These
ratios are defined as Adjusted EBITDA divided by interest expense with
interest capitalized included and financing prepayment costs excluded.
Management considers these metrics useful as they indicate Allied’s ability
to meet its interest cost obligations on a trailing twelve-month basis.

N/A

Total indebtedness ratio is a non-IFRS measure of Allied’s financial
leverage, which is calculated on a proportionate basis by taking debt plus
outstanding letters of credit divided by total assets. Management considers
this metric useful as it indicates Allied’s ability to meet its debt obligations.

Section V -
Asset Profile

ALLIED 2022 ANNUAL REPORT

FORWARD-LOOKING STATEMENTS

Certain information included in this MD&A contains forward-looking statements within the meaning of

applicable securities laws, including, among other things, statements concerning Allied’s objectives and

strategies to achieve those objectives, statements with respect to Management’s beliefs, plans, estimates

and intentions and statements concerning anticipated future events, circumstances, expectations, results,

operations or performance that are not historical facts . Forward-looking statements can be identified

generally by the use of forward-looking terminology, such as “indicators”, “outlook”, “forecast”, “objective”,

“may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans”, “continue” or

similar expressions suggesting future outcomes or events . In particular, certain statements in the Letter

to Unitholders, Section I—Overview, under the headings “Business Overview and Strategy”, “Focus and

Definition”, “Vision and Mission”, “Environmental, Social and Governance” and “Business Environment

and Outlook”, Section III - Leasing under the headings “Status” and “Lease Maturity”, Section V - Asset

Profile, under the headings “Rental Properties”, and “Development Properties”, Section VI - Liquidity and

Capital Resources and Section IX - Risks and Uncertainties, constitute forward-looking information . This

MD&A includes, but is not limited to, forward-looking statements regarding: increases to Allied’s annual

NOI due to development activities; expected annualized adjusted EBITDA on the properties acquired

from Choice Properties; the proposed sale of the Portfolio and the expected use of proceeds if such sale is

completed; expected capital expenditure and allocation over 2022; completion of construction and lease-up

in connection with Properties Under Development (“PUDs”); growth of our same asset NOI, FFO per unit

excluding condominium related items, financing prepayment costs and the mark-to-market adjustment on

unit-based compensation and AFFO per unit excluding condominium related items, financing prepayment

costs and the mark-to-market adjustment on unit-based compensation; continued demand for space in our

target markets; the expected effect of the global pandemic and consequent economic disruption; Allied’s

internal forecast; the creation of future value; estimated gross leasable area (“GLA”), NOI and growth from

PUDs; estimated costs of PUDs; future economic occupancy; return on investments, including yield on

cost of PUDs; estimated rental NOI and anticipated rental rates; lease up of our intensification projects;

anticipated available square feet of leasable area; targets for LEED certification; the development of a

Net Zero Carbon (NZC) Plan and the identification of a clear pathway for Allied to reach net zero; our

ability to generate ancillary revenue; our ability to achieve risk-adjusted returns on intensification; our

expectations regarding the timing of development of potential incremental density; receipt of municipal

approval for value-creation projects, including intensifications; Management’s expectations regarding

future distributions; and completion of future financings and availability of capital . Such forward-

looking statements reflect Management’s current beliefs and are based on information currently available

to Management .

The forward-looking statements in this MD&A are not guarantees of future results, operations or

performance and are based on estimates and assumptions that are subject to risks and uncertainties,

including those described in Section IX - Risks and Uncertainties, which could cause actual results,

operations or performance to differ materially from the forward-looking statements in this MD&A .

ALLIED 2022 ANNUAL REPORTThose risks and uncertainties include risks associated with property ownership, property development,

geographic focus, asset-class focus, competition for real property investments, financing and interest

rates, Unit price changes, government regulations, environmental matters, construction liability, taxation,

cybersecurity, and COVID-19 . Material assumptions that were made in formulating the forward-looking

statements in this MD&A include the following: that our current target markets remain stable, with no

material increase in supply of directly-competitive office space; that acquisition capitalization rates remain

reasonably constant; that the trend toward intensification within our target markets continues; and that the

equity and debt markets continue to provide us with access to capital at a reasonable cost to fund our future

growth and potentially refinance our mortgage debt as it matures . Although the forward-looking statements

contained in this MD&A are based on what Management believes are reasonable assumptions, there can be

no assurance that actual results, operations or performance will be consistent with these statements .

All forward-looking statements in this MD&A are qualified in their entirety by this forward-looking

disclaimer . Without limiting the generality of the foregoing, the discussion in the Letter to Unitholders,

Section I - Overview, Section V - Asset Profile and Section VI - Liquidity and Capital Resources are qualified

in their entirety by this forward-looking disclaimer . These statements are made as of January 31, 2023, and,

except as required by applicable law, Allied undertakes no obligation to update publicly or revise any such

statements to reflect new information or the occurrence of future events or circumstances .

ALLIED 2022 ANNUAL REPORTSection II
—Operations

The following sets out summary information and financial results for three months and year

ended December 31, 2022, and the comparable period in 2021 .

ALLIED 2022 ANNUAL REPORTNET INCOME AND COMPREHENSIVE INCOME

The following table reconciles the consolidated statements of income and comprehensive income on an

IFRS basis to a proportionate basis, which is a non-IFRS measure, for the three months and years ended

December 31, 2022, and December 31, 2021 . Refer to Non-IFRS Measures on page 21 .

There is an additional table to reconcile net income and comprehensive income from continuing operations

to net income from continuing operations excluding fair value adjustments, financing prepayment costs

and impairment, a non-IFRS measure, for the three months and years ended December 31, 2022, and

December 31, 2021 . Refer to Non-IFRS Measures on page 21 .

THREE MONTHS ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

IFRS
BASIS

INVESTMENT
IN JOINT
VENTURE

PROPORTIONATE
BASIS

IFRS
BASIS

INVESTMENT
IN JOINT
VENTURE

PROPORTIONATE
BASIS

Continuing operations

Rental revenue

$135,924

$1,855

$137,779

$122,534

$1,411

$123,945

Property operating
costs

(58,639)

(745)

(59,384)

(55,056)

(1,096)

(56,152)

Net rental income

77,285

Operating income

$77,285

1,110

$1,110

78,395

$78,395

67,478

$67,478

315

$315

67,793

$67,793

Interest expense

(20,722)

—

(20,722)

(15,883)

(16)

(15,899)

(5,794)

(7,464)

(189)

(385)

9,435

(108)

(273)

7,036

—

(7,464)

(108)

(273)

7,036

(5,794)

(189)

(385)

9,429

(42,988)

1,733

693

—

1,809

(1,809)

—

(835)

1,733

(6)

—

835

(6)

—

(42,295)

63,573

(1,134)

62,439

$20,178

$—

$20,178

$113,518

$—

$113,518

General and
administrative
expenses

Condominium
marketing expenses

Amortization of other
assets

Interest income

Fair value (loss) gain on
investment properties
and investment
properties held for sale

Fair value gain (loss) on
derivative instruments

Net income (loss) from
joint venture

Net income and
comprehensive income
from continuing
operations (1)

ALLIED 2022 ANNUAL REPORTTHREE MONTHS ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

IFRS
BASIS

INVESTMENT
IN JOINT
VENTURE

PROPORTIONATE
BASIS

IFRS
BASIS

INVESTMENT
IN JOINT
VENTURE

PROPORTIONATE
BASIS

Discontinued operations
(UDC segment)

Rental revenue

$23,810

Property operating
costs

(7,251)

Net rental income

$16,559

Interest expense

(1,778)

Fair value gain on
investment properties
held for sale

Net income and
comprehensive income
from discontinued
operations

Net income and
comprehensive income

6,433

21,214

$41,392

$—

—

$—

—

$—

$23,810

$24,188

(7,251)

(8,861)

$16,559

$15,327

(1,778)

(1,555)

6,433

32,631

21,214

46,403

$41,392

$159,921

$—

—

$—

—

$—

$24,188

(8,861)

$15,327

(1,555)

32,631

46,403

$159,921

(1)

Includes two investment properties held for sale as at December 31, 2022, and three investment properties held for sale as at December 31,
2021.

Net income and comprehensive income from continuing
operations

Fair value loss (gain) on investment properties
and investment properties held for sale

Fair value (gain) loss on derivative instruments

Mark-to-market adjustment on unit-based compensation

Financing prepayment costs

Net income from continuing operations excluding fair value
adjustments, financing prepayment costs and impairment (1)

THREE MONTHS ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$20,178

42,988

(1,733)

(55)

(564)

$60,814

$113,518

(63,573)

—

721

$50,672

(1) This excludes the Urban Data Centre segment which was classified as a discontinued operation in Q4 2022. The prior period comparative

figures have been revised accordingly.

On an IFRS basis, net income and comprehensive income from continuing operations for the three months

ended December 31, 2022, decreased by $93,340 from the comparable period in 2021, primarily due to

fair value adjustments, partially offset by an increase in operating income . On an IFRS basis, net income

and comprehensive income from discontinued operations for the three months ended December 31, 2022,

decreased by $25,189 from the comparable period in 2021, primarily due to fair value adjustments . For

the three months ended December 31, 2022, the fair value loss on investment properties and investment

properties held for sale of continuing and discontinued operations on an IFRS basis is $36,555 (December 31,

2021 - fair value gain on investment properties and investment properties held for sale of $96,204) .

ALLIED 2022 ANNUAL REPORTGeneral and
administrative expenses

Condominium marketing
expenses

Amortization of other
assets

Interest income

Fair value (loss) gain on
investment properties
and investment
properties held for sale

Fair value gain on
derivative instruments

Impairment of residential
inventory

Net loss from joint
venture

Net income and
comprehensive income
from continuing
operations (1)

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

IFRS
BASIS

INVESTMENT
IN JOINT
VENTURE

PROPORTIONATE
BASIS

IFRS
BASIS

INVESTMENT IN
JOINT VENTURE

PROPORTIONATE
BASIS

Continuing operations

Rental revenue

$519,468

$6,771

$526,239

$472,799

Property operating costs

(224,260)

(3,843)

(228,103)

(204,792)

Net rental income

295,208

2,928

298,136

268,007

Operating income

$295,208

$2,928

$298,136

$268,007

$4,907

(3,274)

1,633

$1,633

$477,706

(208,066)

269,640

$269,640

Interest expense

(72,802)

(22,593)

(602)

(1,325)

32,080

—

(72,802)

(114,196)

(206)

(114,402)

(22,593)

(25,834)

(602)

(573)

(1,325)

32,092

(1,167)

28,023

—

(14)

—

(25,834)

(587)

(1,167)

28,023

(73,750)

(6,101)

(79,851)

161,222

(1,864)

159,358

37,343

(15,729)

—

37,343

16,350

(15,729)

—

(3,161)

3,161

—

(451)

451

16,350

—

$174,669

$—

$174,669

$331,381

$—

$331,381

Discontinued operations
(UDC segment)

Rental revenue

$ 96,669

Property operating costs

(32,375)

Net rental income

$64,294

Interest expense

(6,532)

Fair value gain on
investment properties
held for sale

Net income and
comprehensive income
from discontinued
operations

Net income and
comprehensive income

142,932

$200,694

$375,363

$—

—

$—

—

$—

$ 96,669

$ 96,087

(32,375)

(34,703)

$64,294

$61,384

(6,532)

(5,949)

142,932

56,335

$200,694

$111,770

$375,363

$443,151

$—

—

$ —

—

$—

$ 96,087

(34,703)

$61,384

(5,949)

56,335

$111,770

$443,151

(1)

Includes two investment properties held for sale as at December 31, 2022, and three investment properties held for sale as at December 31, 2021.

ALLIED 2022 ANNUAL REPORTYEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

Net income and comprehensive income from continuing operations

$174,669

Fair value loss (gain) on investment properties and investment
properties held for sale

Fair value gain on derivative instruments

Mark-to-market adjustment on unit based compensation

Financing prepayment costs

Impairment of residential inventory

Net income from continuing operations excluding fair value
adjustments, financing prepayment costs and impairment (1)

73,750

(37,343)

(1,123)

(564)

15,729

$225,118

$331,381

(161,222)

(16,350)

—

52,610

—

$206,419

(1) This excludes the Urban Data Centre segment which was classified as a discontinued operation in Q4 2022. The prior period comparative

figures have been revised accordingly.

On an IFRS basis, net income and comprehensive income from continuing operations for the year ended

December 31, 2022, decreased by $156,712 from the comparable period in 2021 primarily due to fair value

adjustments, partially offset by an increase in operating income and a decrease in interest expense . On

an IFRS basis, net income and comprehensive income from discontinued operations for the year ended

December 31, 2022, increased by $88,924 from the comparable period in 2021, primarily due to fair value

adjustments . For the year ended December 31, 2022, the fair value gain on investment properties and

investment properties held for sale of continuing and discontinued operations on an IFRS basis is $69,182

(December 31, 2021 - $217,557) .

ALLIED 2022 ANNUAL REPORTNET OPERATING INCOME (“NOI”)

Allied operates in seven urban markets — Montréal, Ottawa, Toronto, Kitchener, Calgary, Edmonton and

Vancouver . For the purpose of analyzing NOI, Allied groups the cities by geographic location .

Allied’s real estate portfolio has grown through acquisitions and development activities that have positively

contributed to the operating results for the three months and year ended December 31, 2022, as compared

to the same period in the prior year .

As the Urban Data Centre segment has been classified as held for sale as at December 31, 2022, its results of

operations have been presented separately as discontinued operations .

The following table reconciles operating income to net operating income, a non-IFRS measure . Refer to

Non-IFRS measures on page 21 .

THREE MONTHS ENDED

YEAR ENDED

DECEMBER 31,
2022

DECEMBER 31,
2021

DECEMBER 31,
2022

DECEMBER 31,
2021

Operating income, IFRS basis

Add: investment in joint venture

Operating income, proportionate basis

Amortization of improvement allowances (1)(2)

Amortization of straight-line rents (1)(2)

NOI from continuing operations

NOI from discontinued operations

Total NOI

$77,285

1,110

$78,395

8,147

(2,533)

$84,009

$16,392

$100,401

$67,478

$295,208

$268,007

315

$67,793

8,124

(1,016)

$74,901

$15,337

$90,238

2,928

1,633

$298,136

$269,640

32,379

(6,739)

$323,776

$64,134

$387,910

31,894

(3,442)

$298,092

$60,627

$358,719

(1)

Includes Allied’s proportionate share of the equity accounted investment of the following amounts for the three months and year
ended December 31, 2022: amortization improvement allowances of $164 and $613, respectively (December 31, 2021 - $130 and $119,
respectively), and amortization of straight-line rents of $(25) and $(609), respectively (December 31, 2021 - $(239) and $(1,047), respectively).
(2) Excludes the Urban Data Centre segment which was classified as a discontinued operation in Q4 2022. The prior period comparative figures
have been revised accordingly. For the three months and year ended December 31, 2022, the Urban Data Centre segment’s amortization
of improvement allowances was $132 and $536, respectively (December 31, 2021 - $135 and $530, respectively). For the three months and
year ended December 31, 2022, the Urban Data Centre segment’s amortization of straight-line rents was $(299) and $(695), respectively
(December 31, 2021 - $(125) and $(1,287), respectively).

The following tables set out the NOI by segment and space type from the rental and development properties

for the three months and year ended December 31, 2022, and the comparable period in 2021 .

SEGMENT

Urban Workspace

THREE MONTHS ENDED

CHANGE

DECEMBER 31, 2022

DECEMBER 31, 2021

Montréal & Ottawa

$29,220

29.1%

$30,401

33 .7%

$(1,181)

(3 .9)%

Toronto & Kitchener

Calgary & Edmonton

Vancouver

40,676

5,579

8,534

NOI from continuing operations

$84,009

NOI from discontinued operations

$16,392

40.5

5.6

8.5

83.7%

16.3%

34,853

4,784

4,863

$74,901

$15,337

38 .6

5 .3

5 .4

83 .0%

17 .0%

5,823

795

3,671

$9,108

$1,055

Total NOI

$100,401

100.0%

$90,238

100 .0%

$10,163

16 .7

16 .6

75 .5

12 .2%

6 .9%

11 .3%

ALLIED 2022 ANNUAL REPORTTYPE OF SPACE

DECEMBER 31, 2022

DECEMBER 31, 2021

THREE MONTHS ENDED

CHANGE

Urban Workspace - Office

$69,914

69.7%

$63,534

70 .4%

$6,380

10 .0%

Urban Workspace - Retail

Urban Workspace - Parking

9,074

5,021

NOI from continuing operations

$84,009

NOI from discontinued operations

$16,392

9.0

5.0

83.7%

16.3%

7,592

3,775

$74,901

$15,337

8 .4

4 .2

83 .0%

17 .0%

1,482

1,246

$9,108

$1,055

Total NOI

$100,401

100.0%

$90,238

100 .0%

$10,163

19 .5

33 .0

12 .2%

6 .9%

11 .3%

The increase in NOI from continuing operations for the three months ended December 31, 2022, was due

to acquisitions, increased variable parking revenue, and rent commencement at The Well, partially offset

by known non-renewals at Cité Multimédia and de-leasing to facilitate upgrade activities at 1001 Boulevard

Robert-Bourassa in Montréal . The increase in NOI from discontinued operations for the three months ended

December 31, 2022, was due to rent, occupancy and ancillary revenue growth in the UDC portfolio .

SEGMENT

Urban Workspace

YEAR ENDED

CHANGE

DECEMBER 31, 2022

DECEMBER 31, 2021

Montréal & Ottawa

$116,059

29.9%

$115,970

32 .3%

Toronto & Kitchener

154,644

39.9

142,360

Calgary & Edmonton

Vancouver

21,823

31,250

5.6

8.1

19,829

19,933

NOI from continuing operations

$323,776

83.5%

$298,092

NOI from discontinued operations

$64,134

16.5%

$60,627

39 .7

5 .5

5 .6

83 .1%

16 .9%

$89

12,284

1,994

11,317

$25,684

$3,507

Total NOI

$387,910

100.0%

$358,719

100 .0%

$29,191

YEAR ENDED

CHANGE

TYPE OF SPACE

DECEMBER 31, 2022

DECEMBER 31, 2021

Urban Workspace - Office

$269,974

69.6%

$254,516

70 .9%

$15,458

Urban Workspace - Retail

Urban Workspace - Parking

36,374

17,428

9.4

4.5

30,758

12,818

NOI from continuing operations

$323,776

83.5%

$298,092

NOI from discontinued operations

$64,134

16.5%

$60,627

8 .6

3 .6

83 .1%

16 .9%

5,616

4,610

$25,684

$3,507

Total NOI

$387,910

100.0%

$358,719

100 .0%

$29,191

0 .1%

8 .6

10 .1

56 .8

8 .6%

5 .8%

8 .1%

6 .1%

18 .3

36 .0

8 .6%

5 .8%

8 .1%

ALLIED 2022 ANNUAL REPORTThe increase in NOI from continuing operations for the year ended December 31, 2022, was due to

acquisitions, increased variable parking revenue and rent commencement at The Well, partially offset by

known non-renewals at Cité Multimédia in Montréal and 185 Spadina in Toronto and de-leasing to facilitate

upgrade activities at 1001 Boulevard Robert-Bourassa in Montréal . The increase in NOI from discontinued

operations for the year ended December 31, 2022, was due to rent and occupancy growth in the UDC

portfolio .

SAME ASSET NOI

Same asset NOI, a non-IFRS measure in the table below, refers to those investment properties that were

owned by Allied from October 1, 2021, to December 31, 2022 . Same asset NOI of the development portfolio

for the three months ended December 31, 2022, consists of Breithaupt Phase III, Adelaide & Duncan,

185 Spadina, College & Manning, KING Toronto, QRC West Phase II, King & Brant, 400 Atlantic, Boardwalk-

Revillon Building, 342 Water Street, 3575 Saint-Laurent and portions of The Well, 1001 Boulevard Robert-

Bourassa and RCA Building - 1001 Lenoir Street . Same asset NOI of the assets held for sale for the three

months ended December 31, 2022, consists of five investment properties .

THREE MONTHS ENDED

CHANGE

DECEMBER 31,
2022

DECEMBER 31,
2021

Urban Workspace

Montréal & Ottawa

Toronto & Kitchener

Calgary

Vancouver

Rental Portfolio - Same Asset NOI

Assets Held for Sale - Same Asset NOI

Rental Portfolio and Assets Held for Sale -
Same Asset NOI

Urban Workspace

$26,552

30,745

4,929

5,100

$67,326

16,820

$84,146

4,040

Development Portfolio - Same Asset NOI

$4,040

Total Portfolio - Same Asset NOI

Acquisitions

Dispositions

Lease terminations

$88,186

9,415

(5)

741

Development fees and corporate items

2,064

Total NOI

$100,401

$28,363

31,407

4,199

4,530

$68,499

15,480

$83,979

2,690

$2,690

$86,669

247

393

268

2,661

$90,238

$(1,811)

(662)

730

570

$(1,173)

1,340

$167

1,350

$1,350

$1,517

9,168

(398)

473

$(597)

$10,163

(6 .4)%

(2 .1)

17 .4

12 .6

(1 .7)%

8 .7

0 .2%

50 .2

50 .2%

1 .8%

11 .3%

Same asset NOI of the total portfolio increased by $1,517 or 1 .8% for the three months ended December 31,

2022 . Same asset NOI of the rental portfolio and assets held for sale increased by $167 or 0 .2% as a result of

increased variable parking revenue, rent growth and economic occupancy in Vancouver, Calgary, and rent,

occupancy and ancillary revenue growth in the UDC portfolio . This was offset by known non-renewals at

Cité Multimédia in Montréal .

ALLIED 2022 ANNUAL REPORTSame asset NOI of the development portfolio increased by $1,350 or 50 .2%, primarily due to rent

commencement at The Well . This was partially offset by de-leasing to facilitate upgrade activities at 1001

Boulevard Robert-Bourassa in Montréal .

Same asset NOI, a non-IFRS measure in the table below, refers to those investment properties that

were owned by Allied from January 1, 2021, to December 31, 2022 . Same asset NOI of the development

portfolio for the year ended December 31, 2022, consists of Breithaupt Phase III, Adelaide & Duncan, 185

Spadina, College & Manning, KING Toronto, QRC West Phase II, King & Brant, 400 Atlantic, Boardwalk-

Revillon Building, 342 Water Street, 3575 Saint-Laurent and portions of The Well, 1001 Boulevard Robert-

Bourassa and RCA Building - 1001 Lenoir Street . Same asset NOI of the assets held for sale for the year

ended December 31, 2022, consists of five investment properties .

YEAR ENDED

CHANGE

DECEMBER 31,
2022

DECEMBER 31,
2021

Urban Workspace

Montréal & Ottawa

Toronto & Kitchener

Calgary

Vancouver

$104,940

124,339

18,571

20,593

Rental Portfolio - Same Asset NOI

$268,443

Assets Held for Sale - Same Asset NOI

65,331

$108,765

125,549

16,753

19,374

$270,441

62,009

Rental Portfolio and Assets Held for Sale
- Same Asset NOI

$333,774

$332,450

Urban Workspace

Development Portfolio - Same Asset NOI

Total Portfolio - Same Asset NOI

Acquisitions

Dispositions

Lease terminations

Development fees and corporate items

8,722

$8,722

$342,496

33,420

1,319

1,094

9,581

9,514

$9,514

$341,964

2,366

1,548

1,281

11,560

Total NOI

$387,910

$358,719

$(3,825)

(1,210)

1,818

1,219

$(1,998)

3,322

$1,324

(792)

$(792)

$532

31,054

(229)

(187)

(1,979)

$29,191

(3 .5)%

(1 .0)

10 .9

6 .3

(0 .7)%

5 .4

0 .4%

(8 .3)

(8 .3)%

0 .2%

8 .1%

Same asset NOI of the total portfolio increased by $532 or 0 .2% for the year ended December 31, 2022 . Same

asset NOI of the rental portfolio and assets held for sale increased by $1,324 or 0 .4% as a result of increased

variable parking revenue, rent growth and economic occupancy in Vancouver and Calgary, and rent and

occupancy growth in the UDC portfolio . This was offset by known non-renewals at Cité Multimédia in

Montréal .

Same asset NOI of the development portfolio decreased by $792 or 8 .3% primarily due to de-leasing to

facilitate upgrade activities at 1001 Boulevard Robert-Bourassa in Montréal and 185 Spadina in Toronto . This

was partially offset by rent commencement at The Well .

ALLIED 2022 ANNUAL REPORTINTEREST EXPENSE

Interest expense for the three months and years ended December 31, 2022, and 2021, are as follows:

THREE MONTHS ENDED

CHANGE

DECEMBER 31,
2022

DECEMBER 31,
2021

Interest on debt:

Mortgages payable

Construction loans payable

Promissory note payable

Unsecured Facility

Unsecured Debentures

Unsecured Term Loans

Interest on lease liabilities (1)

Amortization, net discount (premium)
on debt

Amortization, net financing costs

Interest capitalized to qualifying
investment properties and
residential inventory

Interest expense excluding
financing prepayment costs

Financing prepayment costs

Interest expense, IFRS basis

$1,133

2,236

504

5,060

18,675

7,031

803

879

641

$1,002

1,390

—

1,409

18,666

2,202

806

(117)

590

$131

846

504

3,651

4,829

(3)

996

$36,962

$25,948

$11,014

(15,676)

(10,786)

(4,890)

$21,286

(564)

$20,722

$15,162

721

$15,883

$6,124

(1,285)

$4,839

13 .1%

60 .9

100 .0

259 .1

—

219 .3

(0 .4)

851 .3

8 .6

42 .4%

45 .3

40 .4%

(178 .2)

30 .5%

(1) Excludes interest on a lease liability held for sale of $1,778 (December 31, 2021 - $1,555).

For the three months ended December 31, 2022, interest expense on an IFRS basis increased by $4,839

or 30 .5% over the comparable period primarily due to a higher balance of Unsecured Term Loans,

higher draws on the Unsecured Facility, partially offset by higher capitalized interest and lower financing

prepayment costs .

ALLIED 2022 ANNUAL REPORTInterest on debt:

Mortgages payable

Construction loans payable

Promissory note payable

Unsecured Facility

Unsecured Debentures

Unsecured Term Loans

Interest on lease liabilities (1)

Amortization, net discount (premium)
on debt

Amortization, net financing costs

Interest capitalized to qualifying
investment properties and
residential inventory

Interest expense excluding
financing prepayment costs

Financing prepayment costs

Interest expense, IFRS basis

YEAR ENDED

CHANGE

DECEMBER 31,
2022

DECEMBER 31,
2021

$4,635

6,487

1,512

11,125

74,705

20,592

3,224

2,401

2,495

$16,722

2,983

—

2,836

64,940

8,739

3,235

(531)

2,394

$(12,087)

(72 .3)%

3,504

1,512

8,289

9,765

11,853

(11)

2,932

101

117 .5

100 .0

292 .3

15 .0

135 .6

(0 .3)

552 .2

4 .2

25 .5%

$127,176

$101,318

$25,858

(53,810)

(39,732)

(14,078)

35 .4

$73,366

(564)

$72,802

$61,586

52,610

$114,196

$11,780

(53,174)

$(41,394)

19 .1%

(101 .1)

(36 .2)%

(1) Excludes interest on a lease liability held for sale of $6,532 (December 31, 2021 - $5,949).

For the year ended December 31, 2022, interest expense on an IFRS basis decreased by $41,394 or 36 .2%

primarily due to a financing prepayment cost in the comparative period, a lower balance of mortgages

payable and higher capitalized interest, partially offset by a higher balance of Unsecured Term Loans,

higher Unsecured Debentures’ interest expense, and higher draws on the Unsecured Facility .

For the three months and year ended December 31, 2022, capitalized interest increased over the

comparable period with the continuation of development and upgrade activities across the portfolio .

In accordance with IAS 23 - Borrowing Costs, interest may be capitalized on properties in connection

with activity required to get the assets ready for their intended use (refer to note 2 (g) in Allied’s audited

consolidated financial statements for the year ended December 31, 2022, for further details) . This

would include upgrade work as well as work completed in relation to a future development, such as

obtaining zoning approval, completing site approval plans, and engineering and architectural drawings .

On completion of upgrade and development activity, the ability to capitalize interest expense ends,

partially offsetting the positive impact of lease commencement .

ALLIED 2022 ANNUAL REPORTGENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the three months and years ended December 31, 2022 and 2021, are

as follows:

THREE MONTHS ENDED

CHANGE

DECEMBER 31,
2022

DECEMBER 31,
2021

Salaries and benefits

Professional and trustees fees

Office and general expenses

Capitalized to qualifying investment
properties

Total general and administrative
expenses, IFRS basis

$6,403

1,343

1,448

$9,194

(3,400)

$5,794

$6,317

1,184

1,938

$9,439

(1,975)

$7,464

$86

159

(490)

$(245)

(1,425)

1 .4%

13 .4

(25 .3)

(2 .6)%

(72 .2)

$(1,670)

(22 .4)%

For the three months ended December 31, 2022, general and administrative expenses decreased by $1,670

or 22 .4% from the comparable period primarily due to increased capitalization of general and administrative

expenses as there was a higher volume of development and upgrade projects underway .

Salaries and benefits

Professional and trustees fees

Office and general expenses

Capitalized to qualifying investment
properties

Total general and administrative
expenses, IFRS basis

YEAR ENDED

CHANGE

DECEMBER 31,
2022

DECEMBER 31,
2021

$21,119

6,051

5,549

$32,719

$21,683

4,481

5,816

$31,980

$(564)

1,570

(267)

$739

(10,126)

(6,146)

(3,980)

(2 .6)%

35 .0

(4 .6)

2 .3%

64 .8

$22,593

$25,834

$(3,241)

(12 .5)%

For the year ended December 31, 2022, general and administrative expenses decreased by $3,241 or

12 .5% from the comparable period primarily due to the mark-to-market adjustment on the unit-based

compensation incurred in the current period, severance expense incurred in the comparable period

and increased capitalization of general and administrative expenses as there was a higher volume of

development and upgrade projects underway, partially offset by higher consulting and trustee fees .

ALLIED 2022 ANNUAL REPORTINTEREST INCOME

Interest income for the three months and years ended December 31, 2022 and 2021, are as follows:

THREE MONTHS ENDED

CHANGE

DECEMBER 31,
2022

DECEMBER 31,
2021

Interest on loans receivable

$8,482

$6,358

$2,124

Guarantee fees

Interest on cash and cash equivalents
and other

794

153

593

201

Interest income, IFRS basis

$9,429

$7,036

$2,393

33 .4%

33 .9

80 .0

34 .0%

For the three months ended December 31, 2022, interest income increased by $2,393 or 34 .0% over the

comparative period primarily due to a higher balance of loans receivable .

YEAR ENDED

CHANGE

DECEMBER 31,
2022

DECEMBER 31,
2021

Interest on loans receivable

Guarantee fees

Interest on cash and cash equivalents
and other

Interest income, IFRS basis

$28,765

2,820

495

$32,080

$24,065

3,294

664

$28,023

$4,700

(474)

(169)

$4,057

19 .5%

(14 .4)

(25 .5)

14 .5%

For the year ended December 31, 2022, interest income increased by $4,057 or 14 .5% from the comparable

period primarily due to a higher balance of loans receivable, partially offset by a retroactive guarantee fee in

the comparative period .

ALLIED 2022 ANNUAL REPORTOTHER FINANCIAL PERFORMANCE MEASURES

FUNDS FROM OPERATIONS (“FFO”) AND FFO EXCLUDING CONDOMINIUM RELATED ITEMS, FINANCING

PREPAYMENT COSTS AND THE MARK-TO-MARKET ADJUSTMENT ON UNIT-BASED COMPENSATION

Allied’s calculation of FFO, a non-IFRS measure, is in compliance with REALPAC’s standardized definition in

the White Paper . FFO excluding condominium related items, financing prepayment costs and the mark-to-

market adjustment on unit-based compensation, a non-IFRS measure, starts with the standardized definition

of FFO and removes the effects of condominium revenue, condominium cost of sales, condominium

marketing costs, financing prepayment costs and the mark-to-market adjustment on unit-based

compensation . Refer to Non-IFRS Measures on page 21 .

Allied initiated condominium pre-sales at KING Toronto, a 50/50 joint venture with Westbank, in the fourth

quarter of 2018 . For the three months and year ended December 31, 2022, Allied incurred (at its share)

$189 and $602, respectively, of condominium marketing costs in connection with the pre-sales activity .

(Marketing costs associated with merchant development are expensed when incurred .) Allied and Westbank

have initiated construction of KING Toronto .

For the three months ended December 31, 2022, FFO per unit excluding condominium related items,

financing prepayment costs and the mark-to-market adjustment on unit-based compensation totaled

$0 .618 . This is an increase of $0 .018 or 3 .0% over the comparable period in the prior year . The increase was

primarily due to an increase in total NOI, partially offset by higher interest expense .

For the year ended December 31, 2022, FFO per unit excluding condominium related items, financing

prepayment costs and the mark-to-market adjustment on unit-based compensation totaled $2 .435 . This is an

increase of $0 .030 or 1 .2% over the comparable period in the prior year . The increase was primarily due to

an increase in total NOI, partially offset by an increase in interest expense .

To ensure sufficient cash is retained to meet capital improvement and leasing objectives, Allied strives to

maintain an appropriate FFO pay-out ratio excluding condominium related items, financing prepayment

costs and the mark-to-market adjustment on unit-based compensation . Refer to Non-IFRS Measures

on page 21 . For the three months and year ended December 31, 2022, the FFO pay-out ratio excluding

condominium related items, financing prepayment costs and the mark-to-market adjustment on unit-based

compensation was 70 .8% and 71 .8%, respectively .

ADJUSTED FUNDS FROM OPERATIONS (“AFFO”) EXCLUDING CONDOMINIUM RELATED ITEMS,

FINANCING PREPAYMENT COSTS AND THE MARK-TO-MARKET ADJUSTMENT ON UNIT-BASED

COMPENSATION

Allied’s calculation of AFFO, a non-IFRS measure, is in compliance with REALPAC’s standardized definition

in the White Paper . AFFO excluding condominium related items, financing prepayment costs and the

mark-to-market adjustment on unit-based compensation, a non-IFRS measure, starts with the standardized

definition of AFFO and removes the effects of condominium revenue, condominium cost of sales,

condominium marketing costs, financing prepayment costs and the mark-to-market adjustment on unit-

based compensation . Refer to Non-IFRS Measures on page 21 .

ALLIED 2022 ANNUAL REPORTFor the three months ended December 31, 2022, AFFO per unit excluding condominium related items,

financing prepayment costs and the mark-to-market adjustment on unit-based compensation totaled $0 .548 .

This represents an increase of $0 .030 or 5 .8% over the comparable period in the prior year . The increase

was primarily due to the changes in FFO excluding condominium related items, financing prepayment costs

and the mark-to-market adjustment on unit-based compensation discussed above and lower regular and

recoverable maintenance capital expenditures, partially offset by higher amortization of straight-line rents .

For the year ended December 31, 2022, AFFO per unit excluding condominium related items, financing

prepayment costs and the mark-to-market adjustment on unit-based compensation totaled $2 .174 . This

represents an increase of $0 .083 or 4 .0% over the comparable period in the prior year . The increase was

primarily due to the changes in FFO excluding condominium related items, financing prepayment costs

and the mark-to-market adjustment on unit-based compensation discussed above and lower regular leasing

expenditures and lower regular and recoverable maintenance capital expenditures, partially offset by higher

amortization of straight-line rents .

To ensure sufficient cash is retained to meet capital improvement and leasing objectives, Allied strives

to maintain an appropriate AFFO pay-out ratio excluding condominium related items, financing

prepayment costs and the mark-to-market adjustment on unit-based compensation, which is the ratio

of actual distributions to AFFO excluding condominium related items, financing prepayment costs and

the mark-to-market adjustment on unit-based compensation in a given period . For the three months and

year ended December 31, 2022, the AFFO pay-out ratio excluding condominium related items, financing

prepayment costs and the mark-to-market adjustment on unit-based compensation was 79 .9% and 80 .4%,

respectively .

RECONCILIATION OF FFO AND AFFO

The following table reconciles Allied’s net income and comprehensive income from continuing operations

to FFO, FFO excluding condominium related items, financing prepayment costs and the mark-to-market

adjustment on unit-based compensation and AFFO excluding condominium related items, financing

prepayment costs and the mark-to-market adjustment on unit-based compensation, which are on a non-IFRS

basis, for the three months and years ended December 31, 2022 and December 31, 2021 . Refer to Non-IFRS

Measures on page 21 .

ALLIED 2022 ANNUAL REPORTTHREE MONTHS ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

CHANGE

$20,178

$113,518

$(93,340)

46,403

(25,189)

Net income and comprehensive income from
continuing operations

Net income and comprehensive income from
discontinued operations

Adjustment to fair value of investment properties
and investment properties held for sale

Adjustment to fair value of derivative instruments

Incremental leasing costs

Amortization of improvement allowances

Amortization of property, plant and equipment (1)

Adjustments relating to joint venture:

Adjustment to fair value on investment
properties

Amortization of improvement allowances

Interest expense (2)

FFO

Condominium marketing costs

Financing prepayment costs

Mark-to-market adjustment on unit-based
compensation

FFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

Amortization of straight-line rents

Regular leasing expenditures (3)

Regular maintenance capital expenditures

Incremental leasing costs
(related to regular leasing expenditures)

Recoverable maintenance capital expenditures

Adjustment relating to joint venture:

21,214

36,555

(1,733)

2,479

8,115

(693)

164

377

$86,755

189

(564)

(55)

$86,325

(2,807)

(2,855)

(354)

(1,736)

(1,995)

(96,204)

2,249

8,129

—

1,134

130

326

$75,691

108

721

—

$76,520

(902)

(3,253)

(1,566)

(1,574)

(2,910)

132,759

(1,739)

230

(14)

(1,827)

$11,064

(1,285)

(55)

$9,805

(1,905)

398

1,212

(162)

915

214

Amortization of straight-line rents

(25)

(239)

AFFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

Weighted average number of units (4)

Basic

Diluted

Per unit - basic

FFO

FFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

AFFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

$76,553

$66,076

$10,477

139,765,128

127,441,142

127,611,273

12,323,986

12,153,855

$0.621

$0.618

$0 .594

$0 .027

$0 .600

$0 .018

$0.548

$0 .518

$0 .030

ALLIED 2022 ANNUAL REPORTTHREE MONTHS ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

CHANGE

Per unit - diluted

FFO

FFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

AFFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

Pay-out Ratio

FFO

FFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

AFFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

$0.621

$0.618

$0 .593

$0 .028

$0 .600

$0 .018

$0.548

$0 .518

$0 .030

70.5%

70.8%

79.9%

71 .6%

(1 .1%)

70 .9%

(0 .1%)

82 .1%

(2 .2%)

(1) Property, plant and equipment relates to owner-occupied property.
(2) This amount represents interest expense on Allied’s joint venture investment in TELUS Sky and is not capitalized under IFRS, but is allowed as

an adjustment under REALPAC’s definition of FFO.

(3) Refer to Capital Expenditures on page 46 for a description of regular leasing expenditures.
(4) The weighted average number of units includes Units and Exchangeable LP Units. The Exchangeable LP Units are classified as equity in the

audited consolidated financial statements as non-controlling interests.

ALLIED 2022 ANNUAL REPORTDECEMBER 31, 2022

DECEMBER 31, 2021

CHANGE

YEAR ENDED

$174,669

$331,381

$(156,712)

200,694

(69,182)

(37,343)

15,729

9,281

32,302

224

6,101

613

1,389

$334,477

602

(564)

(1,123)

$333,392

(6,825)

(13,956)

(1,979)

(6,497)

(5,947)

(609)

111,770

88,924

(217,557)

(16,350)

—

8,038

32,305

—

1,864

119

1,806

$253,376

573

52,610

—

$306,559

(3,682)

(17,177)

(4,327)

(5,626)

(8,183)

(1,047)

148,375

(20,993)

15,729

1,243

(3)

224

4,237

494

(417)

$81,101

(53,174)

(1,123)

$26,833

(3,143)

3,221

2,348

(871)

2,236

438

$297,579

$266,517

$31,062

136,880,675

136,904,082

127,305,384

127,455,829

9,575,291

9,448,253

Net income and comprehensive income from
continuing operations

Net income and comprehensive income from
discontinued operations

Adjustment to fair value of investment properties
and investment properties held for sale

Adjustment to fair value of derivative instruments

Impairment of residential inventory

Incremental leasing costs

Amortization of improvement allowances

Amortization of property, plant and equipment (1)

Adjustments relating to joint venture:

Adjustment to fair value on investment
properties

Amortization of improvement allowances

Interest expense (2)

FFO

Condominium marketing costs

Financing prepayment costs

Mark-to-market adjustment on unit-based
compensation

FFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

Amortization of straight-line rents

Regular leasing expenditures (3)

Regular maintenance capital expenditures

Incremental leasing costs
(related to regular leasing expenditures)

Recoverable maintenance capital expenditures

Adjustment relating to joint venture:

Amortization of straight-line rents

AFFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

Weighted average number of units (4)

Basic

Diluted

ALLIED 2022 ANNUAL REPORTPer unit - basic

FFO

FFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

AFFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

Per unit - diluted

FFO

FFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

AFFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

Pay-out Ratio

FFO

FFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

AFFO excluding condominium related items,
financing prepayment costs and the mark-to-
market adjustment on unit-based compensation

DECEMBER 31, 2022

DECEMBER 31, 2021

CHANGE

YEAR ENDED

$2.444

$1 .990

$0 .454

$2.436

$2 .408

$0 .028

$2.174

$2 .094

$0 .080

$2.443

$1 .988

$0 .455

$2.435

$2 .405

$0 .030

$2.174

$2 .091

$0 .083

71.6%

71.8%

85 .5%

(13 .9%)

70 .6%

1 .2%

80.4%

81 .2%

(0 .8%)

an adjustment under REALPAC’s definition of FFO.

audited consolidated financial statements as non-controlling interests.

ALLIED 2022 ANNUAL REPORTCAPITAL EXPENDITURES

Our portfolio requires ongoing maintenance capital expenditures and leasing expenditures .

Regular maintenance capital expenditures are costs incurred to maintain and sustain the existing property

infrastructure, including structural repairs . Recoverable maintenance capital expenditures are typically

not structural in nature, but allow the building to operate more efficiently, such as investing in building

automation systems and HVAC systems . These improvements provide a direct benefit to users and can

be recovered over the useful life of the asset according to the lease . Both regular maintenance capital

expenditures and recoverable maintenance capital expenditures are deducted in the calculation of AFFO .

Regular leasing expenditures are leasing costs incurred to maintain the existing revenues of a property

and are deducted in the calculation of AFFO . These costs are considered operational, and typically include

improvement allowances, landlord’s work and leasing commissions required to replace or renew users at

existing rates or market rates .

For the three months ended December 31, 2022, Allied incurred (i) $2,855 in regular leasing expenditures or

$10 .44 per square foot, (ii) $354 in regular maintenance capital expenditures and (iii) $1,995 of recoverable

maintenance capital expenditures .

For the year ended December 31, 2022, Allied incurred (i) $13,956 in regular leasing expenditures or $11 .98

per square foot, (ii) $1,979 in regular maintenance capital expenditures and (iii) $5,947 of recoverable

maintenance capital expenditures .

Revenue-enhancing capital is invested to improve the revenue generating ability of the properties . This

includes investments to change the use of space, increase gross leasable area, or materially improve the

aesthetics or efficiency of a property . Development costs are investments to generate new revenue streams

and/or to increase the productivity of a property . These consist of pre-development costs, carrying costs,

direct construction costs, leasing costs, improvement allowances, borrowing costs, and direct costs of

internal staff directly attributable to the projects under development .

For the three months and year ended December 31, 2022, Allied invested $93,398 and $391,210, respectively,

of revenue enhancing capital into its portfolio to enhance its income-producing capability and in ongoing

development activity .

THREE MONTHS ENDED

YEAR ENDED

DECEMBER 31,
2022

DECEMBER 31,
2021

DECEMBER 31,
2022

DECEMBER 31,
2021

Regular maintenance capital expenditures

Recoverable maintenance capital expenditures

Regular leasing expenditures

$354

$1,995

$2,855

$1,566

$2,910

$3,253

Revenue-enhancing capital and development costs

$93,398

$128,973

$1,979

$5,947

$13,956

$391,210

$4,327

$8,183

$17,177

$417,967

ALLIED 2022 ANNUAL REPORTEARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”)

The following table reconciles Allied’s net income and comprehensive income to Adjusted EBITDA,

a non-IFRS measure, for the three months and years ended December 31, 2022 and December 31, 2021 .

Refer to Non-IFRS Measures on page 21 .

THREE MONTHS ENDED

YEAR ENDED

DECEMBER 31,
2022

DECEMBER 31,
2021

DECEMBER 31,
2022

DECEMBER 31,
2021

$41,392

22,500

385

8,279

—

$159,921

$375,363

$443,151

17,454

273

8,259

—

79,334

1,325

32,915

15,729

120,351

1,167

32,424

—

35,862

(95,070)

(63,081)

(215,693)

Net income and comprehensive income
for the period

Interest expense (1)

Amortization of other assets

Amortization of improvement allowances

Impairment of residential inventory

Fair value loss (gain) on investment
properties and investment properties
held for sale (2)

Fair value (gain) loss on derivative
instruments

Mark-to-market adjustment on unit-based
compensation

Adjusted EBITDA (3)

$106,630

$90,843

(1,733)

(55)

—

(37,343)

(16,350)

(1,123)

$403,119

—

$365,050

(1)

Includes Allied’s proportionate share of the equity accounted investment’s interest expense of $nil and $nil for the three months and year ended
December 31, 2022, respectively (December 31, 2021 - $16 and $206, respectively).

(2) Includes Allied’s proportionate share of the equity accounted investment’s fair value gain on investment properties of $693 and fair value loss
of $6,101 for the three months and year ended December 31, 2022, respectively (December 31, 2021 - fair value loss on investment properties of
$1,134 and $1,864, respectively).

(3) Includes the Urban Data Centre segment which was classified as a discontinued operation in Q4 2022.

ALLIED 2022 ANNUAL REPORT
Section III
—Leasing

Allied strives to maintain high levels of occupancy and leased area . At December 31, 2022,

Allied’s rental portfolio (which excludes assets held for sale including UDC) was 90 .8% leased .

ALLIED 2022 ANNUAL REPORTSTATUS

Leasing status for the rental portfolio as at December 31, 2022, is summarized below:

YEAR ENDED

GLA

AS A % OF TOTAL GLA (1)

Leased area (occupied & committed) on January 1, 2022

Vacancy committed for future leases

Occupancy - beginning of period

Previously committed vacant space now occupied

New leases and expansions on vacant space

New vacancies during the period

Surrender/early termination agreements

Suite additions, remeasurements and removals

12,861,227

(70,606)

12,790,621

21,321

402,631

(480,202)

(204,061)

1,954

90.4%

89.9%

Occupancy (pre-2022 acquisitions, dispositions and transfers)

12,532,264

88.0%

Occupancy related to acquired properties

Occupancy related to transfers to/from PUD and investment
properties held for sale

Occupancy - end of period

Vacancy committed for future leases

Leased area (occupied & committed) on December 31, 2022

1,129,422

(829,619)

12,832,067

166,163

12,998,230

(1) Excludes properties under development, investment properties held for sale and residential GLA.

89.6%

90.8%

Of the 14,317,179 square feet total GLA in Allied’s rental portfolio, 12,832,067 square feet were occupied on

December 31, 2022 . Another 166,163 square feet were subject to contractual lease commitments with users

whose leases commence subsequent to December 31, 2022, bringing the leased area to 12,998,230 square

feet, which represents 90 .8% of Allied’s total rental portfolio GLA .

The table below outlines the rental portfolio’s leased area as at December 31, 2022, for the stabilized

properties and the transitional properties . Transitional properties consist of three properties (810 Saint

Antoine, El Pro Lofts - 644 Courcelle and 375 Water) where we have suppressed occupancy to facilitate

longer term upgrade plans .

Stabilized rental portfolio

Transitional rental portfolio

Total rental portfolio

DECEMBER 31, 2022

LEASED AREA (SF)

LEASED AREA (%)

12,727,429

270,801

12,998,230

91 .3%

72 .2%

90.8%

ALLIED 2022 ANNUAL REPORTThe table below outlines the timing of the contractual lease commitments by commencement of occupancy:

FIXTURING COMMENCEMENT
(OCCUPANCY)

Lease commitments - GLA

% of lease commitments

Q1 2023

Q2 2023

Q3 2023

Q4 2023

THEREAFTER

TOTAL

126,233

75 .9%

34,159

20 .6%

—

—%

—

—%

5,771

3 .5%

166,163

100 .0%

In most instances, occupancy commences with a fixturing period prior to rent commencement . During

the fixturing period, straight-line rent revenue is recognized, and no recoverable costs are paid by the user .

Thereafter, recoverable costs are paid by the user and recognized as rental revenue . In cases where interest

and realty taxes were being capitalized prior to occupancy (in accordance with IFRS), capitalization ends on

occupancy . During occupancy, rental revenue is recognized and interest and realty taxes are expensed .

In some instances, particularly in ground-up developments, there may be fixturing periods outside of the

term of the lease while base building work is being completed . In this case, capitalization is taking place so

revenue is not recognized .

The table below outlines the timing of the contractual lease commitments by commencement of rent

payment:

RENT COMMENCEMENT
(ECONOMIC OCCUPANCY)

Lease commitments - GLA

% of lease commitments

Q1 2023

Q2 2023

Q3 2023

Q4 2023

THEREAFTER

TOTAL

18,063

39,421

43,662

23,255

10 .9%

23 .8%

26 .3%

14 .0%

41,762

25 .0%

166,163

100 .0%

Allied monitors the level of sub-lease space being marketed in its rental portfolio, below is a summary:

DECEMBER 31, 2022 SEPTEMBER 30, 2022

JUNE 30, 2022

MARCH 31, 2022

Toronto

Montréal

Calgary

Vancouver

Total square feet

% of Total GLA

271,100

158,157

32,361

7,411

469,029

3.3%

242,962

81,072

27,203

5,499

356,736

2 .4%

249,239

81,072

15,006

16,035

361,352

2 .4%

225,815

126,618

18,823

10,536

381,792

2 .5%

This level of marketed sub-lease space is consistent with past experience and does not represent an

operating or leasing challenge .

ALLIED 2022 ANNUAL REPORTACTIVITY

Allied places a high value on user retention and when retention is neither possible nor desirable,

Allied strives to introduce high-quality new users to its portfolio .

Leasing activity in connection with the rental portfolio for the year ended December 31, 2022, is

summarized in the following table:

LEASABLE SF

LEASED SF BY
DECEMBER 31

% LEASED BY
DECEMBER 31

UNLEASED SF AT
DECEMBER 31

Unleased area on January 1, 2022,
including re-measurement (1)

Maturities during the year ended
December 31, 2022 (2)(3)

Total (4)

Unleased area related to properties
acquired in 2022

Maturities during the year ended
December 31, 2022, related to
properties acquired in 2022 (3)

Maturities in future years

1,341,007

625,964

1,484,983

2,825,990

818,332

1,444,296

46 .7%

55 .1%

715,043

666,651

1,381,694

99,538

23,327

23 .4%

76,211

173,919

142,322

343,285

81 .8%

31,597

Total (4)

3,099,447

1,953,230

(1) The unleased area on January 1, 2022, including re-measurement, consists of Allied’s rental properties owned as at December 31, 2022.
(2) Some maturities occurred at December 31, 2022, and are included in Allied’s leased area.
(3) Of the total portfolio, which includes properties acquired in 2022, 57.9% of the maturing space was leased for the year ended

December 31, 2022.

(4) The information above is net of transfers to/from PUD and investment properties held for sale.

The tables below summarize the rental rates achieved for leases that were renewed in the rental portfolio for

the three months and year ended December 31, 2022 .

THREE MONTHS ENDED
DECEMBER 31, 2022

YEAR ENDED
DECEMBER 31, 2022

EXPIRING
RATE

RENEWAL
RATE

SPREAD

SQUARE
FEET

EXPIRING
RATE

RENEWAL
RATE

SPREAD

SQUARE
FEET

LEASING SPREAD
ON RENEWALS

Ending to Starting Base Rent

Total Portfolio

Excluding Calgary

$21 .57

$22 .07

$22 .89

$23 .97

6 .1%

8 .6%

278,058

242,637

$21 .44

$22 .96

$22 .64

$24 .75

5 .6%

934,188

7 .8% 804,338

Average to Average Base Rent

Total Portfolio

Excluding Calgary

$20 .19

$20 .90

$23 .34

$24 .34

15 .6%

16 .5%

278,058

242,637

$20 .57

$22 .13

$23 .29

$25 .43

13 .2%

934,188

14 .9% 804,338

ALLIED 2022 ANNUAL REPORTLEASE RENEWAL RATE

% of total leased SF

Maturing leases - weighted average rent

Renewing leases - weighted average rent

YEAR ENDED DECEMBER 31, 2022

ABOVE IN-PLACE
RENTS

AT IN-PLACE
RENTS

BELOW IN-PLACE
RENTS

49 .2%

$24 .80

$28 .14

42 .6%

$18 .38

8 .2%

$17 .17

$11 .78

Leasing activity resulted in an increase of 6 .1% and 5 .6% in the net rent per square foot from maturing leases

upon renewal for the three months and year ended December 31, 2022, respectively . Excluding transactions

in Calgary, the rental rates achieved on maturing leases resulted in an increase of 8 .6% and 7 .8% in net rent

per square foot for the three months and year ended December 31, 2022, respectively .

The following table outlines leasing activity in the rental portfolio for the three months and year

ended December 31, 2022 .

Net effective rent (per square foot per year) (1)

Net annualized rent

$19 .84

$23 .34

Tours

Net leased square feet

Number of transactions

Lease term (in years)

Tenant improvements

Leasing commissions

Landlord’s work

Total leasing costs

Net effective rent

THREE MONTHS ENDED
DECEMBER 31, 2022

YEAR ENDED
DECEMBER 31, 2022

NEW

LEASES RENEWALS

TOTAL

LEASES RENEWALS

TOTAL

241,966

278,058

520,024

1,019,042

934,188

1,953,230

226

994

3 .4

2 .6

(3 .15)

(0 .80)

(1 .71)

(1 .64)

(0 .48)

(0 .15)

114

3 .0

$21 .71

(2 .34)

(0 .63)

(0 .87)

244

5 .5

216

3 .5

460

4 .6

$19 .95

$23 .27

$21 .53

(2 .87)

(1 .14)

(1 .61)

(1 .91)

(0 .59)

(0 .14)

(2 .41)

(0 .88)

(0 .91)

$(5 .66)

$(2 .27)

$(3 .84)

$(5 .62)

$(2 .64)

$(4 .20)

$14.18

$21.07

$17.87

$14.33

$20.63

$17.33

(1) Calculated based on a weighted average of leased square feet.

ALLIED 2022 ANNUAL REPORTUSER PROFILE

The following sets out Allied’s user-mix on the basis of percentage of rental revenue for the year

ended December 31, 2022:

CATEGORY

Business services and professional

Telecommunications and information technology

Media and entertainment

Retail

Financial services

Government

Life sciences

Parking and other

Educational and institutional

% OF RENTAL REVENUE (1)
DECEMBER 31, 2022

40 .4%

15 .9%

13 .8%

9 .8%

6 .8%

6 .2%

2 .8%

2 .7%

1 .6%

100.0%

(1) The rental revenue is on a proportionate basis, which is a non-IFRS measure. Refer to Non-IFRS Measures on page 21.

The following sets out information on the top-10 users by rental revenue for the year ended December 31,

2022:

USER

Ubisoft Divertissements Inc .

Google Canada Corporation

Société Québecoise des
Infrastructures

Morgan Stanley Services
Canada Corp

National Capital Commission

National Bank of Canada

Technicolor Canada Inc .

Entertainment One

Shopify Inc

Hydro-Québec

% OF RENTAL REVENUE (1)
DECEMBER 31, 2022

WEIGHTED AVERAGE
REMAINING LEASE
TERM (YEARS)

% OF TOTAL
RENTAL GLA

CREDIT RATING
DBRS/S&P/
MOODY’S

3 .1%

2 .3%

2 .0%

1 .8%

1 .7%

1 .4%

1 .3%

1 .2%

1 .1%

0 .9%

16.8%

9 .5

6 .8

5 .0

6 .9

11 .7

4 .2

2 .4

5 .5

9 .7

7 .2

7.2

3 .8%

2 .3%

2 .0%

1 .6%

1 .4%

1 .2%

0 .7%

1 .1%

0 .9%

16.4%

Not Rated

*-/AA+/Aa2

Not Rated

AH/A-/A1

Not Rated

AA/A/Aa3

*-/CCC+/Caa1

*-/BBB/Baa2

Not Rated

AAL/AA-/Aa2

* Credit rating for parent company
(1) The rental revenue is on a proportionate basis, which is a non-IFRS measure. Refer to Non-IFRS Measures on page 21.

ALLIED 2022 ANNUAL REPORTLEASE MATURITY

As at December 31, 2022, 90 .8% of the GLA in Allied’s rental portfolio (which excludes assets held for sale

including UDC) was leased and its weighted average term to maturity was 5 .5 years . The estimated weighted

average market net rental rate is based on Management’s estimates of today’s market rental rates and is

supported by independent appraisals of certain properties . There can be no assurance that Management’s

current estimates are accurate or that they will not change with the passage of time .

The following contains information on the urban workspace leases that mature through 2027 and the

corresponding estimated weighted average market rental rate as at December 31, 2022 . Where the renewal

rate on maturity is contractually predetermined, it is reflected below as the market rental rate .

TOTAL RENTAL
PORTFOLIO

SQUARE
FEET

% OF TOTAL
GLA

WEIGHTED AVERAGE
IN-PLACE RENTAL RATE

ESTIMATED WEIGHTED
AVERAGE MARKET
RENTAL RATE

December 31, 2023

1,553,867

10 .9%

December 31, 2024

December 31, 2025

December 31, 2026

1,014,987

1,385,951

1,365,610

7 .1%

9 .7%

9 .5%

December 31, 2027

1,866,627

13 .0%

23 .90

25 .50

23 .59

24 .01

21 .06

% OF TOTAL GLA

W/A RENTAL RATE

ESTIMATED W/A MARKET RATE

$24 .62

$23 .90

10 .9%

$25 .90

$25 .50

7 .1%

$24 .41

$23 .59

$25 .65

$24 .01

9 .7%

9 .5%

24 .62

25 .90

24 .41

25 .65

23 .81

$30 .00

$23 .81

$25 .00

$21 .06

$20 .00

13 .0%

$15 .00

$10 .00

$5 .00

$0 .00

December 31, 2023

December 31, 2024

December 31, 2025

December 31, 2026

December 31, 2027

1,553,867

1,014,987

1,385,951

1,365,610

1,866,627

SQUARE FEET

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

ALLIED 2022 ANNUAL REPORTThe following tables contain information on lease maturities by segment:

MONTRÉAL
& OTTAWA

December 31, 2023

December 31, 2024

December 31, 2025

December 31, 2026

December 31, 2027

TORONTO &
KITCHENER

December 31, 2023

December 31, 2024

December 31, 2025

December 31, 2026

December 31, 2027

CALGARY

December 31, 2023

December 31, 2024

December 31, 2025

December 31, 2026

December 31, 2027

VANCOUVER

December 31, 2023

December 31, 2024

December 31, 2025

December 31, 2026

December 31, 2027

SQUARE
FEET

% OF SEGMENT
GLA

WEIGHTED AVERAGE
IN-PLACE RENTAL RATE

ESTIMATED WEIGHTED
AVERAGE MARKET
RENTAL RATE

450,862

372,043

325,067

528,042

892,703

6 .9%

5 .7%

5 .0%

8 .1%

13 .7%

17 .86

16 .99

17 .76

17 .75

15 .51

18 .01

17 .24

18 .29

18 .54

19 .18

SQUARE
FEET

% OF SEGMENT
GLA

WEIGHTED AVERAGE
IN-PLACE RENTAL RATE

ESTIMATED WEIGHTED
AVERAGE MARKET
RENTAL RATE

640,682

389,041

771,574

516,659

776,268

11 .6%

7 .0%

14 .0%

9 .3%

14 .0%

25 .06

32 .81

26 .40

27 .08

26 .65

28 .79

33 .92

29 .31

30 .22

28 .98

SQUARE
FEET

% OF SEGMENT
GLA

WEIGHTED AVERAGE
IN-PLACE RENTAL RATE

ESTIMATED WEIGHTED
AVERAGE MARKET
RENTAL RATE

199,066

112,898

228,571

116,279

91,641

15 .5%

8 .8%

17 .8%

9 .1%

7 .1%

19 .99

18 .49

18 .35

16 .03

13 .26

11 .03

13 .62

12 .62

13 .94

11 .94

SQUARE
FEET

% OF SEGMENT
GLA

WEIGHTED AVERAGE
IN-PLACE RENTAL RATE

ESTIMATED WEIGHTED
AVERAGE MARKET
RENTAL RATE

263,257

141,005

60,739

204,630

106,016

26 .1%

14 .0%

6 .0%

20 .3%

10 .5%

34 .39

33 .40

38 .88

36 .96

33 .56

36 .08

36 .49

39 .30

39 .11

35 .13

ALLIED 2022 ANNUAL REPORTSection IV
—Historical Performance

The following sets out summary information and financial results for the eight most recently completed

fiscal quarters .

ALLIED 2022 ANNUAL REPORTQ4 2022

Q3 2022

Q2 2022

Q1 2022

Q4 2021

Q3 2021

Q2 2021

Q1 2021

Rental revenue (1)(2)

$135,924

$131,823

$130,780

$120,942

$122,534

$118,090

$114,872

$117,304

Property operating costs (1)(2)

$(58,639)

$(56,401)

$(55,686)

$(53,535)

$(55,056)

$(50,000)

$(48,427)

$(51,309)

Operating income (1)(2)

$77,285

$75,422

$75,094

$67,407

$67,478

$68,090

$66,445

$65,995

Net income and
comprehensive income (1)

$41,392

$46,743

$100,038

$187,190

$159,921

$107,185

$98,523

$77,522

per unit (basic and diluted) (1)

$0.30

$0 .33

$0 .72

$1 .46

$1 .25

$0 .84

$0 .77

$0 .61

Net income attributable to
Unitholders (1)

$39,223

$44,573

$97,869

$187,190

$159,921

$107,185

$98,523

$77,522

per unit (basic and diluted) (1)

$0.28

$0 .32

$0 .70

$1 .46

$1 .25

$0 .84

$0 .77

$0 .61

Net income from continuing
operations (1)(2)

$20,178

$101

$85,516

$68,874

$113,518

$98,318

$63,848

$55,697

per unit (basic and diluted) (1)(2)

$0.14

$—

$0 .61

$0 .54

$0 .89

$0 .77

$0 .50

$0 .44

Net income from continuing
operations attributable to
Unitholders (1)(2)

$18,009

$(2,068)

$83,347

$68,874

$113,518

$98,318

$63,848

$55,697

per unit (basic and diluted) (1)(2)

$0.13

$(0 .01)

$0 .60

$0 .54

$0 .89

$0 .77

$0 .50

$0 .44

Weighted average units
(diluted) (3)

139,765,128 139,765,373 139,860,134 128,279,982 127,611,273 127,447,002 127,443,551 127,329,378

Distributions (1)(4)

$61,134

$61,131

$61,132

$55,966

$54,225

$54,101

$54,094

$54,101

FFO (5)

$86,755

$85,332

$85,050

$77,340

$75,691

$41,690

$76,580

$59,415

FFO per unit (diluted) (5)

FFO pay-out ratio (5)

$0.621

70.5%

$0 .611

$0 .608

$0 .603

$0 .593

$0 .327

$0 .601

$0 .467

71 .6%

71 .9%

72 .4%

71 .6%

129 .8%

70 .6%

91 .1%

All amounts below are excluding condominium related items, financing prepayment costs and the mark-to-market adjustment
on unit-based compensation (6)

FFO (5)

$86,325

$84,747

$77,573

$76,520

$79,537

$76,705

$73,797

FFO per unit (diluted) (5)

$0.618

$0 .606

$0 .605

$0 .600

$0 .624

$0 .602

$0 .580

FFO payout-ratio (5)

70.8%

72 .1%

70 .9%

68 .0%

70 .5%

73 .3%

AFFO (5)

$76,553

$73,508

$75,947

$71,571

$66,076

$66,132

$67,980

$66,329

AFFO per unit (diluted) (5)

$0.548

$0 .526

$0 .543

$0 .558

$0 .518

$0 .519

$0 .533

$0 .521

AFFO payout-ratio (5)

79.9%

83 .2%

80 .5%

78 .2%

82 .1%

81 .8%

79 .6%

81 .6%

ALLIED 2022 ANNUAL REPORTQ4 2022

Q3 2022

Q2 2022

Q1 2022

Q4 2021

Q3 2021

Q2 2021

Q1 2021

NAV per unit (7)

$50.96

$51 .10

$51 .20

$50 .92

$50 .30

$49 .50

$49 .07

$48 .72

Net debt as a multiple
of annualized adjusted
EBITDA (5)(8)

9.8x

9 .6x

10 .2x

9 .4x

8 .6x

8 .0x

7 .9x

Total indebtedness ratio (5)

35.6%

34 .3%

33 .9%

33 .3%

33 .5%

32 .9%

31 .0%

31 .1%

Total rental GLA

14,317

14,968

14,812

15,417

14,234

14,106

13,936

13,886

Leased rental GLA

Leased area %

12,998

90.8%

13,582

13,468

13,775

12,861

12,781

12,772

12,755

90 .7%

90 .9%

89 .3%

90 .4%

90 .6%

91 .6%

91 .9%

(1) This measure is presented on an IFRS basis.
(2) Excludes the results of the Urban Data Centres segment which was classified as a discontinued operation in Q4 2022. The prior period

comparative figures have been revised accordingly.

(3) Starting Q1 2022, this includes the weighted average number of Units and Exchangeable LP Units.
(4) Starting Q2 2022, this includes distributions on Units and Exchangeable LP Units.
(5) This is a non-IFRS measure, refer to page 21. These non-IFRS measures include the results of the continuing operations and the discontinued

operations.

(6) In the fourth quarter of 2022, Allied incurred $(564) of financing prepayment costs in connection with the favourable refinancing of a

mortgage. In addition, in the first, third and fourth quarters of 2021, Allied incurred $14,161, $37,728 and $721, respectively, of financing
prepayment costs in connection with the favourable refinancing of unsecured debentures and first mortgages.

(7) Net asset value per unit (“NAV per unit”) is calculated as follows: total equity as at the corresponding period ended, (per the

consolidated balance sheets) divided by the actual number of Units and Exchangeable LP Units outstanding at period end.

(8) Net debt as a multiple of annualized adjusted EBITDA for Q1 2022 including the expected annualized EBITDA from the six properties acquired

from Choice Properties on March 31, 2022, is 9.4x.

Allied’s quarterly results are impacted by occupancy, the economic productivity of the portfolio,

acquisitions, the magnitude and timing of development expenditures and project completions, and changes

in the fair values of investment properties and investment properties held for sale .

ALLIED 2022 ANNUAL REPORTSection V
—Asset Profile

The following table reconciles the consolidated balance sheets on an IFRS basis to a proportionate basis, a

non-IFRS measure, as at December 31, 2022, and December 31, 2021 . Refer to Non-IFRS Measures on page 21 .

ALLIED 2022 ANNUAL REPORTDECEMBER 31, 2022

DECEMBER 31, 2021

INVESTMENT
IN JOINT
VENTURE

PROPORTIONATE
BASIS

IFRS BASIS

INVESTMENT
IN JOINT
VENTURE

PROPORTIONATE
BASIS

IFRS BASIS

Assets

Non-current assets

Investment properties

$9,669,005

$120,630

$9,789,635

$9,527,105

$124,960

$9,652,065

Residential inventory

187,272

—

187,272

170,980

—

170,980

Investment in joint venture
and loan receivable

7,089

(7,089)

—

124,790

(124,790)

Loans and notes receivable

174,019

—

Other assets

56,221

1,372

174,019

57,593

223,456

28,185

10,093,606

114,913

10,208,519

10,074,516

—

1,370

1,540

—

223,456

29,555

10,076,056

Current assets

Cash and cash equivalents

20,990

1,273

22,263

22,548

2,170

24,718

Loan receivable from
joint venture

113,287

(113,287)

—

Loans and notes receivable

258,093

—

258,093

144,306

Accounts receivable,
prepaid expenses and
deposits

65,544

Investment properties held
for sale

1,354,830

613

—

66,157

57,061

1,354,830

86,260

—

709

—

1,812,744

(111,401)

1,701,343

310,175

2,879

—

144,306

57,770

86,260

313,054

Total assets

$11,906,350

$3,512

$11,909,862

$10,384,691

$4,419

$10,389,110

Liabilities

Non-current liabilities

Debt

$3,864,256

$—

$3,864,256

$3,417,138

$—

$3,417,138

Lease liabilities

Other liabilities

50,851

43,438

3,958,545

Current liabilities

Debt

346,929

—

Accounts payable and other
liabilities

370,823

3,512

Lease liability held for sale

107,215

—

824,967

3,512

50,851

43,438

157,550

44,635

3,958,545

3,619,323

346,929

36,146

—

157,550

44,635

3,619,323

36,146

374,335

107,215

828,479

303,450

4,419

307,869

—

339,596

4,419

344,015

Total liabilities

$4,783,512

$3,512

$4,787,024

$3,958,919

$4,419

$3,963,338

ALLIED 2022 ANNUAL REPORTDECEMBER 31, 2022

DECEMBER 31, 2021

IFRS
BASIS

INVESTMENT
IN JOINT
VENTURE

PROPORTIONATE
BASIS

IFRS
BASIS

INVESTMENT
IN JOINT
VENTURE

PROPORTIONATE
BASIS

Equity

Unitholders’ equity

$6,581,166

Non-controlling interests

541,672

Total equity

$7,122,838

$—

—

$—

$6,581,166

$6,425,772

541,672

—

$7,122,838

$6,425,772

$—

—

$—

$6,425,772

—

$6,425,772

Total liabilities and equity $11,906,350

$3,512

$11,909,862

$10,384,691

$4,419

$10,389,110

As at December 31, 2022, Allied’s portfolio of 217 investment properties consists of 199 rental properties

(three of which are partially under development), 13 development properties, and five investment properties

held for sale . Allied’s portfolio of investment properties has a fair value of $11,144,465, including one equity

accounted investment in a joint venture .

Changes to the carrying amounts of investment properties and investment properties held for sale on

a proportionate basis, a non-IFRS measure, are summarized in the following table . Refer to Non-IFRS

Measures on page 21 .

ALLIED 2022 ANNUAL REPORTTHREE MONTHS ENDED
DECEMBER 31, 2022

YEAR ENDED
DECEMBER 31, 2022

RENTAL
PROPERTIES

PROPERTIES
UNDER
DEVELOPMENT

TOTAL

RENTAL
PROPERTIES

PROPERTIES
UNDER
DEVELOPMENT

TOTAL

Balance, beginning of period

$9,474,149

$1,455,480

$10,929,629

$8,499,495

$1,238,830

$9,738,325

Additions:

Acquisitions

—

126,198

805,757

165,747

971,504

872

1,634

25,271

4,014

61,006

15,019

1,728

5,889

62,734

20,908

59,655

95,747

135,592

263,544

399,136

—

4,915

—

(74,945)

(15,254)

(90,199)

376,730

(376,730)

(293,542)

293,542

3,900

561

—

3,900

561

Improvement allowances (1)

24,399

Leasing commissions (1)

Capital expenditures (1)

Dispositions

2,380

36,092

—

Transfers from PUD

179,560

(179,560)

Transfers to PUD

(74,300)

74,300

—

4,915

—

Transfers from other assets

Finance leases

Amortization of straight-
line rent and improvement
allowances (1)

Fair value (loss) gain on
investment properties and
investment properties held
for sale (1)

(5,973)

526

(5,447)

(26,874)

1,389

(25,485)

(26,197)

(9,665)

(35,862)

112,326

(49,245)

63,081

Balance, end of period

$9,615,025

$1,529,440

$11,144,465

$9,615,025

$1,529,440

$11,144,465

Investment properties

$8,260,195

$1,529,440

$9,789,635

$8,260,195

$1,529,440

$9,789,635

Investment properties
held for sale

1,354,830

—

1,354,830

—

1,354,830

$9,615,025

$1,529,440

$11,144,465

$9,615,025

$1,529,440

$11,144,465

(1)

Includes Allied’s proportionate share of the equity accounted investment of the following amounts for the three months and year ended
December 31, 2022: improvement allowances of $400 and $512, respectively; leasing commissions of $— and $305, respectively; capital
expenditures of $426 and $962, respectively; amortization of straight-line rent and improvement allowances of $(139) and $(8), respectively;
and a fair value gain (loss) on investment properties of $693 and $(6,101), respectively.

As at December 31, 2022, Allied had five properties classified as investment properties held for sale totaling

$1,354,830, four located in Toronto and one located in Montréal . There were three investment properties

held for sale as at December 31, 2021, totaling $86,260, two located in Toronto and one located in Montréal .

The increase of $1,268,570 in the year ended December 31, 2022, is due to the addition of five investment

properties and the disposition of three investment properties held for sale .

For the three months ended December 31, 2022, Allied recognized a fair value loss on investment properties

and investment properties held for sale of $35,862 on a proportionate basis . This was primarily due to

macroeconomic conditions .

ALLIED 2022 ANNUAL REPORTFor the year ended December 31, 2022, Allied recognized a fair value gain on investment properties and

investment properties held for sale of $63,081 on a proportionate basis . This was primarily due to an

increase in value from compressing capitalization rates in the UDC portfolio and from additional density

value recognized, moderated by macroeconomic conditions .

For the three months ended December 31, 2022, Allied capitalized $15,676 of borrowing costs to its capital

expenditures on a proportionate basis, $12,235 of which related to development activity and $1,592 to

upgrade activity in the rental portfolio . Allied capitalized $1,849 of borrowing costs to qualifying residential

inventory .

For the year ended December 31, 2022, Allied capitalized $53,810 of borrowing costs to its capital

expenditures on a proportionate basis, $43,066 of which related to development activity and $4,540 to

upgrade activity in the rental portfolio . Allied capitalized $6,204 of borrowing costs to qualifying residential

inventory .

The appraised fair value of investment properties and investment properties held for sale is most commonly

determined using the following methodologies:

Discounted cash flow method (“DCF method”) - Under this approach, discount rates are applied to the

projected annual operating cash flows, generally over a ten-year period, including a terminal value of the

properties based on a capitalization rate applied to the estimated net operating income (“NOI”), a non-IFRS

measure, in the terminal year . This method is primarily used to value the rental portfolio, and, in some

cases, investment properties held for sale .

Comparable sales method - This approach compares a subject property’s characteristics with those of

comparable properties which have recently sold . The process uses one of several techniques to adjust

the price of the comparable transactions according to the presence, absence, or degree of characteristics

which influence value . These characteristics include the cost of construction incurred at a property under

development . This method is primarily used to value the development portfolio and ancillary parking

facilities and, in some cases, investment properties held for sale .

Direct capitalization method - Under this approach, capitalization rates are applied to the estimated stabilized

NOI of the properties . Estimated stabilized NOI is based on projected rental revenue and property operating

costs, and external evidence such as current market rents for similar properties, and is further adjusted for

estimated vacancy loss and capital reserves . Currently, this method is used only to value residential use .

Allied’s portfolio is valued by an external appraiser each quarter . Management verifies all major inputs to

the valuations, analyzes the change in fair values at the end of each reporting period and reviews the results

with the independent appraiser every quarter . There were no material changes to the valuation techniques

during the period .

In valuing the investment properties as at December 31, 2022, the independent appraiser compares

the value derived using the DCF method to the value that would have been calculated by applying a

capitalization rate to NOI . This is done to assess the reasonability of the value obtained under the DCF

method . The resulting portfolio weighted average capitalization rate was 4 .62%, detailed in the table below:

ALLIED 2022 ANNUAL REPORTOVERALL
CAPITALIZATION
RATE

DECEMBER 31, 2022

DECEMBER 31, 2021

RANGE %

WEIGHTED
AVERAGE %

FAIR
VALUE $ (1)

RANGE %

WEIGHTED
AVERAGE %

FAIR
VALUE $ (1)

Montréal & Ottawa

4.50% - 7.00%

4.98%

$2,490,473

4 .50% - 6 .75%

5 .03%

$2,546,217

Toronto & Kitchener

4.00% - 5.75%

4.39%

4,396,581

3 .75% - 5 .75%

4 .39%

3,569,080

Calgary

Vancouver

5.75% - 7.50%

6.58%

286,467

5 .00% - 7 .00%

4.00% - 4.25%

4.03%

967,050

3 .50% - 4 .00%

5 .93%

3 .76%

358,989

711,180

Urban Workspace

4.00% - 7.50%

4.62%

$8,140,571

3 .50% - 7 .00%

4 .64%

$7,185,466

Urban Data Centres (2)

—%

—

5 .00% - 5 .75%

5 .30%

1,133,022

Rental Properties

4.00% - 7.50%

4.62%

$8,140,571

3 .50% - 7 .00%

4 .74%

$8,318,488

Residential Properties

3.75% - 5.00%

4.61%

119,624

5 .00% - 5 .00%

5 .00%

94,747

Properties Under
Development

4.00% - 7.25%

4.66%

1,529,440

4 .00% - 7 .00%

4 .24%

1,238,830

Investment Properties

3.75% - 7.50%

4.62%

$9,789,635

3 .50% - 7 .00%

4 .69%

$9,652,065

Investment Properties Held
for Sale

4.50% - 5.25%

4.80%

$1,354,830

—%

$86,260

$11,144,465

$9,738,325

(1) Presented on a proportionate basis, which is a non-IFRS measure. Refer to Non-IFRS Measures on page 21.
(2) For the year ended December 31, 2022, the Urban Data Centres were classified as investment properties held for sale.

RENTAL PROPERTIES

Allied’s rental portfolio was built by consolidating the ownership of urban office properties and network-

dense urban data centres . Scale within each city of focus proved to be important as Allied grew . It

enabled Allied to provide users with greater expansion flexibility, more parking and better human and

digital connectivity than its direct competitors . Scale across the country also proved to be important . It

enabled Allied to serve national and global users better, to expand its growth opportunities and to achieve

meaningful geographic diversification .

URBAN WORKSPACE

Allied has evolved into a leading owner operator of urban workspace in Canada’s major cities . It owns

199 rental properties in six Canadian cities (three of these rental properties are partially under development)

and five investment properties held for sale as at December 31, 2022 . Listed below are Allied’s top-10 urban

workspace rental properties measured by Normalized Last Quarter Annualized (“LQA”) NOI, a non-IFRS

measure . Refer to Non-IFRS Measures on page 21 . These properties represent 31 .3% of the total LQA NOI as

at December 31, 2022 .

ALLIED 2022 ANNUAL REPORTPROPERTY NAME

NORMALIZED
LQA NOI

APPRAISED
FAIR VALUE CAP RATE

Le Nordelec, Montréal

$15,657

$313,380

5 .00%

Cité Multimédia, Montréal

14,202

416,010

4 .75%

1001 Boulevard Robert-Bourassa,
Montréal (1)

QRC West, Toronto

14,125

13,547

355,810

341,430

5 .50%

4 .00%

747 Rue du Square Victoria,
Montréal

10,861

284,400

4 .75%

5455 de Gaspé Avenue, Montréal

King Portland Centre, Toronto

9,174

6,993

162,490

184,030

5 .00%

4 .00%

375 Water Street, Vancouver

6,861

215,610

4 .00%

555 Richmond Street West,
Toronto

175 Bloor Street E, Toronto

6,845

6,598

188,710

185,090

Total

$104,863

$2,646,960

4 .50%

4 .25%

4.64%

PRINCIPAL USERS

Gsoft, Unity Technologies,
Yellow Pages Media

Acceo Solutions, Morgan Stanley,
Technicolor

Autorité Régionale de Transport
Métropolitain, Hydro-Québec,
National Bank of Canada,
Société Québecoise des Infrastructures

eOne, Sapient Canada

Dassault Systèmes Canada, Otera Capital
Inc ., Secretariat of the Convention on
Biological Diversity,
Société Québecoise des Infrastructures

Attraction Media, Framestore,
Ubisoft

Indigo, Shopify

Global Technology Provider, Quarterdeck
Brewing Co, Zoic Studios BC Inc .

Centre Francophone de Toronto,
Synaptive Medical

Klick Health, Leo Burnett Company, Norr

(1) A portion of the property is under development. The appraised fair value includes the portion in the rental portfolio and the portion under

development.

URBAN DATA CENTRES

As at December 31, 2022, the Urban Data Centre segment has been classified as discontinued operations and

is comprised of three investment properties held for sale totaling $1,305,990 and a related lease liability held

for sale totaling $107,215 . The three investment properties are 151 Front Street W, 905 King Street W and 250

Front Street W and the lease liability is at 250 Front Street W .

The following table summarizes the results from discontinued operations:

Rental Revenue

Property operating costs

Operating income

Interest expense

Fair value gain on investment properties held for sale

Net income from discontinued operations

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$96,669

(32,375)

64,294

(6,532)

142,932

$200,694

$96,087

(34,703)

61,384

(5,949)

56,335

$111,770

ALLIED 2022 ANNUAL REPORTACQUISITIONS

During the year ended December 31, 2022, Allied acquired the following properties from third parties:

PROPERTY

ACQUISITION
DATE

ACQUISITION
COST (1)

OFFICE
GLA

RETAIL
GLA

TOTAL
GLA

PARKING
STALLS

108 East 5th Avenue, Vancouver (2)(3)

February 23, 2022

$39,549

N/A

1010 Sherbrooke W, Montréal

March 31, 2022

116,248

326,754

110 Yonge, Toronto (3)

525 University, Toronto

March 31, 2022

55,757

137,967

78,100

192,771

175 Bloor E, Toronto (3)

March 31, 2022

166,547

295,739

N/A

1,600

2,376

9,392

9,177

N/A

328,354

80,476

202,163

304,916

1508 West Broadway, Vancouver (4)

March 31, 2022

166,408

82,961

64,183

147,144

1185 West Georgia, Vancouver

March 31, 2022

131,671

160,364

540 King W, Toronto

121 John, Toronto

April 8, 2022

July 6, 2022

26,615

4,544

—

2,444

700 Saint-Hubert, Montréal (2)

October 31, 2022

126,198

143,314

4,869

5,935

798

800

165,233

5,935

3,242

144,114

N/A

276

178

264

265

157

146

Total

$971,504

1,282,447

99,130

1,381,577

1,370

Includes transaction costs and the assumption of liabilities.

(1)
(2) This property is a property under development.
(3) Allied owns a 50% interest in these properties. The GLA is at Allied’s ownership. The parking spaces are at 100% ownership.
(4) Allied acquired a leasehold interest in 1508 West Broadway.

DISPOSITIONS

On January 24, 2022, Allied and its partners closed on the fifth and final phase of The Well air rights,

the associated underground parking and transfer floor slab developments for net cash consideration of

$14,841 (at Allied’s share), which represented the fair value at the time of disposition so accordingly there

was no gain or loss recorded . In addition, during the year ended December 31, 2022, Allied received cash of

$413 (at Allied’s share) for the release of a holdback related to the disposition of the first phase of The Well

air rights .

On June 30, 2022, Allied closed on the disposition of two investment properties held for sale, which were

662 King Street West and 668 King Street West, both in Toronto, for net proceeds of $38,954 and $9,991,

respectively . The total net cash consideration of $48,945 represented the fair value at the time of disposition,

so there was no gain or loss recorded on closing . The disposition costs incurred were fully recoverable from

the purchaser .

On August 16, 2022, Allied closed on the disposition of one investment property held for sale, 100 Lombard

Street in Toronto, at a selling price of $26,000, which represented the fair value at the time of disposition, so

there was no gain or loss recorded on closing . In addition, Allied incurred net working capital adjustments

of $487 and selling costs of $21, resulting in total net cash consideration of $25,492 .

ALLIED 2022 ANNUAL REPORTRENTAL PROPERTIES UNDERGOING INTENSIFICATION APPROVAL

One way Allied creates value is by intensifying the use of underutilized land . The land beneath the buildings

in Toronto is significantly underutilized in relation to the existing zoning potential . This is also true of some

of Allied’s buildings in Kitchener, Montréal, Calgary, Edmonton, and Vancouver . These opportunities are

becoming more compelling as the urban areas of Canada’s major cities intensify . Since Allied has captured

the unutilized land value at a low cost, it can achieve attractive risk-adjusted returns on intensification .

Allied began tracking the intensification potential inherent in the Toronto portfolio in the fourth quarter of

2007 (see our MD&A dated March 7, 2008, for the quarter and year ended December 31, 2007) . At the time,

the 46 properties in Toronto comprised 2 .4 million square feet of GLA and were situated on 780,000 square

feet (17 .8 acres) of underutilized land immediately east and west of the Downtown Core . The 115 properties

in Toronto (including properties in the development portfolio) now comprise 5 .0 million square feet of GLA

and are situated on 40 .1 acres of underutilized land immediately east and west of the Downtown Core . With

achievable rezoning, the underlying land in our Toronto portfolio could permit up to 12 .0 million square feet

of GLA, 7 .0 million square feet more than currently is in place .

Allied entered the Montréal market in April of 2005 . The 34 properties in Montréal now comprise 6 .3

million square feet of GLA . As they are much larger buildings on average than those comprising the Toronto

portfolio, the 46 .1 acres of land on which they sit (immediately south, east and northeast of the Downtown

Core) are more fully utilized than the land in the Toronto portfolio . Nevertheless, the underlying land in

the Montréal portfolio could permit up to 9 .4 million square feet of GLA, 3 .1 million square feet more than

currently is in place .

There is similar potential inherent in the rest of Allied’s portfolio, which is quantified in the chart below .

Across Canada on a portfolio-wide basis, there is 12 .9 million square feet of potential incremental density,

of which 2 .5 million square feet is currently in PUD, and the remaining 10 .4 million square feet is potential

incremental density . Of the 10 .4 million square feet of potential incremental density, 5 .2 million square

feet is reflected in the appraised fair values, mainly at properties where zoning approvals are in place . The

remaining 5 .2 million square feet is not reflected in the appraised fair values .

ALLIED 2022 ANNUAL REPORTPOTENTIAL INCREMENTAL DENSITY (IN SQ .FT .) - GEOGRAPHIC BREAKDOWN

CITY

Toronto (1)

Kitchener

Montréal

Ottawa

Calgary

Edmonton

Vancouver

Total

CURRENT GLA

CURRENT PUD
(ESTIMATED ON
COMPLETION)

POTENTIAL
INCREMENTAL
DENSITY

TOTAL POTENTIAL
GLA

4,965,084

562,303

6,266,588

231,434

1,283,002

—

1,008,768

14,317,179

959,966

147,000

923,686

—

88,000

297,851

123,640

6,065,093

332,218

2,163,456

—

1,436,198

—

371,046

11,990,143

1,041,521

9,353,730

231,434

2,807,200

297,851

1,503,454

2,540,143

10,368,011

27,225,333

(1) The GLA estimated on completion for properties under development in Toronto excludes 291,381 square feet of GLA at The Well, which has been

transferred to the rental portfolio.

The timing of development for the 10 .4 million square feet of potential incremental density is impossible to

predict with precision, however the chart below provides a reasonable estimate of when the potential could

begin to be realized . One factor is our self-imposed limitation on development activity . The focus in the

short-term and the long-term remains on the Toronto portfolio .

Toronto & Kitchener

Calgary & Edmonton

Montréal & Ottawa

Vancouver

Projected Portfolio

Development Pipeline

6,000,000

5,000,000

4,000,000

3,000,000

124,000

2,000,000

924,000

1,000,000

386,000

1,107,000

Current PUD

122,000

28,000

529,000

Short Term
(0-5 Years)

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43,000

551,000

3,816,000

300,000

1,491,000

1,436,000

30,000,000

25,000,000

20,000,000

15,000,000

2,052,000

10,000,000

5,000,000

Medium Term
(5-10 Years)

Long Term
(10+ Years)

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ALLIED 2022 ANNUAL REPORT

Allied has initiated the intensification approval process for seven properties in Toronto, three properties in

Montréal and one property in Vancouver, all of which are owned in their entirety by Allied . These properties

are identified in the following table:

PROPERTY
NAME

APPRAISED
FAIR VALUE

REZONING
APPROVAL
STATUS

USE

CURRENT
GLA

ESTIMATED GLA
ON COMPLETION

ESTIMATED
COMPLETION

The Castle (1)

King & Peter (2)

$102,840

In progress

Office, limited retail

179,907

440,000

Unscheduled

121,360

Completed

Office, limited retail

86,230

790,000

Unscheduled

King & Spadina (3)

88,860

In progress

Office, limited retail

77,550

430,000

Unscheduled

King & Brant (4)

Union Centre

45,850

Completed

Office, residential, retail

16,340

240,000

Unscheduled

199,500

Completed

Office, limited retail

41,787

1,330,000

Unscheduled

Bathurst Street Assembly (5)

49,380

In progress

Office, residential, retail

36,919

318,000

Unscheduled

Adelaide & Spadina (6)

34,500

Completed

Office, retail

11,015

230,000

Unscheduled

Le Nordelec - Lot A (7)

23,600

In progress

Office

—

230,000

Unscheduled

Le Nordelec - Lot B (8)

52,080

In progress

Office

32,893

744,000

Unscheduled

Le Nordelec - Lot E (9)

10,800

Completed

Office

7,550

135,000

Unscheduled

365 Railway

Total

17,440

In progress

Office

31,528

60,000

Unscheduled

$746,210

521,719

4,947,000

(1) The Castle is comprised of 41-53 Fraser, 8 Pardee Avenue and 135 Liberty Street.
(2) King & Peter is comprised of 82 Peter and 388 King W.
(3) King & Spadina is comprised of 460 King W, 468 King W, the surface parking lot at 464 King W, and the surface parking lot at 78 Spadina.
(4) King & Brant is comprised of 540 King W, 544 King W and the surface parking lot at 7-9 Morrison.
(5) Bathurst Street Assembly is comprised of 141 Bathurst, 579 Richmond, the surface parking lot at 555 Richmond and the associated ancillary

residential properties at Bathurst and Richmond.

(6) Adelaide & Spadina is comprised of 383 Adelaide W and 387 Adelaide W.
(7) Le Nordelec - Lot A is comprised of 1900 Saint Patrick, a component of the 1751 Richardson & 1700 Saint-Patrick property.
(8) Le Nordelec - Lot B is compromised of 1655 Richardson and the adjacent surface parking lot.
(9) Le Nordelec - Lot E is comprised of 1301-1303 Montmorency.

Estimated GLA is based on applicable standards of area measurement and the expected or actual outcome

of rezoning . These properties are currently generating NOI and will continue to do so until Allied initiates

construction . With respect to the ultimate intensification of these properties, a significant amount of

pre-leasing will be required on the larger projects before construction commences . The design-approval

costs have been, and will continue to be, funded by Allied for its share . Allied intends to align all new

developments and redevelopments with its Net Zero Carbon Plan .

ALLIED 2022 ANNUAL REPORT

DEVELOPMENT PROPERTIES

Development is another way to create value and a particularly effective one for Allied, given the strategic

positioning of its portfolio in the urban areas of Canada’s major cities . Urban intensification is the single

most important trend in relation to Allied’s business . Not only does it anchor Allied’s investment and

operating focus, it provides the context within which Allied creates value for its Unitholders .

The completion of projects currently under development is an important component of Allied’s growth . The

expectation is largely contingent upon completing the development projects in the manner contemplated .

The most important factor affecting completion will be successful lease-up of space in the development

portfolio . The material assumption is that the office leasing market in the relevant markets remains stable .

Pursuant to Allied’s Declaration of Trust, the cost of Properties Under Development cannot exceed 15% of

GBV . At December 31, 2022, the cost of Allied’s Properties Under Development was 12 .6% of GBV (December

31, 2021 - 11 .2%) . This self-imposed limitation is intended to align the magnitude of Allied’s development

activity with the overall size of the business .

Properties Under Development consist of properties purchased with the intention of being developed or

redeveloped before being operated and properties transferred from the rental portfolio once activities

changing the condition or state of the property, such as the de-leasing process, commence .

Allied has the following 13 Properties Under Development and three rental properties partially under

development . Seven of the projects are ground-up developments and nine are redevelopments .

GROUND-UP DEVELOPMENTS

Ground-up development involves construction of significant amounts of new leasable area .

PROPERTY NAME

USE

ESTIMATED GLA ON
COMPLETION (SF)

% OF OFFICE DEVELOPMENT
PRE-LEASED

The Well, Toronto (1)(2)(6)

Breithaupt Phase III, Kitchener (1)

Office, retail

Office

Adelaide & Duncan, Toronto (1)(3)

Office, retail, residential

QRC West Phase II, Toronto (4)

KING Toronto, Toronto (1)(5)

108 East 5th Avenue, Vancouver (1)

700 Saint Hubert, Montréal

Total

Office, retail

Office

Office, retail

763,000

147,000

230,000

93,134

100,000

102,000

144,114

1,579,248

98%

100

—

82%

(1) These properties are co-owned, reflected in the table above at Allied’s ownership interest.
(2) Each of Allied and RioCan own an undivided 50% interest in The Well. The GLA components (in square feet) at Allied’s 50% share will be as
follows: approximately 584,000 of office, 160,000 of retail, 19,000 of storage and the residential air rights. The residential air rights and
associated underground parking and transfer floor slab developments (“The Well Air Rights”) were sold by the co-ownership as previously
announced, with the first phase closed in Q4 2020, the second and third phases closed in Q2 2021, the fourth phase closed in Q4 2021 and the
last phase closed in January 2022.

(3) The GLA components (in square feet) at our 50% share are as follows: 144,000 of residential, 77,000 of office and 9,000 of retail.
(4) The GLA components (in square feet) are as follows: 77,434 of office and 15,700 of retail.
(5) Allied entered into a joint arrangement with Westbank to develop KING Toronto. As part of the arrangement, Allied sold a 50% undivided

interest to Westbank. KING Toronto is comprised of the following properties: 489 King W, 495 King W, 499 King W, 511-529 King W, 533 King W,
539 King W. The GLA components (in square feet) at our 50% share will be as follows: 60,000 of retail and 40,000 of office.

(6) A portion of The Well has been transferred to the rental portfolio. The percentage of office development pre-leased and the estimated GLA on

completion includes the portion in the rental portfolio.

ALLIED 2022 ANNUAL REPORTREDEVELOPMENTS

Redevelopment involves transformation of existing leasable area to enhance revenue-producing capability .

PROPERTY NAME

The Lougheed (604-1st SW), Calgary

400 Atlantic, Montréal

Boardwalk-Revillon Building, Edmonton (1)

185 Spadina, Toronto

342 Water, Vancouver (2)

1001 Boulevard Robert-Bourassa, Montréal (3)(4)

RCA Building, Montréal (4)

422-424 Wellington W, Toronto

3575 Saint Laurent, Montréal (5)

Total

USE

GLA (SF)

Office, retail

Office

Office, retail

Office

Retail

Office, retail

88,000

87,473

297,851

55,213

21,640

335,652

171,668

10,000

184,779

1,252,276

(1) The GLA components (in square feet) are as follows: 233,559 of office and 64,292 of retail.
(2) The GLA components (in square feet) are as follows: 15,385 of office and 6,255 of retail.
(3) The GLA components (in square feet) are as follows: 303,281 of office and 32,371 of retail.
(4) A portion of the property is under development. The GLA represents the portion under development.
(5) The GLA components (in square feet) are as follows: 165,502 of office and 19,277 of retail.

The following table sets out the fair value of Allied’s Properties Under Development as at December 31, 2022,

as well as Management’s estimates with respect to the financial outcome on completion . Estimated NOI from

development completion is based on stabilized occupancy and, in the first year, its impact is moderated by

the discontinuation of capitalized costs .

PROPERTY NAME

The Well, Toronto (1)(2)

Adelaide & Duncan, Toronto (1)(3)

TRANSFER
TO RENTAL
PORTFOLIO

Q3 2022 -
Q4 2023

Q2 2023 -
Q4 2024

APPRAISED
VALUE

ESTIMATED
ANNUAL NOI

ESTIMATED
TOTAL COST

ESTIMATED YIELD
ON COST

ESTIMATED
COST TO
COMPLETE

$909,480

$37,500 - 43,250

$793,000

4 .7% - 5 .5%

$78,000

177,260

9,625 - 11,125

206,200

4 .7% - 5 .4%

45,700

Breithaupt Phase III, Kitchener (1)(4)

Q3 2023

QRC West, Phase II, Toronto

Q2 2024

81,590

70,560

5,375 - 5,500

78,652

6 .8% - 7 .0%

8,700

4,550 - 4,650

91,574

5 .0% - 5 .1%

32,400

KING Toronto, Toronto (1)(5)

Q2 2025

67,800

5,000 - 6,000

93,791

5 .3% - 6 .8%

22,400

108 East 5th Avenue, Vancouver (1)

Q1 2025

49,290

4,350 - 4,600

106,384

4 .1% - 4 .3%

58,000

700 Saint Hubert

Q2 2023

126,990

4,000 - 5,000

130,457

3 .1% - 3 .8%

10,500

Redevelopments (6)

Total

Q1 2023 -
Q4 2024

231,220+

13,865 - 16,540+

346,992+

3 .9% - 4 .7%

54,600+

$1,714,190+ (7) $84,265 - 96,665+

(1) These properties are co-owned, reflected in the table above at Allied’s ownership percentage of assets and liabilities.
(2) The estimated costs are net of the actual gross proceeds from the sale of the The Well Air Rights of $111,758 (at Allied’s share). The transfer of The Well to the rental

portfolio is occurring in phases.

(3) The project is anticipated to be completed in two phases. The commercial phase is scheduled for completion in Q2 2023 and the residential phase is scheduled for

completion in Q4 2024.

(4) Breithaupt Phase III is comprised of 43 Wellington, 53 & 55 Wellington, 305 Joseph, 20 Breithaupt and 2-4 Stewart.
(5) Allied entered into a joint arrangement with Westbank to develop KING Toronto. As part of the arrangement, Allied sold a 50% undivided interest to Westbank.

KING Toronto is comprised of the following properties: 489 King W, 495 King W, 499 King W, 511-529 King W, 533 King W, 539 King W. The appraised value relates
to the commercial component. The estimated total cost is net of the estimated gross proceeds from the sale of the residential inventory of $290,000 - $295,000.

(6) Redevelopments consist of nine projects, seven which include properties in their entirety and two which include a portion of the property.
(7) The Properties Under Development as at December 31, 2022 of $1,529,440 excludes the portion of The Well that has been transferred to the rental portfolio.

ALLIED 2022 ANNUAL REPORTThe initial cost of Properties Under Development includes the acquisition cost of the property, direct

development costs, realty taxes and borrowing costs directly attributable to the development . Borrowing

costs and realty taxes associated with direct expenditures on Properties Under Development are capitalized .

The amount of capitalized borrowing costs is determined first by reference to borrowings specific to the

project, where relevant, and otherwise by applying a weighted average cost of borrowings to eligible

expenditures after adjusting for borrowings associated with other specific developments .

Transfer to the rental portfolio occurs when the property is capable of operating in the manner intended by

Management . Generally this occurs upon completion of construction and receipt of all necessary occupancy

and other permits . In some instances, particularly in ground-up developments like The Well and Breithaupt

Phase III, base building work is underway during the fixturing period . In this case, transfer to the rental

portfolio occurs when the base building work is complete . Estimated annual NOI is based on 100% economic

occupancy . The most important factor affecting estimated annual NOI is the successful lease-up of vacant

space in the development properties at current levels of net rent per square foot . The material assumption

is that the office leasing market in the relevant markets remains stable . Estimated total cost includes

acquisition cost, estimated total construction, financing costs and realty taxes . The material assumption

made in formulating the estimated total cost is that construction and financing costs remain stable for the

remainder of the development period . Estimated yield on cost is the estimated annual NOI as a percentage

of the estimated total cost . Estimated cost to complete is the difference between the estimated total cost and

the costs incurred to date .

RESIDENTIAL INVENTORY

Residential inventory is as follows:

KING Toronto

$187,272

$170,980

DECEMBER 31, 2022

DECEMBER 31, 2021

The changes in the aggregate carrying value of Allied’s residential inventory is as follows:

Balance, beginning of year

Development expenditures

Impairment

Balance, end of year

DECEMBER 31, 2022

DECEMBER 31, 2021

$170,980

32,021

(15,729)

$187,272

$140,038

30,942

—

$170,980

Residential inventory consists of assets that are developed by Allied for sale in the ordinary course of

business . Allied may transfer an investment property to residential inventory based on a change in use,

as evidenced by the commencement of development activities with the intention to sell . Alternatively, a

transfer from residential inventory to investment property would be evidenced by the commencement of

leasing activity .

ALLIED 2022 ANNUAL REPORTOn November 30, 2018, Allied entered into a joint arrangement with Westbank to develop KING Toronto .

KING Toronto is a mixed-use property comprised of office, retail and residential uses . As part of the

arrangement Allied sold a 50% undivided interest to Westbank . The residential component will be

developed and sold as condominium units, totaling 440 units . As at December 31, 2022, 384 units or 87%

have been pre-sold, subject to customary closing conditions . Management expects the condominium sales to

close in 2024 .

During the year ended December 31, 2022, Allied recorded an impairment of $15,729 on KING Toronto .

Residential inventory carrying value is calculated as the estimated gross proceeds less estimated costs to

complete . The impairment in the period reflects higher estimated costs to complete .

DEVELOPMENT COMPLETIONS

PROPERTY

COMPLETION

INVESTMENT

LQA NOI (1)

UNLEVERED
YIELD ON COST

FAIR VALUE

VALUE
CREATION

VALUE
CREATION AS
% OF COST

QRC West, Toronto

2015

$130,000

$13,547

10 .4%

$341,430

$211,430

162 .6%

The Breithaupt Block,
Kitchener

180 John, Toronto

189 Joseph, Kitchener

King Portland Centre,
Toronto (2)

425 Viger, Montréal

2016

2017

2019

2020

$25,020

$27,500

$11,360

$76,678

$104,268

$2,523

$1,540

$770

$6,278

$8,221

5 .6%

6 .8%

8 .2%

7 .9%

10 .1%

$46,980

$21,960

$34,220

$13,290

$6,720

$1,930

87 .8%

24 .4%

17 .0%

$154,310

$77,632

101 .2%

$172,680

$68,412

65 .6%

(1) This is a non-IFRS measure. Refer to Non-IFRS Measures on page 21.
(2) Includes 642 King W completed in early 2018 and 620 King W completed in early 2019. 602-606 King W are excluded as they were not

under development.

LOANS RECEIVABLE

As at December 31, 2022, total loans receivable outstanding is $432,032 (December 31, 2021 - $367,579) .

In February 2015, Allied entered into a joint arrangement with Westbank and completed the acquisition of

an undivided 50% interest in Adelaide & Duncan . As part of the arrangement, Allied advanced $21,173 to

Westbank for its purchase of a 50% undivided interest in the property . The facility is secured by a charge on

the property (subordinated to the construction lender) and assignment of rents and leases . Interest accrues

and is payable monthly at a rate of 7 .75% per annum . The loan is repayable when the joint arrangement

obtains external permanent financing . As at December 31, 2022, the loan receivable outstanding is $21,173

(December 31, 2021 - $21,173) .

On August 1, 2017, Allied entered into an arrangement with Westbank to provide a credit facility of up to

$100,000, plus interest, for the land acquisition and the pre-development costs of 400 West Georgia in

Vancouver . The facility is secured by Westbank’s covenant and a charge on the property (subordinated to

the construction lender) . On February 11, 2019, the facility was increased to $160,000, and on August 18,

2022, the facility was further increased to $175,000 . On May 18, 2022, Westbank exercised its option to

extend the maturity date from August 31, 2022, to August 31, 2023 . On January 12, 2023, the maturity date of

ALLIED 2022 ANNUAL REPORTthe facility was further extended from August 31, 2023 to February 29, 2024 . Interest accrues to the credit

facility monthly at a rate of 6 .75% per annum up to August 31, 2022 . Thereafter, interest accrues to the credit

facility monthly at the greater of 6 .75% per annum and the prime rate plus 3 .00% per annum . On placement

of permanent financing, Allied intends to acquire a 50% undivided interest in 400 West Georgia based on

total development costs . As at December 31, 2022, the loan receivable outstanding is $161,032 (December 31,

2021 - $144,271) .

On November 30, 2018, Allied entered into a joint arrangement with Westbank to develop KING Toronto . As

part of the arrangement, Allied advanced $67,030 to Westbank for its purchase of a 50% undivided interest

in the property . The facility is secured by a charge on the property (subordinated to the construction

lender) . Interest accrues to the credit facility at a rate of 7 .00% per annum . The loan is repayable at the

earlier of November 30, 2023, or the closing of the condominium units . As at December 31, 2022, the loan

receivable outstanding is $97,037 (December 31, 2021 - $90,586) .

On March 18, 2019, Allied made an amendment to the joint arrangement with Perimeter to develop

Breithaupt Phase III and a loan receivable arrangement to provide 50% of the pre-development costs . The

facility is secured by a charge on the property (subordinated to the construction lender) . Interest accrues

at a rate of 7 .00% per annum and is payable on loan repayment . The loan is repayable in installments upon

completion of development and rent commencement, which is anticipated to begin in the second quarter of

2023 . As at December 31, 2022, the loan receivable outstanding is $9,913 (December 31, 2021 - $10,256) due

to repayments made earlier than anticipated .

On July 31, 2019, Allied entered into an arrangement with Westbank to provide a credit facility of up

to $185,000, plus interest, for the land acquisition and the pre-development costs of 150 West Georgia

(previously known as 720 Beatty Street) in Vancouver . The funding will initially be secured by a first

mortgage on the property for a fixed term . On placement of construction financing, the mortgage will be

secured by a charge on the property (subordinated to the construction lender) . Interest accrues to the

credit facility monthly at a rate of 7 .00% per annum . The credit facility matures on December 9, 2025 . On

placement of permanent financing, Allied intends to acquire a 50% undivided interest in 150 West Georgia

based on an agreed upon formula . As at December 31, 2022, the loan receivable outstanding is $142,877

(December 31, 2021 - $101,293) .

The table below summarizes the loans receivable as at December 31, 2022, and December 31, 2021 .

DECEMBER 31, 2022

DECEMBER 31, 2021

$21,173

161,032

97,037

9,913

142,877

$432,032

$21,173

144,271

90,586

10,256

101,293

$367,579

Adelaide & Duncan

400 West Georgia

KING Toronto

Breithaupt Phase III

150 West Georgia (1)

Total loans receivable

(1) Previously known as 720 Beatty Street.

ALLIED 2022 ANNUAL REPORTSection VI
—Liquidity and Capital Resources

Allied’s liquidity and capital resources are used to fund capital investments including development

activity, leasing costs, interest expense and distributions to Unitholders . The primary source of liquidity

is net operating income generated from rental properties, which is dependent on rental and occupancy

rates, the structure of lease agreements, leasing costs, and the rate and amount of capital investment and

development activity, among other variables .

Allied has financed its operations through the use of equity, mortgage debt secured by rental properties,

construction loans, a promissory note payable, an unsecured operating facility, senior unsecured

debentures and unsecured term loans . Conservative financial management has been consistently applied

through the use of long term, fixed rate, debt financing . Allied’s objective is to maximize financial

flexibility while continuing to strengthen the balance sheet . Management intends to achieve this by

continuing to access the equity market, unsecured debenture market, unsecured loans and growing the

pool of unencumbered investment properties, which totals $8,345,530, representing 85 .2% of investment

properties, on a proportionate basis, as at December 31, 2022 . Refer to Non-IFRS Measures on page 21 .

In November 2021, Allied established an at-the-market equity program (the “ATM Program”) which allows

it to issue and sell up to $300,000 of Units to the public, from time to time, at its discretion . The ATM

Program is designed to provide Allied with additional financing flexibility which may be used in conjunction

with other existing funding sources . Allied intends to use the net proceeds from the ATM Program for

development, repayment of indebtedness and general trust purposes .

ALLIED 2022 ANNUAL REPORTDEBT

The following illustrates the calculation of debt (net of transaction costs) on an IFRS basis and net debt, a

non-IFRS measure, as at December 31, 2022, and December 31, 2021 . Refer to Non-IFRS Measures on page 21 .

Mortgages payable

Construction loans payable

Promissory note payable

Unsecured revolving operating facility

Senior unsecured debentures

Unsecured term loans

Debt, IFRS basis

Less: cash and cash equivalents (1)

Net debt

DECEMBER 31, 2022

DECEMBER 31, 2021

$112,822

223,725

195,673

440,000

2,589,939

649,026

$4,211,185

22,263

$4,188,922

$118,057

132,696

—

365,000

2,587,989

249,542

$3,453,284

24,718

$3,428,566

(1) This is on a proportionate basis and includes cash and cash equivalents attributable to TELUS Sky totaling $1,273 as at December 31,

2022 (December 31, 2021 - $2,170).

The table below summarizes the scheduled principal maturity and weighted average contractual interest

rates for Allied’s mortgages payable, promissory note payable, unsecured debentures and unsecured term

loans . As at December 31, 2022, 86 .3% of Allied’s debt had a fixed rate .

INTEREST
RATE OF
MATURING
MORTGAGES

MORTGAGES
PAYABLE

PROMISSORY
NOTE
PAYABLE

INTEREST
RATE

SENIOR
UNSECURED
DEBENTURES

INTEREST
RATE

UNSECURED
TERM LOANS

INTEREST
RATE

TOTAL

CONSOLIDATED
INTEREST
RATE OF
MATURING
DEBT

$15,299

4 .30% $200,000

2 .00%

49,197

6,423

21,834

487

14,750

—

5,000

—

3 .47

—

3 .59

—

4 .04

—

$—

—

—%

—

$—

—

200,000

3 .64

400,000

600,000

1 .73

250,000

300,000

3 .11

3 .13

300,000

3 .39

400,000

3 .12

—

500,000

3 .10

—

—%

$215,299

2 .13%

—

49,197

4 .87

3 .50

—

606,423

871,834

300,487

314,750

300,000

405,000

—

500,000

3 .47

4 .46

2 .28

3 .11

3 .17

3 .39

3 .12

—

3 .10

$112,990

3.37% $200,000

2.00% $2,600,000

2.86% $650,000

4.34% $3,562,990

3.10%

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

ALLIED 2022 ANNUAL REPORT
The weighted average term of Allied’s debt (excluding construction loans and the Unsecured Facility) is

4 .8 years . The chart below summarizes the maturities of principal in regards to debt obligations as at

December 31, 2022:

MORTGAGES

UNSECURED TERM LOANS

UNSECURED DEBENTURES

PROMISSORY NOTE

CONSOLIDATED W/A CONTRACTUAL INTEREST RATE

$1,000,000

$900,000

$800,000

$700,000

$600 .0

4.46%

$600,000

3.47%

$200 .0

$500,000

3.11%

3.17%

3.12%

3.39%

$400,000

2.13%

$400 .0

2.28%

$400 .0

$300 .0

$250 .0

$300,000

$200,000

$200 .0

$100,000

$15 .3

2023

$49 .2

2024

6 .00%

5 .00%

4 .00%

3.10%

$500 .0

3 .00%

2 .00%

1 .00%

$6 .4

2025

$21 .8

2026

$0 .5

2027

$14 .8

2028

2029

$5 .0

2030

2031

2032

0 .00%

The table below summarizes the weighted average effective interest rate as at December 31, 2022:

MORTGAGES
PAYABLE

PROMISSORY
NOTE PAYABLE

SENIOR
UNSECURED
DEBENTURES

UNSECURED
TERM LOANS

TOTAL

Weighted Average Effective Interest Rate
as at December 31, 2022

2 .92%

3 .81%

2 .86%

4 .34%

3 .47%

ALLIED 2022 ANNUAL REPORTMORTGAGES PAYABLE

As at December 31, 2022, mortgages payable, net of financing costs, total $112,822 and have a weighted

average contractual interest rate of 3 .37% (December 31, 2021 - 3 .39%) . The weighted average term of the

mortgage debt is 3 .0 years (December 31, 2021 - 4 .0 years) . The mortgages are secured by a first registered

charge over specific investment properties and first general assignments of leases, insurance and registered

chattel mortgages .

The following table contains information on the remaining contractual mortgage maturities:

2023

2024

2025

2026

2027

2028

2030

Mortgages, principal

Net premium on assumed mortgages

Net financing costs

PRINCIPAL
REPAYMENTS

BALANCE DUE AT
MATURITY

DECEMBER 31,
2022

DECEMBER 31,
2021

$3,069

2,528

6,423

1,391

487

293

5,000

$19,191

$12,230

46,669

—

20,443

—

14,457

—

$15,299

49,197

6,423

21,834

487

14,750

5,000

$93,799

$112,990

$118,094

584

(752)

1,066

(1,103)

$112,822

$118,057

CONSTRUCTION LOANS PAYABLE

As at December 31, 2022, and December 31, 2021, Allied’s obligations under the construction loans are as

follows:

JOINT ARRANGEMENT

OWNERSHIP

DATE OF
MATURITY

DECEMBER 31,
2022

DECEMBER 31,
2021

Adelaide & Duncan

Breithaupt Phase III

KING Toronto

108 East 5th Avenue

50%

August 11, 2023

$85,485

$62,048

June 2, 2023

December 17, 2024

December 6, 2025

50,472

71,762

16,006

31,041

39,607

—

$223,725

$132,696

ALLIED 2022 ANNUAL REPORTOn January 31, 2019, the Adelaide & Duncan joint arrangement obtained a $270,000 construction lending

facility from a syndicate of Canadian banks, in which Allied’s 50% share is $135,000 . The loan matures

on August 11, 2023, and bears interest at bank prime plus 35 basis points or bankers’ acceptance rate plus

135 basis points with a standby fee of 25 basis points and a letter of credit fee of 100 basis points . Allied

is providing a joint and several guarantee of the entire facility and is earning a related guarantee fee on

$135,000 of the guarantee . On August 23, 2019, the Adelaide & Duncan joint arrangement entered into a

swap agreement to fix 75% of the construction costs up to $209,572 at 2 .86% .

On February 21, 2020, Allied and Perimeter obtained a $138,000 construction loan for the Breithaupt

Phase III joint arrangement from a syndicate of Canadian banks, in which Allied’s 50% share is $69,000 . On

December 1, 2022, Allied and Perimeter exercised their option to extend the loan maturity to June 2, 2023,

which bears interest at bank prime or bankers’ acceptance rate plus 120 basis points with a standby fee of 20

basis points and a letter of credit fee of 100 basis points . Allied is providing a joint and several guarantee of

the entire facility and is earning a related guarantee fee on $69,000 of the guarantee .

On December 17, 2020, Allied and Westbank obtained a $465,000 green construction loan for the KING

Toronto joint arrangement from a syndicate of Canadian banks, in which Allied’s 50% share is $232,500 .

The loan matures on December 17, 2024, and bears interest at bank prime plus 45 basis points or bankers’

acceptance rate plus 145 basis points with a standby fee of 25 basis points and a letter of credit fee of 100

basis points . Allied is providing a joint and several guarantee of the entire facility and is earning a related

guarantee fee on $232,500 of the guarantee .

On December 5, 2022, the 108 East 5th Avenue joint arrangement obtained a $150,000 construction lending

facility from a syndicate of Canadian banks, in which Allied’s 50% share is $75,000 . The loan matures on

December 6, 2025, and bears interest at prime plus 35 basis points or bankers’ acceptance rate plus 135

basis points with a standby fee of 27 basis points and a letter of credit fee rate of 100 basis points . These

interest rates and the standby fee (other than the letter of credit fee) are subject to variability based on

the achievement of two distinct sustainability performance targets . For each sustainability performance

target achieved, the interest rate and standby fee would decrease by 0 .025% per annum and 0 .005% per

annum, respectively . In addition, if certain sustainability minimums are not achieved, the interest rate and

standby fee would increase by 0 .025% per annum and 0 .005% per annum, respectively . Depending on the

applicable sustainability performance target or sustainability minimum, the settlement of these interest rate

variations and the standby fee occurs either annually or at the earlier of December 6, 2025, and the date the

construction lending facility is fully repaid . Allied has provided a joint and several guarantee of the entire

facility and is earning a related guarantee fee on $75,000 of the guarantee . On January 13, 2023, the 108

East 5th Avenue joint arrangement entered into a swap agreement to fix 75% of the construction costs up to

$110,175 at 4 .90% .

ALLIED 2022 ANNUAL REPORTPROMISSORY NOTE PAYABLE

On March 31, 2022, Allied acquired a portfolio of six properties from Choice Properties, which was

partially settled with the issuance of a $200,000 promissory note . The promissory note is secured by a first

registered charge on five of the six properties acquired . Allied’s obligations under the promissory note are

as follows:

Promissory note payable

Net discount on promissory
note payable

CONTRACTUAL
INTEREST RATE

DATE OF
MATURITY

FREQUENCY
OF INTEREST
PAYMENT

DECEMBER31,
2022

DECEMBER 31,
2021

1 .00% for 2022,
2 .00% for 2023

December 31, 2023

Quarterly

$200,000

(4,327)

$195,673

$—

—

$—

UNSECURED REVOLVING OPERATING FACILITY

As at December 31, 2022, and December 31, 2021, Allied’s obligation under the unsecured revolving

operating facility (the “Unsecured Facility”) is as follows:

MATURITY
DATE

CONTRACTUAL
INTEREST RATES
ON DRAWINGS

STANDBY
FEE

FACILITY
LIMIT

DRAWINGS

LETTERS
OF CREDIT

AMOUNT
AVAILABLE

DECEMBER 31, 2022

Unsecured Facility
limit $600,000 (1)

January 30,
2025

Prime + 0.20% or
Bankers’ acceptance
+ 1.20% (2)

0.24%

$600,000

$(440,000)

$(15,563)

$144,437

(1) This Unsecured Facility contains a $100,000 accordion feature, allowing Allied to increase the amount available under the facility to

$700,000.

(2) The interest rates on drawings for this facility are subject to certain conditions being met. In the event that these conditions are not met, this
Unsecured Facility will bear interest at bank prime plus 45 basis points or bankers’ acceptance plus 145 basis points with a standby fee of
29 basis points.

MATURITY
DATE

CONTRACTUAL
INTEREST RATES
ON DRAWINGS

STANDBY
FEE

FACILITY
LIMIT

DRAWINGS

LETTERS
OF CREDIT

AMOUNT
AVAILABLE

DECEMBER 31, 2021

Unsecured Facility
limit $600,000 (1)

January 30,
2025

Prime + 0 .20% or
Bankers’ acceptance
+ 1 .20% (2)

0 .24%

$600,000

$(365,000)

$(19,025)

$215,975

(1) This Unsecured Facility contains a $100,000 accordion feature, allowing Allied to increase the amount available under the facility to

$700,000.

ALLIED 2022 ANNUAL REPORTSENIOR UNSECURED DEBENTURES

As at December 31, 2022, and December 31, 2021, Allied’s obligations under the senior unsecured debentures

are as follows:

SERIES

Series C

Series D

Series E

Series F

Series G

Series H

Series I

Unsecured Debentures, principal

Net financing costs

CONTRACTUAL
INTEREST RATE

DATE OF
MATURITY

INTEREST
PAYMENT DATE

DECEMBER 31,
2022

DECEMBER 31,
2021

April 21, 2025

April 21 and October 21

$200,000

3 .636%

3 .394%

3 .113%

3 .117%

3 .131%

1 .726%

August 15, 2029

February 15 and August 15

April 8, 2027

April 8 and October 8

February 21, 2030

February 21 and August 21

May 15, 2028

May 15 and November 15

February 12, 2026

February 12 and August 12

3 .095%

February 6, 2032

February 6 and August 6

300,000

400,000

300,000

600,000

500,000

300,000

400,000

300,000

600,000

500,000

$2,600,000

(10,061)

(12,011)

$2,589,939

$2,587,989

The Series C, D, E, F, G, H and I Senior Unsecured Debentures are collectively referred to as the “Unsecured

Debentures” .

The respective financing costs recognized are amortized using the effective interest method and recorded to

interest expense .

UNSECURED TERM LOANS

As at December 31, 2022, and December 31, 2021, Allied’s obligations under the unsecured term loans are

as follows:

CONTRACTUAL
INTEREST RATE

DATE OF
MATURITY

FREQUENCY
OF INTEREST
PAYMENT

DECEMBER 31,
2022

DECEMBER 31,
2021

Unsecured term loan

3 .496%

January 14, 2026 (1)

Monthly

$250,000

Unsecured term loan

4 .865%

October 22, 2025

Monthly

400,000

—

Unsecured Term Loans, principal

Net financing costs

$650,000

$250,000

(974)

(458)

$649,026

$249,542

(1) The unsecured term loan is due on January 14, 2024, with two one-year extensions to January 14, 2026. The swap agreement to fix the rate at

3.496% covers the term including both extensions.

ALLIED 2022 ANNUAL REPORTThe two unsecured term loans are collectively referred to as “Unsecured Term Loans” . The respective

financing costs are amortized using the effective interest method and recorded to interest expense .

On April 22, 2022, Allied entered into an unsecured term loan with a financial institution for $400,000 at

a rate of prime plus 10 basis points or bankers’ acceptance plus 110 basis points, due on October 22, 2025 .

The proceeds from the loan were used to repay the Unsecured Facility . Debt financing costs of $700 were

incurred and recorded against the principal owing . On June 24, 2022, Allied entered into a swap agreement

to fix the rate at 4 .86% . On December 21, 2022, Allied amended the swap agreement for the settlement

period, which increased the rate from 4 .86% to 4 .865% .

CREDIT RATINGS

Allied’s credit ratings as at December 31, 2022, are summarized below:

DEBT

RATING AGENCY

LONG-TERM
CREDIT RATING

TREND/OUTLOOK

Issuer Rating & Unsecured Debentures

DBRS Limited

Issuer Rating & Unsecured Debentures

Moody’s Investors Service Inc .

BBB

Baa2

Stable

DBRS Limited (“DBRS”) and Moody’s Investors Service Inc . (“Moody’s”) provide issuer ratings and credit

ratings of debt securities for commercial issuers that indicate the risk associated with a borrower’s

capabilities to fulfill its obligations . The minimum DBRS investment grade rating is “BBB (low),” with the

highest rating being “AAA .” The minimum Moody’s investment grade rating is “Baa3,” with the highest rating

being “Aaa” .

With these ratings, Allied’s ability to access the debt capital markets on favourable financial terms will be

enhanced . Allied expects the ratings to be particularly helpful as Allied fortifies the balance sheet with a

view to bringing added financial flexibility and discipline to the urban development program .

The above-mentioned ratings assigned to Allied and the Unsecured Debentures are not recommendations

to buy, sell or hold any securities of Allied . Allied has paid customary rating fees to DBRS and Moody’s in

connection with the above-mentioned ratings . There can be no assurance that any rating will remain in

effect for any given period of time or that a rating will not be lowered, withdrawn or revised by the rating

agency if in its judgment circumstances so warrant .

ALLIED 2022 ANNUAL REPORTFINANCIAL COVENANTS

The Unsecured Facility, Unsecured Term Loans and Unsecured Debentures contain numerous financial

covenants . Failure to comply with the covenants could result in a default, which, if not waived or cured,

could result in adverse financial consequences . The related covenants are as follows:

UNSECURED FACILITY AND UNSECURED TERM LOANS

The following outlines the covenants as defined in the agreements governing the Unsecured Facility

and Unsecured Term Loans . The covenants are calculated on a proportionate basis, as required in these

agreements . Refer to Non-IFRS Measures on page 21 .

THRESHOLD

DECEMBER 31,
2022

DECEMBER 31,
2021

COVENANT (1)

Indebtedness ratio

Secured indebtedness ratio

Debt service coverage ratio (2)

Equity maintenance

Consolidated adjusted EBITDA to be more than
1 .5 times debt service payments

At least $1,250,000 plus 75% of future equity issuances
($2,819,658)

Unencumbered property assets
value ratio

Unencumbered property assets to be more than
1 .4 times total unsecured debt

Distribution payout ratio

Maintain distributions below 100% of FFO

Below 60%

Below 45%

35.6%

4.5%

3.0x

33 .5%

2 .5%

2 .1x

6,581,166

6,425,772

2.6x

71.2%

2 .8x

71 .2%

Includes results from continuing operations, discontinued operations and assets and liabilities classified as held for sale.

(1)
(2) The debt service coverage ratio as at December 31, 2022, includes financing prepayment costs of $(564) for the twelve months ended
December 31, 2022 (December 31, 2021 - $52,610). Excluding these financing prepayment costs, the debt service coverage ratio as at
December 31, 2022, would be 2.9x (December 31, 2021 - 2.9x).

SENIOR UNSECURED DEBENTURES

The following outlines the requirements of covenants specified in the trust indenture with respect to the

Unsecured Debentures . The covenants are calculated on a proportionate basis, which is in line with the trust

indenture . Refer to Non-IFRS Measures on page 21 .

COVENANT

THRESHOLD

Pro forma interest coverage
ratio

Pro forma asset coverage test

Maintain a 12-month rolling consolidated
pro forma EBITDA of at least 1 .65 times pro forma
interest expense

Maintain net consolidated indebtedness below 65%
of net aggregate assets on a pro forma basis

DECEMBER 31,
2022

DECEMBER 31,
2021

2.8x

3 .5x

35.5%

33 .5%

Equity maintenance (1)

Maintain Unitholders’ equity above $300,000

6,581,166

6,425,772

Pro forma unencumbered net
aggregate adjusted asset ratio

Maintain pro forma unencumbered net aggregate
adjusted assets above 1 .4 times consolidated
unsecured indebtedness

2.8x

3 .0x

(1)

Includes results from continuing operations, discontinued operations and assets and liabilities classified as held for sale.

ALLIED 2022 ANNUAL REPORTAs at December 31, 2022, Allied was in compliance with the terms and covenants of the agreements

governing the Unsecured Facility, the Unsecured Term Loans and the Unsecured Debentures .

A number of other financial ratios are also monitored by Allied, such as net debt as a multiple of annualized

adjusted EBITDA and interest coverage ratio - including interest capitalized and excluding financing

prepayment costs . These ratios are presented in Section I—Overview .

EQUITY

The equity of Allied is comprised of Units issued by Allied and Exchangeable LP Units issued by Allied

Properties Exchangeable Limited Partnership (“the Partnership”):

UNITS (AUTHORIZED - UNLIMITED)

Each Unit represents a single vote at any meeting of holders of Units and Special Voting Units

(as defined below) and entitles the holders of Units and Special Voting Units to receive a pro rata share of all

distributions, in accordance with the conditions provided for in the Declaration of Trust .

EXCHANGEABLE LP UNITS (AUTHORIZED - UNLIMITED)

Exchangeable LP Units issued by the Partnership are economically equivalent to Units, receive distributions

equal to the distributions paid on the Units and are exchangeable, on a one-for-one basis, at the holder’s

option, for Units . All Exchangeable LP Units are held, directly or indirectly, by Choice Properties .

The 11,809,145 Exchangeable LP Units issued on March 31, 2022, in connection with the acquisition of six

properties from Choice Properties contain lock-up and standstill restrictions . The lock-up will expire based

on the following schedule:

LOCK-UP EXPIRATION DATE

NUMBER OF EXCHANGEABLE LP UNITS ELIGIBLE FOR RELEASE

June 30, 2023

September 30, 2023

December 31, 2023

March 31, 2024

2,952,286

2,952,287

11,809,145

Each Exchangeable LP Unit is accompanied by one special voting unit of Allied (“Special Voting Unit”) which

provides the holder thereof with the right to one vote at all meetings of holders of Units and Special Voting

Units . The Declaration of Trust was amended on March 4, 2022, to provide for the creation and issuance of

the Special Voting Units .

ALLIED 2022 ANNUAL REPORTThe following represents the number of Units and Exchangeable LP Units issued and outstanding, and the

related carrying value of equity, for the years ended December 31, 2022 and December 31, 2021 .

NUMBER ISSUED AND OUTSTANDING

AMOUNT

UNITS

EXCHANGEABLE
LP UNITS

TOTAL
EQUITY

UNITS

EXCHANGEABLE
LP UNITS

TOTAL
EQUITY

Balance - January 1, 2021

127,259,218

Restricted Unit Plan
(net of forfeitures)

Unit Option Plan -
options exercised

Unit issuance
(net of costs)

Balance -
December 31, 2021

Restricted Unit Plan
(net of forfeitures)

Unit Option Plan -
options exercised

Unit issuance
(net of costs)

Balance -
December 31, 2022

—

1,533

477,100

127,737,851

—

6,332

—

127,259,218

$3,884,661

$—

$3,884,661

—

(2,141)

1,533

477,100

20,079

—

(2,141)

20,079

127,737,851

$3,902,655

$—

$3,902,655

—

(2,661)

6,332

200

—

(2,661)

200

211,800

11,809,145

12,020,945

9,184

550,660

559,844

127,955,983

11,809,145

139,765,128

$3,909,378

$550,660

$4,460,038

During the year ended December 31, 2022, the acquisition of six office assets from Choice Properties was

satisfied in part by the issuance of 11,809,145 Exchangeable LP Units . The Exchangeable LP Units were

recognized as non-controlling interests in the consolidated statements of equity . In January 2022, Allied

issued 211,800 Units under the ATM Program in settlement of trades executed at the end of December 2021

at a weighted average price of $44 .02 per Unit for gross proceeds of $9,324, and incurred commissions of

$140, for net proceeds of $9,184 .

During the year ended December 31, 2021, Allied issued 477,100 Units under the ATM Program at a weighted

average price of $44 .07 per Unit for gross proceeds of $21,028, and incurred commissions of $315, for net

proceeds of $20,713 . Issuance costs on the ATM Program were $634 for the year ended December 31, 2021 .

The commissions and issuance costs were applied against the gross proceeds and charged against

Unitholders’ equity .

ALLIED 2022 ANNUAL REPORTAllied does not hold any of its own Units, nor does Allied reserve any Units for issue under options

and contracts .

As at January 31, 2023, 127,955,983 Units and 1,717,043 options to purchase Units were issued and

outstanding .

The weighted average number of Units and Exchangeable LP Units for the purpose of calculating basic

and diluted income per unit is as follows:

THREE MONTHS ENDED

YEAR ENDED

DECEMBER 31,
2022

DECEMBER 31,
2021

DECEMBER 31,
2022

DECEMBER 31,
2021

Units

127,955,983

127,441,142

127,951,020

127,305,384

Exchangeable LP Units (1)

11,809,145

—

8,929,655

—

Total units - basic

Unit Option Plan

139,765,128

127,441,142

136,880,675

127,305,384

—

170,131

23,407

150,445

Total units - fully diluted

139,765,128

127,611,273

136,904,082

127,455,829

(1)

Issued on March 31, 2022.

NORMAL COURSE ISSUER BID

On February 22, 2022, Allied received approval from the Toronto Stock Exchange (“TSX”) for the renewal of

its normal course issuer bid (“NCIB”), which entitles Allied to purchase up to 12,602,594 of its outstanding

Units, representing approximately 10% of its public float as at February 10, 2022 . The NCIB commenced

February 24, 2022, and will expire on February 23, 2023, or such earlier date as Allied completes its

purchases pursuant to the NCIB . All purchases under the NCIB will be made on the open market through

the facilities of the TSX or alternate trading systems in Canada at market prices prevailing at the time of

purchase . Any Units that are repurchased will either be cancelled or delivered to participants under Allied’s

Restricted Unit Plan or to employees pursuant to Allied’s employee programs .

During the year ended December 31, 2022, Allied purchased 61,725 Units for $2,664 at a weighted average

price of $43 .16 per Unit under its NCIB program, of which 61,148 Units were purchased for delivery to

participants under Allied’s Restricted Unit Plan and 577 Units were purchased for certain employee rewards

outside of Allied’s Restricted Unit Plan .

ALLIED 2022 ANNUAL REPORTCOMPENSATION PLANS

Allied adopted a unit option plan (the “Unit Option Plan”) providing for the issuance, from time to time, at

the discretion of the trustees, of options to purchase Units for cash . Participation in the Unit Option Plan is

restricted to certain employees of Allied . The Unit Option Plan complies with the requirements of the TSX .

The exercise price of any option granted will not be less than the closing market price of the Units on the

day preceding the date of grant . The term of the options may not exceed ten years . Options granted prior

to February 22, 2017 vest evenly over three years; options granted subsequently vest evenly over four years

from the date of grant . All options are settled in Units . Effective December 2021, no further options will be

granted under the Unit Option Plan .

At December 31, 2022, Allied had granted options to purchase up to 1,717,043 Units outstanding, of

which 1,151,274 had vested . At December 31, 2021, Allied had granted options to purchase 1,726,381 Units

outstanding, of which 842,672 had vested .

For the year ended December 31, 2022, Allied recorded a unit-based compensation expense of $876

(December 31, 2021 - $1,740) in general and administrative expense in the consolidated statements of income

and comprehensive income related to the Unit Option Plan .

In March 2010, Allied adopted a restricted unit plan (the “Restricted Unit Plan”), whereby restricted Units

(“Restricted Units”) are granted to certain key employees and trustees, at the discretion of the Board of

Trustees . The Restricted Units are purchased in the open market . Employees and trustees who are granted

Restricted Units have the right to vote and to receive distributions from the date of the grant . Generally, the

Restricted Units granted to employees vest as to one-third on each of the three anniversaries following the

date of the grant . Restricted Units granted to non-management trustees are fully vested . Whether vested or

not, without the specific authority of the Governance and Compensation Committee, the Restricted Units

may not be sold, mortgaged or otherwise disposed of for a period of six years following the date of the grant,

except that in the case of a non-management trustee, the release date will be automatically accelerated

to the date such person ceases to hold office as a trustee of Allied . The Restricted Unit Plan contains

provisions providing for the vesting or forfeiture of unvested Restricted Units within specified time periods

in the event the employee’s employment is terminated, and authorizes the Chief Executive Officer, in his

or her discretion, to accelerate the release date and vesting of Restricted Units in certain circumstances

where an employee’s employment is terminated . At December 31, 2022, Allied had 322,411 Restricted Units

outstanding (December 31, 2021 – 296,810) .

For the year ended December 31, 2022, Allied recorded a unit-based compensation expense of $2,807

(December 31, 2021 - $2,376) in general and administrative expense in the consolidated statements of income

and comprehensive income related to the Restricted Unit Plan .

ALLIED 2022 ANNUAL REPORTIn December 2021, Allied adopted a cash settled performance and restricted trust unit plan (the “PTU/RTU

Plan”) whereby performance trust units and/or restricted trust units (together, “Plan Units”) are granted

to certain employees at the discretion of the Board . Plan Units are subject to such vesting, settlement,

performance criteria and adjustment factors as are established by the Board at the time of the grant and

accumulate distribution equivalents in the form of additional Plan Units . The PTU/RTU Plan contains

provisions providing for the vesting or forfeiture of unvested Plan Units within specified time periods in

the event the employee’s employment is terminated, and authorizes the Chief Executive Officer, in their

discretion, to amend the vesting and settlement of Plan Units in certain circumstances where an employee’s

employment is terminated . The following is a summary of the activity of Allied’s PTU/RTU Plan:

Plan Units, beginning of period

Granted

Cancelled/Forfeited

Distributions equivalents

Plan Units, end of period

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

—

172,500

(1,035)

7,728

179,193

—

For the year ended December 31, 2022, Allied recorded a unit-based compensation expense of $738

(December 31, 2021 - $nil), including the mark-to-market adjustment, in general and administrative expense

in the consolidated statements of income and comprehensive income .

DISTRIBUTIONS

Allied is focused on increasing distributions to its Unitholders on a regular and prudent basis . During the

first 12 months of operations, Allied made regular monthly distributions of $1 .10 per unit on an annualized

basis . The distribution increases since then are set out in the table below:

MARCH,
2004

MARCH,
2005

MARCH,
2006

MARCH,
2007

MARCH,
2008

DECEMBER,
2012

DECEMBER,
2013

DECEMBER,
2014

Annualized increase per Unit

$0 .04

$0 .06

$0 .04

$0 .05

% increase

Annualized distribution per Unit

3 .6%

$1 .14

3 .5%

$1 .18

3 .4%

$1 .22

3 .3%

$1 .26

4 .8%

$1 .32

3 .0%

$1 .36

3 .7%

$1 .41

3 .5%

$1 .46

DECEMBER,
2015

DECEMBER,
2016

DECEMBER,
2017

DECEMBER,
2018

JANUARY,
2020

JANUARY,
2021

JANUARY,
2022

JANUARY,
2023

Annualized increase per Unit

$0 .04

$0 .03

$0 .04

$0 .05

% increase

Annualized distribution per Unit

2 .7%

$1 .50

2 .0%

$1 .53

2 .0%

$1 .56

2 .6%

$1 .60

3 .1%

$1 .65

3 .0%

$1 .70

2 .9%

$1 .75

2 .9%

$1 .80

ALLIED 2022 ANNUAL REPORTOn each date that a distribution is declared by Allied on the Units, a distribution in an equal amount per

unit is declared by the Partnership on the Exchangeable LP Units . A holder of Exchangeable LP Units may

elect to defer receipt of all or a portion of distributions declared by the Partnership until the first business

day following the end of the fiscal year . If the holder elects to defer, the Partnership will loan the holder

an amount equal to the deferred distribution without interest, and the loan will be due and payable on the

first business day following the end of the fiscal year during which the loan was advanced . The distributions

declared by the Partnership on the Exchangeable LP Units from April 1, 2022, to December 31, 2022, was

$15,496, for which Choice Properties elected to receive a loan in lieu of all of the distributions . Of the

$15,496 loan in lieu of distributions, a note receivable of $13,774 was issued to Choice Properties for the cash

advances made during the nine months ended December 31, 2022, with the remaining $1,722 advanced

to Choice Properties as a note receivable on January 16, 2023 . Since there is a legally enforceable right

and an intention by Allied and Choice Properties to settle the note receivable from Choice Properties and

the distributions payable to Choice Properties on a net basis, these financial instruments are offset on the

balance sheet . On January 3, 2023, $13,774 of the note receivable due from Choice Properties was settled on

a net basis against the distribution payable to Choice Properties .

SOURCES OF DISTRIBUTIONS

For the three months and year ended December 31, 2022, Allied declared $61,134 and $239,363 in

distributions, respectively (December 31, 2021 - $54,225 and $216,521, respectively), including distributions

to holders of the Exchangeable LP Units of $5,165 and $15,496, respectively (December 31, 2021 - $nil and

$nil, respectively) .

THREE MONTHS ENDED

YEAR ENDED

DECEMBER 31,
2022

DECEMBER 31,
2021

DECEMBER 31,
2022

DECEMBER 31,
2021

Distributions declared

Net income and comprehensive income

$61,134

$41,392

$54,225

$239,363

$216,521

$159,921

$375,363

$443,151

Cash flows provided by operating activities

$94,509

$87,509

$321,193

$241,114

AFFO excluding condominium related items,
financing prepayment costs and the mark-to-market
adjustment on unit-based compensation (1)

AFFO excluding condominium related items,
financing prepayment costs and the mark-to-market
adjustment on unit-based compensation payout ratio (1)

$76,553

$66,076

$297,579

$266,517

79.9%

82 .1%

80.4%

81 .2%

(Deficit) excess of net income over distributions declared

$(19,742)

$105,696

$136,000

$226,630

Excess of cash flows provided by operating activities over
distributions declared

Excess of cash provided by AFFO excluding condominium
related items, financing prepayment costs and the
mark-to-market adjustment on unit-based
compensation over distributions declared

(1) This is a non-IFRS measure, refer to page 21.

$33,375

$33,284

$81,830

$24,593

$15,419

$11,851

$58,216

$49,996

ALLIED 2022 ANNUAL REPORTIn determining the amount of distributions to be made, Allied’s Board of Trustees consider many factors,

including provisions in its Declaration of Trust, macroeconomic and industry specific environments, the

overall financial condition of Allied, future capital requirements, debt covenants, and taxable income .

In accordance with Allied’s distribution policy, Management and the Board of Trustees regularly review

Allied’s rate of distributions to ensure an appropriate level of cash and non-cash distributions . Management

anticipates that distributions declared will, in the foreseeable future, continue to vary from net income

as net income includes fair value adjustments and other non-cash items . While cash flows from operating

activities are generally sufficient to cover distribution requirements, timing of expenses and seasonal

fluctuations in non-cash working capital may result in a shortfall . These seasonal or short-term fluctuations

will be funded, if necessary, by the Unsecured Facility . As such, the cash distributions are not an economic

return of capital, but a distribution of sustainable cash flow from operations . Based on current facts and

assumptions, Management does not anticipate cash distributions will be reduced or suspended in the

foreseeable future .

The rate of distribution as at December 31, 2022, amounts to $1 .75 per unit per annum (December 31, 2021 -

$1 .70 per Unit per annum) .

COMMITMENTS

At December 31, 2022, Allied had future commitments as set out below, excluding the amount held within

equity accounted investments:

DECEMBER 31, 2022

DECEMBER 31, 2021

Capital expenditures and committed acquisitions

$247,819

$473,779

As at December 31, 2022, commitments of $510 (December 31, 2021 - $354) were held within equity

accounted investments .

As at December 31, 2022, there are no committed acquisitions (December 31, 2021 - $126,198 for the

acquisition of 700 Saint-Hubert, which closed on October 31, 2022) .

The above does not include Allied’s lease liability commitments, which are disclosed in note 13 of the

consolidated financial statements for the year ended December 31, 2022 .

ALLIED 2022 ANNUAL REPORTSection VII
—Accounting Estimates and Assumptions

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The preparation of the consolidated financial statements requires management to make judgments and

estimates in applying Allied’s accounting policies that affect the reported amounts and disclosures made in

the consolidated financial statements and accompanying notes .

Critical accounting estimates and assumptions are discussed in Allied’s audited consolidated financial

statements for the year ended December 31, 2022, and the notes contained therein .

SIGNIFICANT ACCOUNTING POLICIES

Accounting policies and any respective changes are discussed in Allied’s audited consolidated financial

statements for the year ended December 31, 2022, and the notes contained therein .

ALLIED 2022 ANNUAL REPORTSection VIII
—Disclosure Controls and Internal Controls

Management maintains appropriate information systems, procedures and controls to provide reasonable

assurance that information that is publicly disclosed is complete, reliable and timely . The Chief Executive

Officer (the “CEO”) and Chief Financial Officer (the “CFO”) evaluated, or caused to be evaluated under

their direct supervision, the design and operating effectiveness of disclosure controls and procedures (as

defined in National Instrument 52-109, Certification of Disclosure in Issuers’ Annual and Interim Filings)

at December 31, 2022, and based on that evaluation, have concluded that such disclosure controls and

procedures were appropriately designed and were operating effectively .

Management is responsible for establishing adequate internal controls over financial reporting to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of financial

statements for external purposes in accordance with IFRS . The CEO and CFO evaluated, or caused to

be evaluated under their direct supervision, the effectiveness of Allied’s internal controls over financial

reporting (as defined in National Instrument 52-109, Certification of Disclosure in Issuers’ Annual and

Interim Filings) at December 31, 2022, using the COSO Internal Control - Integrated Framework (2013),

published by the Committee of Sponsoring Organizations of the Treadway Commission . Based on that

assessment, the CEO and the CFO determined that internal controls over financial reporting were

appropriately designed and were operating effectively .

No changes were made in the design of internal controls over financial reporting during the period ended

December 31, 2022, that have materially affected, or are reasonably likely to materially affect, Allied’s

internal controls over financial reporting .

It should be noted that a control system, no matter how well conceived and operated, can provide only

reasonable, not absolute, assurance that the objectives of the control system are met . Because of the

inherent limitations in all control systems, no evaluation of controls can provide absolute assurance of

control issues, including whether instances of fraud, if any, have been detected . These inherent limitations

include, among other items: (i) that Management’s assumptions and judgments could ultimately prove to be

incorrect under varying conditions and circumstances; (ii) the impact of any undetected errors; and (iii) that

controls may be circumvented by the unauthorized acts of individuals, by collusion of two or more people,

or by Management override .

ALLIED 2022 ANNUAL REPORTSection IX
—Risks and Uncertainties

There are certain risk factors inherent in the investment and ownership of real estate . Real estate

investments are capital intensive, and success from real estate investments depends upon maintaining

occupancy levels and rental income flows to generate acceptable returns . These success factors are

dependent on general economic conditions and local real estate markets, demand for leased premises

and competition from other available properties .

Allied’s portfolio is focused on a particular asset class in seven metropolitan real estate markets in Canada .

This focus enables Management to capitalize on certain economies of scale and competitive advantages

that would not otherwise be available .

The following discussion of risks is not exhaustive but is designed to highlight the key risks that may

affect Allied’s business, operations and financial condition or future performance .

ALLIED 2022 ANNUAL REPORTOPERATING RISKS AND RISK MANAGEMENT

REAL ESTATE RISK

Allied is subject to the conventional risks associated with the ownership of real estate .

Certain significant expenditures, including property taxes, maintenance costs, mortgage payments,

insurance costs and related charges must be made by Allied throughout the period of its ownership of

the properties regardless of whether the property is producing sufficient income to cover such expenses .

In order to provide desirable rentable space over the long term, Allied must maintain or, in some cases,

improve each property’s condition to meet market demand . Maintaining and improving a rental property

can entail significant costs that Allied may not be able to pass on to users .

Real property investments tend to be relatively illiquid, with the degree of liquidity generally fluctuating in

relation to demand for and the perceived desirability of such investments . Such illiquidity may tend to limit

Allied’s ability to vary its portfolio promptly in response to changing economic or investment conditions . If

Allied were to dispose of real property investments, the proceeds to Allied might be significantly less than

the aggregate carrying value of its properties .

Allied strives to mitigate these risks by remaining fully informed on best practices, trends and legislative and

demographic changes in the commercial real estate markets within which we operate . Allied additionally

strives to mitigate these risks by focusing intently on execution .

LEASE ROLL-OVER RISK

Allied is subject to lease roll-over risk . Lease roll-over risk arises from the possibility that Allied may

experience difficulty renewing or replacing users occupying space covered by leases that mature . Allied

strives to stagger its lease maturity schedule so that it is not faced with a disproportionately large level of

lease maturities in a given year . For Allied’s current lease maturity schedule, refer to page 54 .

In evaluating lease roll-over risk, it is informative to determine Allied’s sensitivity to a decline in occupancy .

For every full-year decline of 100 basis points in occupancy at its average rental rate per square foot, Allied’s

annual AFFO excluding condominium related items, financing prepayment costs and the mark-to-market

adjustment on unit-based compensation would decline by approximately $6,229 (approximately $0 .045 per

unit) . The decline in AFFO excluding condominium related items and financing prepayment costs per unit

would be more pronounced if the decline in occupancy involved space leased above the average rental rate

per square foot and less pronounced if the decline in occupancy involved space leased below the average

rental rate per square foot .

USER TERMINATIONS AND FINANCIAL STABILITY

Allied’s distributable income would be adversely affected if a significant number of users were to become

unable to meet their obligations under their leases or if a significant amount of available space in its

properties were not able to be leased on economically favourable lease terms . Upon the expiry of any

lease, there can be no assurance that the lease will be renewed or the user replaced . The terms of any

subsequent lease may be less favourable to Allied than the existing lease . In the event of default by a user,

ALLIED 2022 ANNUAL REPORTdelays or limitations in enforcing rights as lessor may be experienced and substantial costs in protecting

Allied’s investment may be incurred . Furthermore, at any time, a user of any of Allied’s properties may seek

the protection of bankruptcy, insolvency or similar laws that could result in the rejection and termination

of such user’s lease and thereby cause a reduction in the cash flow available to Allied . The ability to rent

unleased space in the properties in which Allied will have an interest will be affected by many factors . Costs

may be incurred in making improvements or repairs to property required by a new user . The failure to rent

unleased space on a timely basis or at all would likely have an adverse effect on Allied’s financial condition .

DEVELOPMENT RISK

As an owner of Properties Under Development, Allied is subject to development risks, such as construction

delays, cost over-runs and the failure of users to take occupancy and pay rent in accordance with lease

arrangements . In connection with all Properties Under Development, Allied incurs development costs prior

to (and in anticipation of ) achieving a stabilized level of rental revenue . In the case of the development of

ancillary or surplus land, these risks are managed in most cases by not commencing construction until a

satisfactory level of pre-leasing is achieved . Overall, these risks are managed through Allied’s Declaration of

Trust, which states that the cost of development cannot exceed 15% of GBV .

JOINT ARRANGEMENTS AND PARTNERSHIPS

Allied has entered into various joint arrangements and partnerships with different entities . If these joint

arrangements or partnerships do not perform as expected or default on financial obligations, Allied has an

associated risk . Allied reduces this risk by seeking to negotiate contractual rights upon default, by entering

into agreements with financially stable partners and by working with partners who have a successful record

of completing development projects .

Allied may own less than a controlling interest, may not be in a position to exercise sole decision-making

authority regarding the properties owned through joint arrangements and may not fully manage those

properties . Investments in joint arrangements may, under certain circumstances, involve risks not

present when a third party is not involved, including: (i) counter-party risk; (ii) the possibility that joint

arrangement partners may have business interests or goals that are inconsistent with Allied’s business

interests or goals; and (iii) the need to obtain the joint arrangement partner’s consent with respect to

certain major decisions relating to these assets, such as decisions relating to the sale of the assets, timing

and amount of distributions of cash from such properties to Allied and its joint arrangement partners, and

capital expenditures . In addition, the sale or transfer of interests in certain of the joint arrangements and

partnerships may be subject to rights of first refusal and certain of the joint arrangement agreements may

provide for buy-sell, put or similar arrangements .

COMPETITION

The real estate business is competitive . Numerous other developers, managers and owners of office

properties compete with Allied in seeking users . Some of the properties of Allied’s competitors are better

located or less levered than Allied’s properties and any property in which Allied subsequently acquires an

interest . Some of Allied’s competitors are better capitalized and stronger financially and hence better able

ALLIED 2022 ANNUAL REPORTto withstand an economic downturn . The existence of competing developers and owners and competition

for Allied’s users could have an adverse effect on Allied’s ability to lease space in its properties and on the

rents charged or concessions granted, and could adversely affect Allied’s revenues and its ability to meet its

debt obligations . An increase in the availability of investment funds and an increase in interest in immovable

property investments may tend to increase competition for immovable property investments, thereby

increasing purchase prices and reducing the yield on them . Competition for acquisitions of real properties is

intense, and some competitors may have the ability or inclination to acquire properties at a higher price or

on terms less favourable than those that Allied is prepared to accept .

UNEXPECTED COSTS OR LIABILITIES RELATED TO ACQUISITIONS

A risk associated with acquisitions is that there may be an undisclosed or unknown liability relating to

the acquired property, and Allied may not be indemnified for some or all of these liabilities . Following an

acquisition, Allied may discover that it has acquired undisclosed liabilities, which may be material . The due

diligence procedures performed by Management are designed to address this risk . Allied performs what it

believes to be an appropriate level of investigation in connection with its acquisition of properties and seeks

through contract to ensure that risks lie with the appropriate party .

RELIANCE ON KEY PERSONNEL

The management of Allied depends on the services of certain key personnel . The loss of the services of any

key personnel could have an adverse effect on Allied .

CONDOMINIUM MARKET

Some of Allied’s current development projects could be impacted by changes in condominium markets .

These include changes in general and local economic and industry conditions, such as employment levels,

availability of financing for homebuyers, interest rates, consumer confidence, levels of new and existing

homes for sale, demographic trends and housing demand .

FINANCIAL RISKS AND RISK MANAGEMENT

FINANCING AND INTEREST RATE RISK

Allied is subject to risk associated with debt financing . Allied’s financing may include indebtedness with

interest rates based on variable lending rates that will result in fluctuations in Allied’s cost of borrowing .

The availability of debt to re-finance existing and maturing loans and the cost of servicing such debt will

influence Allied’s success . In order to minimize risk associated with debt financing, Allied strives to re-

finance maturing loans with long-term fixed-rate debt and to stagger the maturities over time . For Allied’s

current debt-maturity schedule, refer to page 77 .

Interest rates on debt for mortgages payable, promissory note payable, unsecured debentures and

unsecured term loans are between 1 .00% and 4 .87% with a weighted average contractual interest rate of

3 .10% . The weighted average term of our debt (excluding construction loans and the Unsecured Facility) is

4 .8 years . Refer to note 12(b) and (d) of the consolidated financial statements for further details .

ALLIED 2022 ANNUAL REPORTAllied is additionally subject to risk associated with equity financing . The ability to access the equity capital

markets at appropriate points in time and at an acceptable cost will influence Allied’s success . In order to

minimize the risk associated with equity financing, Allied engages in extensive investor relations activity

with retail and institutional investors globally and strives to fix the cost of equity in conjunction with a clear

use of proceeds .

ACCESS TO CAPITAL

The real estate industry is highly capital intensive . Allied will require access to capital to maintain its

properties, to complete development and intensification projects, as well as to fund its growth strategy and

significant capital expenditures from time to time . There is no assurance that capital will be available when

needed or on favourable terms . Allied’s access to capital and cost of capital will be subject to a number of

factors, including general market conditions; the market’s perception of Allied’s growth potential; Allied’s

current and expected future earnings; Allied’s cash flow and cash distributions; and the market price of

Allied’s Units . If Allied is unable to obtain sources of capital, it may not be able to acquire or develop assets,

or pursue the development or intensification of properties when strategic opportunities arise .

AVAILABILITY OF CASH FLOW AND DISTRIBUTIONS

There can be no assurance that Allied will maintain or increase its distribution levels in the future .

Distributions are made at the discretion of the Trustees based on many factors, including provisions of the

Declaration of Trust, macroeconomic and industry specific environments, the overall financial condition of

Allied, future capital requirements, debt covenants, and taxable income . Distributable income may exceed

actual cash available to Allied from time to time because of items such as principal repayments of debt, user

inducements, leasing commissions and capital expenditures, if any . Allied may be required to use part of its

debt capacity or reduce distributions in order to accommodate such items . The market value of the Units

may be negatively impacted if Allied is unable to maintain its distribution levels in the future .

MORTGAGE PAYMENTS

Approximately 76 .1% of the principal amount of the Mortgages have terms of five years or less . Variations in

interest rates and principal repayments required under the Mortgages and Allied’s operating and acquisition

credit facilities, on renewal or otherwise, could result in significant changes in the amount required to be

applied to debt service and, as a result, reduce the amount of cash available for distribution to Unitholders .

Certain covenants in the Mortgages and credit facilities may also limit payments by Allied to its Unitholders .

If Allied becomes unable to pay its debt service charges or otherwise commits an event of default, the rights

of its lenders will rank senior to any rights of Unitholders .

ALLIED 2022 ANNUAL REPORTCREDIT RISK

Allied is subject to credit risk arising from the possibility that users may not be able to fulfill their lease

obligations . Allied strives to mitigate this risk by maintaining a diversified user-mix and limiting exposure to

any single user . Allied’s exposure to top-10 users is 16 .8% of rental revenue and the credit quality of our top-

10 users continues to improve .

As Allied has invested in mortgages to third parties to facilitate acquisitions, further credit risks arise in the

event that borrowers default on the repayment of their mortgages to Allied . Allied’s mortgage investments

will typically be subordinate to prior ranking mortgage or charges . Not all of Allied’s financing activities will

translate into acquisitions . As at December 31, 2022, Allied had $432,032 in loans receivable, the majority

of which is loaned to affiliates of a single private company . In the event of a large commercial real estate

market correction, the fair market value of an underlying property may be unable to support the mortgage

investment . Allied mitigates this risk by obtaining corporate guarantees and/or registered mortgage charges .

UNIT PRICE RISK

Unit price risk arises from the unit-based compensation liabilities which are recorded at fair value at each

quarter-end date . Allied’s unit-based compensation liabilities negatively impact operating income when the

Unit price rises and positively impact operating income when the Unit price declines .

POTENTIAL VOLATILITY OF UNIT PRICES

Allied is an unincorporated trust and its Units are listed on the TSX . A publicly-traded real estate investment

trust will not necessarily trade at values determined solely by reference to the underlying value of its real

estate assets . The prices at which the Units will trade cannot be predicted and could be subject to significant

fluctuations in response to variations in quarterly operating results, distributions, and other factors beyond

the control of Allied such as changes or uncertainty regarding global economic conditions, including but

not limited to those caused by the occurrence of a natural disaster, a public health emergency or other

force majeure event . The annual yield on the Units as compared to the annual yield on other financial

instruments may also influence the price of the Units in the public trading markets . In addition, securities

markets may experience significant price and volume fluctuations from time to time that are unrelated or

disproportionate to the operating performance of particular issuers . These broad fluctuations may adversely

affect the market price of the Units .

DILUTION

Allied may, in its sole discretion, issue additional Units, or securities convertible or exchangeable into Units,

from time to time, and the voting power and/or economic interest of Unitholders may be diluted thereby .

Allied cannot predict the size or nature of future sales or issuances of securities, or the effect, if any, that

such future sales and issuances will have on the market price of the Units .

ALLIED 2022 ANNUAL REPORTOTHER RISKS

COVID-19 RISK

As a result of the continuously evolving circumstances surrounding the COVID-19 pandemic, uncertainty

remains with respect to Allied’s revised internal forecast, the most significant being the fact that it cannot

predict how consumers, users and governments will respond during the transition to a fully reopened

economy . In addition, Allied cannot predict the extent and severity of the economic disruption and related

financial impact flowing from the global pandemic .

The global pandemic could have adverse consequences on Allied including, but not limited to, business

continuity interruptions, disruptions and costs of development activities, unfavorable market conditions,

and threats to the health and safety of employees . Allied’s users may also face business challenges as a result

of the pandemic that may adversely affect their business and their ability to pay rent as required under the

leases . Allied has afforded rent deferrals to certain users . There can be no assurance that deferred rents

will be collected in accordance with deferral arrangements or at all . Any inability to collect rents in a timely

manner or at all could adversely affect Allied’s business and financial results .

Certain of the materials and products used in the development of Allied’s Properties Under Development

are sourced from third-party suppliers and manufacturers in China and elsewhere . The COVID-19 pandemic

has resulted in the extended shutdown of certain businesses across the world which may in turn result

in disruptions or delays to the supply of such materials and products including disruptions from the

temporary closure of third-party supplier and manufacturer facilities and interruptions in product supply .

Any disruption of Allied’s suppliers and their contract manufacturers may have an impact on the planned

development of Allied’s Properties Under Development and related timelines .

In response to the pandemic, Allied has developed and implemented a plan to monitor and mitigate risks

posed to its employees, users and business . Allied’s plan is guided by local public health authorities and

governments in each of its markets . Allied continues to closely monitor business operations and may take

further actions that respond to directives of governments and public health authorities or that are in the best

interests of employees, users, suppliers or other stakeholders, as necessary .

However, no such plan can eliminate the risks associated with events of this magnitude, and much of the

impacts will be the result of matters beyond Allied’s control . There can be no assurance that the measures

undertaken to date will eliminate the risk of disruption to Allied’s business operations and development

activity, and there can be no assurance that Allied’s users will be able to maintain their business operations

and continue to be able to pay rent in full, on a timely basis or at all . Such events could materially adversely

affect Allied’s operations, reputation and financial condition, including the fair value of Allied’s properties .

The global pandemic has caused an economic slowdown and increased volatility in financial markets,

which has negatively impacted the market price for the equity securities of Allied . Governments and central

banks have responded with monetary and fiscal interventions intended to stabilize economic conditions .

ALLIED 2022 ANNUAL REPORTHowever, it is not currently known how these interventions will impact debt and equity markets or the

economy generally . Although the impact of COVID-19, and its duration, on the global economy remains

uncertain, disruptions caused by COVID-19 may materially adversely affect Allied’s users, the debt and

equity markets and Allied’s operations and financial performance . It could also potentially affect Allied’s

current credit ratings, total return and distributions . Even after the COVID-19 pandemic has subsided, Allied

may experience material adverse impacts to its business as a result of the global economy as well as lingering

effects on Allied’s employees, suppliers, third-party service providers and/or users .

GENERAL ECONOMIC CONDITIONS

Allied may be affected by changes in general economic conditions (such as inflation and the availability

and cost of credit), local real estate markets (such as an oversupply of space or a reduction in demand for

real estate in the area), government regulations, competition from other available premises, including new

developments, and various other factors . Property valuations may be impacted by inflation and interest

rate risk . The global economy may face increasing uncertainty due to acts of nature, including the COVID-19

global pandemic, trade protectionism, disputes and political events around the world, which could

potentially impact Canadian trade and the Canadian economy at large . This could have an impact on the

markets in which Allied operates and in turn could have an adverse effect on Allied .

GENERAL UNINSURED LOSSES

Allied carries comprehensive general liability, fire, flood, extended coverage and rental loss insurance with

policy specifications, limits and deductibles customarily carried for similar properties . There are, however,

certain types of risks, generally of a catastrophic nature, such as wars or environmental contamination,

which are either uninsurable or not insurable on an economically viable basis . Allied will have insurance

for earthquake risks, subject to certain policy limits, deductibles and self-insurance arrangements, and

will continue to carry such insurance if it is economical to do so . Should an uninsured or underinsured

loss occur, Allied could lose its investment in, and anticipated profits and cash flows from, one or more of

its properties, but Allied would continue to be obliged to repay any recourse mortgage indebtedness on

such properties .

ENVIRONMENTAL AND CLIMATE CHANGE RISK

As an owner of real estate, Allied is subject to various federal, provincial and municipal laws relating

to environmental matters . Allied will make the necessary capital and operating expenditures to ensure

compliance with environmental laws and regulations .

Such laws provide that Allied could be liable for the costs of removal of certain hazardous substances,

remediation of certain hazardous locations or other environmental impacts . The failure to remove or

remediate such substances, locations or environmental impacts, if any, could adversely affect Allied’s

ability to sell such real estate or to borrow using such real estate as collateral and could potentially also

result in claims against Allied . Allied is not aware of any material non-compliance with environmental laws

at any of the properties . Allied is also not aware of any pending or threatened investigations or actions by

environmental regulatory authorities in connection with any of the properties or any pending or threatened

claims relating to environmental conditions at the properties .

100

ALLIED 2022 ANNUAL REPORTClimate change could pose significant environmental, social and business risks . If environmental laws and

regulations change, Allied could be subject to more stringent environmental laws and regulations in the

future . Compliance with more stringent environmental laws and regulations could have an adverse effect on

Allied’s business, financial condition or results of operation . It is Allied’s operating policy to obtain a Phase

I environmental assessment conducted by an independent and experienced environmental consultant

prior to acquiring a property . Phase I environmental assessments have been performed in respect of all

properties . Allied is committed to evaluating potential impacts to its business on an ongoing basis and to

making investments to mitigate potential identified impacts .

Physical risks from climate change that may result in damage to Allied’s properties may include natural

disasters and severe weather, such as floods, blizzards and rising temperatures . The extent of Allied’s

casualty losses and loss in operating income in connection with such events is a function of the severity of

the event and the total amount of exposure in the affected area . Allied is also exposed to risks associated

with inclement winter weather, including increased need for maintenance and repair of its buildings . In

addition, the physical impacts from climate change, including changing weather patterns, could have effects

on Allied’s business by increasing the cost of property insurance, and/or energy at its properties . As a result,

the consequences of natural disasters, severe weather and climate change could increase Allied’s costs

and reduce Allied’s cash flow . Allied is evaluating all of its assets to understand how the physical risks from

climate change could impact the portfolio and is taking a proactive and precautionary approach to mitigate

potential impacts .

Although there can be no assurances, Allied does not believe that costs relating to environmental matters

will have a material adverse effect on Allied’s business, financial condition or results of operation .

TAXATION RISK

Allied is a mutual fund trust as defined in the Tax Act . The Tax Act contains restrictions relating to the

activities and the investments permitted by a mutual fund trust and, if Allied failed to adhere to these

restrictions, adverse tax consequences would arise .

On June 22, 2007, specified investment flow through trusts or partnerships (“SIFT”) rules were introduced

and changed the manner in which certain trusts are taxed . Certain distributions from a SIFT would not

be deductible in computing the SIFT’s taxable income and therefore the distributions would be subject

to trust entity level tax, at the general tax rate applicable to Canadian corporations . Trusts that meet the

REIT exemption are not subject to SIFT rules . The determination as to whether Allied qualifies for the REIT

exemption in a particular taxation year can only be made with certainty at the end of that taxation year .

Asset tests need to be met at all times in the taxation year and revenue tests need to be met for the taxation

year . While there is uncertainty surrounding the interpretation of the relevant provisions of the REIT

exemption and application of SIFT rules, Allied expects that it will qualify for the REIT exemption .

In the event that the SIFT rules apply to Allied, the impact to Unitholders will depend on the status of

the holder and, in part, on the amount of income distributed which would not be deductible by Allied in

computing its income in a particular year and what portions of Allied’s distributions constitute

“non-portfolio earnings”, other income and return of capital .

101

ALLIED 2022 ANNUAL REPORTCYBERSECURITY RISK

The efficient operation of Allied’s business is dependent on computer hardware and software systems .

Information systems are vulnerable to cybersecurity incidents . A cybersecurity incident is considered to be

any material adverse event that threatens the confidentiality, integrity or availability of Allied’s information

resources . A cybersecurity incident is an intentional attack or an unintentional event including, but not

limited to, malicious software, attempts to gain unauthorized access to data or information systems, and

other electronic security breaches that could lead to disruptions in critical systems, unauthorized release

of confidential or otherwise protected information and corruption of data . Allied’s primary risks that

could directly result from the occurrence of a cyber incident include operational interruption, damage to

its reputation, damage to its business relationships with users, the disclosure of confidential information

including personally identifiable information, potential liability to third parties, loss of revenue, additional

regulatory scrutiny and fines, as well as litigation and other costs and expenses . Allied undertakes regular

internal and external assessments of its information security posture, including annual third-party

penetration testing and ongoing third-party assessment of Allied’s information technology footprint . Allied

has adopted ISO 27001:2013 as a guiding framework for its portfolio and has obtained ISO 27001 certification

and a SOC 2 Type 2 audit report for its UDC portfolio . For information stored with or processed by third

parties, Allied undertakes due diligence prior to working with them and uses contractual means to ensure

compliance to standards set by Allied . Allied’s employees complete information security training every four

months and an external Information Technology General Controls audit is completed annually . Additionally,

Allied monitors and assesses risks surrounding collection, usage, storage, protection, and retention/

destruction practices of personal data . Allied also maintains information security risk insurance coverage .

Since inception, Allied has not experienced an unauthorized intrusion or infiltration of its systems that

has resulted in a data breach . These measures, as well as Allied’s increased awareness of a risk of a cyber

incident, do not guarantee that its financial results will not be negatively impacted by such an incident .

CHANGES IN LEGISLATION AND INVESTMENT ELIGIBILITY

There can be no assurance that income tax laws (or the judicial interpretation thereof or the administrative

and/or assessing practices of the Canada Revenue Agency) and/or the treatment of mutual fund trusts will

not be changed in a manner which adversely affects Unitholders . Allied will endeavour to ensure that the

Units continue to be qualified investments for registered retirement savings plans, deferred profit sharing

plans, registered retirement income funds, registered education savings plans, registered disability savings

plans and tax-free savings accounts . Units will cease to be qualified investments for registered retirement

savings plans, deferred profit sharing plans, registered retirement income funds, registered education

savings plans, registered disability savings plans and tax-free savings accounts if the Units were no longer

listed on a stock exchange that, for the purposes of the Tax Act, is a designated stock exchange (which

includes the TSX) and Allied no longer qualified as a mutual fund trust or as a registered investment . The

Tax Act imposes penalties for the acquisition or holding of non-qualified investments .

102

ALLIED 2022 ANNUAL REPORTABSENCE OF SHAREHOLDER RIGHTS

Unitholders do not have all of the statutory rights normally associated with ownership of shares of a

company . On May 12, 2016, Allied amended the Declaration of Trust to include certain rights, remedies

and procedures in favour of Unitholders consistent, to the extent possible, with those available to

shareholders of a corporation pursuant to the Canada Business Corporations Act, as further described in

Allied’s Management Information Circular dated April 11, 2016 . The rights granted in the Declaration of

Trust are granted as contractual rights afforded to Unitholders (rather than as statutory rights) . Similar to

other existing rights contained in Allied’s Declaration of Trust (i .e ., the take-over bid provisions and conflict

of interest provisions), making these rights and remedies and certain procedures available by contract is

structurally different from the manner in which the equivalent rights and remedies or procedures (including

the procedure for enforcing such remedies) are made available to shareholders of a corporation, who

benefit from those rights and remedies or procedures by the corporate statute that governs the corporation,

such as the Canada Business Corporations Act . As such, there is no certainty how these rights, remedies or

procedures may be treated by the courts in the non-corporate context or that a Unitholder will be able to

enforce the rights and remedies in the manner contemplated by the amendments . Furthermore, how the

courts will treat these rights, remedies and procedures will be in the discretion of the court, and the courts

may choose to not accept jurisdiction to consider any claim contemplated in the provisions .

The Units are not “deposits” within the meaning of the Canada Deposit Insurance Corporation Act and are not

insured under the provisions of that Act or any other legislation . Furthermore, Allied is not a trust company

and, accordingly, it is not registered under any trust and loan company legislation as it does not carry on or

intend to carry on the business of a trust company .

UNITHOLDER LIABILITY

On December 16, 2004, the Province of Ontario proclaimed the Trust Beneficiaries Liability Act (Ontario)

in force . This legislation provides that beneficiaries of Ontario based income trusts are not liable, as

beneficiaries, for any act, default, obligation or liability of the income trust . Unitholders of Allied will have

the benefit of this legislation with respect to liabilities arising on or after December 16, 2004 . This legislation

has not been subject to interpretation by courts in the Province of Ontario or elsewhere .

103

ALLIED 2022 ANNUAL REPORTSection X
—Property Table

104

ALLIED 2022 ANNUAL REPORTDECEMBER 31, 2022
PROPERTIES

Office
GLA

Retail
GLA

Total GLA

% Total
GLA

Total Vacant
& Unleased

Total
Leased

Leased %

Urban Workspace

28 Atlantic

32 Atlantic

47 Jefferson

64 Jefferson

College & Manning -
547-549 College

College & Manning -
559-563 College (1)

College & Palmerston -
491 College (1)

The Castle - 135 Liberty

The Castle - 41 Fraser

The Castle - 47 Fraser

The Castle - 49 Fraser

The Castle - 53 Fraser

10,065

50,434

6,884

78,820

—

10,065

50,434

6,884

78,820

—

2,708

24,627

2,634

27,261

8,863

55,357

14,857

7,468

17,472

78,797

3,717

—

3,480

—

12,580

55,357

14,857

10,948

17,472

78,797

2,681

The Castle - 8 Pardee

—

2,681

The Well - 8 Spadina (1)(6)

246,702

285

246,987

The Well - 452 Front W (1)(6)

The Well - 468 Front W (1)(6)

42,871

1,523

—

42,871

1,523

—

10,065

100 .0%

50,434

100 .0%

6,884

100 .0%

78,820

100 .0%

2,708

100 .0%

27,261

100 .0%

12,580

100 .0%

29,409

25,948

46 .9%

—

14,857

100 .0%

10,948

100 .0%

10,363

7,109

40 .7%

—

78,797

100 .0%

2,681

100 .0%

246,987

100 .0%

42,871

100 .0%

1,523

100 .0%

King West

644,740

15,505

660,245

4.6%

39,772

620,473

94.0%

12 Brant

141 Bathurst

183 Bathurst

241 Spadina

379 Adelaide W

383 Adelaide W

387 Adelaide W

420 Wellington W

425 Adelaide W

425-439 King W

432 Wellington W

441-443 King W

445-455 King W

460 King W

461 King W

468 King W

469 King W

478 King W

485 King W

—

11,936

10,101

24,136

24,833

38,560

4,515

6,500

31,339

70,846

—

5,643

6,046

3,045

—

3,163

3,809

11,936

10,101

29,779

30,879

41,605

4,515

6,500

34,502

74,655

—

11,936

100 .0%

10,101

100 .0%

10,268

19,511

65 .5%

—

30,879

100 .0%

26,432

15,173

36 .5%

2,133

2,382

52 .8%

—

6,500

100 .0%

34,502

100 .0%

1,247

73,408

98 .3%

66,486

23,497

89,983

10,545

79,438

88 .3%

—

6,377

8,997

2,904

31,523

16,304

10,144

38,717

63,121

61,618

—

12,339

4,285

35,833

—

12,273

8,701

—

8,997

9,281

47,827

14,429

74,550

63,121

73,891

8,701

12,339

—

17,071

63,121

—

8,997

100 .0%

9,281

100 .0%

47,827

100 .0%

14,429

100 .0%

57,479

77 .1%

—

—%

73,891

100 .0%

8,701

100 .0%

12,339

100 .0%

105

ALLIED 2022 ANNUAL REPORTDECEMBER 31, 2022
PROPERTIES

Office
GLA

Retail
GLA

Total GLA

% Total
GLA

Total Vacant
& Unleased

Total
Leased

Leased %

Urban Workspace

500 King W

522 King W

540 King W

544 King W

44,130

21,598

28,850

21,863

—

5,935

16,340

—

552-560 King W

6,784

17,395

65,728

50,713

5,935

16,340

24,179

—

65,728

100 .0%

14,449

36,264

71 .5%

—

5,935

100 .0%

16,340

100 .0%

24,179

100 .0%

555 Richmond W

296,009

1,850

297,859

29,468

268,391

90 .1%

579 Richmond W

26,818

—

26,818

8,961

17,857

66 .6%

64 Spadina

80-82 Spadina

96 Spadina

King Portland Centre -
602-606 King W (1)

King Portland Centre -
620 King W (1)

King Portland Centre -
642 King W (1)

—

5,297

60,048

16,009

77,223

8,240

5,297

76,057

85,463

19,208

6,364

25,572

127,658

9,170

136,828

—

5,297

100 .0%

76,057

100 .0%

11,562

73,901

86 .5%

—

25,572

100 .0%

136,828

100 .0%

7,370

5,365

12,735

363

12,372

97 .1%

King West Central

1,211,593

265,522

1,477,115

10.3%

195,620

1,281,495

86.8%

116 Simcoe

117 & 119 John

121 John

125 John

179 John

180 John

200 Adelaide W

208-210 Adelaide W

217 Richmond W

257 Adelaide W

312 Adelaide W

331-333 Adelaide W

358-360 Adelaide W

388 King W

82 Peter

99 Spadina

QRC West -
134 Peter, Phase I

QRC West -
364 Richmond W, Phase I

Union Centre

15,461

—

15,461

3,973

11,488

74 .3%

—

7,562

2,444

2,171

70,898

45,631

26,614

11,477

31,707

42,763

62,420

19,048

50,786

798

—

21,670

—

5,584

3,725

—

20,275

19,040

40,069

6,846

51,058

—

7,562

3,242

2,969

70,898

45,631

26,614

11,477

53,377

42,763

68,004

22,773

50,786

39,315

46,915

51,058

—

1,528

—

3,681

3,405

7,562

100 .0%

1,714

52 .9%

2,969

100 .0%

70,898

100 .0%

45,631

100 .0%

26,614

100 .0%

7,796

67 .9%

49,972

93 .6%

—

42,763

100 .0%

23,093

44,911

66 .0%

—

22,773

100 .0%

12,228

18,227

—

38,558

75 .9%

21,088

53 .6%

46,915

100 .0%

51,058

100 .0%

298,782

8,213

306,995

9,080

297,915

97 .0%

38,279

41,787

—

38,279

41,787

6,864

4,952

31,415

36,835

82 .1%

88 .1%

Entertainment District

871,670

74,236

945,906

6.6%

87,031

858,875

90.8%

106

ALLIED 2022 ANNUAL REPORTDECEMBER 31, 2022
PROPERTIES

Office
GLA

Retail
GLA

Total GLA

% Total
GLA

Total Vacant
& Unleased

Total
Leased

Leased %

Urban Workspace

110 Yonge (2)

175 Bloor E (3)

193 Yonge

78,100

295,739

2,376

9,177

80,476

304,916

13,247

67,229

83 .5%

60,666

244,250

80 .1%

34,349

16,898

51,247

—

51,247

100 .0%

525 University

192,771

9,392

202,163

1,772

200,391

99 .1%

Downtown

600,959

37,843

638,802

4.5%

75,685

563,117

88.2%

10,554

34,672

6,756

27,916

80 .5%

4,829

88,945

16,290

72,655

81 .7%

13,822

48,640

—

48,640

100 .0%

106 Front E

184 Front E

35-39 Front E

36-40 Wellington E

24,118

84,116

34,818

15,494

9,993

41-45 Front E

20,958

14,239

45-55 Colborne

30,622

13,288

47 Front E

49 Front E

9,068

9,482

4,337

10,435

25,487

35,197

43,910

13,405

19,917

50 Wellington E

22,112

12,454

34,566

54 Esplanade

56 Esplanade

60 Adelaide E

65 Front E

70 Esplanade

—

9,038

59,270

22,137

106,193

14,339

19,590

4,608

5,922

6,109

9,038

81,407

110,801

20,261

25,699

4,055

21,432

84 .1%

13,967

21,230

60 .3%

3,591

2,900

5,849

—

40,319

10,505

14,068

91 .8%

78 .4%

70 .6%

34,566

100 .0%

9,038

100 .0%

17,530

63,877

78 .5%

8,383

102,418

92 .4%

—

20,261

100 .0%

25,699

100 .0%

St. Lawrence Market

450,180

141,765

591,945

4.1%

79,321

512,624

86.6%

135-137 George

133 George

139-141 George

204-214 King E

230 Richmond E

252-264 Adelaide E

489 Queen E

70 Richmond E

Dominion Square -
468 Queen N

Dominion Square -
468 Queen S

Dominion Square -
478-496 Queen

2,399

1,617

2,190

—

2,399

1,617

2,190

115,087

13,837

128,924

73,542

44,537

31,737

34,469

—

73,542

2,582

—

47,119

31,737

34,469

30,383

3,523

33,906

—

2,399

100 .0%

1,617

100 .0%

2,190

—

—%

—

128,924

100 .0%

73,542

100 .0%

13,550

33,569

71 .2%

—

31,737

100 .0%

34,469

100 .0%

33,906

100 .0%

34,313

9,091

43,404

1,358

42,046

96 .9%

6,552

33,526

40,078

—

40,078

100 .0%

QRC East - 111 Queen E

190,953

20,733

211,686

6,165

205,521

97 .1%

Queen Richmond

567,779

83,292

651,071

4.5%

23,263

627,808

96.4%

Toronto

4,346,921

618,163

4,965,084

34.7%

500,692

4,464,392

89.9%

107

ALLIED 2022 ANNUAL REPORTDECEMBER 31, 2022
PROPERTIES

Office
GLA

Retail
GLA

Total GLA

% Total
GLA

Total Vacant
& Unleased

Total
Leased

Leased %

Urban Workspace

195 Joseph

25 Breithaupt (4)

51 Breithaupt (4)

72 Victoria

26,462

46,845

66,355

90,010

—

26,462

46,845

66,355

90,010

—

26,462

100 .0%

46,845

100 .0%

66,355

100 .0%

4,386

85,624

95 .1%

91 .8%

The Tannery - 151 Charles W

306,821

25,810

332,631

27,281

305,350

Kitchener

536,493

25,810

562,303

3.9%

31,667

530,636

94.4%

Toronto & Kitchener

4,883,414

643,973

5,527,387

38.6%

532,359

4,995,028

90.4%

The Chambers - 40 Elgin

195,994

5,466

201,460

—

201,460

100 .0%

The Chambers - 46 Elgin

Ottawa

28,218

224,212

1,756

7,222

29,974

2,430

27,544

91 .9%

231,434

1.6%

2,430

229,004

99.0%

1001 Boulevard
Robert-Bourassa (6)

653,962

—

653,962

7,005

646,957

98 .9%

1010 Sherbrooke W

326,754

1,600

328,354

23,900

304,454

92 .7%

3510 Saint-Laurent

85,646

15,022

100,668

—

100,668

100 .0%

3530-3540 Saint-Laurent

425 Viger

4396-4410 Saint-Laurent

4446 Saint-Laurent

451-481 Saint-Catherine W

480 Saint-Laurent

5445 de Gaspé

5455 de Gaspé

5505 Saint-Laurent

6300 Parc

645 Wellington

52,321

307,201

41,374

72,819

21,044

53,407

4,008

9,146

14,147

7,251

9,983

6,293

56,329

316,347

55,521

80,070

31,027

59,700

4,780

51,549

13,555

302,792

91 .5%

95 .7%

838

54,683

98 .5%

14,198

2,350

65,872

82 .3%

28,677

92 .4%

447

59,253

99 .3%

483,685

896

484,581

53,713

430,868

88 .9%

466,698

22,562

489,260

243,788

184,510

129,017

2,221

3,933

8,117

246,009

188,443

137,134

7,917

2,221

481,343

98 .4%

243,788

99 .1%

17,339

171,104

90 .8%

5,506

5,281

131,628

96 .0%

118,932

95 .7%

700 Saint Antoine

107,320

16,893

124,213

740 Saint-Maurice

67,674

—

67,674

—

67,674

100 .0%

747 Square-Victoria

531,612

37,752

569,364

51,828

517,536

90 .9%

43,500

79,707

—

43,500

79,707

29,000

14,500

33 .3%

11,472

68,235

85 .6%

359,039

12,571

371,610

173,350

198,260

53 .4%

27,072

135,232

—

27,072

135,232

1,255

25,817

95 .4%

20,912

114,320

84 .5%

810 Saint Antoine

85 Saint-Paul W

Cité Multimédia -
111 Boulevard
Robert-Bourassa

Cité Multimédia -
50 Queen

Cité Multimédia -
700 Wellington

108

ALLIED 2022 ANNUAL REPORTDECEMBER 31, 2022
PROPERTIES

Office
GLA

Retail
GLA

Total GLA

% Total
GLA

Total Vacant
& Unleased

Total
Leased

Leased %

Urban Workspace

Cité Multimédia - 75 Queen

253,311

2,513

255,824

23,613

232,211

90 .8%

Cité Multimédia - 80 Queen

Cité Multimédia - 87 Prince

69,247

99,089

El Pro Lofts - 644 Courcelle

145,166

Le Nordelec -
1301-1303 Montmorency

Le Nordelec -
1655 Richardson

Le Nordelec - 1751 Richardson
& 1700 Saint-Patrick

7,550

32,893

—

69,247

—

69,247

100 .0%

1,040

8,935

—

100,129

154,101

7,550

32,893

3,254

96,875

96 .8%

50,977

103,124

66 .9%

—

7,550

100 .0%

32,893

100 .0%

785,995

41,479

827,474

45,861

781,613

94 .5%

RCA Building - 1001 Lenoir (6)

147,350

26,243

173,593

—

173,593

100 .0%

Montréal

6,013,983

252,605

6,266,588

43.8%

570,572

5,696,016

90.9%

Montréal & Ottawa

6,238,195

259,827

6,498,022

45.4%

573,002

5,925,020

91.2%

613 11th SW

617 11th SW

Alberta Block - 805 1st SW

—

3,230

9,094

4,288

6,306

22,038

4,288

9,536

31,132

—

4,288

100 .0%

9,536

100 .0%

1,856

29,276

94 .0%

Alberta Hotel - 808 1st SW

28,036

20,424

48,460

10,563

37,897

78 .2%

Atrium on Eleventh -
625 11th SE

Biscuit Block - 438 11th SE

Burns Building - 237 8th SE

34,594

1,373

51,298

67,160

—

7,423

Cooper Block - 809 10th SW

35,256

Customs House - 134 11th SE

77,097

Demcor Condo - 221 10th SE

14,253

Demcor Tower - 239 10th SE

25,228

Five Roses Building -
731-739 10th SW

Glenbow - 802 11th SW

—

Glenbow - 822 11th SW

14,037

Glenbow Annex -
816 11th SW

Glenbow Cornerblock -
838 11th SW

10,998

11,212

Glenbow Ellison - 812 11th SW

13,344

Kipling Square - 601 10th SW

48,502

Leeson Lineham Building -
209 8th SW

LocalMotive - 1240 20th SE

Odd Fellows - 100 6th SW

Pilkington Building -
402 11th SE

27,821

57,536

33,474

40,018

—

5,420

—

35,967

51,298

74,583

35,256

77,097

14,253

25,228

4,204

31,763

88 .3%

—

51,298

100 .0%

3,332

71,251

95 .5%

—

7,021

2,938

35,256

100 .0%

77,097

100 .0%

7,232

50 .7%

22,290

88 .4%

—

20,808

2,495

18,313

88 .0%

7,319

3,501

7,319

17,538

—

7,319

100 .0%

4,743

12,795

73 .0%

—

9,021

—

9,021

100 .0%

22,210

13,344

48,502

33,241

57,536

33,474

40,018

1,146

—

7,171

—

21,064

94 .8%

13,344

100 .0%

41,331

85 .2%

33,241

100 .0%

57,536

100 .0%

33,474

100 .0%

40,018

100 .0%

109

ALLIED 2022 ANNUAL REPORTUrban Workspace

DECEMBER 31, 2022
PROPERTIES

Office
GLA

Retail
GLA

Total GLA

% Total
GLA

Total Vacant
& Unleased

Total
Leased

Leased %

Roberts Block -
603-605 11th SW

23,641

27,499

51,140

Sherwin Block - 738 11th SW

18,319

8,176

26,495

15,915

10,372

35,225

68 .9%

16,123

60 .9%

Telephone Building -
119 6th SW

TELUS Sky -
685 Centre SW (5)

Theatre Grand -
608 1st Street SW

Vintage Towers -
322-326 11th SW

Woodstone Building -
1207-1215 13th SE

63,063

—

63,063

25,183

37,880

60 .1%

144,290

3,711

148,001

32,904

115,097

77 .8%

—

34,100

—

34,100

100 .0%

190,243

20,418

210,661

18,742

191,919

91 .1%

32,428

—

32,428

—

32,428

100 .0%

Young Block - 129 8th SW

4,841

2,164

7,005

2,414

4,591

65 .5%

Calgary

1,067,801

215,201

1,283,002

9.0%

150,999

1,132,003

88.2%

1040 Hamilton

1050 Homer

36,276

38,302

9,162

4,797

45,438

43,099

1185 West Georgia

160,364

4,869

165,233

1220 Homer

1286 Homer

21,708

25,613

—

21,708

25,613

11,856

33,582

73 .9%

—

43,099

100 .0%

165,189

100 .0%

21,708

100 .0%

25,613

100 .0%

1508 West Broadway

82,961

64,183

147,144

4,283

142,861

97 .1%

151-155 West Hastings

2233 Columbia

365 Railway

375 Water

840 Cambie

948-950 Homer

Dominion Building -
207 West Hastings

38,512

21,591

31,528

—

38,512

6,852

28,443

—

31,528

—

38,512

100 .0%

28,443

100 .0%

31,528

100 .0%

150,276

27,149

177,425

24,247

153,178

86 .3%

89,377

—

89,377

23,245

21,758

45,003

—

89,377

100 .0%

45,003

100 .0%

Sun Tower - 128 West Pender

76,247

1,693

59,659

12,646

72,305

77,940

6,203

15,956

66,102

61,984

91 .4%

79 .5%

Vancouver

855,659

153,109

1,008,768

7.0%

62,589

946,179

93.8%

Total Rental Portfolio

13,045,069

1,272,110

14,317,179

100.0%

1,318,949

12,998,230

90.8%

Note that the table above does not include ancillary residential properties, which total 13, and are included in the property count. The table above
also excludes properties under development and investment properties held for sale.
(1) RioCan/Allied Joint Arrangement
(2) Sutter Hill/Allied Joint Arrangement
(3) OPTrust/Allied Joint Arrangement
(4) Perimeter/Allied Joint Arrangement
(5) Westbank/Allied/TELUS Joint Arrangement
(6) A portion of the property is under development. Only the portion of GLA that is in the rental portfolio is included in the property table.

110

ALLIED 2022 ANNUAL REPORTRENTAL RESIDENTIAL UNITS

PROPERTY

TELUS Sky

College & Manning

OCCUPANCY AT
DECEMBER 31, 2022

WEIGHTED AVERAGE
OCCUPANCY FOR THE YEAR
ENDED DECEMBER 31, 2022

81 .4%

96 .8%

65 .0%

64 .5%

PROPERTIES UNDER DEVELOPMENT

ESTIMATED GLA ON
COMPLETION (SF)

The Well, Toronto (1)(2)(5)

The Lougheed (604-1st SW), Calgary

400 Atlantic, Montréal

Boardwalk-Revillon Building, Edmonton (3)

185 Spadina, Toronto

Breithaupt Phase III, Kitchener (1)

342 Water, Vancouver

Adelaide & Duncan, Toronto (1)(4)

1001 Boulevard Robert-Bourassa, Montréal (5)

RCA Building, Montréal (5)

422-424 Wellington W, Toronto

QRC West Phase II, Toronto (6)

KING Toronto, Toronto (1)(7)

108 East 5th Avenue, Vancouver (1)

700 Saint Hubert, Montréal

3575 Saint-Laurent, Montréal

Total Development Portfolio

763,000

88,000

87,473

297,851

55,213

147,000

21,640

230,000

335,652

171,668

10,000

93,134

100,000

102,000

144,114

184,779

2,831,524

(3) The GLA components (in square feet) are as follows: 233,559 of office and 64,292 of retail.
(4) The GLA components (in square feet) at our 50% share are as follows: 144,000 of residential, 77,000 of office and 9,000 of retail.
(5) A portion of the property is under development. The GLA represents the portion under development, except for The Well, which is a ground-up

development and the GLA includes the portion in the rental portfolio.

(6) The GLA components (in square feet) are as follows: 77,434 of office and 15,700 of retail.
(7) Allied entered into a joint arrangement with Westbank to develop KING Toronto. As part of the arrangement, Allied sold a 50% undivided

111

ALLIED 2022 ANNUAL REPORTANCILLARY PARKING FACILITIES

NUMBER OF SPACES

208

121

131

171

840

15 Brant, Toronto

78 Spadina, Toronto

7-9 Morrison, Toronto

105 George, Toronto

301 Markham, Toronto

388 Richmond, Toronto

464 King, Toronto

478 King, Toronto

560 King, Toronto

650 King, Toronto

Total Parking

112

ALLIED 2022 ANNUAL REPORTConsolidated Financial Statements
For the Years Ended December 31,
2022 and 2021

113

ALLIED 2022 ANNUAL REPORTManagement’s Statement of
Responsibility for Financial
Reporting

The accompanying consolidated financial statements, management’s discussion and analysis of results

of operations and financial condition and the annual report are the responsibility of the Management of

Allied Properties Real Estate Investment Trust (“Allied”) . The consolidated financial statements have been

prepared in accordance with International Financial Reporting Standards and where appropriate, include

amounts which are based on judgments, estimates and assumptions of Management .

Management has developed and maintains a system of accounting and reporting which provides for the

necessary internal controls to ensure that transactions are properly authorized and recorded, assets are

safeguarded against unauthorized use or disposition, and liabilities are recognized .

The Board of Trustees (the “Board”) is responsible for ensuring that Management fulfills its responsibility

for financial reporting and is ultimately responsible for reviewing and approving the consolidated

financial statements . The Board carries out this responsibility principally through its Audit Committee

(the “Committee”), which is comprised entirely of independent trustees . The Committee reviews the

consolidated financial statements with both Management and the independent auditors . The Committee

reports its findings to the Board, which approves the consolidated financial statements before they are

submitted to the Unitholders of Allied .

Deloitte LLP (the “Auditors”), the independent auditors of Allied, have audited the consolidated financial

statements of Allied in accordance with Canadian generally accepted auditing standards to enable them to

express to the Unitholders their opinion on the consolidated financial statements . The Auditors have direct

and full access to, and meet periodically with the Committee, both with and without Management present .

Michael R . Emory

President and Chief Executive Officer

Cecilia C . Williams, CPA, CA

Executive Vice President and
Chief Financial Officer

114

ALLIED 2022 ANNUAL REPORTIndependent Auditor’s Report

TO THE UNITHOLDERS AND THE BOARD OF TRUSTEES OF

ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST

OPINION

We have audited the consolidated financial statements of Allied Properties Real Estate Investment Trust

(the “Trust”), which comprise the consolidated balance sheets as at December 31, 2022 and 2021, and the

consolidated statements of income and comprehensive income, equity and cash flows for the years then

ended, and notes to the consolidated financial statements, including a summary of significant accounting

policies (collectively referred to as the “financial statements”) .

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial

position of the Trust as at December 31, 2022 and 2021, and its financial performance and its cash flows for

the years then ended in accordance with International Financial Reporting Standards (“IFRS”) .

BASIS FOR OPINION

We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian

GAAS”) . Our responsibilities under those standards are further described in the Auditor’s Responsibilities for

the Audit of the Financial Statements section of our report . We are independent of the Trust in accordance

with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we

have fulfilled our other ethical responsibilities in accordance with these requirements . We believe that the

audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion .

KEY AUDIT MATTER

A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the

consolidated financial statements for the year ended December 31, 2022 . This matter was addressed in the

context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon,

and we do not provide a separate opinion on this matter .

115

ALLIED 2022 ANNUAL REPORTFAIR VALUE OF INVESTMENT PROPERTIES AND INVESTMENT PROPERTIES HELD FOR SALE— REFER

TO NOTES 2(D), 2(S), 3, 5 AND 6 OF THE FINANCIAL STATEMENTS

KEY AUDIT MATTER DESCRIPTION

Investment properties and investment properties held for sale (collectively, “investment properties”)

are accounted for using the fair value model . The Trust predominantly uses the discounted cash flow

(“DCF”) method to estimate fair value and uses the comparable sales method primarily for properties

under development . The critical assumptions relating to the Trust’s estimates of fair values of investment

properties include discount rates, terminal capitalization rates, and anticipated cash flow assumptions

relating to occupancy and rental rates .

While there are several assumptions that are required to determine the fair value of all investment

properties using the DCF method, the critical assumptions with the highest degree of subjectivity and

impact on fair values are the anticipated rental rates, discount rates, and terminal capitalization rates .

Auditing these critical assumptions required a high degree of auditor judgment as the estimations made by

management contain significant measurement uncertainty . This resulted in an increased extent of audit

effort, including the need to involve fair value specialists .

HOW THE KEY AUDIT MATTER WAS ADDRESSED IN THE AUDIT

Our audit procedures related to the anticipated rental rates, discount rates and terminal capitalization rates

used to determine the fair value of the investment properties included the following, among others:

— Evaluated the effectiveness of controls over determining investment properties’ fair value,

including those over the determination of the anticipated rental rates, discount rates and terminal

capitalization rates .

— Evaluated the reasonableness of management’s forecast of anticipated rental rates by comparing

management’s forecasts with historical results, internal communications to management and the

Board of Trustees, and contractual information, where applicable .

— With the assistance of fair value specialists, evaluated the reasonableness of management’s forecast of

anticipated rental rates, discount rates and terminal capitalization rates by considering recent market

transactions and industry surveys .

OTHER INFORMATION

Management is responsible for the other information . The other information comprises:

— Management’s Discussion and Analysis of Results of Operations and Financial Condition

— The information, other than the financial statements and our auditor’s report thereon, in the

Annual Report .

Our opinion on the financial statements does not cover the other information and we do not express

any form of assurance conclusion thereon . In connection with our audit of the financial statements, our

responsibility is to read the other information identified above and, in doing so, consider whether the other

information is materially inconsistent with the financial statements or our knowledge obtained in the audit,

or otherwise appears to be materially misstated .

116

ALLIED 2022 ANNUAL REPORTWe obtained Management’s Discussion and Analysis of Results of Operations and Financial Condition and

the Annual Report prior to the date of this auditor’s report . If, based on the work we have performed on

this other information, we conclude that there is a material misstatement of this other information, we are

required to report that fact in this auditor’s report . We have nothing to report in this regard .

RESPONSIBILITIES OF MANAGEMENT AND THOSE CHARGED WITH GOVERNANCE FOR THE

FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of the financial statements in

accordance with IFRS, and for such internal control as management determines is necessary to enable the

preparation of financial statements that are free from material misstatement, whether due to fraud or error .

In preparing the financial statements, management is responsible for assessing the Trust’s ability to continue

as a going concern, disclosing, as applicable, matters related to going concern and using the going concern

basis of accounting unless management either intends to liquidate the Trust or to cease operations, or has

no realistic alternative but to do so .

Those charged with governance are responsible for overseeing the Trust’s financial reporting process .

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that

includes our opinion . Reasonable assurance is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists .

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic decisions of users taken on the basis of these

financial statements .

As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain

professional skepticism throughout the audit . We also:

—

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud

or error, design and perform audit procedures responsive to those risks, and obtain audit evidence

that is sufficient and appropriate to provide a basis for our opinion . The risk of not detecting a material

misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control .

— Obtain an understanding of internal control relevant to the audit in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the Trust’s internal control .

— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by management .

— Conclude on the appropriateness of management’s use of the going concern basis of accounting

and, based on the audit evidence obtained, whether a material uncertainty exists related to events

or conditions that may cast significant doubt on the Trust’s ability to continue as a going concern .

117

ALLIED 2022 ANNUAL REPORTIf we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s

report to the related disclosures in the financial statements or, if such disclosures are inadequate, to

modify our opinion . Our conclusions are based on the audit evidence obtained up to the date of our

auditor’s report . However, future events or conditions may cause the Trust to cease to continue as a

going concern .

— Evaluate the overall presentation, structure and content of the financial statements, including the

disclosures, and whether the financial statements represent the underlying transactions and events in

a manner that achieves fair presentation .

— Obtain sufficient appropriate audit evidence regarding the financial information of the entities

or business activities within the Trust to express an opinion on the financial statements . We are

responsible for the direction, supervision and performance of the group audit . We remain solely

responsible for our audit opinion .

We communicate with those charged with governance regarding, among other matters, the planned scope

and timing of the audit and significant audit findings, including any significant deficiencies in internal

control that we identify during our audit .

We also provide those charged with governance with a statement that we have complied with relevant

ethical requirements regarding independence, and to communicate with them all relationships and other

matters that may reasonably be thought to bear on our independence, and where applicable, related

safeguards .

From the matters communicated with those charged with governance, we determine those matters that

were of most significance in the audit of the consolidated financial statements of the current period and are

therefore the key audit matters . We describe these matters in our auditor’s report unless law or regulation

precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that

a matter should not be communicated in our report because the adverse consequences of doing so would

reasonably be expected to outweigh the public interest benefits of such communication .

The engagement partner on the audit resulting in this independent auditor’s report is Antonio Ciciretto .

/s/ Deloitte LLP

CHARTERED PROFESSIONAL ACCOUNTANTS

LICENSED PUBLIC ACCOUNTANTS

TORONTO, ONTARIO

JANUARY 31, 2023

118

ALLIED 2022 ANNUAL REPORTALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
AS AT DECEMBER 31, 2022 AND DECEMBER 31, 2021

(in thousands of Canadian dollars)

NOTES DECEMBER 31, 2022 DECEMBER 31, 2021

Assets

Non-current assets

Investment properties

Residential inventory

Investment in joint venture and loan receivable

Loans and notes receivable

Other assets

Current assets

Cash and cash equivalents

Loan receivable from joint venture

Loans and notes receivable

Accounts receivable, prepaid expenses and deposits

Investment properties held for sale

Total assets

Liabilities

Non-current liabilities

Debt

Lease liabilities

Other liabilities

Current liabilities

Debt

Accounts payable and other liabilities

Lease liability held for sale

Total liabilities

Equity

Unitholders’ equity

Non-controlling interests

Total equity

Total liabilities and equity

5, 6

6, 13

$9,669,005

$9,527,105

187,272

7,089

174,019

56,221

170,980

124,790

223,456

28,185

$10,093,606

$10,074,516

20,990

113,287

258,093

65,544

1,354,830

$1,812,744

22,548

—

144,306

57,061

86,260

$310,175

$11,906,350

$10,384,691

$3,864,256

50,851

43,438

$3,417,138

157,550

44,635

$3,958,545

$3,619,323

346,929

370,823

107,215

$824,967

$4,783,512

$6,581,166

541,672

$7,122,838

$11,906,350

36,146

303,450

—

$339,596

$3,958,919

$6,425,772

—

$6,425,772

$10,384,691

Commitments and Contingencies (note 28)
The accompanying notes are an integral part of these consolidated financial statements.

Gordon Cunningham

Trustee

Michael R . Emory

Trustee

119

ALLIED 2022 ANNUAL REPORTALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(in thousands of Canadian dollars,
except unit and per unit amounts)

Rental revenue

Property operating costs

Operating income

Interest expense

General and administrative expenses

Condominium marketing expenses

Amortization of other assets

Interest income

Fair value (loss) gain on investment properties and investment
properties held for sale

Fair value gain on derivative instruments

Impairment of residential inventory

Net loss from joint venture

Net income and comprehensive income from continuing
operations

Net income and comprehensive income from discontinued
operations

Net income and comprehensive income

Net income and comprehensive income attributable to:

Unitholders’ equity

Non-controlling interests

Net income and comprehensive income per unit

Basic and Diluted

Weighted average number of units

Basic

Diluted

YEAR ENDED

NOTES

DECEMBER 31, 2022

DECEMBER 31, 2021

20, 24

6, 12 (g)

5, 6

27 (d)

$519,468

(224,260)

$295,208

(72,802)

(22,593)

(602)

(1,325)

32,080

(73,750)

37,343

(15,729)

(3,161)

$174,669

$200,694

$375,363

$368,855

6,508

$375,363

$472,799

(204,792)

$268,007

(114,196)

(25,834)

(573)

(1,167)

28,023

161,222

16,350

—

(451)

$331,381

$111,770

$443,151

—

$443,151

$2.74

$3 .48

136,880,675

136,904,082

127,305,384

127,455,829

The accompanying notes are an integral part of these consolidated financial statements.

120

ALLIED 2022 ANNUAL REPORT
ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

ATTRIBUTABLE TO UNITHOLDERS

ATTRIBUTABLE TO
NON-CONTROLLING INTERESTS

(in thousands of
Canadian dollars) NOTES

UNITS

RETAINED
EARNINGS

CONTRIB-
UTED
SURPLUS

UNITHOLD-
ERS’
EQUITY

EXCHANGE-
ABLE LP
UNITS

RETAINED
EARNINGS

EXCHANGE-
ABLE LP
UNITS’
EQUITY

TOTAL
EQUITY

$3,884,661 $2,265,326

$27,045

$6,177,032

$—

$6,177,032

—

443,151

20,079

—

(216,521)

Unit Option Plan –
options exercised

16, 17 (a)

—

443,151

20,079

(216,521)

—

17 (a)

—

1,740

16, 17 (b)

(2,141)

—

2,376

235

—

443,151

20,079

(216,521)

1,740

235

$3,902,655

$2,491,956

$31,161

$6,425,772

$—

$6,425,772

ATTRIBUTABLE TO UNITHOLDERS

ATTRIBUTABLE TO
NON-CONTROLLING INTERESTS

NOTES UNITS

RETAINED
EARNINGS

CONTRIB-
UTED
SURPLUS

UNITHOLD-
ERS’
EQUITY

EXCHANGE-
ABLE LP
UNITS

RETAINED
EARNINGS
(DEFICIT)

EXCHANGE-
ABLE LP
UNITS’
EQUITY

TOTAL
EQUITY

$3,902,655 $2,491,956

$31,161

$6,425,772

$—

$— $6,425,772

—

368,855

9,184

—

(223,867)

Unit Option Plan –
options exercised 16, 17 (a)

200

17 (a)

—

16, 17 (b)

(2,661)

—

(223,867)

200

876

2,807

146

—

368,855

—

6,508

375,363

9,184

550,660

—

550,660

559,844

—

(15,496)

(239,363)

—

200

876

146

$3,909,378 $2,636,944

$34,844

$6,581,166

$550,660

$(8,988)

$541,672

$7,122,838

The accompanying notes are an integral part of these consolidated financial statements.

121

Balance at
January 1, 2021

Net income and
comprehensive
income

Unit issuance
(net of costs)

Distributions

Contributed
surplus –
Unit Option Plan

Restricted Unit
Plan (net of
forfeitures)

Balance at
December 31, 2021

Balance at
January 1, 2022

Net income and
comprehensive
income

Unit issuance
(net of costs)

Distributions

Contributed
surplus –
Unit Option Plan

Restricted Unit
Plan (net of
forfeitures)

Balance at
December 31, 2022

ALLIED 2022 ANNUAL REPORT
ALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(in thousands of Canadian dollars)

NOTES

DECEMBER 31, 2022 DECEMBER 31, 2021

YEAR ENDED

Operating activities

Net income for the year

Fair value gain on investment properties and
investment properties held for sale

Fair value gain on derivative instruments

Payments on settlement of derivative instruments

Impairment of residential inventory

Interest expense (excluding the impact of capitalization)

27 (d)

12 (g)

Interest paid (excluding the impact of capitalization)

5, 7, 13, 22

Interest income

Interest received

Net loss from joint venture

Amortization of other assets

Amortization of improvement allowances

Amortization of straight-line rents

Amortization of discount (premium) on debt

Amortization of lease liabilities

Amortization of net financing costs

Unit-based compensation expense

Additions to residential inventory

12 (g)

5, 13

12 (g)

Change in other non-cash operating items

9, 11, 14, 22

Cash provided by operating activities

$375,363

$443,151

(69,182)

(37,343)

—

15,729

79,334

(77,727)

(32,080)

21,341

3,161

1,325

32,302

(6,825)

1,837

155

2,495

4,421

(32,021)

38,908

$321,193

(217,557)

(16,350)

(3,781)

—

120,145

(113,108)

(28,023)

18,688

451

1,167

32,305

(3,682)

(3,488)

(428)

3,604

4,116

(30,942)

34,846

$241,114

Financing activities

Repayment of mortgages payable

Proceeds from senior unsecured debentures
(net of financing costs)

Redemption of senior unsecured debentures

Principal payments of lease liabilities

Distributions paid on Units

Proceeds of Unit issuance (net of issuance costs)

Proceeds from exercise of Unit options

Restricted Unit Plan (net of forfeitures)

Proceeds from Unsecured Revolving Operating Facility

Repayments of Unsecured Revolving Operating Facility

122

12 (a)

12 (e)

16, 17 (a)

16, 17 (b)

12 (d)

(16,932)

(648,699)

—

(200)

(223,312)

9,184

200

(2,661)

545,000

(470,000)

1,093,900

(150,000)

(189)

(215,918)

20,079

(2,141)

460,000

(155,000)

ALLIED 2022 ANNUAL REPORT(in thousands of Canadian dollars)

NOTES

DECEMBER 31, 2022 DECEMBER 31, 2021

YEAR ENDED

Proceeds from construction loan

Proceeds from unsecured term loan (net of financing costs)

12 (b)

12 (f)

Financing costs

Cash provided by financing activities

Investing activities

91,029

399,300

(10)

$331,598

Acquisition of investment properties

(190,753)

Deposits on acquisitions

(928)

Additions to investment properties (including capitalized interest)

5, 12 (g)

(398,174)

Net proceeds on disposition of investment properties held for sale

Net proceeds on disposition of properties under development

Net distributions from (contributions to) equity accounted
investments

74,437

15,254

1,253

Loans receivable issued to third-parties

8, 9 (a), 22

(58,345)

Proceeds from loans receivable

Proceeds from notes receivable

Advances on note receivable from holder of Exchangeable LP Units

Additions to equipment and other assets

Leasing commissions

Improvement allowances

9 (a)

9 (b)

343

(13,774)

(859)

(20,603)

(62,222)

75,592

—

(836)

$476,844

(288,887)

(268)

(428,248)

—

71,592

(8,129)

(47,435)

382

1,927

—

(337)

(16,841)

(24,678)

Cash used in investing activities

$(654,349)

$(740,922)

Decrease in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of year

(1,558)

22,548

$20,990

(22,964)

45,512

$22,548

Note 22 contains supplemental cash flow information.
The accompanying notes are an integral part of these consolidated financial statements.

123

ALLIED 2022 ANNUAL REPORTALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

(in thousands of Canadian dollars, except per unit and unit amounts)

1 . NATURE OF OPERATIONS

Allied Properties Real Estate Investment Trust (“Allied”) is a Canadian unincorporated closed-end real

estate investment trust created pursuant to the Declaration of Trust dated October 25, 2002, most

recently amended May 3, 2022 . Allied is governed by the laws of the Province of Ontario and began

operations on February 19, 2003 . The units of Allied (“Units”) are traded on the Toronto Stock Exchange

(“TSX”) and are traded under the symbol “AP .UN” .

The subsidiaries of Allied include Allied Properties Management Trust, Allied Properties Management

Limited Partnership, Allied Properties Management GP Limited, Allied Properties Exchangeable Limited

Partnership (the “Partnership”), and Allied Properties Exchangeable GP Inc . (the “General Partner”) .

On March 31, 2022, Allied acquired a portfolio of six properties from Choice Properties Real Estate

Investment Trust (“Choice Properties”), which was partially settled with the issuance of 11,809,145

class B exchangeable limited partnership units of the Partnership (“Exchangeable LP Units”) . Allied

owns 100% of the shares of the General Partner and 100% of the class A LP Units of the Partnership

(the “Class A Units”) .

Allied is domiciled in Ontario, Canada . The address of Allied’s registered office and its principal place of

business is 134 Peter Street, Suite 1700, Toronto, Ontario, M5V 2H2 .

2 . SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements are presented in Canadian dollars .

(a) Statement of compliance

The consolidated financial statements of Allied for the years ended December 31, 2022 and 2021, are

prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the

International Accounting Standards Board (“IASB”) . The policies set out below were consistently

applied to all the years presented unless otherwise noted .

The preparation of financial statements in accordance with IFRS requires the use of certain critical

accounting judgments, estimates and assumptions that affect the amounts reported . Allied’s basis for

applying judgments, estimates and assumptions to its accounting policies are described in note 2 and

3 below .

The consolidated financial statements for the years ended December 31, 2022 and 2021, were approved

and authorized for issue by the Board of Trustees (the “Board”) on January 31, 2023 .

(b) Basis of presentation

The consolidated financial statements have been prepared on a historical cost basis except for the

following items that were measured at fair value:

124

ALLIED 2022 ANNUAL REPORT—

—

investment properties as described in note 2

(d)

and

note 5;

investment properties held for sale and lease liability held for sale as described in note 2 (s);

interest rate swaps as described in note 2 (i); and

— unit-based compensation liabilities as described in note 17 (c) .

The consolidated financial statements are presented in Canadian dollars, which is Allied’s functional

currency, and all amounts are rounded to the nearest thousand, unless otherwise indicated .

The preparation of these consolidated financial statements requires Allied to make estimates and

assumptions that affect the reported amounts of assets and liabilities at the date of the financial

statements and reported amounts of revenue and expenses . Actual outcomes could differ from these

estimates . These consolidated financial statements include estimates, which, by their nature, are

uncertain . The impact of such estimates is pervasive throughout the consolidated financial statements,

and may require accounting adjustments based on future occurrences . Revisions to accounting

estimates are recognized in the period in which the estimate is revised and the revision affects both

current and future periods . Significant estimates and assumptions include the fair values assigned to

investment properties and investment properties held for sale, interest rate derivative contracts, unit-

based compensation liabilities, and allowances for expected credit losses .

The consolidated financial statements comprise the financial statements of Allied and its subsidiaries .

Subsidiaries are all entities over which Allied has control, where control is defined as the power to

direct the relevant activities of an entity so as to obtain benefit from its activities . Control exists when a

parent company is exposed to, or has rights to, variable returns from the subsidiaries and has the ability

to affect those returns through its power .

Subsidiaries are consolidated from the date control is transferred to Allied, and are de-consolidated

from the date control ceases . Intercompany transactions between subsidiaries are eliminated on

consolidation . Accounting policies of subsidiaries have been changed where necessary to ensure

consistency with the policies adopted by Allied . All subsidiaries have a reporting date of December 31 .

(d) Investment properties

At the time of acquisition of a property, Allied applies judgment when determining if the acquisition is

an asset acquisition or a business combination .

Allied classifies its acquisitions as asset acquisitions when it acquires a property or a portfolio of

properties and it has not acquired an operating platform .

Investment properties include rental properties and properties under development that are owned by

Allied, or leased by Allied as a lessee, to earn rental revenue and/or for capital appreciation . Investment

properties are accounted for using the fair value model . Rental income and operating expenses from

investment properties are reported within ‘total revenue’ and ‘total operating expenses’ respectively .

125

ALLIED 2022 ANNUAL REPORTWhere Allied has concluded an acquisition of an asset, Allied uses the asset purchase model whereby

the initial cost of an investment property is comprised of its purchase price and any directly attributable

expenditures . Directly attributable expenditures include transaction costs such as due diligence costs,

appraisal fees, environmental fees, legal fees, land transfer taxes, and brokerage fees .

Investment properties are externally appraised quarterly and are reported in the Consolidated Balance

Sheets at their fair values . Fair value is based on valuations prepared by a nationally recognized and

qualified independent professional appraiser with sufficient experience with respect to both the

geographic location and the nature of the investment property and supported by market evidence .

Any gain or loss resulting from a change in the fair value of an investment property is immediately

recognized in the Consolidated Statements of Income and Comprehensive Income . The fair value of

each investment property is based upon, among other things, rental income from current leases and

assumptions about rental income from future leases reflecting market conditions at the balance sheet

date, less future estimated non-recoverable capital cash outflows in respect of such properties .

The independent professional appraiser engaged by Allied predominantly uses the discounted cash flow

method to determine fair value, whereby the income and expenses are projected over the anticipated

term of the investment and combined with a terminal value, all of which is discounted using an

appropriate discount rate . Properties under development are measured using both a comparable sales

method and a discounted cash flow method, net of costs to complete, as of the balance sheet date . For

further details on methods used, refer to note 5 . Valuations of investment properties are most sensitive

to changes in discount rates and capitalization rates .

Allied has applied judgment based on the extent that costs are incurred to enhance the service potential

of the property in determining whether certain costs are additions to the carrying amount of investment

properties or will be expensed .

Allied has applied judgment when reporting its properties under development . The cost of properties

under development includes the acquisition cost of the property, direct development costs, realty taxes

and borrowing costs attributable to the development . See 2 (g) below for further information regarding

Allied’s accounting for borrowing costs .

(e) Joint arrangements

Investments in joint arrangements are classified as either joint operations or joint ventures depending

on the contractual rights and obligations of each investor . Joint control is the contractually agreed

sharing of control of an arrangement, which exists only when decisions about the relevant activities

require unanimous consent of the parties sharing control .

Joint Operation

A joint operation is a joint arrangement whereby the parties that have joint control have rights to the

assets and obligations for the liabilities relating to the arrangement . A joint operation usually results

from direct interests in the assets and liabilities of an investee . None of the parties involved have

unilateral control of a joint operation . Allied accounts for its joint arrangements as joint operations

wherein it records its share of the assets, liabilities, revenue and expenses of the joint operations .

126

ALLIED 2022 ANNUAL REPORTJoint Venture

A joint venture is a joint arrangement whereby the parties that have joint control have rights to the net

assets relating to the arrangement, and usually results from the establishment of a separate legal entity .

Allied accounts for its joint ventures using the equity method . The share of results of earnings (loss) of

the joint venture is reflected in the consolidated statement of income and comprehensive income .

Under the equity method, an investment in a joint venture is recognized initially in the consolidated

balance sheet at cost and adjusted thereafter to recognize Allied’s share of the profit or loss and other

comprehensive income of the joint venture in accordance with Allied’s accounting policies . When

Allied’s share of losses of a joint venture exceeds Allied’s interest in that joint venture (which includes

any long-term interests that, in substance, form part of Allied’s net investment in the joint venture),

Allied continues recognizing its share of further losses to the extent that Allied has incurred legal or

constructive obligations or made payments on behalf of the joint venture .

When Allied transacts with a joint venture, profits and losses resulting from the transactions with the

joint venture are recognized in Allied’s consolidated financial statements only to the extent of interests

in the joint venture that are not related to Allied .

(f) Revenue recognition

Allied has retained substantially all of the risks and benefits of ownership of its investment properties

and as such accounts for its leases with tenants as operating leases .

Revenue includes rents from tenants under leases, property tax and operating cost recoveries,

percentage participation rents, lease cancellation fees, parking income and other income . Rents from

tenants may include free rent periods and rental increases over the term of the lease and are recognized

in revenue on a straight-line basis over the term of the lease . Typically, in ground-up developments,

when there are fixturing periods outside of the term of the lease, revenue is not recognized during

these fixturing periods . The difference between revenue recognized and the cash received is included in

investment properties as straight-line rents receivable .

Lease incentives provided to tenants (referred to as tenant improvements) are deferred and amortized

on a straight-line basis against revenue over the term of the lease . Recoveries from tenants are

recognized as revenue in the period in which the applicable costs are incurred . Percentage participation

rents are recognized after the minimum sales level has been achieved with each lease, where applicable .

Lease cancellation fees are recognized as revenue once an agreement is completed with the tenant

to terminate the lease and the collectability is reasonably assured . Other income is recognized upon

provision of goods or services when collectability is reasonably assured .

Contracts with customers for residential condominium units generally include one distinct performance

obligation . Revenue is measured at the transaction price agreed under the contract, and is recognized at

the point in time in which control over the property has been transferred . Customer deposits received

are held in trust and restricted for use .

127

ALLIED 2022 ANNUAL REPORT(g) Borrowing costs

Borrowing costs directly attributable to acquiring or constructing a qualifying investment property are

capitalized . Capitalization commences when the activities necessary to prepare an asset for development

or redevelopment begin, and ceases once the asset is substantially complete, or is suspended if the

development of the asset is suspended . The amount of borrowing costs capitalized is determined first by

reference to borrowings specific to the project, where relevant, and otherwise by applying a weighted

average cost of borrowings to eligible expenditures after adjusting for borrowings associated with other

specific developments . Where borrowings are associated with specific developments, the amount

capitalized is the gross costs incurred on those borrowings . The capitalization of borrowing costs is

suspended if there are prolonged periods when development activity is interrupted .

(h) Other assets

Computer and office equipment and owner occupied property are included in other assets and are stated

at cost less accumulated amortization and accumulated impairment losses . Cost includes expenditures

that are directly attributable to the acquisition of the asset .

For the assets that are amortized, Allied records amortization expense on a straight-line basis over the

assets’ estimated useful life . This is generally three to seven years for computer and office equipment,

and will vary for owner occupied property depending on the property . The assets’ residual values and

useful lives are reviewed annually or if expectations differ from previous estimates, and adjusted if

appropriate .

When events and circumstances indicate an asset may be impaired, the carrying amount is written down

immediately to its recoverable amount (defined as the higher of an asset’s fair value less costs to sell and

its value in use) .

(i) Financial instruments

Cash and cash equivalents include cash on hand, balances with banks and short-term deposits with

original maturities of three months or less .

Mortgages payable consists of the legal liabilities owing pursuant to loans secured by mortgages and

premiums and discounts recognized on loans assumed on acquisition of properties, netted against

the transaction costs, and the effective interest method of amortization is applied to the premiums,

discounts and transaction costs .

The following table describes Allied’s classification and measurement of its financial assets and liabilities:

ASSET/LIABILITY

Loans and notes receivable

Cash and cash equivalents

Accounts receivable

Debt

Accounts payable and other liabilities

Interest rate swaps

128

CLASSIFICATION/MEASUREMENT

Amortized cost

Fair value

ALLIED 2022 ANNUAL REPORTAllied designated its accounts receivable, loans and notes receivable, and cash and cash equivalents as

loans and receivables; its debt and accounts payable and other liabilities as other financial liabilities .

All derivatives, including embedded derivatives, are classified at fair value through profit or loss and are

recorded on the consolidated balance sheet at fair value .

At the end of each reporting period, Allied will reassess categorization between levels in the hierarchy

to determine whether transfers have occurred . The reassessment is based on the lowest level input that

is significant to the fair value measurement in its entirety .

Financial Assets

Financial assets are classified as loans and receivables or fair value through profit or loss . Financial

assets are initially measured at fair value . Transaction costs that are directly attributable to the

acquisition or issuance of financial assets or liabilities, with the exception of those classified as at fair

value through profit or loss, are accounted for as part of the respective asset or liability’s carrying value

at inception and amortized over the expected life of the financial instrument using the effective interest

method . Transaction costs directly attributable to the acquisition or issuance of financial assets or

liabilities classified as at fair value through profit or loss are recognized immediately in net income .

Impairment of Financial Assets

Allied assesses, on a continual basis, whether a financial asset that is measured at amortized cost is

impaired under an expected credit loss (“ECL”) model . For user trade receivables within the scope of

IFRS 16, Allied applies the simplified approach permitted by IFRS 9, which requires expected lifetime

losses to be recognized under the initial recognition of its receivables . To measure the expected credit

losses for its accounts receivable, Allied established a provision matrix, that applies loss factors to

contractual payments by aging categories, and incorporates forward-looking factors that are specific to

the tenant, historical credit loss experience, and the economic environment, where applicable .

For loans and notes receivable, Allied applies an ECL approach as required under IFRS 9, which reflects

the present value of all cash shortfalls related to default events either (i) over the following twelve

months or (ii) over the expected life of a financial instrument depending on the credit deterioration

from inception . The ECL reflects an unbiased, probability-weighted outcome which considers multiple

scenarios based on reasonable and supportable forecasts . Allied assesses whether there has been

a significant increase in credit risk since initial recognition of a financial instrument and its ECL

measurement at each reporting date . Increases or decreases in the ECL are recognized as impairment

gains or losses within interest (expense) income in net income and comprehensive income (loss) .

Allied’s financial assets measured at amortized cost are presented net of the ECL in the consolidated

balance sheets .

Financial Liabilities

Financial liabilities are classified and measured as disclosed in the table above . Financial liabilities are

initially recognized at fair value net of any transaction costs directly attributable to the issuance of the

instrument and subsequently carried at amortized cost using the effective interest method, except for

financial liabilities held for trading or designated at fair value through profit or loss, that are carried

subsequently at fair value with gains or losses recognized in profit or loss .

129

ALLIED 2022 ANNUAL REPORTAllied measures its debt, finance lease obligations, and accounts payable and other liabilities, at

amortized cost using the effective interest method . All interest-related charges are reported in the

Consolidated Statements of Income and Comprehensive Income and are included within ‘Interest

expense’, except for those interest-related charges capitalized to qualifying properties under

development or rental properties .

From time to time, Allied uses derivative financial instruments to manage risks from fluctuations in

interest rates . All derivative instruments, including embedded derivatives that must be separately

accounted for, are valued at their respective fair values unless they are effective cash flow hedging

instruments .

On the date a derivative contract is entered into, Allied assesses whether or not to designate the

derivative as either a hedge of the fair value of a recognized asset or liability (a “fair-value hedge”) or a

hedge of the variability of cash flows to be received or paid related to a recognized asset or liability or

a forecasted transaction (a “cash-flow hedge”) . Allied does not hold any fair-value or cash-flow hedges .

Allied has entered into interest rate derivative contracts to limit its exposure to fluctuations in the

interest rates on variable rate mortgages, unsecured term loans and construction loans . Gains or losses

arising from the change in fair values of the interest rate derivative contracts are recognized in the

Consolidated Statements of Income and Comprehensive Income .

(j) Unitholders’ equity

Trust Units represents the initial value of Units that have been issued . Any transaction costs associated

with the issuing of Units are deducted from Unit proceeds .

Unitholders’ equity includes all current and prior period retained income . Distributions payable to

Unitholders are included in ‘Distributions payable on Units’ when the distributions have been approved

and declared prior to the reporting date, but have yet to be paid .

(k) Exchangeable limited partnership units

The Exchangeable LP Units may, at the request of the holder, be exchanged on a one-for-one basis

for Units of Allied . The Exchangeable LP Units are entitled to distributions from the Partnership in

an amount equal to distributions declared by Allied on the Units . The Exchangeable LP Units provide

the holder the indirect economic benefits and exposures to the underlying performance of Allied and

accordingly to the variability of the distributions of Allied, whereas Allied’s unitholders have direct

access to the economic benefits and exposures of Allied through direct ownership interest in Allied .

Accordingly, the Exchangeable LP Units have been presented within non-controlling interests on the

consolidated balance sheets . Net income and other comprehensive income are attributed to unitholders

and to non-controlling interests . Net income and other comprehensive income attributable to non-

controlling interests is equivalent to the amount allocated to the Partnership for income tax purposes .

The basic net income per unit is calculated by dividing net income by the weighted average number of

Units and Exchangeable LP Units outstanding for the period (note 18) .

Distributions payable to holders of Exchangeable LP Units are included in ‘Distributions Payable on

Exchangeable LP Units’ when the distributions have been approved and declared prior to the reporting

date, but have yet to be paid .

130

ALLIED 2022 ANNUAL REPORT(l) Short-term employee benefits

Allied does not provide pension plan benefits . Short-term employee benefits are expensed as a

period expense .

(m) Unit-based compensation plans

Equity-settled unit-based payments to employees and trustees are measured at the fair value of the

equity instruments at the grant date .

The fair value determined at the grant date of the equity-settled unit-based payments is expensed on

a straight-line basis over the period during which the employee becomes unconditionally entitled

to equity instruments, based on Allied’s estimate of equity instruments that will eventually vest . At

the end of each reporting period, Allied revises its estimate of the number of equity instruments that

are expected to vest . Allied utilizes the Black-Scholes Model for the valuation of unit options with no

performance criteria, see note 17 for assumptions used .

Unit options granted under the Unit Option Plan and Restricted Units granted under the Restricted

Unit Plan are subject to vesting conditions and disposition restrictions, in order to provide a long

term compensation incentive . The Unit Options and Restricted Units are subject to forfeiture until

the participant has held his or her position with Allied for a specified period of time . Full vesting of

Restricted Units and Unit Options may not occur until the participant has remained employed by

Allied for three and four years, respectively from the date of grant . Upon forfeiture of Unit Options and

Restricted Units by an employee or trustee of Allied, the expense related to any unvested, forfeited Unit

Options and Restricted Units recognized up to and including the date of the forfeiture is reversed .

(n) Cash-settled unit-based compensation plans

Under the Performance and Restricted Trust Unit Plan (the “PTU/RTU Plan”), performance trust units

and/or restricted trust units (together, “Plan Units”) are granted which entitle certain key employees

to receive the fair value of the Plan Units in cash as a lump sum payment at the end of the applicable

vesting period, which is usually three years in length . The PTU/RTU Plan provides for the accumulation

of additional Plan Units in the form of distribution equivalents during the vesting period .

The Plan Units are recognized as an expense, on a straight-line basis over the period that the employees

render service, in general and administrative expenses with a corresponding amount recorded to

unit-based compensation liabilities . The unit-based compensation liabilities are measured based on

the market value of the underlying units . During the periods in which the unit-based compensation

liabilities are outstanding, the liabilities are adjusted for changes in the market value of the underlying

units, with such positive or negative adjustments recognized in general and administrative expenses

in the period in which they occur . For the performance trust units’ liabilities, performance market

conditions are also considered and the performance trust unit liabilities are adjusted accordingly . Upon

forfeiture of Plan Units by an employee, the liability representing the cumulative expense recognized to

date is reversed with a corresponding reversal of expense .

131

ALLIED 2022 ANNUAL REPORT(o) Provisions

Provisions are recognized when there is a present legal or constructive obligation as a result of past

events, it is probable that an outflow of resources will be required to settle the obligation, and the

amount can be reliably estimated . Provisions are not recognized for future operating losses . Allied does

not have any provisions as of the date of this report .

(p) Per unit calculations

Basic net income per unit is calculated by dividing net income by the weighted average number of Units

outstanding for the period (refer to note 18 for further details) .

Diluted net income per unit is calculated using the denominator of the basic calculation described

above adjusted to include the potentially dilutive effect of the outstanding unit purchase options . The

denominator is increased by the total number of additional Units that would have been issued by Allied

assuming exercise of all unit purchase options with exercise prices below the average market price for

the year (refer to note 17 for further details) .

(q) Residential inventories

Residential inventory are assets that are developed by Allied for sale in the ordinary course of business

and is recorded at the lower of cost and estimated net realizable value . Impairment is reviewed at each

reporting date, with any losses recognized in net income when the carrying value of the inventory

exceeds its net realizable value . The net realizable value is defined as the entity-specific future selling

price, including any development plans, in the ordinary course of business less estimated costs of

completion and selling costs .

The cost of residential inventory includes any costs that are directly attributable to bring the projects to

a state of active development, which includes borrowing costs . Borrowing costs are accounted under

IAS 23 similarly to Allied’s policies for capitalization to qualifying assets .

(r) Leases

Allied recognizes a right-of-use (“ROU”) asset and a lease obligation at the lease commencement date,

in accordance with IFRS 16, Leases . Allied accounts for its ROU assets that do not meet the definition of

investment property as fixed assets . The ROU asset is initially measured at cost and, subsequently, at

cost less any accumulated depreciation and impairment and adjusted for certain remeasurements of the

lease obligation . When a ROU asset meets the definition of investment property, it is initially measured

at cost and subsequently measured at fair value (note 2(d)) . Land held as part of the operating leases

(“ground leases”) which meets the definition of investment property is classified as ROU assets within

investment properties . Management office leases and leases for equipment components embedded as

part of service contracts which do not meet the definitions of investment property are recognized as

ROU assets within other real estate assets . Refer below to the various lease types identified and their

respective financial statement classification .

132

ALLIED 2022 ANNUAL REPORTTYPE OF LEASE

Ground lease

Management office

Other

ROU ASSET CLASSIFICATION

ROU LIABILITY CLASSIFICATION

Investment properties

Other assets

Lease liability

The lease liability is initially measured at the present value of the lease payments at the commencement

date, discounted by using the interest rate implicit in the lease, or, if that rate cannot be readily

determined, at Allied’s incremental borrowing rate . Generally, Allied uses its incremental borrowing

rate as the discount rate . The lease obligation is subsequently measured by increasing the carrying

amount to reflect interest on the lease liability and by reducing the carrying amount to reflect the lease

payments made . Lease liability is remeasured when there is a change in the future lease payments

arising from a change in an index or rate, a change in estimate of the amount expected to be payable

under the residual value guarantee or, as appropriate, change in the assessment of whether a purchase

or extension option is reasonably certain to be exercised or a termination option is reasonably certain

not to be exercised .

Allied has applied judgment to determine the lease term for some lease contracts in which it is a lessee

that include renewal or termination options . The assessment of whether Allied is reasonably certain to

exercise such options impacts the lease term which in turn, affects the amount of lease obligations and

right-of-use assets recognized . Allied also applies judgment in determining the discount rate used to

present value the lease obligations .

(s) Assets and liabilities held for sale and discontinued operations

Non-current assets and groups of assets and liabilities which comprise disposal groups are presented

as assets held for sale on the Consolidated Balance Sheets when the asset or disposal group is available

for immediate sale in its present condition and the sale is highly probable . A sale is highly probable

when management is committed to a plan to sell the asset, the non-current asset or disposal group is

being actively marketed at a sale price that is reasonable in relation to its current fair value, the sale

is expected to be completed within one year from the date of classification, and it is unlikely there

will be significant changes to the plan or that the plan will be withdrawn . Non-current assets and

disposal groups held for sale that are not investment properties are recorded at the lower of carrying

amount and fair value less costs to sell on the Consolidated Balance Sheets . Otherwise, the non-current

assets and disposal groups held for sale are recorded at fair value . Any gain or loss arising from the

change in measurement basis as a result of reclassification is recognized in net income at the time of

reclassification . Investment properties that are held for sale are recorded at fair value determined in

accordance with IFRS 13, Fair Value Measurement .

When a component of an entity has been disposed of and it represents a separate major line of business

or geographical area of operations, or is classified as held for sale and is part of a single coordinated

plan to dispose of such a line of business or area of operations, the related results of operations and

gain or loss on reclassification or disposition are presented separately as discontinued operations on

133

ALLIED 2022 ANNUAL REPORTthe Consolidated Statements of Income and Comprehensive Income . The non-current assets and groups

of assets and liabilities which comprise disposal groups classified as held for sale are not revised in the

Consolidated Balance Sheets for prior periods to reflect the classification for the latest period presented .

However, the revenue, expenses, fair value gain or loss, and any other components making up the net

income and comprehensive income of the discontinued operations are revised for the comparative

period in the Consolidated Statements of Net Income and Comprehensive Income .

(t) Comparative figures

Comparative figures in respect of loans and notes receivables previously classified in financing activities

in the consolidated statements of cash flows have been revised to be classified in investing activities to

conform to the presentation in the current year .

Comparative figures in respect of segment information were revised to present the City of Vancouver

separately from previous presentation within the Calgary and Edmonton segment . The revision reflects

the presentation based on the effect of internal reorganization and corresponding information reported

to and reviewed by the chief operating decision maker to allocate resources and assess the performance

of the segments .

3 . CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

The preparation of the consolidated financial statements requires management to make judgments and

estimates in applying Allied’s accounting policies that affect the reported amounts and disclosures made

in the consolidated financial statements and accompanying notes .

Within the context of these consolidated financial statements, a judgment is a decision made by

management in respect of the application of an accounting policy, a recognized or unrecognized

financial statement amount and/or note disclosure, following an analysis of relevant information that

may include estimates and assumptions . Estimates and assumptions are used mainly in determining

the measurement of balances recognized or disclosed in the consolidated financial statements and are

based on a set of underlying data that may include management’s historical experience, knowledge

of current events and conditions and other factors that are believed to be reasonable under the

circumstances . Management continually evaluates the estimates and judgments it uses .

The following are the accounting policies subject to judgments and key sources of estimation

uncertainty that Allied believes could have the most significant impact on the amounts recognized in

the consolidated financial statements . Allied’s significant accounting policies are disclosed in note 2 .

Investment Properties

Judgments Made in Relation to Accounting Policies Applied - Judgment is applied in determining whether

certain costs are additions to the carrying value of investment properties, identifying the point at which

substantial completion of a development property occurs, and identifying the directly attributable

borrowing costs to be included in the carrying value of the development property . Allied also applies

judgment in determining whether the properties it acquires are considered to be asset acquisitions or

business combinations . Allied has determined through the appropriate analysis that all the properties it

has acquired to date to be asset acquisitions .

134

ALLIED 2022 ANNUAL REPORTKey Sources of Estimation - The fair value of investment properties and investment properties held for

sale is dependent on available comparable transactions, future cash flows over the holding period and

discount rates and capitalization rates applicable to those assets . For further details, see note 5 . The

review of anticipated cash flows involves assumptions relating to occupancy, rental rates and residual

value . In addition to reviewing anticipated cash flows, management assesses changes in the business

climate and other factors which may affect the ultimate value of the property . These assumptions may

not ultimately be achieved .

Joint Arrangements

Judgments Made in Relation to Accounting Policies Applied - Judgment is applied in determining whether

Allied has joint control and whether the arrangements are joint operations or joint ventures . In

making this assessment management applies judgment to determine Allied’s rights and obligations

in the arrangement based on factors such as the structure, legal form and contractual terms of the

arrangement .

Income Taxes

Judgments Made in Relation to Accounting Policies Applied - Allied qualifies as a mutual fund trust (“MFT”)

and a REIT as defined in the Income Tax Act (Canada) . Allied is not liable to pay entity level Canadian

income taxes provided that its taxable income is fully distributed to Unitholders each year and if it

meets the prescribed rules under the Income Tax Act (Canada) to be a REIT and MFT . This results in no

current or deferred income tax being recognized in the financial statements .

Allied applies judgment in determining whether it will continue to qualify as a REIT and in assessing its

interpretation and application to its assets and revenue . While there are uncertainties in interpretation

and application of these rules, Allied believes it meets the REIT and MFT rules .

Allied expects to continue to qualify as a REIT under the Income Tax Act (Canada), however, should it

no longer qualify, it would be subject to entity level tax and would be required to recognize current and

deferred income taxes .

Impact of COVID-19

As a result of the continuously evolving circumstances surrounding the COVID-19 pandemic,

uncertainty remains with respect to Allied’s revised internal forecast, the most significant being the

fact that it cannot predict how consumers, users and governments will respond during the transition to

a fully reopened economy . In addition, Allied cannot predict the extent and severity of the economic

disruption and related financial impact flowing from the global pandemic .

In the preparation of these consolidated financial statements, Allied has incorporated the potential

impact of COVID-19 into its estimates and assumptions that affect the carrying amounts of its assets and

liabilities and the reported amount of its results using the best available information as at December 31,

2022 . Actual results could differ from those estimates . The estimates and assumptions that Allied

considers critical and/or could be impacted by COVID-19 include those underlying the valuation of

135

ALLIED 2022 ANNUAL REPORTinvestment properties and investment properties held for sale, including discount rates and terminal

capitalization rates, operating assumptions, the carrying amount of its investment in a joint venture,

the estimate of any expected credit losses on its accounts receivable and loans and notes receivable and

determining the values of financial instruments .

4 . ACQUISITIONS AND DISPOSITIONS

Acquisitions

During the year ended December 31, 2022, Allied acquired the following properties from third parties:

PROPERTY

ACQUISITION
DATE

PROPERTY
TYPE

INVESTMENT
PROPERTY

INTEREST
ACQUIRED

108 East 5th Avenue, Vancouver

February 23, 2022

Development

1010 Sherbrooke W, Montréal

March 31, 2022

Office, Retail

110 Yonge, Toronto

March 31, 2022

Office, Retail

525 University, Toronto

March 31, 2022

Office, Retail

175 Bloor E, Toronto

March 31, 2022

Office, Retail

1508 West Broadway, Vancouver (1)

March 31, 2022

Office, Retail

1185 West Georgia, Vancouver

March 31, 2022

Office, Retail

540 King W, Toronto

121 John, Toronto

April 8, 2022

Retail

July 6, 2022

Office, Retail

700 Saint-Hubert, Montréal

October 31, 2022

Office

(1) Allied acquired a leasehold interest in 1508 West Broadway.

$39,549

116,248

55,757

137,967

166,547

166,408

131,671

26,615

4,544

126,198

$971,504

50%

100%

50%

100%

50%

100%

The total purchase price, including acquisition costs, for 108 East 5th Avenue of $39,549 is comprised

of net cash consideration of $24,998, a mortgage assumption of $13,625, and a deferred mortgage

premium of $926 .

Six properties were acquired as a portfolio from Choice Properties for a total cost of $774,598, which

includes $31,510 of acquisition costs, which was satisfied by i) a promissory note with a face value of

$200,000 net of a deferred discount of $7,572, which matures on December 31, 2023, bearing interest

at 1% and 2% per annum in 2022 and 2023, respectively (note 12) and ii) the issuance of 11,809,145

Exchangeable LP Units of $550,660 . In addition, Allied assumed other liabilities of $9,571, which were

reimbursed by Choice Properties .

The total purchase price, including acquisition costs, for 540 King Street West is comprised of net cash

consideration of $26,615 .

The total purchase price, including acquisition costs, for 121 John Street is comprised of net cash

consideration of $4,541 and assumption of other liabilities of $3 .

The total purchase price, including acquisition costs, for 700 Saint-Hubert is comprised of net cash

consideration of $112,660 and assumptions of other liabilities of $13,538 .

136

ALLIED 2022 ANNUAL REPORT
During the year ended December 31, 2021, Allied completed the following property acquisitions and

air rights from third parties:

ACQUISITION
DATE

PROPERTY
TYPE

INVESTMENT
PROPERTY

INTEREST
ACQUIRED

PROPERTY

432 Wellington, Toronto

608 1st, Calgary

478 King W, Toronto (1)

65 Front E, Toronto

64 Spadina, Toronto

12 Brant, Toronto

422-424 Wellington W, Toronto

143 Bathurst, Toronto

700 Saint Antoine E, Montréal

810 Saint Antoine E, Montréal

731-10th SW, Calgary (2)

802-838 11th SW, Glenbow Assembly,
Calgary (2)

Sherwin Block, Calgary (2)

207 West Hastings, Vancouver

January 28, 2021

February 8, 2021

April 22, 2021

Retail

April 29, 2021

Office, Retail

May 19, 2021

June 18, 2021

Retail

August 4, 2021

Development

August 23, 2021

Residential

August 30, 2021

Office, Retail

August 30, 2021

October 19, 2021

Office

Retail

October 19, 2021

Office, Retail

October 19, 2021

Office, Retail

November 12, 2021

Office, Retail

Union Centre Air Rights, Toronto

December 15, 2021

$17,806

6,464

10,963

20,064

14,617

16,180

28,648

2,945

80,449

51,263

7,975

12,787

7,299

67,161

344,621

14,814

$359,435

100%

50%

100%

50%

100%

(1) Allied acquired the remaining 50% interest in 478 King W on April 22, 2021.
(2) Allied acquired the remaining 50% interest in 731-10th SW, 802-838 11th SW, and Sherwin Block on October 19, 2021.

The total purchase price, including acquisition costs, for the above noted properties during the year

ended December 31, 2021, of $344,621 is comprised of net cash consideration of $288,887, a mortgage

assumption of $51,750, a deferred mortgage premium of $1,000 and the assumption of other liabilities

of $2,984 . In addition, on December 15, 2021, Allied completed the acquisition of the air rights

associated with Union Centre for a total purchase price including acquisition costs of $14,814, which

was settled in cash and recognized as a capital expenditures addition to investment properties .

Dispositions

On January 24, 2022, Allied and its partners closed on the fifth and final phase of The Well air rights

and associated underground parking and transfer floor slab developments for net cash consideration

of $14,841 (at Allied’s share), which represented the fair value at the time of disposition, so accordingly

there was no gain or loss recorded . In addition, during the year ended December 31, 2022, Allied

received cash of $413 (at Allied’s share) for the release of a holdback related to the disposition of the

first phase of The Well air rights .

137

ALLIED 2022 ANNUAL REPORTOn June 30, 2022, Allied closed on the disposition of two investment properties held for sale, which

were 662 King Street West and 668 King Street West, both in Toronto, for net proceeds of $38,954 and

$9,991, respectively (note 5) . The total net cash consideration of $48,945 represented the fair value at

the time of disposition, so there was no gain or loss recorded on closing . The disposition costs incurred

were fully recoverable from the purchaser .

On August 16, 2022, Allied closed on the disposition of one investment property held for sale,

100 Lombard Street in Toronto, at a selling price of $26,000 (note 5), which represented the fair value at

the time of disposition, so there was no gain or loss recorded on closing . In addition, Allied incurred net

working capital adjustments of $487 and selling costs of $21, resulting in the total net cash consideration

of $25,492 .

During the year ended December 31, 2021, Allied and its partners closed on the dispositions of the

following phases of The Well air rights and associated underground parking and transfer floor slab

developments:

PHASE OF THE WELL AIR RIGHTS

Second phase

Third phase

Fourth phase

CLOSING DATE

April 7, 2021

June 11, 2021

December 20, 2021

CASH CONSIDERATION
(AT ALLIED’S SHARE)

$31,152

24,287

16,153

$71,592

The total cash consideration received of $71,592 (at Allied’s share) represented the fair value at the time

of disposition so there is no gain or loss on disposition .

138

ALLIED 2022 ANNUAL REPORT5 .

INVESTMENT PROPERTIES AND INVESTMENT PROPERTIES HELD FOR SALE

Changes to the carrying amounts of investment properties and investment properties held for sale are

summarized as follows:

YEAR ENDED DECEMBER 31, 2022

YEAR ENDED DECEMBER 31, 2021

RENTAL
PROPERTIES

PROPERTIES
UNDER
DEVELOPMENT
(“PUD”)

TOTAL

RENTAL
PROPERTIES

PROPERTIES
UNDER
DEVELOPMENT
(“PUD”)

TOTAL

Balance, beginning of year

$8,374,535

$1,238,830

$9,613,365 $7,790,855

$896,520

$8,687,375

Additions:

Acquisitions

Improvement allowances

Leasing commissions

Capital expenditures

Dispositions

Transfers from PUD

Transfers to PUD

Transfers from (to) other assets

Lease liabilities

Amortization of straight-line rent
and improvement allowances

Fair value gain (loss) on investment
properties and investment
properties held for sale (1)

805,757

60,494

14,714

134,630

(74,945)

165,747

971,504

315,973

28,648

344,621

1,728

5,889

62,222

22,559

20,603

15,012

2,119

1,829

24,678

16,841

263,544

398,174

123,842

304,406

428,248

(15,254)

(90,199)

(71,592)

376,730

(376,730)

(293,542)

293,542

—

(47,040)

47,040

—

3,900

561

—

3,900

(6,838)

561

1,098

—

(6,838)

1,098

(26,866)

1,389

(25,477)

(28,123)

(500)

(28,623)

118,427

(49,245)

69,182

187,197

30,360

217,557

Balance, end of year

$9,494,395

$1,529,440

$11,023,835 $8,374,535

$1,238,830

$9,613,365

Investment properties

$8,139,565

$1,529,440

$9,669,005 $8,288,275

$1,238,830

$9,527,105

Investment properties held for sale

1,354,830

—

1,354,830

86,260

—

86,260

$9,494,395

$1,529,440

$11,023,835 $8,374,535

$1,238,830

$9,613,365

(1)

Includes a fair value gain on investment properties held for sale for discontinued operations for the year ended December 31, 2022 of $142,932
(December 31, 2021 - $56,335) which is presented separately in the net income from discontinued operations (note 6).

As at December 31, 2022, Allied had five properties classified as investment properties held for sale

totaling $1,354,830, four located in Toronto and one located in Montréal . There were three investment

properties held for sale as at December 31, 2021, totaling $86,260, two located in Toronto and one

located in Montréal . The increase of $1,268,570 in the year ended December 31, 2022, is due to the

addition of five properties and disposition of three investment properties held for sale (note 4) .

For the year ended December 31, 2022, Allied capitalized $47,606 (December 31, 2021 - $34,973) of

borrowing costs to qualifying investment properties .

139

ALLIED 2022 ANNUAL REPORTIncluded in the rental properties amounts noted above are right-of-use assets with a fair value of

$564,200 (December 31, 2021 - $528,400) representing the fair value of Allied’s interest in four

investment properties and one investment property held for sale with corresponding lease liabilities .

The leases’ maturities range from 21 .8 years to 79 .5 years . In addition, Allied has a prepaid land

leasehold interest on a property with a fair value of $178,020 and a maturity of 73 .6 years .

Valuation Methodology

The appraised fair value of investment properties and investment properties held for sale is most

commonly determined using the following methodologies:

(a) Discounted cash flow method - Under this approach, discount rates are applied to the projected

annual operating cash flows, generally over a ten-year period, including a terminal value of the

properties based on a capitalization rate applied to the estimated net operating income (“NOI”), a

non-IFRS measure, in the terminal year . This method is primarily used to value the rental portfolio,

and, in some cases, investment properties held for sale .

(b) Comparable sales method - This approach compares a subject property’s characteristics with

those of comparable properties which have recently sold . The process uses one of several

techniques to adjust the price of the comparable transactions according to the presence, absence,

or degree of characteristics which influence value . These characteristics include the cost of

construction incurred at a property under development . This method is primarily used to value the

development portfolio and ancillary parking facilities and, in some cases, investment properties

held for sale .

stabilized NOI of the properties . Estimated stabilized NOI is based on projected rental revenue and

property operating costs, and external evidence such as current market rents for similar properties,

and is further adjusted for estimated vacancy loss and capital reserves . Currently, this method is

used only to value residential use .

In accordance with its policy, Allied measures and records its investment properties and investment

properties held for sale using valuations under the supervision of Management with the support of

an independent external appraiser . Allied’s portfolio is valued by an external appraiser each quarter .

Management verifies all major inputs to the valuations, analyzes the change in fair values at the end

of each reporting period and reviews the results with the independent appraiser every quarter . There

were no material changes to the valuation techniques during the period .

Significant Inputs

There are significant unobservable inputs used, such as capitalization rates, in determining the fair

value of each investment property and investment property held for sale . Accordingly, all investment

properties and investment properties held for sale are measured in accordance with the fair value

measurement hierarchy levels and the inputs comprise Level 3 unobservable inputs, reflecting

Management’s best estimate of what market participants would use in pricing the asset at the

140

ALLIED 2022 ANNUAL REPORTmeasurement date . Fair values are most sensitive to changes in capitalization rates and stabilized or

forecasted NOI . Generally, an increase in NOI will result in an increase in the fair value and an increase

in capitalization rates will result in a decrease in the fair value . Below are the rates used in the modeling

process for valuations of investment properties and investment properties held for sale .

Discount rate

Terminal capitalization rate

Overall capitalization rate

Discount horizon (years)

WEIGHTED AVERAGE

DECEMBER 31, 2022 DECEMBER 31, 2021

5.93%

4.99%

4.64%

5 .98%

5 .03%

4 .68%

The analysis below shows the maximum impact on fair values of possible changes in capitalization

rates, assuming no changes in NOI (including investment properties and investment properties held for

sale):

CHANGE IN CAPITALIZATION RATE OF

-0.50%

-0.25%

+0.25%

+0.50%

Increase (decrease) in fair value

Investment Properties and
Investment Properties Held for Sale

6 . DISCONTINUED OPERATIONS

$1,331,381

$627,781

$(563,591)

$(1,072,357)

As at December 31, 2022, the Urban Data Centre segment has been classified as discontinued operations

and the disposal group is comprised of three investment properties held for sale totaling $1,305,990

and a related lease liability held for sale totaling $107,215 . The three investment properties are 151 Front

Street W, 905 King Street W and 250 Front Street W and the lease liability is at 250 Front Street W . Allied

expects to sell these properties to a third-party purchaser within one year .

The following table summarizes the results from discontinued operations:

Rental revenue

Property operating costs

Operating income

Interest expense

Fair value gain on investment properties held for sale

Net income from discontinued operations

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$96,669

(32,375)

64,294

(6,532)

142,932

$200,694

$96,087

(34,703)

61,384

(5,949)

56,335

$111,770

141

ALLIED 2022 ANNUAL REPORTYEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$53,521

—

(29,318)

$24,203

$62,344

—

(50,190)

$12,154

Cash provided by (used in):

Operating activities

Financing activities

Investing activities

7 . RESIDENTIAL INVENTORY

Residential inventory is as follows:

KING Toronto

$187,272

$170,980

DECEMBER 31, 2022

DECEMBER 31, 2021

The changes in the aggregate carrying value of Allied’s residential inventory is as follows:

Balance, beginning of year

Development expenditures

Impairment

Balance, end of year

DECEMBER 31, 2022

DECEMBER 31, 2021

$170,980

32,021

(15,729)

$187,272

$140,038

30,942

—

$170,980

Residential inventory consists of assets that are developed by Allied for sale in the ordinary course of

business . Allied may transfer an investment property to residential inventory based on a change in use,

as evidenced by the commencement of development activities with the intention to sell . Alternatively, a

transfer from residential inventory to investment property would be evidenced by the commencement

of leasing activity .

On November 30, 2018, Allied entered into a joint arrangement with Westbank to develop KING

Toronto . KING Toronto is a mixed-use property comprised of office, retail and residential uses . As part

of the arrangement Allied sold a 50% undivided interest to Westbank . The residential component will be

developed and sold as condominium units, totaling 440 units .

During the year ended December 31, 2022, Allied recorded an impairment of $15,729 on KING Toronto .

Residential inventory carrying value is calculated as the estimated gross proceeds less estimated costs to

complete . The impairment in the period reflects higher estimated costs to complete .

For the year ended December 31, 2022, Allied capitalized $6,204 (December 31, 2021 - $4,759) of

borrowing costs to qualifying residential inventory .

142

ALLIED 2022 ANNUAL REPORT8 .

INVESTMENT IN JOINT VENTURE AND LOAN RECEIVABLE

Investment in joint venture and the associated loan receivable is comprised of the following:

Investment in joint venture

Loan receivable from joint venture

Current

Non-current

DECEMBER 31, 2022

DECEMBER 31, 2021

$7,089

113,287

$120,376

$113,287

7,089

$120,376

$11,503

113,287

$124,790

$—

124,790

$124,790

On July 2, 2013, Allied entered into a partnership agreement whereby Allied holds a one-third voting

and economic interest in 7th Avenue Sky Partnership (“TELUS Sky”) . TELUS Sky was created with

the specific purpose of acquiring the entire beneficial interest in the properties located at 100-114

7th Avenue SW, Calgary and participating in its construction, development and management .

On October 31, 2019, Allied advanced a construction loan in the amount of $96,142 to TELUS Sky, with

the loan having a maximum limit of $114,000 . The loan matures on July 15, 2023, and bears interest at

bank prime plus 45 basis points or bankers’ acceptance rate plus 145 basis points . As at December 31,

2022, the loan receivable outstanding is $113,287 (December 31, 2021 - $113,287) . Allied is providing a

joint and several guarantee in the amount of $114,000 to support the TELUS Sky facility .

Allied accounts for its interests in joint ventures using the equity method . The financial information

below represents TELUS Sky at 100% and at Allied’s one-third interest .

Current assets (including cash and cash equivalents)

Non-current assets

Current liabilities

Non-current liabilities

Net assets of TELUS Sky at 100%

Net assets of TELUS Sky at Allied’s share

DECEMBER 31, 2022

DECEMBER 31, 2021

$5,658

366,006

(350,397)

—

$21,267

$7,089

$8,637

378,990

(13,257)

(339,861)

$34,509

$11,503

143

ALLIED 2022 ANNUAL REPORTRevenue

Expenses

Interest expense

General and administrative expense

Interest income

Fair value loss

Net loss and comprehensive loss of TELUS Sky at 100%

Net loss and comprehensive loss of TELUS Sky at Allied’s share

Investment in joint venture, beginning of year

Net loss

Contributions

Distributions

Investment in joint venture, end of year

9 . LOANS AND NOTES RECEIVABLE

Loans and notes receivable are as follows:

Loans receivable (a)

Notes and other receivables (b)

Current

Non-current

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$20,313

(11,529)

—

(18,303)

$(9,483)

$(3,161)

$14,721

(9,822)

(619)

(42)

—

(5,591)

$(1,353)

$(451)

DECEMBER 31, 2022

DECEMBER 31, 2021

$11,503

(3,161)

3,192

(4,445)

$7,089

$3,825

(451)

10,490

(2,361)

$11,503

DECEMBER 31, 2022

DECEMBER 31, 2021

$432,032

$432,112

$258,093

174,019

$432,112

$367,579

183

$367,762

$144,306

223,456

$367,762

144

ALLIED 2022 ANNUAL REPORT(a) In February 2015, Allied entered into a joint arrangement with Westbank and completed the

acquisition of an undivided 50% interest in Adelaide & Duncan . As part of the arrangement, Allied

advanced $21,173 to Westbank for its purchase of a 50% undivided interest in the property . The

facility is secured by a charge on the property (subordinated to the construction lender) and

assignment of rents and leases . Interest accrues and is payable monthly at a rate of 7 .75% per

annum . The loan is repayable when the joint arrangement obtains external permanent financing .

As at December 31, 2022, the loan receivable outstanding is $21,173 (December 31, 2021 - $21,173) .

On August 1, 2017, Allied entered into an arrangement with Westbank to provide a credit facility of

up to $100,000, plus interest, for the land acquisition and the pre-development costs of 400 West

Georgia in Vancouver . The facility is secured by Westbank’s covenant and a charge on the property

(subordinated to the construction lender) . On February 11, 2019, the facility was increased to

$160,000, and on August 18, 2022, the facility was further increased to $175,000 . On May 18, 2022,

Westbank exercised its option to extend the maturity date from August 31, 2022, to August 31, 2023 .

On January 12, 2023, the maturity date of the facility was further extended from August 31, 2023 to

February 29, 2024 . Interest accrues to the credit facility monthly at a rate of 6 .75% per annum up

to August 31, 2022 . Thereafter, interest accrues to the credit facility monthly at the greater of 6 .75%

per annum and the prime rate plus 3 .00% per annum . As at December 31, 2022, the loan receivable

outstanding is $161,032 (December 31, 2021 - $144,271) .

On November 30, 2018, Allied entered into a joint arrangement with Westbank to develop KING

Toronto . As part of the arrangement, Allied advanced $67,030 to Westbank for its purchase of

a 50% undivided interest in the property . The facility is secured by a charge on the property

(subordinated to the construction lender) . Interest accrues to the credit facility at a rate of 7 .00%

per annum . The loan is repayable at the earlier of November 30, 2023, or the closing of the

condominium units . As at December 31, 2022, the loan receivable outstanding is $97,037 (December

31, 2021 - $90,586) .

On March 18, 2019, Allied made an amendment to the joint arrangement with Perimeter to develop

Breithaupt Phase III and a loan receivable arrangement to provide 50% of the pre-development

costs . The facility is secured by a charge on the property (subordinated to the construction

lender) . Interest accrues at a rate of 7 .00% per annum and is payable on loan repayment . The

loan is repayable in installments upon completion of development and rent commencement,

which is anticipated to begin in the second quarter of 2023 . As at December 31, 2022, the loan

receivable outstanding is $9,913 (December 31, 2021 - $10,256) due to repayments made earlier

than anticipated .

145

ALLIED 2022 ANNUAL REPORT

On July 31, 2019, Allied entered into an arrangement with Westbank to provide a credit facility of

up to $185,000, plus interest, for the land acquisition and the pre-development costs of 150 West

Georgia (previously known as 720 Beatty Street) in Vancouver . The funding will initially be secured

by a first mortgage on the property for a fixed term . On placement of construction financing, the

mortgage will be secured by a charge on the property (subordinated to the construction lender) .

Interest accrues to the credit facility monthly at a rate of 7 .00% per annum . The credit facility

matures on December 9, 2025 . As at December 31, 2022, the loan receivable outstanding is $142,877

(December 31, 2021 - $101,293) .

Allied has assessed the expected credit losses on an individual loan basis . Allied assesses the

risk of expected credit losses, including considering the status of corporate guarantees and/or

registered mortgage charges and assignment of leases, outcome of credit checks on borrowers,

results of monitoring the financial and operating performance of borrowers, results of the status of

development projects and status of scheduled principal and interest payments . The expected credit

losses estimated by Management considering the factors described above is $nil as at December 31,

2022 (December 31, 2021 - $nil) .

(b) As at December 31, 2022, and December 31, 2021, the balance of notes and other receivables is

made up of individually insignificant notes receivable .

10 . OTHER ASSETS

Other assets consist of the following:

Equipment and other assets (1)

Property, plant and equipment (2)

Interest rate swap derivative assets

DECEMBER 31, 2022

DECEMBER 31, 2021

$3,323

20,497

32,401

$56,221

$3,565

24,620

—

$28,185

(1) During the year ended December 31, 2022, Allied recorded amortization of equipment and other assets of $1,101 (December 31, 2021 - $1,167).
(2) Property, plant and equipment relates to owner-occupied property. During the year ended December 31, 2022, Allied recorded amortization

of owner-occupied property of $224 (December 31, 2021 - $nil).

11 . ACCOUNTS RECEIVABLE, PREPAID EXPENSES AND DEPOSITS

Accounts receivable, prepaid expenses and deposits consist of the following:

User trade receivables - net of allowance (a)

Other user receivables (b)

Miscellaneous receivables (c)

Prepaid expenses and deposits (d)

146

DECEMBER 31, 2022

DECEMBER 31, 2021

$19,864

5,950

22,979

16,751

$65,544

$16,659

2,092

13,124

25,186

$57,061

ALLIED 2022 ANNUAL REPORT

(a) User trade receivables

User trade receivables include minimum rent, additional rent recoveries, parking, ancillary revenue and

applicable sales taxes .

An allowance is maintained for expected credit losses resulting from the inability of users to meet

obligations under lease agreements . Allied actively reviews receivables on a continuous basis and

determines the potentially uncollectible accounts on a per-user basis giving consideration to their credit

risk, payment history and future expectations of likely default events, and records an impairment based

on expected credit losses as required .

The change in the allowance for expected credit loss is reconciled as follows:

Allowance for expected credit loss, beginning of year

Additional provision recorded during the year

Reversal of previous provisions

Receivables written off during the year

Allowance for expected credit loss, end of year

(b) Other user receivables

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$9,177

3,117

(829)

(129)

$11,336

$6,649

3,024

(407)

(89)

$9,177

Other user receivables pertain to unbilled operating costs such as common area maintenance and

property tax recoveries and chargebacks .

Miscellaneous receivables consist primarily of HST receivables from the government, management

fees and interest income due from external parties, and chargebacks on construction projects which

are managed by Allied for tenants . As at December 31, 2022, there are no credit risk indicators that the

debtors will not meet their payment obligations .

(d) Prepaid expenses and deposits

Prepaid expenses and deposits primarily relate to prepaid interest, deposits for naming rights, and

residential deposits related to KING Toronto .

147

ALLIED 2022 ANNUAL REPORT12 . DEBT

Debt consists of the following items, net of financing costs:

Mortgages payable (a)

Construction loans payable (b)

Promissory note payable (c)

Unsecured revolving operating facility (d)

Senior unsecured debentures (e)

Unsecured term loans (f)

Current

Non-current

(a) Mortgages payable

DECEMBER 31, 2022

DECEMBER 31, 2021

$112,822

223,725

195,673

440,000

2,589,939

649,026

$4,211,185

$346,929

3,864,256

$4,211,185

$118,057

132,696

—

365,000

2,587,989

249,542

$3,453,284

$36,146

3,417,138

$3,453,284

Mortgages payable have a weighted average contractual interest rate of 3 .37% as at December 31,

2022 (December 31, 2021 - 3 .39%) . The mortgages are secured by a first registered charge over specific

investment properties and first general assignments of leases, insurance and registered chattel

mortgages .

2023

2024

2025

2026

2027

2028

2030

Mortgages, principal

Net premium on assumed mortgages

Net financing costs

PRINCIPAL
REPAYMENTS

BALANCE DUE
AT MATURITY

DECEMBER 31,
2022

DECEMBER 31,
2021

$3,069

2,528

6,423

1,391

487

293

5,000

$19,191

$12,230

46,669

—

20,443

—

14,457

—

$15,299

49,197

6,423

21,834

487

14,750

5,000

$93,799

$112,990

$118,094

584

(752)

1,066

(1,103)

$112,822

$118,057

148

ALLIED 2022 ANNUAL REPORT(b) Construction loans payable

As at December 31, 2022, and December 31, 2021, Allied’s obligations under the construction loans are

as follows:

JOINT ARRANGEMENT

OWNERSHIP

DATE OF
MATURITY

DECEMBER 31,
2022

DECEMBER 31,
2021

Adelaide & Duncan

Breithaupt Phase III

KING Toronto

108 East 5th Avenue

50%

August 11, 2023

$85,485

$62,048

June 2, 2023

December 17, 2024

December 6, 2025

50,472

71,762

16,006

31,041

39,607

—

$223,725

$132,696

On January 31, 2019, the Adelaide & Duncan joint arrangement obtained a $270,000 construction

lending facility from a syndicate of Canadian banks, in which Allied’s 50% share is $135,000 . The

loan matures on August 11, 2023, and bears interest at bank prime plus 35 basis points or bankers’

acceptance rate plus 135 basis points with a standby fee of 25 basis points and a letter of credit fee of

100 basis points . Allied is providing a joint and several guarantee of the entire facility and is earning a

related guarantee fee on $135,000 of the guarantee . On August 23, 2019, the Adelaide & Duncan joint

arrangement entered into a swap agreement to fix 75% of the construction costs up to $209,572 at

2 .86% .

On February 21, 2020, Allied and Perimeter obtained a $138,000 construction loan for the Breithaupt

Phase III joint arrangement from a syndicate of Canadian banks, in which Allied’s 50% share is $69,000 .

On December 1, 2022, Allied and Perimeter exercised their option to extend the loan maturity to June

2, 2023, which bears interest at bank prime or bankers’ acceptance rate plus 120 basis points with a

standby fee of 20 basis points and a letter of credit fee of 100 basis points . Allied is providing a joint

and several guarantee of the entire facility and is earning a related guarantee fee on $69,000 of the

guarantee .

On December 17, 2020, Allied and Westbank obtained a $465,000 green construction loan for the

KING Toronto joint arrangement from a syndicate of Canadian banks, in which Allied’s 50% share is

$232,500 . The loan matures on December 17, 2024, and bears interest at bank prime plus 45 basis points

or bankers’ acceptance rate plus 145 basis points with a standby fee of 25 basis points and a letter of

credit fee of 100 basis points . Allied is providing a joint and several guarantee of the entire facility and is

earning a related guarantee fee on $232,500 of the guarantee .

On December 5, 2022, the 108 East 5th Avenue joint arrangement obtained a $150,000 construction

lending facility from a syndicate of Canadian banks, in which Allied’s 50% share is $75,000 . The loan

matures on December 6, 2025, and bears interest at prime plus 35 basis points or bankers’ acceptance

rate plus 135 basis points with a standby fee of 27 basis points and a letter of credit fee rate of 100

basis points . These interest rates and the standby fee (other than the letter of credit fee) are subject

149

ALLIED 2022 ANNUAL REPORTto variability based on the achievement of two distinct sustainability performance targets . For each

sustainability performance target achieved, the interest rate and standby fee would decrease by 0 .025%

per annum and 0 .005% per annum, respectively . In addition, if certain sustainability minimums are

not achieved, the interest rate and standby fee would increase by 0 .025% per annum and 0 .005% per

annum, respectively . Depending on the applicable sustainability performance target or sustainability

minimum, the settlement of these interest rate variations and the standby fee occurs either annually or

at the earlier of December 6, 2025, and the date the construction lending facility is fully repaid . Allied

has provided a joint and several guarantee of the entire facility and is earning a related guarantee fee on

$75,000 of the guarantee . On January 13, 2023, the 108 East 5th Avenue joint arrangement entered into

a swap agreement to fix 75% of the construction costs up to $110,175 at 4 .90% .

On March 31, 2022, Allied acquired a portfolio of six properties from Choice Properties which was

partially settled with the issuance of a $200,000 promissory note (note 4) . The promissory note is

secured by a first registered charge on five of the six acquired properties .

CONTRACTUAL
INTEREST RATE

DATE OF
MATURITY

1 .00% for
2022, 2 .00%
for 2023

December 31,
2023

FREQUENCY
OF INTEREST
PAYMENT

DECEMBER 31,
2022

DECEMBER 31,
2021

Quarterly

$200,000

(4,327)

$195,673

$—

—

$—

Promissory note payable

Net discount on promissory
note payable

(d) Unsecured revolving operating facility

As at December 31, 2022, and December 31, 2021, Allied’s obligation under the unsecured revolving

operating facility (the “Unsecured Facility”) is as follows:

CONTRACTUAL
INTEREST
RATES ON
DRAWINGS

MATURITY
DATE

Unsecured
Facility limit
$600,000 (1)

January 30,
2025

Prime + 0 .20%
or Bankers’
acceptance +
1 .20% (2)

DECEMBER 31, 2022

STANDBY
FEE

FACILITY
LIMIT

DRAWINGS

LETTERS
OF CREDIT

AMOUNT
AVAILABLE

0.24%

$600,000

$(440,000)

$(15,563)

$144,437

(1) This Unsecured Facility contains a $100,000 accordion feature, allowing Allied to increase the amount available under the facility to

$700,000.

(2) The interest rates on drawings for this facility are subject to certain conditions being met. In the event that these conditions are not met,

this Unsecured Facility will bear interest at bank prime plus 45 basis points or bankers’ acceptance plus 145 basis points with a standby fee
of 29 basis points.

150

ALLIED 2022 ANNUAL REPORTMATURITY
DATE

Unsecured
Facility limit
$600,000 (1)

January 30,
2025

CONTRACTUAL
INTEREST
RATES ON
DRAWINGS

Prime + 0 .20%
or Bankers’
acceptance +
1 .20% (2)

DECEMBER 31, 2021

STANDBY FEE

FACILITY
LIMIT

DRAWINGS

LETTERS
OF CREDIT

AMOUNT
AVAILABLE

0 .24%

$600,000

$(365,000)

$(19,025)

$215,975

(1) This Unsecured Facility contains a $100,000 accordion feature, allowing Allied to increase the amount available under the facility to

$700,000.

(2) The interest rates on drawings for this facility are subject to certain conditions being met. In the event that these conditions are not met,

this Unsecured Facility will bear interest at bank prime plus 45 basis points or bankers’ acceptance plus 145 basis points with a standby fee
of 29 basis points.

Allied had a $100,000 bilateral unsecured line of credit with a maturity date of April 20, 2021, bearing

interest at bank prime plus 45 basis points or bankers’ acceptance plus 145 basis points with a standby

fee of 29 basis points .

On January 29, 2021, Allied amended the unsecured facilities to merge the two existing facilities into

one facility with a limit of $500,000 plus a $100,000 accordion feature and extended the maturity to

January 30, 2024 .

On December 31, 2021, Allied amended the unsecured facility to increase the facility limit to $600,000

plus a $100,000 accordion feature and extended the maturity to January 30, 2025 .

(e) Senior unsecured debentures

As at December 31, 2022, and December 31, 2021, Allied’s obligations under the senior unsecured

debentures are as follows:

DATE OF MATURITY INTEREST PAYMENT DATE

DECEMBER 31,
2022

DECEMBER 31,
2021

April 21, 2025

April 21 and October 21

$200,000

CONTRACTUAL
INTEREST
RATE

3 .636%

3 .394%

3 .113%

3 .117%

3 .131%

SERIES

Series C

Series D

Series E

Series F

Series G

Series H

Series I

Unsecured Debentures, principal

Net financing costs

August 15, 2029

February 15 and August 15

April 8, 2027

April 8 and October 8

February 21, 2030

February 21 and August 21

May 15, 2028

May 15 and November 15

1 .726%

February 12, 2026

February 12 and August 12

3 .095%

February 6, 2032

February 6 and August 6

300,000

400,000

300,000

600,000

500,000

300,000

400,000

300,000

600,000

500,000

$2,600,000

(10,061)

(12,011)

$2,589,939

$2,587,989

The Series C, D, E, F, G, H and I Senior Unsecured Debentures are collectively referred to as the

“Unsecured Debentures” .

151

ALLIED 2022 ANNUAL REPORTOn February 12, 2021, Allied issued $600,000 of 1 .726% Series H Unsecured Debentures (the “Series

H Debentures”) due February 12, 2026, with semi-annual interest payments due on February 12 and

August 12 each year commencing on August 12, 2021 . Debt financing costs of $3,100 were incurred and

recorded against the principal owing .

Proceeds from the Series H Debentures were used to redeem in full the $150,000 aggregate principal

amount of 3 .934% Series B Debentures due November 14, 2022, with a financing prepayment cost of

$8,003, prepay $139,213 on a first mortgage with a financing prepayment cost of $6,158, repay $75,000

drawn on Allied’s Unsecured Facility and for general working capital purposes .

On August 6, 2021, Allied issued $500,000 of 3 .095% Series I Unsecured Debentures (the “Series I

Debentures”) due February 6, 2032, with semi-annual interest payments due on February 6 and

August 6 each year commencing on February 6, 2022 . Debt financing costs of $3,000 were incurred

and recorded against the principal owing .

Proceeds from the Series I Debentures were used to prepay $493,840 aggregate principal amount of first

mortgages and for general working capital purposes . The mortgages had a financing prepayment cost

of $38,449 .

The respective financing costs recognized are amortized using the effective interest method and

recorded to interest expense (note 12 (g)) .

(f ) Unsecured term loans

As at December 31, 2022, and December 31, 2021, Allied’s obligations under the unsecured term loans

are as follows:

Unsecured term loan

Unsecured term loans, principal

Net financing costs

CONTRACTUAL
INTEREST RATE

DATE OF
MATURITY

FREQUENCY
OF INTEREST
PAYMENT

DECEMBER 31,
2022

DECEMBER 31,
2021

3 .496%

January 14, 2026 (1)

Monthly

$250,000

4 .865%

October 22, 2025

Monthly

400,000

—

$650,000

$250,000

(974)

(458)

$649,026

$249,542

(1) The unsecured term loan is due on January 14, 2024, with two one-year extensions to January 14, 2026. The swap agreement to fix the rate at

3.496% covers the term including both extensions.

The two unsecured term loans are collectively referred to as “Unsecured Term Loans” . The respective

financing costs are amortized using the effective interest method and recorded to interest expense

(note 12 (g)) .

152

ALLIED 2022 ANNUAL REPORTOn April 22, 2022, Allied entered into an unsecured term loan with a financial institution for

$400,000 at a rate of prime plus 10 basis points or bankers’ acceptance plus 110 basis points, due on

October 22, 2025 . The proceeds from the loan were used to repay the Unsecured Facility . Debt financing

costs of $700 were incurred and recorded against the principal owing . On June 24, 2022, Allied entered

into a swap agreement to fix the rate at 4 .86% . On December 21, 2022, Allied amended the swap

agreement for the settlement period, which increased the rate from 4 .86% to 4 .865% .

(g) Interest expense

Interest expense consists of the following:

Interest on debt:

Mortgages payable

Construction loans payable

Promissory note payable

Unsecured Facility

Unsecured Debentures

Unsecured Term Loans

Interest on lease liabilities (1)

Amortization, net discount (premium) on debt

Amortization, net financing costs

Interest capitalized to qualifying investment properties
and residential inventory

Interest expense excluding financing prepayment costs

Financing prepayment costs (2)

Interest expense

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$4,635

6,487

1,512

11,125

74,705

20,592

3,224

2,401

2,495

$127,176

(53,810)

$73,366

(564)

$72,802

$16,722

2,983

—

2,836

64,940

8,739

3,235

(531)

2,394

$101,318

(39,732)

$61,586

52,610

$114,196

(1) Excludes interest on a lease liability held for sale of $6,532 (December 31, 2021 - $5,949) that is presented separately in the net income from

discontinued operations (note 6).

(2) For the year ended December 31, 2022, financing prepayment costs include $nil of prepayment penalties (December 31, 2021 - $54,357), $nil of

accelerated amortization of net financing costs (December 31, 2021 - $1,210), partially offset by $564 of accelerated amortization of premium
on debt (December 31, 2021 - $2,957).

Borrowing costs have been capitalized to qualifying investment properties and residential inventory at a

weighted average effective rate of 3 .11% per annum (December 31, 2021 – 3 .06%) .

153

ALLIED 2022 ANNUAL REPORT(h) Schedule of principal repayments

The table below summarizes the scheduled principal maturity for Allied’s mortgages payable,

construction loans payable, promissory note payable, Unsecured Facility, Unsecured Debentures and

Unsecured Term Loans as at December 31, 2022 .

2023

2024

2025

2026

2027

THEREAFTER

TOTAL

$3,069

$2,528

$6,423

$1,391

$487

$5,293

$19,191

Mortgages payable,
principal repayments

Mortgages payable,
balance due at maturity

Construction loans payable

135,957

71,762

16,006

12,230

46,669

—

20,443

—

440,000

—

14,457

—

93,799

223,725

200,000

440,000

200,000

600,000

300,000

1,500,000

2,600,000

400,000

250,000

—

650,000

Promissory note payable

200,000

Unsecured Facility

Unsecured Debentures

Unsecured Term Loans

—

Total

$351,256

$120,959

$1,062,429

$871,834

$300,487

$1,519,750

$4,226,715

A description of Allied’s risk management objectives and policies for financial instruments is provided

in note 27 .

13 . LEASE LIABILITIES

Allied’s future minimum lease liability payments as a lessee are as follows:

2023(1)(2)

2024 - 2027(1)(2) THEREAFTER

DECEMBER 31,
2022

DECEMBER 31,
2021

Future minimum lease payments

$10,403

$42,168

$425,412

$477,983

$483,752

(54)

(938)

—

(992)

(191)

Interest accrued (paid) on
lease obligations

Less: amounts representing
interest payments

(10,349)

(41,230)

Present value of lease payments

$—

Current (note 6)

Non-current

(267,346)

$158,066

(318,925)

$158,066

$107,215

50,851

$158,066

(326,011)

$157,550

$—

157,550

$157,550

(1) The future minimum lease payments prior to 2027 are less than the effective interest on the lease liabilities.
(2) Includes future minimum lease payments for the lease liability held for sale.

154

ALLIED 2022 ANNUAL REPORTSome of Allied’s lease agreements contain contingent rent clauses . Contingent rental payments are

recognized in the consolidated statements of income and comprehensive income as required when

contingent criteria are met . The lease agreements contain renewal options, purchase options, escalation

clauses, additional debt and further leasing clauses . For the year ended December 31, 2022, minimum

lease payments of $9,689 (December 31, 2021 - $9,699) were paid by Allied .

14 . ACCOUNTS PAYABLE AND OTHER LIABILITIES

Accounts payable and other liabilities consists of the following:

Trade payables and other liabilities

$245,675

$180,551

DECEMBER 31, 2022

DECEMBER 31, 2021

Prepaid user rents

Accrued interest payable on Unsecured Debentures

Distributions payable on Units

Distributions payable on Exchangeable LP Units (note 16)

Residential deposits (1)

Interest rate swap derivative liabilities

Unit-based compensation liabilities (note 17(c))

Current

Non-current (2)

81,489

23,281

18,656

1,722

42,700

—

738

81,488

23,310

18,101

—

39,693

4,942

—

$414,261

$348,085

$370,823

43,438

$414,261

$303,450

44,635

$348,085

(1) Residential deposits related to the residential condominium units at KING Toronto.
(2) Non-current liabilities as at December 31, 2022, are composed of residential deposits totaling $42,700, unit-based compensation liabilities

totaling $738, and interest rate swap derivative liabilities totaling $nil (December 31, 2021 - $39,693, $nil and $4,942, respectively).

155

ALLIED 2022 ANNUAL REPORT15 . FAIR VALUE MEASUREMENTS

The classification, measurement basis and related fair value disclosures of the financial assets and

liabilities are summarized in the following table:

DECEMBER 31, 2022

DECEMBER 31, 2021

CLASSIFICATION/
MEASUREMENT

CARRYING
VALUE

FAIR VALUE

CARRYING
VALUE

FAIR VALUE

Financial Assets:

Loan receivable from joint venture
(note 8)

Amortized cost

$113,287

Loans and notes receivable (note 9)

Amortized cost

432,112

422,999

367,762

Interest rate swap derivative assets
(note 10)

FVTPL

Accounts receivable (note 11)

Amortized cost

32,401

48,793

32,401

48,793

Cash and cash equivalents (note 22)

Amortized cost

20,990

—

31,875

22,548

—

31,875

22,548

Financial Liabilities:

Debt (note 12)

Mortgages

Amortized cost

$112,822

$107,030

$118,057

$121,169

Construction loans payable

Amortized cost

223,725

132,696

Promissory note payable

Amortized cost

195,673

194,145

—

Unsecured Facility

Amortized cost

440,000

365,000

Unsecured Debentures

Amortized cost

2,589,939

2,255,528

2,587,989

2,608,549

Unsecured Term Loans

Amortized cost

649,026

628,450

249,542

255,366

Accounts payable and other liabilities
(note 14)

Interest rate swap liabilities (note 14)

Unit-based compensation liabilities
(notes 14 and 17(c))

Amortized cost

413,523

343,143

FVTPL

—

738

—

738

4,942

—

Allied uses various methods in estimating the fair value of assets and liabilities that are measured on

a recurring or non-recurring basis in the consolidated balance sheet after initial recognition . The fair

value hierarchy reflects the significance of inputs used in determining the fair values .

— Level 1 – quoted prices in active markets for identical assets and liabilities;

— Level 2 – inputs other than quoted prices in active markets or valuation techniques where

significant inputs are based on observable market data; and

— Level 3 – valuation technique for which significant inputs are not based on observable market data .

156

ALLIED 2022 ANNUAL REPORT
The following table presents the hierarchy of the significance of inputs in determining the fair

value of assets and liabilities for measurement or disclosure based on Allied’s accounting policy

for such instruments:

DECEMBER 31, 2022

DECEMBER 31, 2021

LEVEL 1

LEVEL 2

LEVEL 3

LEVEL 1

LEVEL 2

LEVEL 3

Financial Assets:

Loan receivable from joint venture (note 8)

$—

$113,287

$—

$113,287

$—

Loans and notes receivable (note 9)

Interest rate swap derivative assets
(note 10)

Accounts receivable (note 11)

—

Cash and cash equivalents (note 22)

20,990

422,999

32,401

48,793

—

22,548

367,762

—

31,875

—

Financial Liabilities:

Debt (note 12)

Mortgages

Construction loans payable

Promissory note payable

Unsecured Facility

Unsecured Debentures

Unsecured Term Loans

Accounts payable and other liabilities
(note 14)

Interest rate swap liabilities (note 14)

Unit-based compensation liabilities
(notes 14 and 17(c))

$—

$107,030

$—

$121,169

$—

—

223,725

194,145

440,000

2,255,528

628,450

413,523

—

738

—

132,696

—

365,000

2,608,549

255,366

343,143

4,942

—

There were no transfers between levels of the fair value hierarchy in either period .

157

ALLIED 2022 ANNUAL REPORTThe following summarizes the significant methods and assumptions used in estimating the fair value

of Allied’s financial assets and liabilities measured at fair value:

Interest Rate Swap Derivative Contracts

The fair value of Allied’s interest rate derivative contracts, which represent a net asset as at

December 31, 2022, is $32,401 (December 31, 2021 - net liability of $4,942) . The fair value of the

derivative contracts is determined using forward interest rates observable in the market (Level 2) .

Interest rate swap derivative assets (note 10)

Interest rate swap derivative liabilities (note 14)

Total

Unit-Based Compensation Liabilities

DECEMBER 31, 2022

DECEMBER 31, 2021

$32,401

—

$32,401

$—

(4,942)

$(4,942)

The fair value of Allied’s unit-based compensation liabilities is based on the market value of the

underlying units . For the performance trust units, the performance market conditions are also taken

into consideration .

Debt, Loans and Notes Receivable

The fair value of debt and loans and notes receivable are determined by discounting the cash flows of

these financial instruments using period end market rates for instruments of similar terms and credit

risks that are observable in the market (Level 2) .

16 . EQUITY

The equity of Allied is comprised of Units issued by Allied and Exchangeable LP Units issued by the

Partnership:

Units (authorized - unlimited)

Each Unit represents a single vote at any meeting of holders of Units and Special Voting Units (as

defined below) and entitles the holders of Units and Special Voting Units to receive a pro rata share of all

distributions, in accordance with the conditions provided for in the Declaration of Trust .

Exchangeable LP Units (authorized - unlimited)

Exchangeable LP Units issued by the Partnership are economically equivalent to Units, receive

distributions equal to the distributions paid on the Units and are exchangeable, at the holder’s option,

for Units . All Exchangeable LP Units are held, directly or indirectly, by Choice Properties .

158

ALLIED 2022 ANNUAL REPORTThe 11,809,145 Exchangeable LP Units issued on March 31, 2022, in connection with the acquisition of

certain properties (see note 4) contain lock-up and standstill restrictions . The lock-up will expire based

on the following schedule:

LOCK-UP EXPIRATION DATE

NUMBER OF EXCHANGEABLE LP UNITS ELIGIBLE FOR RELEASE

June 30, 2023

September 30, 2023

December 31, 2023

March 31, 2024

2,952,286

2,952,287

11,809,145

Each Exchangeable LP Unit is accompanied by one special voting unit of Allied (“Special Voting Unit”)

which provides the holder thereof with the right to one vote at all meetings of holders of Units and

Special Voting Units .

The following represents the number of Units and Exchangeable LP Units issued and outstanding, and

the related carrying value of equity, for the years ended December 31, 2022 and December 31, 2021 .

NUMBER ISSUED AND OUTSTANDING

AMOUNT

UNITS

EXCHANGEABLE
LP UNITS

TOTAL
EQUITY

UNITS

EXCHANGEABLE
LP UNITS

TOTAL
EQUITY

Balance at January 1, 2021

127,259,218

Restricted Unit Plan
(net of forfeitures) (note 17(b))

Unit Option Plan -
options exercised (note 17(a))

Unit issuance (net of costs)

—

1,533

477,100

Balance at December 31, 2021

127,737,851

Restricted Unit Plan
(net of forfeitures (note 17(b))

Unit Option Plan -
options exercised (note 17(a))

—

6,332

—

127,259,218

$3,884,661

$—

$3,884,661

—

(2,141)

1,533

477,100

20,079

—

(2,141)

20,079

127,737,851

$3,902,655

$—

$3,902,655

—

(2,661)

6,332

200

9,184

—

(2,661)

200

550,660

559,844

Unit issuance (net of costs)

211,800

11,809,145

12,020,945

Balance at December 31, 2022

127,955,983

11,809,145

139,765,128 $3,909,378

$550,660

$4,460,038

159

ALLIED 2022 ANNUAL REPORTDuring the year ended December 31, 2022, the acquisition of six office assets from Choice Properties

was satisfied in part by the issuance of 11,809,145 Exchangeable LP Units . In January 2022, Allied issued

211,800 Units under the at-the-market program (“ATM Program”) in settlement of trades executed at the

end of December 2021 at a weighted average price of $44 .02 per Unit for gross proceeds of $9,324, and

incurred commissions of $140, for net proceeds of $9,184 . The ATM Program is described in note 27

(a)

During the year ended December 31, 2021, Allied issued 477,100 Units under the ATM Program at a

weighted average price of $44 .07 per Unit for gross proceeds of $21,028, and incurred commissions

of $315, for net proceeds of $20,713 . Issuance costs on the ATM Program were $634 for the year ended

December 31, 2021 . The commissions and issuance costs were applied against the gross proceeds and

charged against Unitholders’ equity .

Allied does not hold any of its own Units, nor does Allied reserve any Units for issue under options

and contracts .

Distributions

On January 16, 2023, Allied declared a distribution for the month of January 2023 of $0 .15 per Unit,

representing $1 .80 per Unit on an annualized basis to Unitholders of record as at January 31, 2023 .

On each date that a distribution is declared by Allied on the Units, a distribution in an equal amount

per unit is declared by the Partnership on the Exchangeable LP Units . A holder of Exchangeable LP

Units may elect to defer receipt of all or a portion of distributions declared by the Partnership until

the first business day following the end of the fiscal year . If the holder elects to defer, the Partnership

will loan the holder an amount equal to the deferred distribution without interest, and the loan will

be due and payable on the first business day following the end of the fiscal year during which the loan

was advanced . The distributions declared by the Partnership on the Exchangeable LP Units from April

1, 2022 to December 31, 2022 was $15,496, for which Choice Properties elected to receive a loan in lieu

of all of the distributions . Of the $15,496 loan in lieu of distributions, a note receivable of $13,774 was

issued to Choice Properties for the cash advances made during the nine months ended December 31,

2022, with the remaining $1,722 advanced to Choice Properties as a note receivable on January 16, 2023 .

Since there is a legally enforceable right and an intention by Allied and Choice Properties to settle the

note receivable from Choice Properties and the distributions payable to Choice Properties on a net basis

on the first business day following the end of the fiscal year, these financial instruments are offset on the

balance sheet . On January 3, 2023, $13,774 of the note receivable due from Choice Properties was settled

on a net basis against the distributions payable to Choice Properties .

On January 16, 2023, the Partnership declared a distribution for the month of January 2023 of $0 .15 per

Exchangeable LP Unit, representing $1 .80 per Exchangeable LP Unit on an annualized basis to holders

of the Exchangeable Units as at January 31, 2023, for which Choice Properties elected to receive a loan in

lieu of the distribution .

160

ALLIED 2022 ANNUAL REPORTNormal Course Issuer Bid

On February 22, 2022, Allied received approval from the Toronto Stock Exchange (“TSX”) for the

renewal of its normal course issuer bid (“NCIB”), which entitles Allied to purchase up to 12,602,594

of its outstanding Units, representing approximately 10% of its public float as at February 10, 2022 .

The NCIB commenced February 24, 2022, and will expire on February 23, 2023, or such earlier date

as Allied completes its purchases pursuant to the NCIB . All purchases under the NCIB will be made

on the open market through the facilities of the TSX or alternate trading systems in Canada at market

prices prevailing at the time of purchase . Any Units that are repurchased will either be cancelled

or delivered to participants under Allied’s Restricted Unit Plan or to employees pursuant to Allied’s

employee programs .

During the year ended December 31, 2022, Allied purchased 61,725 Units for $2,664 at a weighted

average price of $43 .16 per Unit under its NCIB program, of which 61,148 Units were purchased for

delivery to participants under Allied’s Restricted Unit Plan and 577 Units were purchased for certain

employee rewards outside of Allied’s Restricted Unit Plan .

17 . COMPENSATION PLANS

(a) Unit Option Plan

Allied adopted a Unit Option Plan providing for the issuance, from time to time, at the discretion of

the trustees, of options to purchase Units for cash . Participation in the Unit Option Plan is restricted

to certain employees of Allied . The Unit Option Plan complies with the requirements of the TSX . The

exercise price of any option granted will not be less than the closing market price of the Units on the

day preceding the date of grant . Options granted prior to February 22, 2017, vest evenly over three years

and options granted subsequently vest evenly over four years from the date of grant . All options are

settled in Units . Effective December 2021, no further options will be granted under the Unit Option Plan .

SUMMARY OF UNIT OPTION GRANTS:

Date granted

EXPIRY DATE

UNIT OPTIONS
GRANTED

EXERCISE
PRICE

EXERCISED -
LIFE TO DATE

FORFEITED -
LIFE TO DATE

NET
OUTSTANDING

VESTED

March 1, 2016

March 1, 2026

540,480

$31 .56

(350,831)

(19,132)

170,517

February 22, 2017

February 22, 2027

279,654

$35 .34

(23,576)

February 14, 2018

February 14, 2028

198,807

$40 .30

(14,685)

—

February 13, 2019

February 13, 2029

323,497

$47 .53

(2,717)

(4,330)

256,078

184,122

316,450

184,122

241,451

February 5, 2020

February 5, 2030

352,230

$54 .59

—

(1,594)

350,636

183,376

February 3, 2021

February 3, 2031

442,233

$36 .55

(1,533)

(1,460)

439,240

115,730

2,136,901

(393,342)

(26,516)

1,717,043

1,151,274

161

ALLIED 2022 ANNUAL REPORTYEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

THE RANGE OF
EXERCISE PRICES

WEIGHTED AVERAGE
REMAINING
CONTRACTUAL
LIFE (YEARS)

THE RANGE OF
EXERCISE PRICES

WEIGHTED AVERAGE
REMAINING
CONTRACTUAL
LIFE (YEARS)

For the Units outstanding at
the end of the year

$31.56-54.59

6.13

$31 .56-54 .59

7 .13

DECEMBER 31, 2022

DECEMBER 31, 2021

YEAR ENDED

NUMBER
OF UNITS

WEIGHTED
AVERAGE
EXERCISE PRICE

Balance, beginning of year

1,726,381

Granted

Forfeited

Exercised

Balance, end of year

—

(3,006)

(6,332)

1,717,043

$41.95

—

43.28

31.56

$41.98

NUMBER
OF UNITS

1,288,229

442,233

(2,548)

(1,533)

1,726,381

WEIGHTED
AVERAGE
EXERCISE PRICE

$43 .81

36 .55

50 .92

36 .55

$41 .95

Units exercisable at the end of
the year

1,151,274

$41.32

842,672

$40 .05

Allied accounts for its Unit Option Plan using the fair value method, under which compensation

expense is measured at the date options are granted and recognized over the vesting period . Allied

utilizes the Black-Scholes Model for the valuation of Unit options with no performance criteria .

Assumptions utilized in the Black-Scholes Model for the valuation of options granted are as follows:

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

—

—%

$—

442,233

21 .38%

4 .65%

0 .84%

$1,441

Unit options granted

Unit option holding period (years)

Volatility rate

Distribution yield

Risk-free interest rate

Value of options granted

162

ALLIED 2022 ANNUAL REPORTThe underlying expected volatility was determined by reference to historical data of Allied’s Units over

10 years .

For the year ended December 31, 2022, Allied recorded a unit-based compensation expense of $876

(December 31, 2021 - $1,740) in general and administrative expense in the consolidated statements of

income and comprehensive income .

(b) Restricted Unit Plan

Certain employees and the Trustees of Allied may be granted Restricted Units pursuant to the terms of

the Restricted Unit Plan, which are subject to vesting conditions and disposition restrictions, in order

to provide a long-term compensation incentive . The Restricted Units will not vest and remain subject

to forfeiture until the participant has held his or her position with Allied for a specific period of time .

Generally, one third of the Restricted Units vest on each of the first, second and third anniversaries from

the date of grant for employees . Restricted Units granted to non-management trustees are fully vested

on the grant date . Units required under the Restricted Unit Plan are acquired in the secondary market

through a custodian and then distributed to the individual participant accounts . Restricted Units are

released to participants forthwith following the sixth anniversary of the award date or such other date

as determined in accordance with the Restricted Unit Plan .

The following is a summary of the activity of Allied’s Restricted Unit Plan:

Restricted Units, beginning of year

Granted

Released

Forfeited

Restricted Units, end of year

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

296,810

61,148

(35,444)

(103)

322,411

288,135

58,260

(49,585)

—

296,810

For the year ended December 31, 2022, Allied recorded a unit-based compensation expense of

$2,807 (December 31, 2021 - $2,376) in general and administrative expense in the consolidated

statements of income and comprehensive income . During the year ended December 31, 2022,

103 Restricted Units were forfeited for $4 at a weighted average price of $34 .41 per Unit .

163

ALLIED 2022 ANNUAL REPORT(c) Performance and Restricted Trust Unit Plan

In December 2021, Allied adopted a cash settled performance and restricted trust unit plan (the “PTU/

RTU Plan”) whereby performance trust units and/or restricted trust units (together, “Plan Units”) are

granted to certain employees at the discretion of the Board . Plan Units are subject to such vesting,

settlement, performance criteria and adjustment factors as are established by the Board at the time of

the grant and accumulate distribution equivalents in the form of additional Plan Units . The PTU/RTU

Plan contains provisions providing for the vesting or forfeiture of unvested Plan Units within specified

time periods in the event the employee’s employment is terminated, and authorizes the Chief Executive

Officer, in their discretion, to amend the vesting and settlement of Plan Units in certain circumstances

where an employee’s employment is terminated . The following is a summary of the activity of Allied’s

PTU/RTU Plan:

Plan Units, beginning of year

Granted

Forfeited

Distribution equivalents

Plan Units, end of year

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

—

172,500

(1,035)

7,728

179,193

—

For the year ended December 31, 2022, Allied recorded a unit-based compensation expense of $738

(December 31, 2021 - $nil), including the mark-to-market adjustment, in general and administrative

expense in the consolidated statements of income and comprehensive income .

18 . WEIGHTED AVERAGE NUMBER OF UNITS

The weighted average number of Units and Exchangeable LP Units for the purpose of calculating basic

and diluted income per unit is as follows:

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

127,951,020

8,929,655

136,880,675

23,407

136,904,082

127,305,384

—

127,305,384

150,445

127,455,829

Units

Exchangeable LP Units (1)

Total units - basic

Unit Option Plan

Total units - fully diluted

(1)

Issued on March 31, 2022.

164

ALLIED 2022 ANNUAL REPORT19 . NET INCOME PER UNIT

Net income per basic and diluted unit is calculated based on net income and comprehensive income

divided by the weighted average number of units taking into account the dilution effect of Unit options .

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

Net income and comprehensive income from continuing operations
attributable to Unitholders

Net income and comprehensive income from discontinued operations
attributable to Unitholders

Net income and comprehensive income attributable to Unitholders

Net income and comprehensive income attributable to
non-controlling interests

Net income and comprehensive income

$168,161

200,694

$368,855

6,508

$375,363

$331,381

111,770

$443,151

—

$443,151

Net income and comprehensive income per unit (basic and diluted):

DECEMBER 31, 2022

DECEMBER 31, 2021

YEAR ENDED

Continuing operations

Discontinued operations

Attributable to Unitholders

Attributable to non-controlling interests

Net income and comprehensive income per unit (basic and diluted)

$1.23

1.46

$2.69

0.05

$2.74

$2 .60

0 .88

$3 .48

—

$3 .48

20 . TOTAL REVENUE

Total revenue includes the following:

Rental revenue (1)

Tax and insurance recoveries

Miscellaneous revenue (2)

Operating cost recoveries

Total rental revenue from continuing operations

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$252,650

99,633

21,937

145,248

$519,468

$226,962

94,030

15,310

136,497

$472,799

Includes straight-line rent, amortization of tenant improvements and parking revenue earned at properties.

(1)
(2) Includes transient parking, percentage rent, lease terminations and other miscellaneous items.

165

ALLIED 2022 ANNUAL REPORTFuture minimum rental income from continuing operations is as follows:

2023

2024

2025

2026

2027

THEREAFTER

TOTAL

Future minimum
rental income

$296,945

$284,262

$258,496

$229,532

$193,992

$800,562

$2,063,789

21 . GENERAL AND ADMINISTRATIVE EXPENSES

Salaries and benefits

Professional and trustee fees

Office and general expenses

Capitalized to qualifying investment properties

Total general and administrative expenses

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$21,119

6,051

5,549

$32,719

(10,126)

$22,593

$21,683

4,481

5,816

$31,980

(6,146)

$25,834

22 . SUPPLEMENTAL CASH FLOW INFORMATION

The following summarizes supplemental cash flow information in operating activities:

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

Supplemental

Interest paid on debt (including capitalized interest and financing
prepayment costs (note 12))

$131,537

$152,840

The following summarizes supplemental cash flow information in investing activities:

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$13,625

$51,750

Supplemental

Mortgages assumed (note 4)

166

ALLIED 2022 ANNUAL REPORTThe following summarizes the change in non-cash operating items:

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

Net change in accounts receivable, prepaid expenses and deposits

Net change in loans and notes receivable

Net change in accounts payable and other liabilities

Other working capital changes

Change in non-cash operating items

$(8,483)

(64,350)

66,176

45,565

$38,908

$7,391

(45,126)

6,879

65,702

$34,846

23 . JOINT OPERATIONS

Allied has investments in properties under joint arrangements which are accounted for as joint

operations . The following tables summarize Allied’s ownership interests in joint operations and its share

of the rights to the assets, its share of the obligations with respect to liabilities, and its share of revenues

and expenses for the joint operations in which it participates .

Allied’s joint arrangements are governed by agreements with the respective co-owners . Included within

the agreements are standard exit and transfer provisions that include, but are not limited to, buy/sell

and/or right of first offers or refusals that provide for unwinding the arrangement . Allied is liable for its

proportionate share of the obligations of the arrangement . In the event that there is default on payment

by the co-owner, credit risk is typically mitigated with an option to remedy any non-performance by

the defaulting co-owner, as well as recourse against the asset, whereby claims would be against both the

underlying real estate investments and the co-owner in default .

PROPERTIES

LOCATION

CURRENT STATUS

DECEMBER 31, 2022 DECEMBER 31, 2021

OWNERSHIP

642 King W

Toronto, ON

Rental Property

Adelaide & Duncan

Toronto, ON

Property Under Development

Breithaupt Block

Kitchener, ON

College & Manning

Toronto, ON

College & Palmerston

Toronto, ON

Rental Property and
Property Under Development

Rental Property

KING Toronto

Toronto, ON

Property Under Development

King Portland Centre

Toronto, ON

Rental Property

The Well

Toronto, ON

Rental Property and
Property Under Development

108 East 5th Avenue

Vancouver, BC

Property Under Development

175 Bloor Street E

Toronto, ON

110 Yonge Street

Toronto, ON

Rental Property

50%

N/A

167

ALLIED 2022 ANNUAL REPORTTotal assets

Total liabilities

Revenue

Expenses

Income before impairment and fair value adjustment on
investment properties

Impairment of KING Toronto

Fair value gain on investment properties

Net income

24 . SEGMENTED INFORMATION

DECEMBER 31, 2022

DECEMBER 31, 2021

$2,016,405

$570,821

$1,502,233

$444,135

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

$35,071

(13,669)

21,402

(15,729)

10,416

$16,089

$16,072

(8,199)

7,873

—

82,050

$89,923

IFRS 8, Operating Segments, requires reportable segments to be determined based on internal reports

that are regularly reviewed by the chief operating decision maker (“CODM”) for the purpose of

allocating resources to the segment and assessing its performance . Allied has determined that its

CODM is the President and Chief Executive Officer . Allied’s operating segments are managed by use of

properties and cities . The urban office properties are managed by geographic location consisting of four

groups of cities .

The CODM measures and evaluates the performance of Allied’s operating segments based on net rental

income and operating income .

Management reviews assets and liabilities on a total basis and therefore assets and liabilities are not

included in the segmented information below . All revenue is generated in Canada and all assets and

liabilities are located in Canada .

Allied does not allocate interest expense to segments as debt is viewed by Management to be used for

the purpose of acquisitions, development and improvement of all the properties . Similarly, general and

administrative expenses, interest income, fair value of investment properties and investment properties

held for sale, fair value of derivative instruments and impairment of residential inventory are not

allocated to operating segments .

As at December 31, 2022, the Urban Data Centre segment has been classified as discontinued operations

(note 6) and is therefore excluded from the following tables, which present a reconciliation of operating

income to net income from continuing operations for the years ended December 31, 2022 and 2021 .

168

ALLIED 2022 ANNUAL REPORTSEGMENTED CONSOLIDATED STATEMENTS OF INCOME FROM CONTINUING OPERATIONS

YEAR ENDED
DECEMBER 31, 2022

MONTRÉAL
& OTTAWA

TORONTO &
KITCHENER

CALGARY &
EDMONTON (1) VANCOUVER

JOINT
VENTURE
(TELUS SKY) (2)

TOTAL

Rental revenue

$209,163

$230,638

$39,561

$46,877

$(6,771)

$519,468

Property operating costs

(106,385)

(85,416)

(20,417)

(15,885)

3,843

(224,260)

Net rental income and
operating income

Interest expense

General and administrative
expenses

Condominium marketing
expenses

Amortization of other
assets

Interest income

Fair value loss on
investment properties and
investment properties held
for sale

Fair value gain on derivative
instruments

Impairment of residential
inventory

Net loss from joint venture

Net income from
continuing operations

$102,778

$145,222

$19,144

$30,992

$(2,928)

$295,208

(72,802)

(22,593)

(602)

(1,325)

32,080

(73,750)

37,343

(15,729)

(3,161)

$174,669

Includes Allied’s proportionate share of revenue and expenses of its investment in TELUS Sky.

(1)
(2) This is an adjustment to remove the impact of the TELUS Sky joint venture from the Calgary and Edmonton results, to arrive at the equity

method of accounting.

169

ALLIED 2022 ANNUAL REPORTTOTAL

$472,799

(204,792)

YEAR ENDED
DECEMBER 31, 2021

MONTRÉAL &
OTTAWA

TORONTO &
KITCHENER

CALGARY &
EDMONTON (1) VANCOUVER

JOINT
VENTURE
(TELUS SKY) (2)

Rental revenue

Property operating costs

Net rental income and
operating income

Interest expense

General and administrative
expenses

Condominium marketing
expenses

Amortization of other assets

Interest income

Fair value gain on investment
properties and investment
properties held for sale

Fair value gain on derivative
instruments

Net loss from joint venture

Net income from continuing
operations

$201,222

(99,074)

$209,095

(79,318)

$37,337

(19,061)

$30,052

(10,613)

$(4,907)

3,274

$102,148

$129,777

$18,276

$19,439

$(1,633)

$268,007

(114,196)

(25,834)

(573)

(1,167)

28,023

161,222

16,350

(451)

$331,381

Includes Allied’s proportionate share of revenue and expenses of its investment in TELUS Sky.

(1)
(2) This is an adjustment to remove the impact of the TELUS Sky joint venture from the Calgary and Edmonton results, to arrive at the equity

method of accounting.

25 . INCOME TAXES

Allied qualifies as a REIT and MFT for income tax purposes . Pursuant to its Declaration of Trust, it

also distributes or designates substantially all of its taxable income to Unitholders and deducts such

distributions or designations for income tax purposes . Accordingly, there is no entity level tax and no

provision for current and deferred income taxes in the financial statements . Income tax obligations

relating to distributions of Allied are the obligations of the Unitholders .

170

ALLIED 2022 ANNUAL REPORT26 . RELATED PARTY TRANSACTIONS

Allied’s related parties include its subsidiaries, nominee corporations, Allied Properties Management

Trust, Allied Properties Management Limited Partnership, Allied Properties Management GP Limited,

Allied Properties Exchangeable Limited Partnership, Allied Properties Exchangeable GP Inc ., the TELUS

Sky joint venture, key management, Board of Trustees and their close family members .

Allied engages in third-party property management business, including the provision of services for

properties in which a trustee of Allied has an ownership interest . For the year ended December 31,

2022, real estate service revenue earned from these properties was $405 (December 31, 2021 - $413) .

As at December 31, 2022, the loan to the TELUS Sky joint venture has a balance outstanding of $113,287

(December 31, 2021 - $113,287) (see note 8) .

The transactions are in the normal course of operations and were measured at the amount set out in

agreement between the respective property owners . Related party transactions were made on terms

equivalent to those that prevail in arm’s length transactions .

Transactions with key management personnel are summarized in the table below:

Salary, bonus and other short-term employee benefits

Unit-based compensation

Total

$4,452

4,328

$8,780

$4,906

3,177

$8,083

YEAR ENDED

DECEMBER 31, 2022

DECEMBER 31, 2021

171

ALLIED 2022 ANNUAL REPORT27 . RISK MANAGEMENT

(a) Capital management

Allied defines capital as the aggregate of equity, mortgages payable, construction loans payable,

promissory note payable, Unsecured Facility, Unsecured Debentures, Unsecured Term Loans and

lease liabilities . Allied manages its capital to comply with investment and debt restrictions pursuant

to the Declaration of Trust, to comply with debt covenants, to ensure sufficient operating funds are

available to fund business strategies, to fund leasing and capital expenditures, to fund acquisitions

and development activities of properties, and to provide stable and growing cash distributions

to Unitholders .

Various debt, equity and earnings distributions ratios are used to monitor capital adequacy

requirements . For debt management, debt to gross book value and fair value, debt average term to

maturity, and variable debt as a percentage of debt are the primary ratios used in capital management .

The Declaration of Trust requires Allied to maintain debt to gross book value, as defined by the

Declaration of Trust, of less than 60% (65% including convertible debentures, if any) and the variable

rate debt and debt having maturities of less than one year to not exceed 15% of gross book value . As at

December 31, 2022, the debt to gross book value ratio was 35 .6% (December 31, 2021 - 33 .5%) and debts

having variable interest rates or maturities of less than one year aggregated to 7 .4% of gross book value

(December 31, 2021 - 4 .2%) .

On June 2, 2021, Allied filed a short form base shelf prospectus allowing for the issuance, from time to

time, of Units and debt securities, or any combination thereof having an aggregate offering price of up

to $3,000,000 . This document is valid for a 25-month period . The short form base shelf prospectus filed

on June 2, 2021 was amended on November 11, 2021 (the “Shelf Prospectus”), and was filed in each of

the provinces and territories of Canada . On November 12, 2021, Allied filed a prospectus supplement to

its Shelf Prospectus, allowing Allied to offer and issue Units under the ATM Program up to $300,000 .

Distributions of Units under the ATM Program, if any, will be made pursuant to the terms of an equity

distribution agreement (the “Distribution Agreement”) dated November 12, 2021, entered into among

Allied, Goldman Sachs Canada Inc ., National Bank Financial Inc . and Scotia Capital Inc . The volume

and timing of any distributions of Units under the ATM Program will be determined in Allied’s sole

discretion . The ATM Program will be effective until July 2, 2023, unless earlier terminated in accordance

with the terms of the Distribution Agreement . As Units distributed under the ATM Program will be

issued and sold at the prevailing market price at the time of the sale, prices may vary among purchasers

during the period of the ATM Program .

Allied has certain key financial covenants in its Unsecured Debentures, Unsecured Facility and

Unsecured Term Loans . The key financial covenants include debt service ratios and leverage ratios, as

defined in the respective agreements . These ratios are evaluated by Allied on an ongoing basis to ensure

compliance with the agreements . Allied was in compliance with each of the key financial covenants

under these agreements as at December 31, 2022 .

172

ALLIED 2022 ANNUAL REPORT(b) Market risk

Market risk is the risk that the fair value or future cash flow of financial instruments will fluctuate

because of changes in market prices . Allied is exposed to interest rate risk on its borrowings . All of

Allied’s mortgages payable as at December 31, 2022 are at fixed interest rates and are not exposed to

changes in interest rates during the term of the debt . However, there is interest rate risk associated

with Allied’s fixed interest rate term debt due to the expected requirement to refinance such debts

upon maturity . As fixed rate debt matures and as Allied utilizes additional floating rate debt under the

Unsecured Facility, Allied will be further exposed to changes in interest rates . As at December 31, 2022,

the Unsecured Facility, which is at a floating interest rate and is exposed to changes in interest rates,

had a balance outstanding of $440,000 (December 31, 2021 - $365,000) . Also, Allied has construction

loans payable, of which $138,240 is subject to floating interest rates and is exposed to changes in

interest rates (December 31, 2021 - $70,648) . In addition, there is a risk that interest rates will fluctuate

from the date Allied commits to a debt to the date the interest rate is set with the lender . As part of its

risk management program, Allied endeavours to maintain an appropriate mix of fixed rate and floating

rate debt, to stagger the maturities of its debt and to minimize the time between committing to a debt

and the date the interest rate is set with the lender .

The following table illustrates the annualized sensitivity of income and equity to a reasonably possible

change in interest rates of +/- 1 .0% . These changes are considered to be reasonably possible based on

observation of current market conditions . The calculations are based on a change in the average market

interest rate for each period, and the financial instruments held at each reporting date that are sensitive

to changes in interest rates . All other variables are held constant .

AS AT DECEMBER 31, 2022

CARRYING AMOUNT

INCOME IMPACT

-1.0%

+1.0%

Unsecured Facility

Construction loans payable (1)

Mortgages payable due within one year

Promissory note

$440,000

$223,725

$15,299

$195,673

$4,400

$2,237

$153

$1,957

$(4,400)

$(2,237)

$(153)

$(1,957)

(1)

Includes a construction loan of $85,485, which is due within a year and $138,240 construction loans which are subject to floating interest
rates, of which $50,472 is due within one year.

173

ALLIED 2022 ANNUAL REPORT(c) Credit risk

As Allied has provided loans and advances to facilitate property development, further credit risks arise

in the event that borrowers default on the repayment of their amounts owing to Allied . Allied’s loans

and advances will be subordinate to prior ranking mortgages or charges . As at December 31, 2022, Allied

had $432,032 outstanding in loans receivable (December 31, 2021 - $367,579) and $113,287 outstanding

in joint venture loan receivable (December 31, 2021 - $113,287) . In the event of a large commercial real

estate market correction, the fair market value of an underlying property may be unable to support

the loan value . Allied mitigates this risk by obtaining corporate guarantees and/or registered mortgage

charges and assignment of leases, performing credit checks on potential borrowers, monitoring the

financial and operating performance of borrowers, monitoring the status of development projects and

ensuring interest payments are made on time . The expected credit losses estimated by Management,

giving consideration to the factors above, as at December 31, 2022, are $nil (December 31, 2021 - $nil)

(note 9) .

Credit risk from user receivables arises from the possibility that users may experience financial difficulty

and be unable to fulfill their lease commitments, resulting in Allied incurring a financial loss . Allied

manages credit risk to mitigate exposure to financial loss by staggering lease maturities, diversifying

revenue sources over a large user base, ensuring no individual user contributes a significant portion of

Allied’s revenues and conducting credit reviews of new users . The expected credit losses estimated by

Management at December 31, 2022, are $11,336 (December 31, 2021 - $9,177) (note 11

(a)

) .

Allied considers that all the financial assets that are not impaired or past due for each of the reporting

dates under review are of good quality . The carrying amount of accounts receivable best represents

Allied’s maximum exposure to credit risk . None of Allied’s financial assets are secured by collateral or

other credit enhancements .

An aging of trade receivables, including trade receivables past due but not impaired can be shown

DECEMBER 31, 2022

DECEMBER 31, 2021

$1,677

3,129

15,058

$19,864

$4,204

2,190

10,265

$16,659

as follows:

Less than 30 days

30 to 60 days

More than 60 days

Total

174

ALLIED 2022 ANNUAL REPORT(d) Liquidity risk

Liquidity risk arises from the possibility of not having sufficient capital available to fund ongoing

operations or the ability to refinance or meet obligations as they come due . Mitigation of liquidity risk

is also managed through credit risk as discussed above . A portion of Allied’s assets have been pledged

as security under the related mortgages and other security agreements . Contractual interest rates on

the mortgages payable are between 2 .77% and 4 .30% for December 31, 2022 (December 31, 2021 - 2 .77%

and 4 .30%) .

Allied entered into interest rate derivative contracts to limit its exposure to fluctuations in interest rates

on $650,000 of its variable rate unsecured term loan and $85,485 of its construction loans (December

31, 2021 - $250,000 and $62,048, respectively) . As at December 31, 2021, Allied repaid all of its variable

rate mortgages payable and exited its associated interest rate derivative contracts on these mortgages

payable with a cash settlement of $3,781 . Gains or losses arising from the change in fair values of

the interest rate derivative contracts are recognized in the consolidated statements of income and

comprehensive income . For the year ended December 31, 2022, Allied recognized as part of the change

in fair value adjustment on derivative instruments a fair value gain of $37,343 (December 31, 2021 -

$16,350) .

Liquidity and capital availability risks are mitigated by maintaining appropriate levels of liquidity,

diversifying Allied’s sources of funding, maintaining a well-staggered debt maturity profile and actively

monitoring market conditions .

(e) Maturity analysis

The undiscounted future principal and interest payments on Allied’s debt instruments are as follows:

2023

2024

2025

2026

2027

THEREAFTER TOTAL

Mortgages payable

$18,589

$51,754

$7,842

$23,199

$1,088

$20,091

$122,563

Construction loans payable

146,322

77,106

17,004

Promissory note payable

204,000

Unsecured Facility

Unsecured Debentures

29,260

74,485

—

29,260

74,485

—

442,438

—

240,432

204,000

500,958

270,849

662,035

352,188

1,625,868

3,059,910

Unsecured Term Loans

28,200

424,957

250,335

—

731,692

Total

$500,856

$260,805

$1,163,090

$935,569

$353,276

$1,645,959

$4,859,555

(f ) Unit price risk

Unit price risk arises from the unit-based compensation liabilities which are recorded at fair value at

each quarter-end date . Allied’s unit-based compensation liabilities negatively impact operating income

when the Unit price rises and positively impact operating income when the Unit price declines .

175

ALLIED 2022 ANNUAL REPORT28 . COMMITMENTS AND CONTINGENCIES

Allied has entered into commitments for acquisitions, development activity and building renovations

from leasing activity . The commitments as at December 31, 2022 were $247,819 (December 31, 2021 -

$473,779) .

Commitments as at December 31, 2022 of $510 (December 31, 2021 - $354) were held within equity

accounted investments .

As at December 31, 2022, there are no committed acquisitions (December 31, 2021 - $126,198 for the

acquisition of 700 Saint-Hubert, which closed on October 31, 2022) .

Allied is subject to legal and other claims in the normal course of business . Management and legal

counsel evaluate all claims . In the opinion of Management these claims are generally covered by Allied’s

insurance policies and any liability from such remaining claims are not probable to occur and would not

have a material effect on the consolidated financial statements .

Allied, through a financial intermediary, has issued letters of credit in the amount of $23,952 as at

December 31, 2022 (December 31, 2021 - $28,256) .

176

ALLIED 2022 ANNUAL REPORTCorporate Profile

About Us

Allied is a leading operator of distinctive urban workspace in Canada’s major cities and network-dense UDC

space in Toronto . Allied’s mission is to provide knowledge-based organizations with workspace and UDC

space that is sustainable and conducive to human wellness, creativity, connectivity and diversity . Allied’s

vision is to make a continuous contribution to cities and culture that elevates and inspires the humanity in

all people .

177

ALLIED 2022 ANNUAL REPORTSenior Management

Board of Trustees

Michael Emory
President and Chief Executive Officer

Tom Burns
Executive Vice President and Chief Operating Officer

Cecilia Williams
Executive Vice President and Chief Financial Officer

Hugh Clark
Executive Vice President, Development

Doug Riches
Executive Vice President, Special Operations

Matthew Andrade (1)

Gordon Cunningham (2)

Kay Brekken (1)(2)

Michael Emory

Hazel Claxton (2)

Toni Rossi (2)

Gerald Connor (1)

Stephen Sender (1)

Lois Cormack (1)(2)

Jennifer Tory (2)

HEAD OFFICE

TRANSFER AGENT & REGISTRAR

134 Peter Street, Suite 1700

Toronto, Ontario M5V 2H2

T . 416 .977 .9002 | F . 416 .306 .8704

STOCK EXCHANGE LISTING AND SYMBOL

Toronto Stock Exchange

Units - AP .UN

AUDITORS

Deloitte LLP

(1) Audit Committee
(2) Governance, Compensation and Nomination Committee

TSX Trust Company

P .O . Box 700, Postal Station B

Montreal, Quebec H3B 3K3

T . 1 .800 .387 .0825 | F . 1 .888 .249 .6189

E-mail: shareholderinquiries@tmx .com

Website: www .tsxtrust .com

INVESTOR RELATIONS

T . 416 .977 .9002

Email: info@alliedreit .com

Website: www .alliedreit .com

178

ALLIED 2022 ANNUAL REPORT