Allied Properties Real Estate Investment Trust Annual Report 2023

Plain-text annual report

Annual Report December 31, 2023 Urban environments for creativity and connectivity 01. 31.24 Annual Report December 31, 2023 Contents MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION AS AT DECEMBER 31, 2023 . . . . . . . . . . . . . . . . . . . . 5 SECTION I—Overview . . . . . . . . . . . . . . . . . . . . . . . 6 Summary of Key Operating and Financial Performance Measures . . . . . . . . . . . . . . . 7 Operating and Financial Highlights . . . . . . . . . . . . . 9 Summary of Rental Properties . . . . . . . . . . . . . . . . 11 Business Overview and Strategy . . . . . . . . . . . . . . 12 Environmental, Social and Governance (“ESG”) . . . . . . . . . . . . . . . . . . . . . 14 Business Environment and Outlook . . . . . . . . . . . . 16 Non-GAAP Measures . . . . . . . . . . . . . . . . . . . . . . . . 16 Forward-Looking Statements . . . . . . . . . . . . . . . . . 22 SECTION II—Operations . . . . . . . . . . . . . . . . . . . . 24 Net Income and Comprehensive Income . . . . . . . . 25 Net Operating Income (“NOI”) . . . . . . . . . . . . . . . . 29 Same Asset NOI . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 General and Administrative Expenses . . . . . . . . . . 36 Interest Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Other Financial Performance Measures . . . . . . . . . 38 SECTION III—Leasing . . . . . . . . . . . . . . . . . . . . . . 46 Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 SECTION VII—Accounting Estimates and Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 User Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Lease Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 SECTION IV—Historical Performance . . . . . . . . . 55 SECTION V—Asset Profile . . . . . . . . . . . . . . . . . . . 58 Rental Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 Development Properties . . . . . . . . . . . . . . . . . . . . . 68 Residential Inventory . . . . . . . . . . . . . . . . . . . . . . . . 73 Loans Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 SECTION VI—Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Credit Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 85 Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 Exchangeable LP Units . . . . . . . . . . . . . . . . . . . . . . 91 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 SECTION VIII—Disclosure Controls and Internal Controls . . . . . . . . . . . . . . . . . . . . . . . 97 SECTION IX—Risks and Uncertainties . . . . . . . . . 98 Operating Risks and Risk Management . . . . . . . . . 99 Financial Risks and Risk Management . . . . . . . . . Other Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 105 SECTION X—Property Table . . . . . . . . . . . . . . . . 110 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 . . . . . 121 Consolidated Balance Sheets . . . . . . . . . . . . . . . . 127 Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income . . . . . . . . . . . 128 Consolidated Statements of Equity . . . . . . . . . . . 129 Consolidated Statements of Cash Flows . . . . . . . 130 Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . 132 4 ALLIED 2023 ANNUAL REPORTManagement’s Discussion and Analysis of Results of Operations and Financial Condition as at December 31, 2023 5 ALLIED 2023 ANNUAL REPORTSection I —Overview Allied is an unincorporated open-end real estate investment trust created pursuant to the Declaration of Trust (“Declaration of Trust”) dated October 25, 2002, as most recently amended on June 12, 2023 . 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.sedarplus.ca . On June 12, 2023, Allied completed its conversion from a “closed- end” trust to an “open-end” trust . This Management’s Discussion and Analysis (“MD&A”) of results of operations and financial condition relates to the year ended December 31, 2023 . 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, 2024, and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2023 . 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-GAAP Measures and Forward-Looking Statements on pages 16 and 22, respectively . 6 ALLIED 2023 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, 2023 DECEMBER 31, 2022 DECEMBER 31, 2023 DECEMBER 31, 2022 DECEMBER 31, 2021 THREE MONTHS ENDED YEAR ENDED Leased area (1) Occupied area (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 Retention rate on maturities during the period (leased in current period and prior year) (1) Increase in net rent on renewing leases - total rental portfolio (1) 87.3% 86.4% 90 .8% 89 .6% 87.3% 86.4% 90 .8% 89 .6% 90 .4% 89 .9% 24.10 23 .10 24.10 23 .10 24 .64 24.10 23 .10 24.10 23 .10 21 .98 59.7% 45 .6% 59.9% 57 .9% 57 .0% 3.6% 6 .1% 6.8% 5 .6% 7 .9% Investment properties (2) 9,387,032 9,669,005 9,387,032 9,669,005 9,527,105 Unencumbered investment properties (3) 8,757,510 8,345,530 8,757,510 8,345,530 9,064,010 Total assets (2) 10,609,285 11,906,350 10,609,285 11,906,350 10,384,691 Cost of PUD as % of GBV (3) NAV per unit (5) Debt (2) 11.6% 45.60 12 .6% 50 .96 11.6% 45.60 12 .6% 50 .96 11 .2% 50 .30 3,659,611 4,211,185 3,659,611 4,211,185 3,453,284 Total indebtedness ratio (3) 34.7% 35 .6% 34.7% 35 .6% 33 .5% Annualized Adjusted EBITDA (3) 410,488 426,520 416,019 403,119 365,050 Net debt as a multiple of Annualized Adjusted EBITDA (3) Interest coverage ratio including interest capitalized and excluding financing prepayment costs - three months trailing (3) Interest coverage ratio including interest capitalized and excluding financing prepayment costs - twelve months trailing (3) 8.2x 9 .8x 8.1x 10 .4x 9 .4x 2.9x 2 .8x 2.9x 2 .8x 3 .3x 2.5x 3 .0x 2.5x 3 .0x 3 .4x Rental revenue (2)(6) 150,898 135,924 563,980 519,468 472,799 Property operating costs (2)(6) (69,029) (58,639) (246,949) (224,260) (204,792) Operating income (2)(6) 81,869 77,285 317,031 295,208 268,007 Net (loss) income and comprehensive (loss) income (2) (499,340) 41,392 (420,716) 375,363 443,151 7 ALLIED 2023 ANNUAL REPORT ($000’s except per-square foot, per-unit and financial ratios) DECEMBER 31, 2023 DECEMBER 31, 2022 DECEMBER 31, 2023 DECEMBER 31, 2022 DECEMBER 31, 2021 THREE MONTHS ENDED YEAR ENDED Net income (loss) and comprehensive income (loss) from continuing operations (2)(6) Net income from continuing operations excluding fair value adjustments, transaction costs, financing prepayment costs and impairment (4) (499,340) 20,178 (545,707) 174,669 331,381 49,239 60,814 221,833 225,118 206,419 Adjusted EBITDA (3) 102,622 106,630 416,019 403,119 365,050 77,824 78,002 271,237 272,412 Same Asset NOI - rental portfolio (4)(8) Same Asset NOI - total portfolio (3)(8) FFO (3) FFO per unit (diluted) (3) FFO pay-out ratio (3)(7) All amounts below are excluding condominium related items, financing prepayment costs, and the mark-to-market adjustment on unit-based compensation (3): FFO FFO per unit (diluted) FFO payout-ratio (7) AFFO AFFO per unit (diluted) AFFO payout-ratio (7) 84,265 85,460 0.611 73.6% 85,765 0.614 73.3% 78,611 0.562 80.0% N/A N/A 80,590 298,792 284,953 86,755 0 .621 70 .5% 332,578 334,477 253,376 2.380 75.6% 2 .443 71 .6% 1 .988 85 .5% 86,325 332,622 333,392 306,559 0 .618 70 .8% 76,553 0 .548 79 .9% 2.380 75.6% 2 .435 71 .8% 2 .405 70 .6% 304,225 297,579 266,517 2.177 82.7% 2 .174 80 .4% 2 .091 81 .2% (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-GAAP measure, refer to page 16. These non-GAAP measures include the results of the continuing operations and the discontinued operations. (4) This is a non-GAAP measure, refer to page 16. These non-GAAP measures include only the results of the continuing operations. (5) Prior to Allied’s conversion to an open-end trust, net asset value per unit (“NAV per unit”) was calculated as total equity as at the corresponding period ended, 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. With Allied’s conversion to an open-end trust on June 12, 2023, NAV per unit is calculated as total equity plus the value of Exchangeable LP Units as at the corresponding period ended, divided by the actual number of Units and Exchangeable LP Units. The rationale for including the value of Exchangeable LP Units is because they 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. (6) This metric includes only the results of the continuing operations. (7) The payout ratios for the three months and year ended December 31, 2023, exclude the special cash distributions declared of $61,419 on Units and $5,668 on Exchangeable LP Units, and the special Unit distribution declared of $639,780. (8) The Same Asset NOI for the year ended December 31, 2021, is not applicable as the composition of properties is different from the 2022 and 2023 years. 8 ALLIED 2023 ANNUAL REPORT Operating and Financial Highlights Above all, Allied is an owner-operator of distinctive urban workspace in Canada’s major cities . 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 effectively and profitably . 9 ALLIED 2023 ANNUAL REPORTQ4 2023 Operating Results (1) LEASED AREA 87.3% OCCUPIED AREA 86.4% AVERAGE IN-PLACE NET RENT PER OCCUPIED SQUARE FOOT $24.10 RENT GROWTH ON RENEWING SPACE 3.6% WEIGHTED AVERAGE REMAINING LEASE TERM IN YEARS 5.8 2022: $23.10 4.3% from Q4 2022 Q4 2023 Financial Results SAME ASSET NOI - RENTAL PORTFOLIO (2) 0.2% from Q4 2022 FFO PER UNIT (2)(3) $0.614 0.6% AFFO PER UNIT (2)(3) $0.562 2.6% from Q4 2022 from Q4 2022 Year-to-Date Capital Allocation $nil $434.8M Allocated to acquisitions Allocated to revenue-enhancing and development activity Liquidity (4) End of Q4 $1.0B $1.1B including accordion Q4 2023 Balance Sheet NET DEBT AS A MULTIPLE OF ANNUALIZED ADJUSTED EBITDA (2) 8.2x TOTAL INDEBTEDNESS RATIO (2) INTEREST COVERAGE RATIO (2)(5) 34.7% 2.9x UNENCUMBERED INVESTMENT PROPERTIES (2) $8.8B 92.3% of investment properties on a proportionate basis (2) ESG Results (6) 2023 GRESB SCORE FOR STANDING INVESTMENTS 85/100 2023 GRESB SCORE FOR DEVELOPMENT 87/100 Down from 86/100 in 2022 Up from 82/100 in 2022 2022 ENERGY USE INTENSITY (EUI) 13% from our 2019 baseline 2022 GREENHOUSE GAS INTENSITY (GHGI) 11% from our 2019 baseline 2022 WATER USE INTENSITY (WUI) 31% 2022 WASTE DIVERSION 2% from our 2019 baseline from our 2019 baseline (1) These metrics are for the rental portfolio which exclude the assets held for sale and properties under development based on the classification at the end of each period (2) This is a non-GAAP measure, refer to page 16. These non-GAAP measures include the results of the continuing operations and the discontinued operations. Same Asset NOI - rental portfolio excludes 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 amount available on Allied’s unsecured revolving operating facility as at December 31, 2023. (5) This interest coverage ratio including capitalized interest is for the three months trailing. (6) For more information, refer to Allied’s 2022 Environmental, Social and Governance Report published on June 26, 2023, available on www.alliedreit.com. 10 ALLIED 2023 ANNUAL REPORTSUMMARY OF RENTAL PROPERTIES 201 Rental Properties valued at $8.5B (1) (Not including Properties Under Development valued at $1 .0B) (1) TOTAL RENTAL PORTFOLIO GLA 14.9M SF VANCOUVER 1.0M SF ALLIED OCCUPANCY 89 . 2% MARKET OCCUPANCY (2) 91 .8% PROPERTIES EMPLOYEES 13 17 CALGARY 1.3M SF ALLIED OCCUPANCY 76 .1% MARKET OCCUPANCY (2) 74 .6% PROPERTIES EMPLOYEES 30 30 TORONTO 5.4M SF ALLIED OCCUPANCY 86 .3% MARKET OCCUPANCY (2) 83 .6% PROPERTIES ANCILLARY PARKING FACILITIES EMPLOYEES 108 10 226 MONTRÉAL 6.3M SF ALLIED OCCUPANCY 89 . 2% MARKET OCCUPANCY (2) 85 .1% PROPERTIES EMPLOYEES 31 82 OTTAWA 231K SF ALLIED OCCUPANCY 98 .9% MARKET OCCUPANCY (2) 89 .4% KITCHENER 709K SF ALLIED OCCUPANCY 74 .6% MARKET OCCUPANCY (2) 71 .1% PROPERTIES ANCILLARY PARKING FACILITY EMPLOYEES 6 1 4 (1) The rental properties and properties under development values are on a proportionate basis, which are non-GAAP measures. (2) Source: cbre.ca, CBRE Office Figures reports. PROPERTIES EMPLOYEES 2 3 11 ALLIED 2023 ANNUAL REPORTBUSINESS OVERVIEW AND STRATEGY Allied is a leading owner-operator of distinctive urban workspace in Canada’s major cities . 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 . WORKSPACE INNOVATION Allied’s long and extensive experience continues to inform 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 . 12 ALLIED 2023 ANNUAL REPORTFinally, 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 heritage 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 . 13 ALLIED 2023 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 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 (the “GC&NC”) oversees and monitors Allied’s ESG performance and reviews Allied’s ESG Report, ESG Policy and other governance policies and practices annually . On the recommendation of the GC&NC, the Board established four specific and measurable ESG goals, the performance in relation to which the GC&NC and the Board analyzes as part of its assessment of incentive bonus awards for the executive officers . In June 2023, Allied published its 2022 ESG Report in accordance with the Global Reporting Initiative (GRI) 2021 Universal Standards, the Sustainability Accounting Standards Board (SASB) Real Estate Standard, the United Nations Sustainable Development Goals (UN SDGs) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations . 14 ALLIED 2023 ANNUAL REPORTESG HIGHLIGHTS Highlighting Allied’s ESG Achievements Outperformed 2024 Targets (1) Continued to Improve GRESB Scores Allied is committed to the ongoing evolution of its ESG program and performance . Working with team members and external partners, Allied continues to achieve its goals and set new ambitions for the future . Allied continued to exceed its 2024 reduction targets for Energy Use Intensity (EUI), Greenhouse Gas Intensity (GHGI) and Water Use Intensity (WUI) . In its 2023 GRESB assessment, Allied achieved a score of 85 for its standing investments and a score of 87 for its developments, representing continuous improvement overall . Developed an Internal Price of Carbon Allied established its shadow price of carbon to support financial analysis and decision-making for all new investments, developments and retrofit opportunities by assigning a monetary value to every tonne of carbon emitted . Established 70% Certification Target for Standing Portfolio Allied will certify an additional 8 .1 million square feet to LEED and/or BOMA BEST by 2028, at a cost of $0 .09/square foot, increasing its certification percentage from 27% to 70% across the portfolio . Recognized as a Canadian “Best Employer” in 2023 Since 2020, Allied has engaged Kincentric to conduct a third-party employee engagement survey . Allied was recognized as a “Best Employer” in 2020, 2021 and 2023 . Outperformed Peers in User Experience Assessment Ratings Co-hosted Indigenous Relations in Real Estate Development Series In November 2022, Allied completed its annual third-party User Experience Assessment Survey . Results demonstrated year-over- year progress, with improved ratings in key areas and an overall increase in user satisfaction . Allied partnered with ULI Toronto, Shared Path and Westbank to deliver a workshop series for leaders in the industry to advance their understanding of colonization and its impact on Indigenous Peoples, and to start exploring opportunities to collaborate in real estate development . Committed to Green Financing Allied established its Green Financing Framework in 2021 and issued two green bonds in 2021 totaling $1 .1 billion . In December 2022, Allied obtained a $75 million sustainability-linked construction lending facility, at its share, for the development of 108 East 5th Avenue in Vancouver . On this construction lending facility, Allied exceeded one of the sustainability performance targets for 2023, as more than 10% of individuals in its construction and construction-related labour identified themselves as equity deserving groups . (2) (1) These metrics are based on Allied’s 2022 ESG Report, available on www.alliedreit.com. (2) Equity deserving groups include Indigenous people, racialized communities, recent immigrants and refugees, disabled persons, members of the 2SLGBTQQIA+ community, veterans, youth aged 29 and under, and people who identify as having experienced barriers to economic opportunity and participation. 15 ALLIED 2023 ANNUAL REPORTBUSINESS ENVIRONMENT AND OUTLOOK Consistent with the practice of most Canadian public real estate entities, Allied does not provide formal guidance . It has in recent years provided an annual outlook with respect to three non-GAAP metrics, FFO per Unit, AFFO per Unit and Same Asset NOI . Over the course of 2021 and 2022, these metrics were up . In 2023, these metrics were flat or down slightly . While Allied will strive for flat metrics in 2024, Management recognizes that the metrics may contract by up to five percent in the year . Management expects the metrics in the first half to contract, as it assumes no economic occupancy gains in that period . Management does expect economic occupancy gains in the second half of the year, but cannot be certain as to the magnitude of those gains, given the current macroeconomic environment . Allied has assembled the largest and most concentrated portfolio of economically-productive, underutilized urban land in Canada, one that affords extraordinary mixed-use intensification potential in major cities going forward . Allied believes deeply in the continued success of Canadian cities and has the platform and the breadth of funding relationships necessary to drive value in the coming years and decades for the benefit of its constituents . The foregoing sections contain non-GAAP 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-GAAP Measures and Forward-Looking Statements below . NON-GAAP 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 . 16 ALLIED 2023 ANNUAL REPORTNON-GAAP MEASURE DEFINITION RECONCILIATION Allied’s proportionate share or proportionate basis All references to “proportionate share” or “proportionate basis” refer to a non-GAAP 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 Funds from Operations (“FFO”) FFO excluding condominium costs and the mark-to- market adjustment on unit- based compensation FFO is a non-GAAP 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, Exchangeable LP Units and derivative instruments, impairment, transaction costs, incremental leasing costs, net income and comprehensive income from discontinued operations, distributions on Exchangeable LP Units as they are puttable instruments classified as financial liabilities, 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 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 and the mark-to-market adjustment on unit-based compensation. FFO excluding condominium related items 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 items are not indicative of recurring operating performance and the mark-to-market adjustments of unit-based compensation can fluctuate widely with the market. Section II - Operations - Other Financial Performance Measures Section II - Operations - Other Financial Performance Measures FFO excluding condominium 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 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. Section II - Operations - Other Financial Performance Measures 17 ALLIED 2023 ANNUAL REPORTNON-GAAP MEASURE DEFINITION Adjusted Funds from Operations (“AFFO”) AFFO excluding condominium related items 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 AFFO is a non-GAAP 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 rent, 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. AFFO excluding condominium related items 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 and the mark-to-market adjustment on unit-based compensation. AFFO excluding condominium related items 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 items are not indicative of recurring economic earnings, and the mark- to-market adjustments of unit-based compensation can fluctuate widely with the market. 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. RECONCILIATION Section II - Operations - Other Financial Performance Measures Section II - Operations - Other Financial Performance Measures Section II - Operations - Other Financial Performance Measures Net income from continuing operations excluding fair value adjustments, transaction costs, financing prepayment costs and impairment (1) Section II - Operations Net income from continuing operations excluding fair value adjustments, transaction costs, financing prepayment costs and impairment is a non-GAAP 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, Exchangeable LP Units, or derivative instruments, the mark-to-market adjustment on unit-based compensation, transaction costs, 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 transaction costs, financing prepayment costs and impairment are non-recurring in nature. 18 ALLIED 2023 ANNUAL REPORTNON-GAAP MEASURE DEFINITION Net Rental Income (“NRI”) Net Operating Income (“NOI”) from continuing operations NOI from discontinued operations Total NOI Same Asset NOI NRI is a non-GAAP 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. NOI from continuing operations is a non-GAAP financial measure defined as NRI excluding the impact of non-cash items such as amortization of improvement allowances and the amortization of straight-line rent 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. RECONCILIATION Section II - Operations - Net Operating Income Section II - Operations - Net Operating Income NOI from discontinued operations is a non-GAAP 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 rent 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 Total NOI is a non-GAAP 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. Section II - Operations - Net Operating Income Same Asset NOI is a non-GAAP 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-GAAP 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 19 ALLIED 2023 ANNUAL REPORTNON-GAAP MEASURE DEFINITION Gross Book Value (“GBV”) GBV is a non-GAAP 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. RECONCILIATION Section V - Asset Profile Unencumbered investment properties and investment properties held for sale Unencumbered investment properties and investment properties held for sale is a non-GAAP measure defined as the value of investment properties, including 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 and investment properties held for sale 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-GAAP 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-GAAP 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, Exchangeable LP Units, financial instruments, and unit-based compensation. Section II - Operations - Other Financial Performance Measures Annualized Adjusted EBITDA is a non-GAAP 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. Net debt Net debt is a non-GAAP measure, calculated on a proportionate basis, as debt less cash, cash equivalents and a deposit management considers to be cash equivalent. 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 Net debt as a multiple of Annualized Adjusted EBITDA is a non-GAAP 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. N/A 20 ALLIED 2023 ANNUAL REPORTRECONCILIATION N/A NON-GAAP MEASURE DEFINITION FFO and AFFO Payout-Ratios (2) and FFO and AFFO Payout-Ratios excluding condominium related items and the mark- to-market adjustment on unit-based compensation (2) and FFO and AFFO Payout-Ratios excluding condominium related items, financing prepayment costs and the mark-to-market adjustment on unit-based compensation(2) FFO and AFFO payout-ratios, FFO and AFFO payout-ratios excluding condominium related items and the mark-to-market adjustment on unit-based compensation, 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- GAAP measures. These payout ratios are calculated by dividing the actual distributions declared (excluding any special distributions declared in cash or Units) by FFO, AFFO, FFO and AFFO excluding condominium related items and the mark-to-market adjustment on unit-based compensation, 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 Interest coverage ratio, interest coverage ratio including interest capitalized, and interest coverage ratio including interest capitalized and excluding financing prepayment costs are non-GAAP measures calculated on a trailing three-month basis and twelve-month basis for the three months ended and the year ended, respectively. N/A and Interest Coverage Ratio including interest capitalized and excluding financing prepayment costs Interest coverage ratio is defined as Adjusted EBITDA divided by interest expense excluding the distributions on Exchangeable LP Units which are recognized as interest expense. Interest coverage ratio including interest capitalized is defined as Adjusted EBITDA divided by interest expense with interest capitalized included. Interest coverage ratio including interest capitalized and excluding financing prepayment costs is defined as Adjusted EBITDA divided by interest expense with interest capitalized included and financing prepayment costs excluded. The interest expense excludes the distributions on Exchangeable LP Units which are recognized as interest expense. Management considers these metrics useful as they indicate Allied’s ability to meet its interest cost obligations. Total Indebtedness Ratio Total indebtedness ratio is a non-GAAP 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 (1) The label and composition of this non-GAAP financial measure changed from the prior period to adjust for transaction costs incurred on the disposition of investment properties as they are non-recurring. (2) The composition of this non-GAAP financial measure changed from the prior period to exclude special distributions declared in cash or Units as they are non-recurring. 21 ALLIED 2023 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, and the assumptions underlying any of the foregoing . 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”, “assume”, “should”, “plans”, “continue” or similar expressions suggesting future outcomes or events . In particular, certain statements in 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; expected capital expenditure and allocation over 2024; expected Same Asset NOI, FFO per unit and AFFO per unit; completion of construction and lease-up in connection with Properties Under Development (“PUDs”); continued demand for space in our target markets; 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 (“SF”) of leasable area; targets for LEED and/or BOMA certification; 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 . 22 ALLIED 2023 ANNUAL REPORTThe 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 . Those risks and uncertainties include risks associated with financing and interest rates, access to capital, general economic conditions, lease roll-over, development and construction, user terminations and financial stability, competition for users and cybersecurity . 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 provide us with access to capital at a reasonable cost to fund our future growth and potentially refinance our 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 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, 2024, 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 . 23 ALLIED 2023 ANNUAL REPORTSection II —Operations Allied’s operating platform is built on its concentration of distinctive urban workspace, focused strategy and integrated team . 24 ALLIED 2023 ANNUAL REPORTNET INCOME AND COMPREHENSIVE INCOME The following table reconciles the consolidated statements of (loss) income and comprehensive (loss) income on an IFRS basis to a proportionate basis, which is a non-GAAP measure, for the three months and years ended December 31, 2023, and December 31, 2022 . Refer to Non-GAAP Measures on page 16 . There is an additional table to reconcile net (loss) income and comprehensive (loss) income from continuing operations to net income from continuing operations excluding fair value adjustments, transaction costs, financing prepayment costs and impairment, a non-GAAP measure, for the three months and years ended December 31, 2023, and December 31, 2022 . Refer to Non-GAAP Measures on page 16 . THREE MONTHS ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS Continuing operations Rental revenue $150,898 $1,997 $152,895 $135,924 $1,855 $137,779 Property operating costs (69,029) (1,094) (70,123) (58,639) (745) (59,384) Operating income $81,869 $903 $82,772 $77,285 $1,110 $78,395 Interest income Interest expense General and administrative expenses Condominium marketing expenses Amortization of other assets Transaction costs Net (loss) income from joint venture Fair value (loss) gain on investment properties and investment properties held for sale Fair value loss on Exchangeable LP Units Fair value (loss) gain on derivative instruments Net (loss) income and comprehensive (loss) income from continuing operations (1) 18,749 (30,265) (6,729) (89) (381) (167) 5 — — — — — 18,754 9,429 (30,265) (20,722) (6,729) (5,794) (89) (381) (167) (189) (385) — 6 — — — — — (14,131) 14,131 — 1,809 (1,809) 9,435 (20,722) (5,794) (189) (385) — — (494,571) (15,039) (509,610) (42,988) 693 (42,295) (26,571) (27,054) — — (26,571) — (27,054) 1,733 — — — 1,733 $(499,340) $— $(499,340) $20,178 $— $20,178 25 ALLIED 2023 ANNUAL REPORTTHREE MONTHS ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS Discontinued operations (UDC segment) Rental revenue Property operating costs Operating income Interest expense Fair value gain on investment properties held for sale Net income and comprehensive income from discontinued operations Net (loss) income and comprehensive (loss) income $— — $— — — $— — $— — — $— — $— — — $23,810 (7,251) $16,559 (1,778) 6,433 $— — $— — — $23,810 (7,251) $16,559 (1,778) 6,433 $— $— $— $21,214 $— $21,214 $(499,340) $— $(499,340) $41,392 $— $41,392 (1) Includes two investment properties held for sale as at December 31, 2022. There were no investment properties held for sale as at December 31, 2023. THREE MONTHS ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 Net (loss) income and comprehensive (loss) income from continuing operations $(499,340) Fair value loss on investment properties and investment properties held for sale Fair value loss on Exchangeable LP Units Fair value loss (gain) on derivative instruments Mark-to-market adjustment on unit-based compensation Transaction costs Financing prepayment costs 494,571 26,571 27,054 216 167 — $20,178 42,988 — (1,733) (55) — (564) Net income from continuing operations excluding fair value adjustments, transaction costs, financing prepayment costs and impairment (1) $49,239 $60,814 (1) This excludes the Urban Data Centre segment which was classified as a discontinued operation starting in Q4 2022. On an IFRS basis, operating income from continuing operations for the three months ended December 31, 2023, increased by $4,584 or 5 .9%, primarily due to rent commencement at The Well . 26 ALLIED 2023 ANNUAL REPORTOn an IFRS basis, net (loss) income and comprehensive (loss) income from continuing operations for the three months ended December 31, 2023, decreased by $519,518 from the comparable period in 2022, primarily due to a higher fair value loss on investment properties and investment properties held for sale of $451,583 and higher interest expense of $9,543, partially offset by an increase in interest income of $9,320 and operating income of $4,584 . On an IFRS basis, net income and comprehensive income from discontinued operations for the three months ended December 31, 2023, decreased by $21,214 from the comparable period in 2022, related to the disposition of the Urban Data Centre (“UDC”) portfolio in August 2023 . YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS Continuing operations Rental revenue $563,980 $8,452 $572,432 $519,468 $6,771 $526,239 Property operating costs (246,949) (4,420) (251,369) (224,260) (3,843) (228,103) Operating income $317,031 $4,032 $321,063 $295,208 $2,928 $298,136 Interest income Interest expense General and administrative expenses Condominium marketing expenses 53,605 (107,073) (23,577) (538) Amortization of other assets (1,499) Transaction costs (167) 23 — — — — — Net loss from joint venture (15,622) 15,622 53,628 32,080 (107,073) (72,802) (23,577) (22,593) (538) (1,499) (167) — (602) (1,325) — (3,161) 3,161 12 — — — — — 32,092 (72,802) (22,593) (602) (1,325) — — Fair value loss on investment properties and investment properties held for sale Fair value gain on Exchangeable LP Units Fair value (loss) gain on derivative instruments Impairment of residential inventory Net (loss) income and comprehensive (loss) income from continuing operations (1) (772,652) (19,677) (792,329) (73,750) (6,101) (79,851) 28,696 (8,535) (15,376) — — — 28,696 — (8,535) 37,343 (15,376) (15,729) — — — — 37,343 (15,729) $(545,707) $— $(545,707) $174,669 $— $174,669 27 ALLIED 2023 ANNUAL REPORTYEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS $— — $— — — — $54,539 $96,669 (20,718) (32,375) $33,821 $64,294 (4,433) (6,532) (13,246) — 108,849 142,932 $— — $— — — — $96,669 (32,375) $64,294 (6,532) — 142,932 Discontinued operations (UDC segment) Rental revenue $54,539 Property operating costs (20,718) Operating income $33,821 (4,433) (13,246) 108,849 Interest expense Transaction costs Fair value gain on investment properties held for sale Net income and comprehensive income from discontinued operations Net (loss) income and comprehensive (loss) income $124,991 $— $124,991 $200,694 $— $200,694 $(420,716) $— $(420,716) $375,363 $— $375,363 (1) Includes two investment properties held for sale as at December 31, 2022. There were no investment properties held for sale as at December 31, 2023. YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 Net (loss) income and comprehensive (loss) income from continuing operations $(545,707) Fair value loss on investment properties and investment properties held for sale Fair value gain on Exchangeable LP Units Fair value loss (gain) on derivative instruments Mark-to-market adjustment on unit based compensation Transaction costs Financing prepayment costs Impairment of residential inventory 772,652 (28,696) 8,535 (494) 167 — 15,376 $174,669 73,750 — (37,343) (1,123) — (564) 15,729 Net income from continuing operations excluding fair value adjustments, transaction costs, financing prepayment costs and impairment (1) $221,833 $225,118 (1) This excludes the Urban Data Centre segment which was classified as a discontinued operation in Q4 2022. On an IFRS basis, operating income from continuing operations for the year ended December 31, 2023, increased by $21,823 or 7 .4%, primarily due to contributions from the development portfolio and the annualized impact of prior year acquisitions . 28 ALLIED 2023 ANNUAL REPORTOn an IFRS basis, net (loss) income and comprehensive (loss) income from continuing operations for the year ended December 31, 2023, decreased by $720,376 from the comparable period in 2022 primarily due to a higher fair value loss on investment properties and investment properties held for sale of $698,902, higher fair value loss on derivative instruments of $45,878 and higher interest expense of $34,271, partially offset by an increase in operating income of $21,823 and an increase in interest income of $21,525 . On an IFRS basis, net income and comprehensive income from discontinued operations for the year ended December 31, 2023, decreased by $75,703 from the comparable period in 2022, primarily due to fair value adjustments of $34,083, a decrease in operating income of $30,473, and transaction costs of $13,246 related to the disposition of the UDC portfolio in August 2023 . NET 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, 2023, as compared to the same period in the prior year . The following table reconciles operating income to net operating income, a non-GAAP measure . Refer to Non-GAAP Measures on page 16 . THREE MONTHS ENDED YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 DECEMBER 31, 2023 DECEMBER 31, 2022 Operating income, IFRS basis Add: investment in joint venture Operating income, proportionate basis Amortization of improvement allowances (1)(2) Amortization of straight-line rent (1)(2) NOI from continuing operations NOI from discontinued operations $81,869 903 $82,772 7,698 (3,361) $87,109 $— $77,285 1,110 $78,395 8,147 (2,533) $84,009 $16,392 Total NOI $87,109 $100,401 $317,031 $295,208 4,032 2,928 $321,063 $298,136 31,790 (9,074) $343,779 $33,452 $377,231 32,379 (6,739) $323,776 $64,134 $387,910 (1) Includes Allied’s proportionate share of the equity accounted investment of the following amounts for the three months and year ended December 31, 2023: amortization improvement allowances of $169 and $660, respectively (December 31, 2022 - $164 and $613, respectively), and amortization of straight-line rent of $(43) and $(190), respectively (December 31, 2022 - $(25) and $(609), respectively). (2) Excludes the Urban Data Centre segment which was classified as a discontinued operation starting in Q4 2022. For the three months and year ended December 31, 2023, the Urban Data Centre segment’s amortization of improvement allowances was $nil and $326, respectively (December 31, 2022 - $132 and $536, respectively). For the three months and year ended December 31, 2023, the Urban Data Centre segment’s amortization of straight-line rent was $nil and $(695), respectively (December 31, 2022 - $(299) and $(695), respectively). 29 ALLIED 2023 ANNUAL REPORTThe following tables set out the NOI by segment and space type from the rental and development properties for the three months and years ended December 31, 2023 and 2022 . THREE MONTHS ENDED CHANGE SEGMENT DECEMBER 31, 2023 DECEMBER 31, 2022 $ Montréal & Ottawa $31,223 35.8% $29,220 Toronto & Kitchener Calgary & Edmonton Vancouver 42,672 4,894 8,320 49.0 40,676 5.6 9.6 5,579 8,534 29 .1% 40 .5 5 .6 8 .5 $2,003 1,996 (685) (214) NOI from continuing operations $87,109 100.0% $84,009 83 .7% $3,100 % 6 .9% 4 .9 (12 .3) (2 .5) 3 .7% NOI from discontinued operations $— —% $16,392 16 .3% $(16,392) (100 .0)% Total NOI $87,109 100.0% $100,401 100 .0% $(13,292) (13 .2)% THREE MONTHS ENDED CHANGE TYPE OF SPACE DECEMBER 31, 2023 DECEMBER 31, 2022 $ Office Retail Parking $70,944 81.4% $69,914 69 .7% $1,030 10,425 5,740 12.0 6.6 9,074 5,021 9 .0 5 .0 1,351 719 NOI from continuing operations $87,109 100.0% $84,009 83 .7% $3,100 % 1 .5% 14 .9 14 .3 3 .7% NOI from discontinued operations $— —% $16,392 16 .3% $(16,392) (100 .0)% Total NOI $87,109 100.0% $100,401 100 .0% $(13,292) (13 .2)% The increase in NOI from continuing operations for the three months ended December 31, 2023, was due to rent commencement at The Well in Toronto and Cité Multimédia in Montreal of $4,805, and increased variable parking revenue of $719 . This was partially offset by non-renewals at The Castle, 358-360 Adelaide W, and 99 Spadina in Toronto, and Odd Fellows and Telephone Building in Calgary of $1,778 . The decrease in NOI from discontinued operations for the three months ended December 31, 2023, was related to the disposition of the UDC portfolio in August 2023 . 30 ALLIED 2023 ANNUAL REPORT% 3 .9% 8 .7 1 .0 5 .7 % 5 .2% 6 .9 20 .6 6 .2% SEGMENT DECEMBER 31, 2023 DECEMBER 31, 2022 $ YEAR ENDED CHANGE Montréal & Ottawa $120,640 32.0% $116,059 29 .9% 168,070 44.6 154,644 21,823 31,250 39 .9 5 .6 8 .1 $4,581 13,426 216 1,780 Toronto & Kitchener Calgary & Edmonton Vancouver NOI from continuing operations $343,779 NOI from discontinued operations $33,452 $323,776 83 .5% $20,003 6 .2% $64,134 16 .5% $(30,682) (47 .8)% Total NOI $377,231 100.0% $387,910 100 .0% $(10,679) (2 .8)% 22,039 33,030 5.8 8.7 91.1% 8.9% TYPE OF SPACE DECEMBER 31, 2023 DECEMBER 31, 2022 $ YEAR ENDED CHANGE Office Retail Parking NOI from continuing operations $343,779 NOI from discontinued operations $33,452 $283,884 75.3% $269,974 69 .6% $13,910 38,876 21,019 10.3 5.5 91.1% 8.9% 36,374 17,428 $323,776 $64,134 9 .4 4 .5 83 .5% 16 .5% 2,502 3,591 $20,003 $(30,682) (47 .8)% Total NOI $377,231 100.0% $387,910 100 .0% $(10,679) (2 .8)% The increase in NOI from continuing operations for the year ended December 31, 2023, was due to rent commencement at The Well in Toronto of $16,814, the annualized impact of prior year acquisitions in Toronto, Montréal and Vancouver of $8,024, and increased variable parking revenue of $3,591 . This was partially offset by non-renewals at The Castle and 99 Spadina in Toronto of $3,455, and suppressing occupancy to facilitate upgrade activity at 1001 Boulevard Robert-Bourassa and RCA Building - 1001 Lenoir Street in Montréal of $1,976 . The decrease in NOI from discontinued operations for the year ended December 31, 2023, was related to the disposition of the UDC portfolio in August 2023 . 31 ALLIED 2023 ANNUAL REPORTSAME ASSET NOI Same Asset NOI, a non-GAAP measure in the table below, refers to those investment properties that were owned by Allied from October 1, 2022, to December 31, 2023 . Same Asset NOI of the development portfolio for the three months ended December 31, 2023, consists of Breithaupt Phase III, Adelaide & Duncan, 185 Spadina, KING Toronto, QRC West Phase II, King & Brant, 400 Atlantic, Boardwalk-Revillon Building, The Lougheed Building, 342 Water Street, 3575 Saint-Laurent, 365 Railway, 422-424 Wellington W, 108 East 5th Avenue, 810 Saint Antoine, Kipling Square, and portions of The Well, 1001 Boulevard Robert-Bourassa and RCA Building - 1001 Lenoir Street . THREE MONTHS ENDED CHANGE DECEMBER 31, 2023 DECEMBER 31, 2022 Montréal & Ottawa Toronto & Kitchener Calgary Vancouver Rental Portfolio - Same Asset NOI Development Portfolio - Same Asset NOI Total Portfolio - Same Asset NOI Acquisitions Dispositions Lease terminations Development fees and corporate items Total NOI $29,450 35,859 4,249 8,266 $77,824 $6,441 $84,265 378 69 28 2,369 $87,109 $27,778 37,050 4,848 8,326 $78,002 $2,588 $80,590 189 16,814 741 2,067 % 6 .0% (3 .2) (12 .4) (0 .7) (0 .2)% 148 .9% 4 .6% $ $1,672 (1,191) (599) (60) $(178) $3,853 $3,675 189 (16,745) (713) 302 $100,401 $(13,292) (13 .2)% Same Asset NOI of the total portfolio increased by $3,675 or 4 .6% for the three months ended December 31, 2023 . Same Asset NOI of the rental portfolio decreased by $178 or 0 .2% as a result of non-renewals at The Castle, 358-360 Adelaide W, and 99 Spadina in Toronto, and Odd Fellows and Telephone Building in Calgary of $1,778 . This was partially offset by rent growth and rent commencement in Montréal of $891, and increased variable parking revenue of $485 . Same Asset NOI of the development portfolio increased by $3,853 or 148 .9%, primarily due to rent commencement at The Well of $3,779 . 32 ALLIED 2023 ANNUAL REPORTSame Asset NOI, a non-GAAP measure in the table below, refers to those investment properties that were owned by Allied from January 1, 2022, to December 31, 2023 . Same Asset NOI of the development portfolio for the year ended December 31, 2023, consists of Breithaupt Phase III, Adelaide & Duncan, 185 Spadina, KING Toronto, QRC West Phase II, King & Brant, 400 Atlantic, Boardwalk-Revillon Building, The Lougheed Building, 342 Water Street, 3575 Saint-Laurent, 365 Railway, 422-424 Wellington W, 810 Saint Antoine, Kipling Square, and portions of The Well, 1001 Boulevard Robert-Bourassa, and RCA Building - 1001 Lenoir Street . YEAR ENDED CHANGE Montréal & Ottawa Toronto & Kitchener Calgary Vancouver Rental Portfolio - Same Asset NOI Development Portfolio - Same Asset NOI DECEMBER 31, 2023 DECEMBER 31, 2022 $109,208 122,080 19,006 20,943 $271,237 $27,555 $105,153 126,543 19,016 21,700 $272,412 $12,541 Total Portfolio - Same Asset NOI $298,792 $284,953 Acquisitions Dispositions Lease terminations Development fees and corporate items 35,661 34,629 221 7,928 25,633 66,650 1,094 9,580 $ $4,055 (4,463) (10) (757) $(1,175) $15,014 $13,839 10,028 (32,021) (873) (1,652) % 3 .9% (3 .5) (0 .1) (3 .5) (0 .4)% 119 .7% 4 .9% Total NOI $377,231 $387,910 $(10,679) (2 .8)% Same Asset NOI of the total portfolio increased by $13,839 or 4 .9% for the year ended December 31, 2023 . Same Asset NOI of the rental portfolio decreased by $1,175 or 0 .4% as a result of non-renewals at The Castle and 99 Spadina in Toronto of $3,454 and suppressing occupancy at 375 Water Street in Vancouver of $450 to facilitate repositioning of the asset . This was partially offset by rent growth and rent commencement in Montréal of $1,898, and increased variable parking revenue of $2,528 . Same Asset NOI of the development portfolio increased by $15,014 or 119 .7% primarily due to rent recommencement at The Well of $17,535 . This was partially offset by suppressing occupancy to faciliate upgrade activity at 1001 Boulevard Robert-Bourassa in Montréal and RCA Building - 1001 Lenoir Street in Montréal of $1,786 . 33 ALLIED 2023 ANNUAL REPORTINTEREST EXPENSE Interest expense for the three months and years ended December 31, 2023 and 2022, are as follows: Interest on debt: Mortgages payable Construction loans payable Promissory note payable Unsecured revolving operating facility Senior unsecured debentures Unsecured term loans Interest on lease liabilities (1) Amortization, net discount (premium) on debt Amortization, net financing costs Distributions on Exchangeable LP Units (2) Interest capitalized to qualifying investment properties and residential inventory Interest expense excluding financing prepayment costs Financing prepayment costs Interest expense, IFRS basis THREE MONTHS ENDED CHANGE DECEMBER 31, 2023 DECEMBER 31, 2022 $ % $953 4,942 975 685 18,680 7,111 774 996 743 10,983 $46,842 $1,133 2,236 504 5,060 18,675 7,031 803 879 641 — $36,962 $(180) (15 .9)% 2,706 471 (4,375) 5 80 (29) 117 102 10,983 $9,880 121 .0 93 .5 (86 .5) — 1 .1 (3 .6) 13 .3 15 .9 — 26 .7% (16,577) (15,676) (901) (5 .7) $30,265 — $30,265 $21,286 (564) $20,722 $8,979 564 $9,543 42 .2% (100 .0) 46 .1% (1) Excludes interest on a lease liability held for sale of $nil (December 31, 2022 - $1,778). (2) The distributions declared on Exchangeable LP Units are recognized as interest expense due to Allied’s conversion to an open-end trust on June 12, 2023. For the three months ended December 31, 2023, the distributions on Exchangeable LP Units include a special cash distribution of $5,668 (December 31, 2022 - $nil). For the three months ended December 31, 2023, interest expense on an IFRS basis increased by $9,543 or 46 .1% over the comparable period primarily due to distributions on Exchangeable LP Units of $10,983 and higher interest expense on construction loans of $2,706 which had a higher outstanding balance at higher interest rates, partially offset by lower interest expense on the unsecured revolving operating facility of $4,375 and higher capitalized interest of $901 . The unsecured revolving operating facility was fully repaid with proceeds from the disposition of the UDC portfolio on August 16, 2023 . 34 ALLIED 2023 ANNUAL REPORTFor the three months ended December 31, 2023, capitalized interest increased over the comparable period by $901 . This was due to the continuation of development and upgrade activities across the portfolio of $1,957, partially offset by the impact of a lower weighted average interest rate of $1,056 . Interest on debt: Mortgages payable Construction loans payable Promissory note payable Unsecured revolving operating facility Senior unsecured debentures Unsecured term loans Interest on lease liabilities (1) Amortization, net discount (premium) on debt Amortization, net financing costs Distributions on Exchangeable LP Units (2) 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, 2023 DECEMBER 31, 2022 $ % $3,528 16,675 3,967 23,841 74,710 28,007 2,322 3,976 2,865 18,068 $177,959 $4,635 $(1,107) (23 .9)% 6,487 1,512 11,125 74,705 20,592 3,224 2,401 2,495 — $127,176 10,188 2,455 12,716 5 7,415 (902) 1,575 370 18,068 $50,783 157 .1 162 .4 114 .3 — 36 .0 (28 .0) 65 .6 14 .8 — 39 .9% (70,886) (53,810) (17,076) 31 .7 $107,073 — $107,073 $73,366 (564) $72,802 $33,707 564 $34,271 45 .9% (100 .0) 47 .1% (1) Excludes interest on a lease liability held for sale of $4,433 (December 31, 2022 - $6,532). (2) The distributions declared on Exchangeable LP Units are recognized as interest expense due to Allied’s conversion to an open-end trust on June 12, 2023. For the year ended December 31, 2023, the distributions on Exchangeable LP Units include a special cash distribution of $5,668 (December 31, 2022 - $nil). For the year ended December 31, 2023, interest expense on an IFRS basis increased by $34,271 or 47 .1% primarily due to distributions on Exchangeable LP Units of $18,068, higher interest expense on the unsecured revolving operating facility and construction loans of $22,904 which had a higher outstanding balance at higher interest rates, and the annualized impact of unsecured term loans of $7,415 . This is partially offset by higher capitalized interest of $17,076 . The unsecured revolving operating facility was fully repaid with proceeds from the disposition of the UDC portfolio on August 16, 2023 . For the year ended December 31, 2023, capitalized interest increased over the comparable period by $17,076 . This was due to the continuation of development and upgrade activities across the portfolio of $10,847 and the remainder of $6,229 was due to a higher weighted average interest rate . 35 ALLIED 2023 ANNUAL REPORT 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, 2023, 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 financial impact of lease commencement . GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses for the three months and years ended December 31, 2023 and 2022, are as follows: Salaries and benefits Professional and trustees fees Office and general expenses Capitalized to qualifying investment properties Total general and administrative expenses, IFRS basis THREE MONTHS ENDED CHANGE DECEMBER 31, 2023 DECEMBER 31, 2022 $6,455 1,120 1,913 $9,488 (2,759) $6,403 1,343 1,448 $9,194 (3,400) $ $52 (223) 465 $294 641 % 0 .8% (16 .6) 32 .1 3 .2% 18 .9 $6,729 $5,794 $935 16 .1% For the three months ended December 31, 2023, general and administrative expenses increased by $935 or 16 .1% from the comparable period . This was primarily due to lower capitalization to qualifying investment properties of $641 as there were no directly attributable employee costs relating to the disposition of the UDC portfolio in the three months ended December 31, 2023 . 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, 2023 DECEMBER 31, 2022 $21,197 6,749 6,897 $34,843 (11,266) $21,119 6,051 5,549 $32,719 (10,126) $ $78 698 1,348 $2,124 (1,140) $23,577 $22,593 $984 % 0 .4% 11 .5 24 .3 6 .5% (11 .3) 4 .4% 36 ALLIED 2023 ANNUAL REPORTFor the year ended December 31, 2023, general and administrative expenses increased by $984 or 4 .4% from the comparable period primarily due to amortization of a prepaid naming right of $1,419, and change in mark-to-market adjustments on unit-based compensation liabilities of $629, partially offset by higher capitalization to qualifying investment properties of $757 for directly attributable employee costs relating to the disposition of the UDC Portfolio . INTEREST INCOME Interest income for the three months and years ended December 31, 2023 and 2022, are as follows: THREE MONTHS ENDED CHANGE DECEMBER 31, 2023 DECEMBER 31, 2022 $ Interest on loans receivable $10,544 $8,482 $2,062 Guarantee fees Interest on cash, cash equivalents and deposit 910 7,295 794 153 116 7,142 Interest income, IFRS basis $18,749 $9,429 $9,320 % 24 .3% 14 .6 4,668 .0 98 .8% For the three months ended December 31, 2023, interest income increased by $9,320 or 98 .8% over the comparative period primarily due to interest income earned on cash received from the disposition of the UDC portfolio of $7,118 and interest income earned on a higher balance of loans receivable of $2,062 . YEAR ENDED CHANGE DECEMBER 31, 2023 DECEMBER 31, 2022 Interest on loans receivable $38,362 $28,765 Guarantee fees Interest on cash, cash equivalents and deposit 3,487 11,756 2,820 495 $ $9,597 667 11,261 Interest income, IFRS basis $53,605 $32,080 $21,525 % 33 .4% 23 .7 2,274 .9 67 .1% For the year ended December 31, 2023, interest income increased by $21,525 or 67 .1% from the comparable period primarily due to interest income earned on cash received from the disposition of the UDC portfolio of $10,958 and interest income earned on a higher balance of loans receivable of $9,597 . 37 ALLIED 2023 ANNUAL REPORTOTHER FINANCIAL PERFORMANCE MEASURES Allied’s internal forecast for 2023 was low-to-mid-single-digit percentage growth in each of FFO per unit, AFFO per unit and Same Asset NOI . The actual results for the year ended December 31, 2023, was a decline of 2 .3% on FFO per unit, an increase of 0 .1% in AFFO per unit and a decline of 0 .4% on Same Asset NOI in the rental portfolio . Allied’s FFO per unit growth was lower than expected due to extended lease-up timeframes and higher interest expense . The extended lease-up timeframes resulted in Allied’s occupancy as at December 31, 2023, to be 86 .4% . The higher interest expense of $14,104 was due to higher draws on the unsecured credit facility as a result of the timing of the closing of the Urban Data Centre portfolio sale and higher interest rates . Allied’s AFFO per unit met expectations due to lower than expected regular leasing expenditures as a result of extended lease-up timeframes, partially offset by the change in FFO per unit . Allied’s Same Asset NOI was lower than expected due to extended lease-up timeframes as described above . 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-GAAP 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-GAAP 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-GAAP Measures on page 16 . Allied initiated condominium pre-sales at KING Toronto, a 50/50 joint arrangement with Westbank, in the fourth quarter of 2018 . For the three months and year ended December 31, 2023, Allied incurred $89 and $538, 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, 2023, FFO per unit excluding condominium related items, financing prepayment costs, and the mark-to-market adjustment on unit-based compensation totalled $0 .614 . This is a decrease of $0 .004 or 0 .6% over the comparable period in the prior year . The decrease was primarily due to a decrease in operating income of $11,975 ($16,559 is related to the UDC portfolio which was sold in August 2023), partially offset by an increase in interest income of $9,320, lower interest expense of $1,440 (which excludes the distributions on Exchangeable LP Units) and lower general and administrative expenses of $935 . For the year ended December 31, 2023, FFO per unit excluding condominium related items, financing prepayment costs, and the mark-to-market adjustment on unit-based compensation totalled $2 .380 . This is a decrease of $0 .055 or 2 .3% over the comparable period in the prior year . The decrease was primarily due to a decrease in operating income of $8,650 ($30,473 is related to the UDC portfolio which was sold in August 2023) and a higher interest expense of $14,104 (which excludes the distributions on Exchangeable LP Units), partially offset by an increase in interest income of $21,525 . 38 ALLIED 2023 ANNUAL REPORTTo 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-GAAP Measures on page 16 . For the three months and year ended December 31, 2023, the FFO pay-out ratio excluding condominium related items, financing prepayment costs, and the mark-to-market adjustment on unit-based compensation was 73 .3% and 75 .6%, 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-GAAP 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-GAAP 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-GAAP Measures on page 16 . For the three months ended December 31, 2023, AFFO per unit excluding condominium related items, financing prepayment costs, and the mark-to-market adjustment on unit-based compensation totalled $0 .562 . This represents an increase of $0 .014 or 2 .6% over the comparable period in the prior year . The increase was primarily due to lower maintenance capital expenditures of $1,733 and lower regular leasing expenditures of $1,290, partially offset by the changes in FFO excluding condominium related items and the mark-to-market adjustment on unit-based compensation discussed above . For the year ended December 31, 2023, AFFO per unit excluding condominium related items, financing prepayment costs, and the mark-to-market adjustment on unit-based compensation totalled $2 .177 . This represents an increase of $0 .003 or 0 .1% over the comparable period in the prior year . The increase was primarily due to lower regular leasing expenditures by $6,769 and lower maintenance capital expenditures of $2,915, partially offset by higher amortization of straight-line rent by $2,754, and the changes in FFO excluding condominium related items and the mark-to-market adjustment on unit-based compensation discussed above . 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, 2023, the AFFO pay-out ratio excluding condominium related items, financing prepayment costs, and the mark-to-market adjustment on unit-based compensation was 80 .0% and 82 .7%, respectively . 39 ALLIED 2023 ANNUAL REPORTRECONCILIATION OF FFO AND AFFO The following table reconciles Allied’s net (loss) income and comprehensive (loss) income from continuing operations to FFO, FFO excluding condominium related items, financing prepayment costs, and the mark- to-market adjustment on unit-based compensation, AFFO, and AFFO excluding condominium related items, financing prepayment costs, and the mark-to-market adjustment on unit-based compensation, which are on a non-GAAP basis, for the three months and years ended December 31, 2023, and 2022 . Refer to Non-GAAP Measures on page 16 . THREE MONTHS ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 CHANGE $(499,340) $20,178 $(519,518) — 21,214 (21,214) 494,571 26,571 27,054 167 2,302 7,529 103 10,983 15,039 169 312 36,555 — (1,733) — 2,479 8,115 99 — (693) 164 377 458,016 26,571 28,787 167 (177) (586) 4 10,983 15,732 5 (65) $85,460 $86,755 $(1,295) 89 — 216 $85,765 (3,318) (1,565) (616) 189 (564) (55) $86,325 (2,807) (2,855) (2,349) (1,612) (1,736) (100) 564 271 $(560) (511) 1,290 1,733 124 Net (loss) income and comprehensive (loss) 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 Exchangeable LP Units Adjustment to fair value of derivative instruments Transaction costs Incremental leasing costs Amortization of improvement allowances Amortization of property, plant and equipment (1) Distributions on Exchangeable LP Units 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 rent Regular leasing expenditures (3) Regular and recoverable maintenance capital expenditures Incremental leasing costs (related to regular leasing expenditures) 40 ALLIED 2023 ANNUAL REPORTTHREE MONTHS ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 CHANGE Adjustment relating to joint venture: Amortization of straight-line rent (43) (25) (18) 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 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 $78,611 $76,553 $2,058 139,765,128 139,765,128 139,765,128 139,765,128 — — $0.611 $0 .621 $(0 .010) $0.614 $0 .618 $(0 .004) $0.562 $0 .548 $0 .014 $0.611 $0 .621 $(0 .010) $0.614 $0 .618 $(0 .004) $0.562 $0 .548 $0 .014 73.6% 70 .5% 3 .1% 73.3% 70 .8% 2 .5% 80.0% 79 .9% 0 .1% (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 44 for a description of regular leasing expenditures. (4) The weighted average number of units includes Units and Exchangeable LP Units. The Exchangeable LP Units were re-classified from non-controlling interests in equity to liabilities in the audited consolidated financial statements on Allied’s conversion to an open-end trust on June 12, 2023. 41 ALLIED 2023 ANNUAL REPORTNet (loss) income and comprehensive (loss) 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 Exchangeable LP Units Adjustment to fair value of derivative instruments Impairment of residential inventory Transaction costs Incremental leasing costs Amortization of improvement allowances Amortization of property, plant and equipment (1) Distributions on Exchangeable LP Units 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 rent Regular leasing expenditures (3) Regular and recoverable maintenance capital expenditures Incremental leasing costs (related to regular leasing expenditures) Adjustment relating to joint venture: YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 CHANGE $(545,707) $174,669 $(720,376) 124,991 200,694 (75,703) 663,803 (28,696) 8,535 15,376 13,413 9,184 31,456 405 18,068 19,677 660 1,413 (69,182) — (37,343) 15,729 — 9,281 32,302 224 — 6,101 613 1,389 732,985 (28,696) 45,878 (353) 13,413 (97) (846) 181 18,068 13,576 47 24 $332,578 $334,477 $(1,899) 538 — (494) 602 (564) (1,123) $332,622 $333,392 (9,579) (7,187) (5,011) (6,825) (13,956) (7,926) (6,430) (6,497) (64) 564 629 $(770) (2,754) 6,769 2,915 67 419 Amortization of straight-line rent (190) (609) 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 42 $304,225 $297,579 $6,646 139,765,128 136,880,675 139,765,128 136,904,082 2,884,453 2,861,046 ALLIED 2023 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 YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 CHANGE $2.380 $2 .444 $(0 .064) $2.380 $2 .436 $(0 .056) $2.177 $2 .174 $0 .003 $2.380 $2 .443 $(0 .063) $2.380 $2 .435 $(0 .055) $2.177 $2 .174 $0 .003 75.6% 71 .6% 4 .0% 75.6% 71 .8% 3 .8% 82.7% 80 .4% 2 .3% (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 44 for a description of regular leasing expenditures. (4) The weighted average number of units includes Units and Exchangeable LP Units. The Exchangeable LP Units were re-classified from non-controlling interests in equity to liabilities in the audited consolidated financial statements on Allied’s conversion to an open-end trust on June 12, 2023. 43 ALLIED 2023 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 . 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 costs of internal staff directly attributable to the projects under development . THREE MONTHS ENDED YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 DECEMBER 31, 2023 DECEMBER 31, 2022 Revenue-enhancing capital and development costs $145,546 $93,398 $434,793 $391,210 Regular and recoverable maintenance capital expenditures Total capital expenditures Revenue-enhancing leasing expenditures Regular leasing expenditures Total improvement allowances and leasing commissions $616 $146,162 $21,700 $1,565 $2,349 $95,747 $26,430 $2,855 $5,011 $7,926 $439,804 $399,136 $81,108 $7,187 $69,686 $13,956 $23,265 $29,285 $88,295 $83,642 44 ALLIED 2023 ANNUAL REPORTEARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (“EBITDA”) The following table reconciles Allied’s net (loss) income and comprehensive (loss) income to Adjusted EBITDA, a non-GAAP measure, for the three months and years ended December 31, 2023, and December 31, 2022 . Refer to Non-GAAP Measures on page 16 . THREE MONTHS ENDED YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 DECEMBER 31, 2023 DECEMBER 31, 2022 Net (loss) income and comprehensive (loss) income for the period Interest expense Amortization of other assets Amortization of improvement allowances Impairment of residential inventory Transaction costs Fair value loss (gain) on investment properties and investment properties held for sale (1) Fair value loss (gain) on Exchangeable LP Units Fair value loss (gain) on derivative instruments Mark-to-market adjustment on unit-based compensation $(499,340) 30,265 381 7,698 — 167 509,610 26,571 27,054 $41,392 22,500 385 8,279 — — 35,862 — (1,733) $(420,716) $375,363 111,506 1,499 32,116 15,376 13,413 683,480 (28,696) 79,334 1,325 32,915 15,729 — (63,081) — 8,535 (37,343) 216 (55) (494) (1,123) Adjusted EBITDA (2) $102,622 $106,630 $416,019 $403,119 (1) Includes Allied’s proportionate share of the equity accounted investment’s fair value loss on investment properties of $15,039 and $19,677, respectively for the three months and year ended December 31, 2023, respectively (December 31, 2022 - fair value gain on investment properties of $693 and fair value loss of $6,101, respectively). (2) Includes the Urban Data Centre segment which was classified as a discontinued operation starting in Q4 2022. 45 ALLIED 2023 ANNUAL REPORTSection III —Leasing Allied strives to maintain high levels of occupancy and leased area . At December 31, 2023, Allied’s rental portfolio was 87 .3% leased . 46 ALLIED 2023 ANNUAL REPORTSTATUS Leasing status for the rental portfolio as at December 31, 2023, is summarized below: GLA AS A % OF TOTAL GLA (1) Leased area (occupied & committed) on December 31, 2022 Vacancy committed for future leases Occupancy - December 31, 2022 Previously committed vacant space now occupied New leases and expansions on vacant space New vacancies during the year Surrender/early termination agreements Suite additions, remeasurements and removals 12,998,230 (166,163) 12,832,067 166,163 214,932 (731,786) (109,556) 11,483 90 .8% 89 .6% Occupancy (pre-2023 acquisitions, dispositions and transfers) 12,383,303 86 .5% Occupancy related to transfers from/(to) PUD Occupancy - December 31, 2023 Vacancy committed for future leases Leased area (occupied & committed) - December 31, 2023 542,776 12,926,079 121,756 13,047,835 (1) Excludes properties under development, investment properties held for sale, and residential GLA. 86.4% 87.3% Of the 14,954,282 square feet total GLA in Allied’s rental portfolio, 12,926,079 square feet were occupied on December 31, 2023 . Another 121,756 square feet were subject to contractual lease commitments with users whose leases commence subsequent to December 31, 2023, bringing the leased area to 13,047,835 square feet, which represents 87 .3% of Allied’s total rental portfolio GLA . The table below outlines the timing of the contractual lease commitments by commencement of occupancy: FIXTURING COMMENCEMENT (OCCUPANCY) Q1 2024 Q2 2024 Q3 2024 Q4 2024 THEREAFTER TOTAL Lease commitments - GLA % of lease commitments 97,063 79 .7% 5,723 4 .7% 8,000 6 .6% — —% 10,970 9 .0% 121,756 100 .0% 47 ALLIED 2023 ANNUAL REPORTIn most instances, occupancy commences with a fixturing period prior to rent commencement . During the fixturing period, straight-line rent revenue is recognized . Thereafter, base and additional rent 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) Q1 2024 Q2 2024 Q3 2024 Q4 2024 THEREAFTER TOTAL Lease commitments - GLA % of lease commitments 22,654 18 .6% 10,170 8 .4% 9,743 8 .0% 50,697 41 .6% 28,492 23 .4% 121,756 100 .0% Allied monitors the level of sub-lease space being marketed in its rental portfolio, below is a summary: Toronto Montréal Calgary Vancouver Total square feet % of Total GLA DECEMBER 31, 2023 SEPTEMBER 30, 2023 JUNE 30, 2023 MARCH 31, 2023 516,084 152,207 70,714 22,343 761,348 5.1% 555,850 156,937 74,924 35,681 823,392 5 .6% 530,563 216,812 70,714 16,964 835,053 5 .8% 442,813 268,399 75,536 33,193 819,941 5 .7% 48 ALLIED 2023 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, 2023, is summarized in the following table: LEASABLE SF LEASED SF BY DECEMBER 31 % LEASED BY DECEMBER 31 UNLEASED SF AT DECEMBER 31 Total GLA as at December 31, 2022 Leased area as at December 31, 2022 14,317,179 12,998,230 Unleased area as at December 31, 2022 1,318,949 Area expiring on December 31, 2022, and vacant on January 1, 2023 Vacancy related to transfers from/(to) PUD 170,554 40,132 Unleased area on January 1, 2023, including re-measurement (1) Maturities during the year ended December 31, 2023 (2) Maturities in future years Total (3) 1,529,635 310,577 20 .3% 1,219,058 1,844,524 1,010,643 54 .8% 833,881 529,861 3,374,159 1,851,081 2,052,939 (1) The unleased area on January 1, 2023, including re-measurement, consists of Allied’s rental properties owned as at December 31, 2023. (2) Some maturities occurred at December 31, 2023, and are included in Allied’s leased area. (3) The information above is net of transfers to/from PUD and investment properties held for sale. Allied endeavours to renew leases in advance of expiry . Including the early renewals in the prior year related to the maturities in the three months and year ended December 31, 2023, Allied leased 59 .7% and 59 .9% of the GLA, respectively, which is summarized in the following table: THREE MONTHS ENDED DECEMBER 31, 2023 YEAR ENDED DECEMBER 31, 2023 LEASABLE SF LEASED SF BY DECEMBER 31 % LEASED BY DECEMBER 31 LEASABLE SF LEASED SF BY DECEMBER 31 % LEASED BY DECEMBER 31 Maturities during the period (leased in prior year) (1) Maturities during the period (leased in current year) Total 1,361 1,361 100 .0% 234,491 234,491 100 .0% 715,161 716,522 426,235 427,596 59 .6% 59.7% 1,844,524 1,010,643 2,079,015 1,245,134 54 .8% 59.9% (1) In the prior year, these leases were reported as maturities in future years. 49 ALLIED 2023 ANNUAL REPORTThe 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, 2023 . THREE MONTHS ENDED DECEMBER 31, 2023 YEAR ENDED DECEMBER 31, 2023 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 $26 .13 $27 .08 3 .6% 366,603 $24 .23 $25 .87 6 .8% 1,212,880 Average-to-Average Base Rent Total Portfolio $25 .29 $27 .23 7 .7% 366,603 $23 .46 $26 .51 13 .0% 1,212,880 Leasing activity resulted in an increase of 6 .8% in ending-to-starting and 13 .0% in average-to-average net rent per square foot from maturing leases upon renewal for the year ended December 31, 2023, illustrating Allied’s ability to generate rent growth upon renewal . LEASE RENEWAL RATE % of total leased SF Maturing leases - weighted average rent Renewing leases - weighted average rent YEAR ENDED DECEMBER 31, 2023 ABOVE IN-PLACE RENTS AT IN-PLACE RENTS BELOW IN-PLACE RENTS 49 .2% $23 .15 $27 .01 44 .2% $25 .56 $25 .56 6 .6% $23 .44 $19 .40 50 ALLIED 2023 ANNUAL REPORTThe following table outlines leasing activity in the rental portfolio for the three months and year ended December 31, 2023: THREE MONTHS ENDED DECEMBER 31, 2023 YEAR ENDED DECEMBER 31, 2023 NEW LEASES RENEWALS TOTAL NEW LEASES RENEWALS TOTAL Tours 272 1,113 Net leased square feet 193,080 366,603 559,683 638,201 1,212,880 1,851,081 Number of transactions Lease term (in years) Net effective rent (per square foot per year) (1) Net annualized rent Tenant improvements Leasing commissions Landlord’s work Total leasing costs Net effective rent 51 5 .0 $20 .56 (2 .64) (1 .35) (1 .11) $(5 .10) $15.46 77 2 .7 $27 .23 (1 .42) (0 .62) (1 .07) $(3 .11) $24.12 128 3 .5 $24 .93 (1 .84) (0 .87) (1 .08) $(3 .79) $21.14 170 4 .8 238 3 .9 408 4 .2 $20 .38 (2 .80) (1 .51) (1 .16) $26 .51 $24 .40 (3 .55) (0 .68) (0 .36) (3 .29) (0 .96) (0 .63) $(5 .47) $(4 .59) $(4 .88) $14.91 $21.92 $19.52 (1) Calculated based on a weighted average of leased square feet. USER PROFILE The following sets out Allied’s user-mix on the basis of percentage of rental revenue for the year ended December 31, 2023: 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, 2023 39 .2% 17 .2 13 .4 9 .8 6 .7 5 .8 3 .4 2 .9 1 .6 100.0% (1) The rental revenue is on a proportionate basis, which is a non-GAAP measure. Refer to Non-GAAP Measures on page 16. 51 ALLIED 2023 ANNUAL REPORTThe following sets out information on the top-10 users by rental revenue for the year ended December 31, 2023: USER % OF RENTAL REVENUE (1) DECEMBER 31, 2023 WEIGHTED AVERAGE REMAINING LEASE TERM (YEARS) % OF TOTAL RENTAL GLA CREDIT RATING DBRS/S&P/ MOODY’S Ubisoft Divertissements Inc . 3 .2% Google Canada Corporation Shopify Inc . Société Québecoise des Infrastructures TMG MacManus Canada Inc . Morgan Stanley Services Canada Corp National Capital Commission National Bank of Canada Technicolor Canada Inc . Unity Technologies Canada Company 2 .7 2 .6 1 .9 1 .7 1 .7 1 .5 1 .3 1 .3 1 .2 19.1% 8 .5 8 .6 10 .5 4 .4 5 .9 5 .9 10 .7 2 .8 4 .4 7 .0 7.2 3 .6% Not Rated 3 .2 1 .8 1 .9 1 .8 1 .5 1 .3 1 .3 1 .0 1 .1 18.5% -/AA+/Aa2 Not Rated AAL/AA-/Aa2 Not Rated AH/A-/A1 AAA/AAA/Aaa AA/A/Aa3 *Not Rated Not Rated * Credit rating for parent company (1) The rental revenue is on a proportionate basis, which is a non-GAAP measure. Refer to Non-GAAP Measures on page 16. 52 ALLIED 2023 ANNUAL REPORTLEASE MATURITY As at December 31, 2023, 87 .3% of the GLA in Allied’s rental portfolio was leased and its weighted average term to maturity was 5 .8 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 2028 and the corresponding estimated weighted average market rental rate as at December 31, 2023 . 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, 2024 1,063,749 December 31, 2025 1,484,295 December 31, 2026 1,409,986 December 31, 2027 December 31, 2028 1,697,954 1,130,283 7 .1% 9 .9% 9 .4% 11 .4% 7 .6% $24 .08 $23 .70 $23 .68 $22 .14 $24 .69 % OF TOTAL GLA W/A RENTAL RATE ESTIMATED W/A MARKET RATE $24.54 $23.70 $24.91 $23.68 9.9% 9.4% $25.57 $22.14 11.4% $25.86 $24.08 7.1% 25.0% 20.0% AA LL GG ll aa tt oo TT ff oo %% 15.0% 10.0% 5.0% 0.0% $25 .86 $24 .54 $24 .91 $25 .57 $26 .36 $26.36 $24.69 $30.00 $25.00 $20.00 $15.00 7.6% $10.00 $5.00 $0.00 December 31, 2024 December 31, 2025 December 31, 2026 December 31, 2027 December 31, 2028 1,063,749 1,484,295 1,409,986 1,697,954 1,130,283 SQUARE FEET ee tt aa rr ll aa tt nn ee rr ee gg aa rr ee vv aa dd ee tt hh gg ii ee WW 53 ALLIED 2023 ANNUAL REPORT The following tables contain information on lease maturities by segment: SQUARE FEET % OF SEGMENT GLA WEIGHTED AVERAGE IN-PLACE RENTAL RATE ESTIMATED WEIGHTED AVERAGE MARKET RENTAL RATE 395,171 366,800 548,296 792,118 477,083 6 .0% 5 .6% 8 .4% 12 .1% 7 .3% $16 .64 $18 .22 $17 .29 $16 .54 $18 .57 $19 .11 $19 .28 $18 .73 $21 .13 $19 .20 SQUARE FEET % OF SEGMENT GLA WEIGHTED AVERAGE IN-PLACE RENTAL RATE ESTIMATED WEIGHTED AVERAGE MARKET RENTAL RATE 410,317 816,936 511,464 700,473 439,345 6 .7% 13 .4% 8 .4% 11 .5% 7 .2% $28 .40 $26 .80 $27 .00 $27 .90 $32 .43 $30 .57 $29 .17 $28 .18 $31 .15 $35 .16 SQUARE FEET % OF SEGMENT GLA WEIGHTED AVERAGE IN-PLACE RENTAL RATE ESTIMATED WEIGHTED AVERAGE MARKET RENTAL RATE 90,363 239,103 134,320 100,796 134,759 6 .8% 18 .0% 10 .1% 7 .6% 10 .2% $16 .08 $17 .60 $15 .54 $13 .00 $11 .77 $12 .15 $12 .91 $14 .05 $11 .36 $13 .06 SQUARE FEET % OF SEGMENT GLA WEIGHTED AVERAGE IN-PLACE RENTAL RATE ESTIMATED WEIGHTED AVERAGE MARKET RENTAL RATE 167,898 61,456 215,906 104,567 79,096 17 .2% 6 .3% 22 .1% 10 .7% 8 .1% $35 .37 $38 .85 $37 .12 $34 .74 $40 .64 $37 .63 $39 .66 $39 .61 $35 .57 $43 .38 MONTRÉAL & OTTAWA December 31, 2024 December 31, 2025 December 31, 2026 December 31, 2027 December 31, 2028 TORONTO & KITCHENER December 31, 2024 December 31, 2025 December 31, 2026 December 31, 2027 December 31, 2028 CALGARY December 31, 2024 December 31, 2025 December 31, 2026 December 31, 2027 December 31, 2028 VANCOUVER December 31, 2024 December 31, 2025 December 31, 2026 December 31, 2027 December 31, 2028 54 ALLIED 2023 ANNUAL REPORTSection IV —Historical Performance The following sets out summary information and financial results for the eight most recently completed fiscal quarters . 55 ALLIED 2023 ANNUAL REPORTQ4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Rental revenue (1)(2) $150,898 $138,455 $136,137 $138,490 $135,924 $131,823 $130,780 $120,942 Property operating costs (1)(2) (69,029) (58,558) (58,037) (61,325) (58,639) (56,401) (55,686) (53,535) Operating income (1)(2) $81,869 $79,897 $78,100 $77,165 $77,285 $75,422 $75,094 $67,407 Net (loss) income and comprehensive (loss) income (1) $(499,340) $(33,958) $126,265 $(13,683) $41,392 $46,743 $100,038 $187,190 per unit (basic and diluted) (1) $(3 .57) $(0 .24) $0 .90 $(0 .10) $0 .30 $0 .33 $0 .72 $1 .46 Net (loss) income attributable to Unitholders (1) $(499,340) $(33,958) $124,032 $(16,447) $39,223 $44,573 $97,869 $187,190 per unit (basic and diluted) (1) $(3 .57) $(0 .24) $0 .89 $(0 .12) $0 .28 $0 .32 $0 .70 $1 .46 Net (loss) income from continuing operations (1)(2) $(499,340) $(25,746) $11,081 $(31,702) $20,178 $101 $85,516 $68,874 per unit (basic and diluted) (1)(2) $(3 .57) $(0 .18) $0 .08 $(0 .23) $0 .14 $— $0 .61 $0 .54 Net (loss) income from continuing operations attributable to Unitholders (1)(2) $(499,340) $(25,746) $8,848 $(34,466) $18,009 $(2,068) $83,347 $68,874 per unit (basic and diluted) (1)(2) $(3 .57) $(0 .18) $0 .06 $(0 .25) $0 .13 $(0 .01) $0 .60 $0 .54 Weighted average units (diluted) (3) 139,765,128 139,765,128 139,765,128 139,765,128 139,765,128 139,765,373 139,860,134 128,279,982 Distributions (1)(4) $62,895 $62,895 $62,894 $62,894 $61,134 $61,131 $61,132 $55,966 FFO (5) $85,460 $83,719 $82,224 $81,175 $86,755 $85,332 $85,050 $77,340 FFO per unit (diluted) (5) $0 .611 $0 .599 $0 .588 $0 .581 $0 .621 $0 .611 $0 .608 $0 .603 FFO pay-out ratio (5) 73 .6% 75 .1% 76 .5% 77 .5% 70 .5% 71 .6% 71 .9% 72 .4% All amounts below are excluding condominium related items, financing prepayment costs and the mark-to-market adjustment on unit-based compensation (6) FFO (5) $85,765 $83,556 $82,216 $81,085 $86,325 $84,747 $84,747 $77,573 FFO per unit (diluted) (5) $0 .614 $0 .598 $0 .588 $0 .580 $0 .618 $0 .606 $0 .606 $0 .605 FFO payout-ratio (5) 73 .3% 75 .3% 76 .5% 77 .6% 70 .8% 72 .1% 72 .1% 72 .1% AFFO (5) $78,611 $76,174 $74,958 $74,482 $76,553 $73,508 $75,947 $71,571 AFFO per unit (diluted) (5) $0 .562 $0 .545 $0 .536 $0 .533 $0 .548 $0 .526 $0 .543 $0 .558 AFFO payout-ratio (5) 80 .0% 82 .6% 83 .9% 84 .4% 79 .9% 83 .2% 80 .5% 78 .2% 56 ALLIED 2023 ANNUAL REPORTNAV per unit (7) $45 .60 $49 .83 $50 .80 $50 .41 $50 .96 $51 .10 $51 .20 $50 .92 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Net debt as a multiple of annualized adjusted EBITDA (5)(8) 8 .2x 7 .9x 10 .5x 10 .5x 9 .8x 9 .6x 9 .6x 10 .2x Total indebtedness ratio (5) 34 .7% 34 .2% 36 .9% 36 .5% 35 .6% 34 .3% 33 .9% 33 .3% Total rental GLA 14,954 14,759 14,479 14,423 14,317 14,968 14,812 15,417 Leased rental GLA 13,048 12,934 12,690 12,809 12,998 13,582 13,468 13,775 Leased area % 87 .3% 87 .6% 87 .6% 88 .8% 90 .8% 90 .7% 90 .9% 89 .3% (1) This measure is presented on an IFRS basis. (2) Excludes the results of the UDC segment which was classified as a discontinued operation in Q4 2022. The prior period comparative figures have been revised accordingly. (3) 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. The distributions in Q4 2023 exclude the special cash distributions declared of $61,419 on Units and $5,668 on Exchangeable LP Units, and the special Unit distribution declared of $639,780. (5) This is a non-GAAP measure, refer to page 16. These non-GAAP 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 for an accelerated amortization of deferred premium in connection with the favourable refinancing of a mortgage. (7) Prior to Allied’s conversion to an open-end trust, net asset value per unit (“NAV per unit”) was calculated as total equity as at the corresponding period ended, divided by the actual number of Units and Exchangeable LP Units outstanding at period end. On Allied’s conversion to an open-end trust on June 12, 2023, NAV per unit was calculated as total equity plus the value of Exchangeable LP Units as at the corresponding period ended, divided by the actual number of Units and Exchangeable LP Units. The rationale for including the value of Exchangeable LP Units is because they 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. (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 for the past eight quarters are impacted by occupancy, the economic productivity of the portfolio, acquisitions, dispositions, the magnitude and timing of development expenditures and project completions, interest rate fluctuations and changes in the fair values of investment properties and investment properties held for sale . 57 ALLIED 2023 ANNUAL REPORTSection V —Asset Profile Allied is an owner-operator of distinctive urban workspace in seven major cities across Canada . Its urban portfolios are concentrated in mixed-use, amenity-rich neighbourhoods . 58 ALLIED 2023 ANNUAL REPORTThe following table reconciles the consolidated balance sheets on an IFRS basis to a proportionate basis, a non-GAAP measure, as at December 31, 2023, and December 31, 2022 . Refer to Non-GAAP Measures on page 16 . DECEMBER 31, 2023 DECEMBER 31, 2022 IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS Assets Non-current assets Investment properties $9,387,032 $102,200 $9,489,232 $9,669,005 $120,630 $9,789,635 Residential inventory 209,783 — 209,783 187,272 — 187,272 Investment in joint venture 8,866 (8,866) — 7,089 (7,089) Loans and notes receivable 321,371 — 321,371 174,019 — Other assets 48,528 1,382 49,910 56,221 1,372 — 174,019 57,593 9,975,580 94,716 10,070,296 10,093,606 114,913 10,208,519 Current assets Cash and cash equivalents 211,069 1,054 212,123 20,990 1,273 22,263 Loan receivable from joint venture 93,291 (93,291) — 113,287 (113,287) Loans and notes receivable 188,382 Accounts receivable, prepaid expenses and deposits 140,963 Investment properties held for sale — — 851 — 188,382 258,093 141,814 65,544 — 1,354,830 — 613 — — 258,093 66,157 1,354,830 Total assets $10,609,285 $3,330 $10,612,615 $11,906,350 $3,512 $11,909,862 633,705 (91,386) 542,319 1,812,744 (111,401) 1,701,343 Liabilities Non-current liabilities Debt $3,510,366 $— $3,510,366 $3,864,256 $— $3,864,256 Lease liabilities Other liabilities 50,639 48,784 3,609,789 — — — 50,639 48,784 50,851 43,438 3,609,789 3,958,545 — — — 50,851 43,438 3,958,545 59 ALLIED 2023 ANNUAL REPORTDECEMBER 31, 2023 DECEMBER 31, 2022 IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS IFRS BASIS INVESTMENT IN JOINT VENTURE PROPORTIONATE BASIS Current liabilities Exchangeable LP Units 238,309 Debt 149,245 — — 238,309 — 149,245 346,929 — — Accounts payable and other liabilities 476,863 3,330 480,193 370,823 3,512 Lease liability held for sale — — — 107,215 — 864,417 3,330 867,747 824,967 3,512 — 346,929 374,335 107,215 828,479 Total liabilities $4,474,206 $3,330 $4,477,536 $4,783,512 $3,512 $4,787,024 Equity Unitholders’ equity $6,135,079 Non-controlling interests — Total equity $6,135,079 $— — $— $6,135,079 $6,581,166 — 541,672 $6,135,079 $7,122,838 $— — $— $6,581,166 541,672 $7,122,838 Total liabilities and equity $10,609,285 $3,330 $10,612,615 $11,906,350 $3,512 $11,909,862 As at December 31, 2023, Allied’s portfolio of 213 investment properties consists of 201 rental properties (five of which are partially under development), and 12 development properties . Allied’s portfolio of investment properties has a fair value of $9,489,232, including one equity accounted investment in a joint venture . 60 ALLIED 2023 ANNUAL REPORTChanges to the carrying amounts of investment properties and investment properties held for sale on a proportionate basis, a non-GAAP measure, are summarized in the following table . Refer to Non-GAAP Measures on page 16 . THREE MONTHS ENDED DECEMBER 31, 2023 YEAR ENDED DECEMBER 31, 2023 RENTAL PROPERTIES PROPERTIES UNDER DEVELOPMENT TOTAL RENTAL PROPERTIES PROPERTIES UNDER DEVELOPMENT TOTAL Balance, beginning of period $8,618,544 $1,235,460 $9,854,004 $9,615,025 $1,529,440 $11,144,465 Additions: Improvement allowances (1) Leasing commissions (1) Capital expenditures (1) 19,352 5,485 82,887 (1,568) (4) 17,784 5,481 62,197 16,350 9,421 327 71,618 16,677 63,275 146,162 211,749 228,055 439,804 Dispositions (20,000) — (20,000) (1,477,000) — (1,477,000) Transfers from PUD 209,400 (209,400) (1,170) (252) 1,170 — — — 688,540 (688,540) (89,320) 89,320 — — (252) (505) — (505) Transfers to PUD Transfers to other assets Amortization of straight- line rent and improvement allowances (1) Fair value (loss) gain on investment properties and investment properties held for sale (1) (4,027) (310) (4,337) (25,486) 3,139 (22,347) (439,147) (70,463) (509,610) (530,478) (153,002) (683,480) Balance, end of period $8,471,072 $1,018,160 $9,489,232 $8,471,072 $1,018,160 $9,489,232 (1) Includes Allied’s proportionate share of the equity accounted investment of the following amounts for the three months and year ended December 31, 2023: improvement allowances of $205 and $773, respectively; leasing commissions of $3 and $97, respectively; capital expenditures of $337 and $847, respectively; amortization of straight-line rent and improvement allowances of $(126) and $(470), respectively; and a fair value loss on investment properties of $15,039 and $19,677, respectively. As at December 31, 2023, Allied did not have any investment properties held for sale . There were five investment properties held for sale as at December 31, 2022, totaling $1,354,830, four located in Toronto and one located in Montréal . The decrease of $1,354,830 for the year ended December 31, 2023, is due to the disposition of investment properties held for sale . For the three months ended December 31, 2023, Allied recognized a fair value loss on investment properties and investment properties held for sale of $509,610 on a proportionate basis . This was primarily in the rental portfolio due to the expansion of capitalization rates to reflect the current macroeconomic conditions and the extended lease-up timeframes . 61 ALLIED 2023 ANNUAL REPORTFor the year ended December 31, 2023, Allied recognized a fair value loss on investment properties and investment properties held for sale of $683,480 on a proportionate basis . This was primarily in the rental portfolio due to the expansion of capitalization rates to reflect the current macroeconomic conditions and extended lease-up timeframes, and higher costs of projects in the development portfolio, partially offset by a fair value gain on the UDC portfolio . For the three months ended December 31, 2023, Allied capitalized $16,890 of borrowing costs to its capital expenditures on a proportionate basis, $11,209 of which related to development activity and $3,428 to upgrade activity in the rental portfolio . Allied capitalized $2,253 of borrowing costs to qualifying residential inventory . For the year ended December 31, 2023, Allied capitalized $72,300 of borrowing costs to its capital expenditures on a proportionate basis, $52,537 of which related to development activity and $10,548 to upgrade activity in the rental portfolio . Allied capitalized $9,215 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-GAAP 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 . 62 ALLIED 2023 ANNUAL REPORTAllied determines the fair value of its investment property portfolio every quarter and at year-end with the support of a third-party appraiser . The fair value of each investment property is determined based on various factors, including rental income from current leases, assumptions about rental income and cash outflows related to future leases reflecting market conditions, and recent market transactions . Allied’s valuation of its investment properties considers both asset-specific and market-specific factors, as well as observable transactions for similar assets . The determination of fair value requires the use of estimates, which are determined with the support of a third-party appraiser and compared with market data, third-party reports, and research, as well as observable market conditions . In valuing the investment properties as at December 31, 2023, the value derived using the DCF method was compared to the value that would have been calculated by applying a capitalization rate to stabilized 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 .83%, detailed in the table below: DECEMBER 31, 2023 DECEMBER 31, 2022 OVERALL CAPITALIZATION RATE RANGE % WEIGHTED AVERAGE % FAIR VALUE $ (1) RANGE % WEIGHTED AVERAGE % FAIR VALUE $ (1) Montréal & Ottawa 4.50% - 7.00% 5.08% $2,550,767 4 .50% - 7 .00% 4 .98% $2,490,473 Toronto & Kitchener 4.00% - 6.00% 4.66% 4,663,539 4 .00% - 5 .75% 4 .39% 4,396,581 Calgary Vancouver 6.75% - 7.75% 7.19% 246,946 5 .75% - 7 .50% 6 .58% 286,467 4.00% - 4.50% 4.18% 906,880 4 .00% - 4 .25% 4 .03% 967,050 Rental Properties 4.00% - 7.75% 4.81% $8,368,132 4 .00% - 7 .50% 4 .62% $8,140,571 Residential Properties 4.00% - 4.50% 4.38% 102,940 3 .75% - 5 .00% 4 .61% 119,624 Properties Under Development 4.25% - 7.50% 5.12% 1,018,160 4 .00% - 7 .25% 4 .66% 1,529,440 Investment Properties 4.00% - 7.75% 4.83% $9,489,232 3 .75% - 7 .50% 4 .62% $9,789,635 Investment Properties Held for Sale N/A N/A $— 4 .50% - 5 .25% 4 .80% $1,354,830 $9,489,232 $11,144,465 (1) Presented on a proportionate basis, which is a non-GAAP measure. Refer to Non-GAAP Measures on page 16. 63 ALLIED 2023 ANNUAL REPORTRENTAL PROPERTIES Allied’s rental portfolio was built by consolidating the ownership of urban office properties . 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 201 rental properties in six Canadian cities (five of these rental properties are partially under development) as at December 31, 2023 . ACQUISITIONS AND DISPOSITIONS During the year ended December 31, 2023, Allied did not acquire any investment properties . On August 16, 2023, Allied closed on the disposition of the UDC portfolio to KDDI Canada Inc ., a wholly owned subsidiary of KDDI Corporation (“KDDI”) for total gross cash proceeds of $1,350,000, which represented the fair value of these investment properties at the time of disposition net of the lease liability at 250 Front Street W . Therefore, there was no gain or loss recorded on closing . The UDC portfolio includes 151 Front Street W, 905 King Street W and 250 Front Street W and the lease liability at 250 Front Street W . On December 15, 2023, Allied closed on the disposition of one investment property held for sale, 8 Place du Commerce in Montréal, at a selling price of $20,000, which represented the fair value of the investment property at the time of disposition, accordingly there was no gain or loss recorded on closing . In addition, Allied incurred net working capital adjustments of $152 and selling costs of $167, resulting in total net cash consideration of $19,681 . RENTAL 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, 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 . 64 ALLIED 2023 ANNUAL REPORTAllied began tracking the intensification potential inherent in the Toronto portfolio in the fourth quarter of 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 112 properties in Toronto now comprise 5 .4 million square feet of current rental portfolio GLA and are situated on 40 .0 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, 6 .6 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 current rental portfolio 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 2 .3 million square feet that is currently in PUD and 10 .0 million square feet that is potential incremental density which totals 12 .3 million square feet as at December 31, 2023 . Of the 10 .0 million square feet of potential incremental density, 4 .8 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 . POTENTIAL INCREMENTAL DENSITY (IN SQUARE FEET) - GEOGRAPHIC BREAKDOWN CITY Toronto (1) Kitchener Montréal (2) Ottawa Calgary Edmonton Vancouver Total CURRENT GLA CURRENT PUD (ESTIMATED ON COMPLETION) POTENTIAL INCREMENTAL DENSITY TOTAL POTENTIAL GLA 5,392,443 709,088 6,317,019 231,270 1,327,159 — 977,303 538,585 — 1,209,805 — 48,502 297,851 183,640 6,079,112 332,616 1,841,945 — 1,434,755 — 312,923 12,010,140 1,041,704 9,368,769 231,270 2,810,416 297,851 1,473,866 14,954,282 2,278,383 10,001,351 27,234,016 (1) The GLA estimated on completion for properties under development in Toronto excludes 636,028 square feet of GLA at The Well and 76,734 square feet of Adelaide & Duncan, which has been transferred to the rental portfolio. (2) The GLA estimated on completion for properties under development in Montréal excludes 100,208 square feet of GLA at 700 Saint Hubert, which has been transferred to the rental portfolio. 65 ALLIED 2023 ANNUAL REPORTThe timing of development for the 10 .0 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 will be on the Toronto portfolio . Toronto & Kitchener Calgary & Edmonton Montréal & Ottawa Vancouver Development Potential 43 352 4,129 270 1,490 1,435 30,000 25,000 20,000 15,000 ) t e e f e r a u q s f o s d n a s u o h t n i ( A L G o 2,283 10,000 5,000 0 i l o f t r o P d e t c e o r P j l a t o T 184 1,210 346 539 Current PUD Short Term (0-5 Years) Medium Term (5-10 Years) Long Term (10+ Years) 6,000 5,000 4,000 3,000 2,000 1,000 0 ) t e e f e r a u q s f o s d n a s u o h t n i ( y t i s n e D l a t n e m e r c n I l a i t n e t o P 66 ALLIED 2023 ANNUAL REPORT Allied has initiated the intensification approval process for seven properties in Toronto and three properties in Montréal, all of which are owned in their entirety by Allied . These properties are identified in the following table: PROPERTY NAME REZONING APPROVAL STATUS USE CURRENT GLA ESTIMATED GLA ON COMPLETION ESTIMATED COMPLETION The Castle (1) King & Peter (2) King & Spadina (3) King & Brant (4) Union Centre In progress Office, limited retail 180,281 440,000 Unscheduled Completed Office, limited retail 86,230 790,000 Unscheduled In progress Office, limited retail 77,550 430,000 Unscheduled Completed Office, residential, retail 22,275 240,000 Unscheduled Completed Office, limited retail 41,787 1,330,000 Unscheduled Bathurst Street Assembly (5) In progress Office, residential, retail 36,919 318,000 Unscheduled Adelaide & Spadina (6) Le Nordelec - Lot A (7) Le Nordelec - Lot B (8) Le Nordelec - Lot E (9) Total Completed In progress Office, retail 11,015 230,000 Unscheduled Office — 230,000 Unscheduled In progress Office, residential 32,893 744,000 Unscheduled Completed Office 7,550 135,000 Unscheduled 496,500 4,887,000 (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 . Allied intends to align all new developments and redevelopments with its Net Zero Carbon Plan . 67 ALLIED 2023 ANNUAL REPORTDEVELOPMENT 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 there continues to be demand for leasing office space . Allied will not commence material development of its urban office portfolio unless it has significant pre-leased commitments to mitigate risk . Pursuant to Allied’s Declaration of Trust, the cost of Properties Under Development cannot exceed 15% of GBV . At December 31, 2023, the cost of Allied’s Properties Under Development was 11 .6% of GBV (December 31, 2022 - 12 .6%) . 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 12 Properties Under Development and five rental properties partially under development . Eight of the projects are ground-up developments and nine are redevelopments . 68 ALLIED 2023 ANNUAL REPORTGROUND-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)(3) Office, retail Adelaide & Duncan, Toronto (1)(3)(4) Office, retail, residential QRC West Phase II, Toronto (5) KING Toronto, Toronto (1)(6) 108 East 5th Avenue, Vancouver (1) 700 Saint Hubert, Montréal (3)(7) 365 Railway, Vancouver Office, retail Office, retail Office Office, retail Office 763,000 230,000 93,134 100,000 102,000 144,114 60,000 810 Saint Antoine, Montréal (8) Retail, residential 380,000 Total 1,872,248 98% 100 100 — 54 70 — N/A 81% (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 in phases since Q4 2020, and the last phase closed in January 2022. (3) A portion of the property been transferred to the rental portfolio. The information in the table includes both the rental and development portions. (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) The GLA components (in square feet) are as follows: 77,434 of office and 15,700 of retail. (6) 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, and 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. (7) The GLA components (in square feet) are as follows: 143,314 of office and 800 of retail. (8) The GLA components (in square feet) are as follows: 350,000 of residential and 30,000 of retail. 69 ALLIED 2023 ANNUAL REPORTREDEVELOPMENTS Redevelopment involves transformation of existing leasable area to enhance revenue-producing capability . PROPERTY NAME 400 Atlantic, Montréal (1) Boardwalk-Revillon Building, Edmonton (2) 185 Spadina, Toronto 342 Water, Vancouver (3) 1001 Boulevard Robert-Bourassa, Montréal (4)(5) RCA Building, Montréal (5) 422-424 Wellington W, Toronto 3575 Saint Laurent, Montréal (6) Kipling Square, Calgary (7) Total USE ESTIMATED GLA (SF) Office, retail Office, retail Office Office, retail Office, retail Office Retail Office, retail Office 87,473 297,851 55,213 21,640 298,342 215,305 10,000 184,779 48,502 1,219,105 (1) The GLA components (in square feet) are as follows: 87,181 of office and 292 of retail. (2) The GLA components (in square feet) are as follows: 233,559 of office and 64,292 of retail. (3) The GLA components (in square feet) are as follows: 15,385 of office and 6,255 of retail. (4) The GLA components (in square feet) are as follows: 275,699 of office and 22,643 of retail. (5) A portion of the property is under development. The GLA represents the portion under development. (6) The GLA components (in square feet) are as follows: 169,166 of office and 15,613 of retail. (7) Conversion from office to retail planning is underway to optimize the use of this property. 70 ALLIED 2023 ANNUAL REPORTThe following table sets out Allied’s Properties Under Development as at December 31, 2023, 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 TRANSFER TO RENTAL PORTFOLIO ESTIMATED ANNUAL NOI ESTIMATED TOTAL COST ESTIMATED YIELD ON COST ESTIMATED COST TO COMPLETE The Well, Toronto (1)(2) Q3 2022 to Q2 2024 $37,500 - 43,250 $805,000 4 .7% - 5 .4% $21,012 700 Saint Hubert, Montréal Q3 2023 to Q2 2024 4,650 - 5,500 138,664 3 .4% - 4 .0% Adelaide & Duncan, Toronto (1)(3) Q4 2023 to Q4 2024 10,500 - 11,500 240,007 4 .4% - 4 .8% QRC West, Phase II, Toronto Q2 2024 4,660 - 4,770 94,700 4 .9% - 5 .0% 108 East 5th Avenue, Vancouver (1) Q1 2025 4,350 - 4,600 108,884 4 .0% - 4 .2% KING Toronto, Toronto (1)(4) Q4 2025 5,000 - 6,000 128,505 3 .9% - 4 .9% 810 Saint Antoine, Montréal 365 Railway, Vancouver TBD TBD TBD TBD TBD TBD TBD TBD 3,695 45,255 4,415 39,284 38,344 TBD TBD Redevelopments Q2 2024 to Q1 2025 24,415 - 27,290 576,717 4 .2% - 4 .7% 71,568 Total $91,075 - 102,910+ (1) These properties are co-owned, reflected in the table above at Allied’s ownership percentage. (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 residential phase is scheduled for completion in Q4 2024. (4) 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, and 539 King W. The estimated gross proceeds from the sale of the residential inventory is in the range of $290,000 - $295,000. The estimated total cost includes the commercial and residential components and is net of the estimated gross proceeds from the sale of the residential inventory of $290,000. 71 ALLIED 2023 ANNUAL REPORTThe initial cost of Properties Under Development includes the acquisition cost of the property, direct development costs, operating costs, realty taxes and borrowing costs directly attributable to the development . Borrowing costs, operating 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, 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 . 72 ALLIED 2023 ANNUAL REPORTRESIDENTIAL INVENTORY Residential inventory is as follows: KING Toronto $209,783 $187,272 DECEMBER 31, 2023 DECEMBER 31, 2022 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, 2023 DECEMBER 31, 2022 $187,272 37,887 (15,376) $209,783 $170,980 32,021 (15,729) $187,272 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 . As at December 31, 2023, 397 units or 90% have been pre-sold, subject to customary closing conditions . Management expects the condominium sales to close in 2025 . Residential inventory carrying value is calculated as the estimated gross proceeds less estimated costs to complete . The impairment during the year ended December 31, 2023, and year ended December 31, 2022, reflects higher estimated costs to complete . 73 ALLIED 2023 ANNUAL REPORTLOANS RECEIVABLE As at December 31, 2023, total loans receivable outstanding is $509,697 (December 31, 2022 - $432,032) . 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, 2023, the loan receivable outstanding is $21,173 (December 31, 2022 - $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, plus interest and on August 18, 2022, the facility was further increased to $175,000, plus interest . 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 extended to February 29, 2024 . On December 6, 2023, the maturity date of the facility was further extended to August 20, 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, 2023, the loan receivable outstanding including interest is $188,355 (December 31, 2022 - $161,032) . On November 30, 2018, Allied entered into a joint arrangement with Westbank to develop KING Toronto . As part of the arrangement, Allied advanced a loan (the “Original Facility”), originally in the principal amount of $67,030, to Westbank for its purchase of a 50% undivided interest in the property . Further advances were made to Westbank under the Original Facility and the aggregate principal amount of the loan was increased to $73,414 . Interest accrues to the Original Facility at a rate of 7 .00% per annum for the period up to and including November 30, 2023 . Thereafter, interest accrues to the Original Facility at the greater of (i) 7 .00% per annum; and (ii) prime plus 3 .00% per annum . During the fourth quarter of 2023, the loan was further amended to (i) add an additional credit facility in an aggregate principal amount not to exceed $40,000 (the “Additional Facility”); and (ii) extend the maturity date of the Original Facility to the earlier of December 31, 2026, or the closing of the condominium units (this maturity date also applies to the Additional Facility) . The maturity date of the Original Facility was previously the earlier of November 30, 2023, or the closing of the condominium units . Interest accrues to the Additional Facility at a rate of prime plus 8 .00% per annum . As at December 31, 2023, the total loan receivable outstanding including interest is $112,161 (December 31, 2022 - $97,037) . 74 ALLIED 2023 ANNUAL REPORTOn 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 . As at December 31, 2023, the loan receivable outstanding is $9,913 (December 31, 2022 - $9,913) . 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 in Vancouver . The facility is 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, 2023, the loan receivable outstanding is $178,095 (December 31, 2022 - $142,877) . 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, construction and leasing status on the development projects, timing of rent commencement on leases, and status of scheduled principal and interest payments . The table below summarizes the loans receivable as at December 31, 2023, and December 31, 2022 . Adelaide & Duncan 400 West Georgia KING Toronto Breithaupt Phase III 150 West Georgia Total loans receivable DECEMBER 31, 2023 DECEMBER 31, 2022 $21,173 188,355 112,161 9,913 178,095 $21,173 161,032 97,037 9,913 142,877 $509,697 $432,032 75 ALLIED 2023 ANNUAL REPORTSection VI —Liquidity and Capital Resources Allied’s liquidity and capital resources are used to fund capital investments including development activity and 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 and the structure of lease agreements, among other variables . Allied has financed its operations through the use of equity, Exchangeable LP Units, mortgage debt secured by rental properties, construction loans, a promissory note payable, an unsecured revolving 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 . As at December 31, 2023, 92 .3% of investment properties on a proportionate basis were unencumbered . In November 2021, Allied established an at-the-market equity program (the “ATM Program”) which allowed it to issue and sell up to $300,000 of Units to the public, from time to time, at its discretion . The ATM Program was designed to provide Allied with additional financing flexibility which was used in conjunction with other existing funding sources . The ATM Program was effective until July 2, 2023 . Allied has various sources of liquidity, including cash and cash equivalents and the unused portion of its unsecured revolving operating facility, which totaled $997,217 as at December 31, 2023, compared to $166,700 as at December 31, 2022 . The increase of $830,517 in liquidity is primarily due to the full repayment of the unsecured revolving operating facility with proceeds from the sale of Allied’s UDC portfolio on August 16, 2023 . 76 ALLIED 2023 ANNUAL REPORTDEBT The following illustrates the calculation of debt (net of transaction costs) on an IFRS basis and net debt, a non-GAAP measure, as at December 31, 2023, and December 31, 2022 . As at December 31, 2023, 92 .7% of Allied’s debt is at a fixed rate (December 31, 2022 - 86 .3%) . Refer to Non-GAAP Measures on page 16 . Mortgages payable Construction loans payable Promissory note payable Unsecured revolving operating facility Senior unsecured debentures Unsecured term loans Debt, IFRS basis Less: cash, cash equivalents and deposit (1) Net debt DECEMBER 31, 2023 DECEMBER 31, 2022 $111,875 307,013 — — 2,591,569 649,154 $3,659,611 288,595 $3,371,016 $112,822 223,725 195,673 440,000 2,589,939 649,026 $4,211,185 22,263 $4,188,922 (1) This is on a proportionate basis and includes cash and cash equivalents attributable to TELUS Sky totaling $1,054 as at December 31, 2023 (December 31, 2022 - $1,273). The table below summarizes the scheduled principal maturity and weighted average contractual interest rates for Allied’s mortgages payable, unsecured debentures and unsecured term loans . MORTGAGES PAYABLE INTEREST RATE OF MATURING MORTGAGES SENIOR UNSECURED DEBENTURES INTEREST RATE UNSECURED TERM LOANS INTEREST RATE TOTAL CONSOLIDATED INTEREST RATE OF MATURING DEBT 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 $49,345 3 .47% $— 6,578 21,996 655 14,926 183 5,191 199 208 — 3 .59 — 4 .04 — — — — 13,396 4 .29 200,000 600,000 300,000 300,000 300,000 400,000 — 500,000 — —% 3 .64 1 .73 3 .11 3 .13 3 .39 3 .12 — 3 .10 — $— 400,000 250,000 — — — — — — — —% 4 .87 3 .50 — — — — — — — $49,345 3 .47% 606,578 871,996 300,655 314,926 300,183 405,191 199 500,208 13,396 4 .46 2 .28 3 .11 3 .17 3 .39 3 .12 — 3 .10 4 .29 $112,677 3 .38% $2,600,000 2 .86% $650,000 4 .34% $3,362,677 3 .17% 77 ALLIED 2023 ANNUAL REPORT The chart below summarizes the maturities of principal for Allied’s debt (excluding construction loans and the unsecured revolving operating facility), which has a weighted average term of 4 .1 years, as at December 31, 2023: MORTGAGES UNSECURED TERM LOANS UNSECURED DEBENTURES CONSOLIDATED W/A CONTRACTUAL INTEREST RATE $1,000 $900 $800 $700 $600.0 4.46% $600 3.47% $200.0 3.11% 3.17% 3.12% 3.39% $400.0 2.28% $400.0 $300.0 $300.0 $300.0 $250.0 ) $ f o s n o i l l i m n i ( t n u o m A $500 $400 $300 $200 $100 $0 $49.3 $0.0 $0.0 2024 4.29% 3.10% $500.0 6.00% 5.00% 4.00% 3.00% ee tt aa rr tt ss ee rr ee tt nn II 2.00% 1.00% $6.6 2025 $22.0 2026 $0.7 2027 $14.9 2028 $0.2 2029 $5.2 2030 $0.2 2031 $0.2 2032 $13.4 2033 0.00% Year The table below summarizes the weighted average effective interest rate as at December 31, 2023: MORTGAGES PAYABLE PROMISSORY NOTE PAYABLE (1) SENIOR UNSECURED DEBENTURES UNSECURED TERM LOANS TOTAL Weighted Average Effective Interest Rate as at December 31, 2023 3 .08% N/A 2 .86% 4 .34% 3 .19% (1) The promissory note payable had a weighted average effective interest rate of 3.81% up to its repayment on December 29, 2023. 78 ALLIED 2023 ANNUAL REPORT MORTGAGES PAYABLE As at December 31, 2023, mortgages payable, net of financing costs, total $111,875 and have a weighted average contractual interest rate of 3 .38% (December 31, 2022 - 3 .37%) . The weighted average term of the mortgage debt is 3 .3 years (December 31, 2022 - 3 .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: 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 PRINCIPAL REPAYMENTS BALANCE DUE AT MATURITY DECEMBER 31, 2023 DECEMBER 31, 2022 $2,676 $46,669 $49,345 6,578 1,553 655 469 183 5,191 199 208 107 — — 20,443 — 14,457 — — — — 13,289 — 6,578 21,996 655 14,926 183 5,191 199 208 13,396 — Mortgages, principal $17,819 $94,858 $112,677 $112,990 Net premium on assumed mortgages Net financing costs 233 (1,035) $111,875 584 (752) $112,822 79 ALLIED 2023 ANNUAL REPORTCONSTRUCTION LOANS PAYABLE As at December 31, 2023, and December 31, 2022, Allied’s obligations under the construction loans are as follows: JOINT ARRANGEMENT OWNERSHIP DATE OF MATURITY DECEMBER 31, 2023 DECEMBER 31, 2022 Adelaide & Duncan Breithaupt Phase III KING Toronto 108 East 5th Avenue 50% 50% 50% 50% August 11, 2025 $110,046 $85,485 March 31, 2025 December 17, 2024 December 6, 2025 58,005 99,900 39,062 50,472 71,762 16,006 $307,013 $223,725 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 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 . On August 11, 2023, the loan maturity was extended from August 11, 2023, to August 11, 2025, and the facility limit was increased from $270,000 to $295,000, in which Allied’s 50% share is $147,500 . Allied is providing a joint and several guarantee of the entire facility and is earning a related guarantee fee on up to $147,500 of the facility . On August 23, 2019, the Adelaide & Duncan joint arrangement entered into a swap agreement to fix approximately 75% of the construction loan up to $209,572 at 2 .86% . The swap matured on March 31, 2023, so the construction loan is no longer fixed and is subject to the facility’s variable rate . 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 up to $69,000 of the facility . On May 31, 2023, the loan maturity was extended to September 29, 2023 . On September 27, 2023, the loan maturity was further extended to March 31, 2025, and the interest rate was updated to bank prime plus 25 basis points or bankers’ acceptance rate plus 145 basis points with a standby fee of 20 basis points and a letter of credit fee of 100 basis points . On December 17, 2020, Allied and Westbank obtained a $465,000 green construction lending facility for the KING Toronto joint arrangement from a syndicate of Canadian banks, in which Allied’s 50% share is $232,500 . Up to $120,000 of the deposits paid by the purchasers of the KING Toronto condominium units can be released to the KING Toronto joint arrangement to fund the construction of the condominium units (“Purchaser Deposits”) . As at December 31, 2023, $92,402 of the Purchaser Deposits was released . When the release of the Purchaser Deposits exceeds $80,000, the facility limit is reduced . As such, on November 6, 80 ALLIED 2023 ANNUAL REPORT2023, the facility limit was decreased from $465,000 to $452,598, in which Allied’s 50% share is $226,299 . 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 up to $226,299 of the facility . 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 up to $75,000 of the facility . On January 13, 2023, the 108 East 5th Avenue joint arrangement entered into a swap agreement to fix approximately 75% of the construction loan up to $110,175 at 4 .90% . PROMISSORY 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 was secured by a first registered charge on five of the six properties acquired and was fully repaid on December 29, 2023 . CONTRACTUAL INTEREST RATE DATE OF MATURITY FREQUENCY OF INTEREST PAYMENT DECEMBER 31, 2023 DECEMBER 31, 2022 Promissory note payable Net discount on promissory note payable 1 .00% for 2022, 2 .00% for 2023 December 29, 2023 Quarterly $— — $— $200,000 (4,327) $195,673 81 ALLIED 2023 ANNUAL REPORTUNSECURED REVOLVING OPERATING FACILITY As at December 31, 2023, and December 31, 2022, 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, 2023 Unsecured Facility limit $800,000 (1) January 30, 2025 Prime + 0 .45% or Bankers’ acceptance + 1 .45% (2) 0 .29% $800,000 $— $(14,906) $785,094 (1) This Unsecured Facility contains a $100,000 accordion feature, allowing Allied to increase the amount available under the facility to $900,000. (2) The interest rates for this facility were subject to certain conditions being met up to August 15, 2023. On March 31, 2023, Allied amended the Unsecured Facility to increase the limit by $100,000 to $700,000 and on June 26, 2023, Allied amended the Unsecured Facility to increase the limit by $100,000 to $800,000 . On January 26, 2024, Allied updated the Unsecured Facility of $800,000 by extending the maturity date to January 26, 2027, and the facility is now provided by a syndicate of lenders . The Unsecured Facility bears interest at a variable rate of either prime plus 45 basis points or the Canadian overnight repo rate average (“CORRA”) plus 145 basis points per annum with a standby fee of 29 basis points and a letter of credit fee rate of 145 basis points . 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 contained a $100,000 accordion feature, allowing Allied to increase the amount available under the facility to $700,000. (2) The conditions on the interest rates for this facility were met for the year ended December 31, 2022. 82 ALLIED 2023 ANNUAL REPORTSENIOR UNSECURED DEBENTURES As at December 31, 2023, and December 31, 2022, Allied’s obligations under the senior unsecured debentures are as follows: CONTRACTUAL INTEREST RATE DATE OF MATURITY INTEREST PAYMENT DATE DECEMBER 31, 2023 DECEMBER 31, 2022 April 21, 2025 April 21 and October 21 $200,000 $200,000 SERIES Series C Series D Series E Series F Series G Series H Series I 3 .636% 3 .394% 3 .113% 3 .117% 3 .131% 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 6 300,000 300,000 400,000 300,000 600,000 500,000 300,000 300,000 400,000 300,000 600,000 500,000 $2,600,000 $2,600,000 (8,431) (10,061) $2,591,569 $2,589,939 Unsecured Debentures, principal Net financing costs 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, 2023, and December 31, 2022, Allied’s obligations under the unsecured term loans are as follows: Unsecured term loan Unsecured term loan CONTRACTUAL INTEREST RATE DATE OF MATURITY FREQUENCY OF INTEREST PAYMENT DECEMBER 31, 2023 DECEMBER 31, 2022 3 .496% January 14, 2026 Monthly $250,000 $250,000 4 .865% October 22, 2025 Monthly 400,000 400,000 Unsecured Term Loans, principal $650,000 $650,000 Net financing costs (846) (974) $649,154 $649,026 83 ALLIED 2023 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% . On February 3, 2023, Allied extended the maturity date on its $250,000 unsecured term loan from January 14, 2024, to January 14, 2026, by exercising two one-year extension options . Debt financing costs of $300 were incurred for these extensions . CREDIT RATINGS Allied’s credit ratings as at December 31, 2023, are summarized below: DEBT RATING AGENCY LONG-TERM CREDIT RATING TREND/OUTLOOK Issuer Rating & Unsecured Debentures DBRS Limited BBB Stable DBRS Limited (“DBRS”) provides 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 .” On August 16, 2023, DBRS confirmed Allied’s issuer rating and senior unsecured debentures ratings at BBB with a stable trend, following Allied’s announcement on the closing of the sale of its UDC Portfolio . 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 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 . Moody’s Investor Services Inc . (“Moody’s”) previously rated Allied Baa3 with a negative outlook . During the fourth quarter, Allied discontinued Moody’s credit rating services . 84 ALLIED 2023 ANNUAL REPORTFINANCIAL COVENANTS The Unsecured Facility, Unsecured Term Loans, construction loans payable 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 . Effective June 2023, the agreements governing the Unsecured Facility, Unsecured Term Loans, construction loans payable and Unsecured Debentures were amended to exclude the value of the Exchangeable LP Units recognized as a liability and the distribution on the Exchangeable LP Units recognized as an interest expense from the calculation of certain covenants . Effective December 2023, waivers were obtained related to the agreements governing the Unsecured Facility, construction loans payable and Unsecured Term Loans to exclude the special cash distribution and the special Unit distribution from the calculation of the distribution payout ratio . 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-GAAP Measures on page 16 . THRESHOLD DECEMBER 31, 2023 DECEMBER 31, 2022 COVENANT (1) Indebtedness ratio Secured indebtedness ratio Debt service coverage ratio (2) Equity maintenance Below 60% Below 45% 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 34.7% 4.0% 2.5x 35 .6% 4 .5% 3 .0x $6,135,079 $6,581,166 2.7x 73.7% 2 .6x 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, 2023, includes financing prepayment costs of $nil for the twelve months ended December 31, 2023 (December 31, 2022 - $(564) for an accelerated amortization of deferred premium). Excluding these financing prepayment costs, the debt service coverage ratio as at December 31, 2023, would be 2.5x (December 31, 2022 - 2.9x). 85 ALLIED 2023 ANNUAL REPORTSENIOR 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-GAAP Measures on page 16 . COVENANT THRESHOLD DECEMBER 31, 2023 DECEMBER 31, 2022 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 3.0x 2 .8x 34.8% 35 .5% Equity maintenance (1) Maintain Unitholders’ equity above $300,000 $6,135,079 $6,581,166 Pro forma unencumbered net aggregate adjusted asset ratio Maintain pro forma unencumbered net aggregate adjusted assets above 1 .4 times consolidated unsecured indebtedness 3.0x 2 .8x (1) Includes results from continuing operations, discontinued operations and assets and liabilities classified as held for sale. As at December 31, 2023, 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 . These ratios are presented in Section I—Overview . 86 ALLIED 2023 ANNUAL REPORTEQUITY 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 . The following represents the number of Units issued and outstanding, and the related carrying value of equity, for the years ended December 31, 2023, and December 31, 2022 . Balance at January 1, 2022 127,737,851 $3,902,655 NUMBER ISSUED AND OUTSTANDING AMOUNT Restricted Unit Plan (net of forfeitures) (note 18(b)) Unit Option Plan - options exercised (note 18(a)) Unit issuance (net of costs) Balance at December 31, 2022 Restricted Unit Plan (net of forfeitures (note 18(b)) Distribution in Units (1) Consolidation of Units (1) Balance at December 31, 2023 — 6,332 211,800 (2,661) 200 9,184 127,955,983 $3,909,378 — 31,703,663 (31,703,663) 127,955,983 (2,250) 639,780 — $4,546,908 (1) This represents the special Unit distribution. See Note 16 of the audited consolidated financial statements for the year ended December 31, 2023. 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 . Allied does not hold any of its own Units, nor does Allied reserve any Units for issue under options and contracts . 87 ALLIED 2023 ANNUAL REPORTAs at January 31, 2024, 127,955,983 Units and 1,712,971 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, 2023 DECEMBER 31, 2022 DECEMBER 31, 2023 DECEMBER 31, 2022 Units 127,955,983 127,955,983 127,955,983 127,951,020 Exchangeable LP Units (1) 11,809,145 11,809,145 11,809,145 8,929,655 Total units - basic Unit Option Plan 139,765,128 139,765,128 139,765,128 136,880,675 — — — 23,407 Total units - fully diluted 139,765,128 139,765,128 139,765,128 136,904,082 (1) Issued on March 31, 2022. NORMAL COURSE ISSUER BID On February 22, 2023, 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 12,582,628 of its outstanding Units, representing approximately 10% of its public float as at February 10, 2023 . The NCIB commenced February 24, 2023, and will expire on February 23, 2024, 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, 2023, Allied purchased 76,959 Units for $2,250 at a weighted average price of $29 .25 per Unit under its NCIB program, of which 76,450 Units were purchased for delivery to participants under Allied’s Restricted Unit Plan and 509 Units were purchased for certain employee rewards outside of Allied’s Restricted Unit Plan . COMPENSATION 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 do 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 . 88 ALLIED 2023 ANNUAL REPORTAt December 31, 2023, Allied had granted options to purchase up to 1,712,971 Units outstanding, of which 1,437,023 had vested . At December 31, 2022, Allied had granted options to purchase 1,717,043 Units outstanding, of which 1,151,274 had vested . For the year ended December 31, 2023, Allied recorded a unit-based compensation expense of $389 (December 31, 2022 - $876) in general and administrative expense in the consolidated statements of (loss) income and comprehensive (loss) 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, 2023, Allied had 294,254 Restricted Units outstanding (December 31, 2022 – 322,411) . For the year ended December 31, 2023, Allied recorded a unit-based compensation expense of $2,421, (December 31, 2022 - $2,807) in general and administrative expense in the consolidated statements of (loss) income and comprehensive (loss) income related to the Restricted Unit Plan . 89 ALLIED 2023 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 Settled Forfeited Distributions equivalents Plan Units, end of period YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 179,193 170,461 (7,274) — 28,897 371,277 — 172,500 — (1,035) 7,728 179,193 For the year ended December 31, 2023, Allied recorded a unit-based compensation expense of $1,327 (December 31, 2022 - $738), including the mark-to-market adjustment, in general and administrative expense in the consolidated statements of (loss) income and comprehensive (loss) income . During the year ended December 31, 2023, 7,274 Plan Units vested and were settled in cash resulting in a decrease of $127 to the unit-based compensation liabilities . 90 ALLIED 2023 ANNUAL REPORTEXCHANGEABLE LP UNITS EXCHANGEABLE LP UNITS (AUTHORIZED - UNLIMITED) The Exchangeable LP Units issued by Allied Properties Exchangeable Limited Partnership (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 . On each of June 30, 2023, September 30, 2023, and December 31, 2023, the lock-up expired on 2,952,286 Exchangeable LP Units . The following Exchangeable LP Units are subject to lock-up and the expiration is based on the following schedule: LOCK-UP EXPIRATION DATE NUMBER OF EXCHANGEABLE LP UNITS ELIGIBLE FOR RELEASE March 31, 2024 2,952,287 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 . The following represents the number of Exchangeable LP Units issued and outstanding, and the related carrying value, for the years ended December 31, 2023, and December 31, 2022 . Balance at January 1, 2022 Unit issuance (net of costs) Distributions Retained Earnings Balance at December 31, 2022 Distributions Retained Earnings Reclassification of Exchangeable LP Units Fair value gain on Exchangeable LP Units NUMBER ISSUED AND OUTSTANDING — 11,809,145 — — 11,809,145 — — — — Balance at December 31, 2023 11,809,145 AMOUNT $— 550,660 (15,496) 6,508 $541,672 (8,857) 4,997 (270,807) (28,696) $238,309 91 ALLIED 2023 ANNUAL REPORTPrior to Allied’s conversion to an open-end trust, the Exchangeable LP Units were presented within non- controlling interests in the consolidated balance sheets . In addition, net income and other comprehensive income was attributable to unitholders and to non-controlling interests, with the latter equivalent to the amount allocated to the Partnership for income tax purposes . On Allied’s conversion to an open-end trust on June 12, 2023, the Exchangeable LP Units were reclassified to financial liabilities in the consolidated balance sheets as they can be exchanged for Units which are puttable instruments . Allied recognized in equity the difference between the carrying value of the equity instrument and the fair value of the financial liabilities at the date of reclassification . Subsequent to the conversion, at the end of each period, the Exchangeable LP Units are measured at fair value through profit or loss . The fair value of the Exchangeable LP Units is determined by using the quoted trading price of Units, as the Exchangeable LP Units are exchangeable into Units at the option of the holder . 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 .04 $0 .04 $0 .04 $0 .06 $0 .04 $0 .05 $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 .03 $0 .04 $0 .05 $0 .05 $0 .05 $0 .05 % increase 2 .7% Annualized distribution per Unit $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 On December 15, 2023, Allied declared a special distribution of $5 .48 per Unit, comprised of $0 .48 per Unit payable in cash and $5 .00 per Unit payable by the issuance of Units of Allied to Unitholders of record as at December 29, 2023 (the “Special Distribution”) . The Special Distribution was made primarily to distribute to Unitholders a portion of the capital gain realized by Allied during the year ended December 31, 2023, from the sale of the UDC Portfolio . 92 ALLIED 2023 ANNUAL REPORTOn December 29, 2023, 31,703,663 Units were distributed at a price of $20 .18 per Unit, for an aggregate value of $639,780 . Immediately following the Special Distribution of Units, the outstanding Units of Allied were consolidated such that each Unitholder held, after the consolidation, the same number of Units as held immediately prior to the Special Distribution . 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 January 1, 2023, to December 31, 2023, was $26,925, which includes a special cash distribution of $5,668, which is $0 .48 per Exchangeable LP Unit, for which Choice Properties elected to receive a loan in lieu of all of the distributions . The loan in lieu of distributions issued to Choice Properties for the cash advances made during the year ended December 31, 2023, was a note receivable of $21,207 and $7,440 was advanced to Choice Properties as a note receivable on January 15, 2024 . 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 2, 2024, $21,207 of the note receivable due from Choice Properties was settled on a net basis against the distributions payable to Choice Properties . 93 ALLIED 2023 ANNUAL REPORTSOURCES OF DISTRIBUTIONS For the three months and year ended December 31, 2023, Allied declared $62,895 and $251,578 in distributions, respectively, excluding the Special Distribution (December 31, 2022 - $61,134 and $239,363, respectively), which includes distributions to holders of the Exchangeable LP Units of $16,297 and $26,925, respectively (December 31, 2022 - $5,165 and $15,496, respectively) . THREE MONTHS ENDED YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 DECEMBER 31, 2023 DECEMBER 31, 2022 Distributions declared (1) $62,895 $61,134 $251,578 $239,363 Net (loss) income and comprehensive (loss) income $(499,340) $41,392 $(420,716) $375,363 Cash flows provided by operating activities $133,427 $94,509 $320,886 $321,193 AFFO excluding condominium related items and the mark-to-market adjustment on unit- based compensation (2) AFFO excluding condominium related items and the mark-to-market adjustment on unit- based compensation payout ratio (2) (Deficit) excess of net (loss) income over distributions declared Excess of cash flows provided by operating activities over distributions declared Excess of cash provided by AFFO excluding condominium related items and the mark- to-market adjustment on unit-based compensation over distributions declared $78,611 $76,553 $304,225 $297,579 80.0% 79 .9% 82.7% 80 .4% $(562,235) $(19,742) $(672,294) $136,000 $70,532 $33,375 $69,308 $81,830 $15,716 $15,419 $52,647 $58,216 (1) Distributions declared excludes the Special Distribution of $67,087. (2) This is a non-GAAP measure, refer to page 16. 94 ALLIED 2023 ANNUAL REPORTIn determining the amount of distributions to be made, Allied’s Board of Trustees considers 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 (excluding the Special Distribution) as at December 31, 2023, amounts to $1 .80 per Unit per annum (December 31, 2022 - $1 .75 per Unit per annum) . COMMITMENTS At December 31, 2023, Allied had future commitments as set out below, excluding the amount held within equity accounted investments: Capital expenditures and committed acquisitions $168,071 $247,819 DECEMBER 31, 2023 DECEMBER 31, 2022 As at December 31, 2023, commitments of $406 (December 31, 2022 - $510) were held within equity accounted investments . The above does not include Allied’s lease liability commitments, which are disclosed in note 13 of the audited consolidated financial statements for the year ended December 31, 2023 . 95 ALLIED 2023 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, 2023, and the notes contained therein . MATERIAL ACCOUNTING POLICY INFORMATION Accounting policies and any respective changes are discussed in Allied’s audited consolidated financial statements for the year ended December 31, 2023, and the notes contained therein . 96 ALLIED 2023 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, 2023, 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, 2023, 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, 2023, 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 . 97 ALLIED 2023 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 . 98 ALLIED 2023 ANNUAL REPORTOPERATING RISKS AND RISK MANAGEMENT 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 53 . Allied also seeks to mitigate this risk by diversifying its user-mix and managing its exposure to its top-10 users and by engaging in proactive user communication to manage lease renewal and replacement activity well in advance of lease expiries . For Allied’s current user profile schedule, refer to page 51 . In evaluating lease roll-over risk, it is informative to determine Allied’s sensitivity to a decline in occupancy . As at December 31, 2023, Allied had total GLA in the rental portfolio of 14,954,282 square feet, of which 87 .3% is leased . The weighted average annual rental revenue is approximately $43 .87 per square foot, therefore for every full-year decline of 100 basis points in occupancy, Allied’s annual rental revenue would decline by approximately $5,724 . The decline in rental revenue 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 . DEVELOPMENT AND CONSTRUCTION RISK As an owner of Properties Under Development, Allied is subject to development risks, such as risks associated with the pricing and availability of labour and materials, construction delays, cost over-runs, challenges in securing municipal approvals and potential delays in occupancy and/or rent commencement . In connection with all Properties Under Development, Allied incurs development costs prior to (and in anticipation of ) achieving a stabilized level of rental revenue . Allied manages these risks through fixed- price contracts, where possible, by commencing municipal approval processes at an early stage and by not commencing construction until a satisfactory level of pre-leasing is achieved for ground-up developments . Overall, these risks are managed through Allied’s Declaration of Trust, which states that the cost of development cannot exceed 15% of GBV . 99 ALLIED 2023 ANNUAL REPORTUSER 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 resulting in early termination and a significant amount of available space in its properties were not able to be re-leased on economically favourable lease terms . Upon the termination of any lease, there can be no assurance that the user will be 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, delays 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 . Allied conducts due diligence on the quality and financial viability of users and seeks to obtain large security deposits when warranted . 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 lease space on a timely basis or at all would likely have an adverse effect on Allied’s financial condition . 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 to 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 . Allied mitigates these risks through the strategic positioning of its portfolio in amenity-rich urban areas of Canada’s major cities, its focus on operations and targeted broker outreach . 100 ALLIED 2023 ANNUAL REPORTREAL 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 through a robust preventative maintenance program, contractual rent escalation mechanisms and by focusing intently on execution . 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, to enter into agreements with financially stable partners and to work 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 . 101 ALLIED 2023 ANNUAL REPORTRELIANCE ON KEY PERSONNEL The management of Allied depends on the services of certain key personnel, particularly its Chief Executive Officer, Cecilia Williams, and its Chief Financial Officer, Nanthini Mahalingam . The unexpected loss of services from key personnel or a limitation in their availability could have an adverse effect on the business, financial condition and results of operations of Allied, specifically if there is not adequate succession plans in place for these personnel . Allied’s ability to retain its senior management team or attract suitable replacements in the event of a departure is dependent on, among other things, the competitive nature of the employment market . Allied engages in ongoing succession planning for its key personnel and other senior management and periodically conducts broader reviews of its management structure and succession plans . Allied does not have key-personnel insurance on any of its key employees . 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 . FINANCIAL RISKS AND RISK MANAGEMENT FINANCING AND INTEREST RATE RISK; ACCESS TO CAPITAL 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 78 . Interest rates on debt for mortgages payable, unsecured debentures and unsecured term loans are between 1 .73% and 4 .87% with a weighted average contractual interest rate of 3 .17% . The weighted average term of our debt (excluding construction loans and the Unsecured Facility) is 4 .1 years . Refer to note 12(b) and (d) of the audited consolidated financial statements for further details . Allied 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 . 102 ALLIED 2023 ANNUAL REPORTThe 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 . CREDIT 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 19 .1% of rental revenue and the credit quality of our top- 10 users continues to improve . 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 the amounts owed to Allied . Allied’s loans and advances will typically be subordinate to prior ranking mortgage or charges . As at December 31, 2023, Allied had $509,697 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 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, construction and leasing status on the development projects, timing of rent commencement on leases, and status of scheduled principal and interest payments . 103 ALLIED 2023 ANNUAL REPORTUNIT PRICE RISK Unit price risk arises from the unit-based compensation liabilities and Exchangeable LP Units which are recorded at fair value at each quarter-end date . Allied’s unit-based compensation liabilities and Exchangeable LP Units negatively impact net income and comprehensive income when the Unit price rises and positively impact net (loss) income and comprehensive (loss) 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 . 104 ALLIED 2023 ANNUAL REPORTOTHER RISKS 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 an outbreak of a pandemic or other health crisis, trade protectionism and disruptions, 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 . CYBERSECURITY 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 . 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 . 105 ALLIED 2023 ANNUAL REPORTTAXATION RISK AND CHANGES IN LEGISLATION 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 . 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 . 106 ALLIED 2023 ANNUAL REPORTENVIRONMENTAL 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 . Climate 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 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 . 107 ALLIED 2023 ANNUAL REPORTGENERAL 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 . PANDEMICS AND OTHER PUBLIC HEALTH CRISES Pandemics and other public health crises can result in significant economic disruptions, slowdowns and increased volatility in financial markets, which 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 . Such occurrences could also potentially affect the market price for the equity securities of Allied, its current credit rating, total return and distributions . Allied’s users may also face business challenges as a result of a pandemic or other public health crisis that may adversely affect their business and their ability 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 . 108 ALLIED 2023 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 . 109 ALLIED 2023 ANNUAL REPORTSection X —Property Table 110 ALLIED 2023 ANNUAL REPORTDECEMBER 31, 2023 PROPERTIES Office GLA Retail GLA Total GLA % Total GLA Total Vacant & Unleased Total Leased Leased % 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 The Castle - 8 Pardee 10,065 50,434 6,884 78,820 — — — — 10,065 50,434 6,884 78,820 — 2,708 2,708 — — — — — 10,065 100 .0% 50,434 100 .0% 6,884 100 .0% 78,820 100 .0% 2,708 100 .0% 24,627 2,634 27,261 3,202 24,059 88 .3% 8,863 55,526 14,857 7,468 17,472 78,797 — 3,717 — — 3,480 — — 2,681 5,935 — — — 12,580 55,526 14,857 10,948 17,472 78,797 2,681 409,842 64,245 31,003 44,954 85,984 — 12,580 100 .0% 22,339 33,187 59 .8% — — 10,363 48,740 — — — — — — 14,857 100 .0% 10,948 100 .0% 7,109 30,057 40 .7% 38 .1% 2,681 100 .0% 409,842 100 .0% 64,245 100 .0% 31,003 100 .0% 44,954 100 .0% 85,984 100 .0% The Well - 8 Spadina (1)(6) 403,907 The Well - 452 Front W (1) The Well - 460 Front W (1)(6) The Well - 482 Front W (1) 64,245 31,003 44,954 The Well - 486 Front W (1)(6) — 85,984 King West 897,922 107,139 1,005,061 6.7% 84,644 920,417 91.6% 12 Brant 141 Bathurst 183 Bathurst 241 Spadina 379 Adelaide W 383 Adelaide W 387 Adelaide W 420 Wellington W 425 Adelaide W — 11,936 10,101 24,136 24,827 38,560 4,515 6,500 31,339 70,846 — 5,643 6,046 3,045 — — 3,163 3,809 425-439 King W 66,486 23,497 432 Wellington W 441-443 King W 445-455 King W 460 King W 461 King W 468 King W — 6,377 8,997 2,904 31,523 16,304 10,144 38,717 63,121 4,285 35,833 — 11,936 10,101 29,779 30,873 41,605 4,515 6,500 34,502 74,655 89,983 8,997 9,281 47,827 14,429 74,550 63,121 — 11,936 100 .0% 3,483 17,202 6,618 12,577 65 .5% 42 .2% — 30,873 100 .0% 23,972 17,633 42 .4% — — — 5,254 6,599 — 3,156 4,729 1,499 4,515 100 .0% 6,500 100 .0% 34,502 100 .0% 69,401 83,384 8,997 6,125 43,098 12,930 93 .0% 92 .7% 100 .0% 66 .0% 90 .1% 89 .6% — 74,550 100 .0% 63,121 — —% 111 ALLIED 2023 ANNUAL REPORTDECEMBER 31, 2023 PROPERTIES Office GLA Retail GLA Total GLA % Total GLA Total Vacant & Unleased Total Leased Leased % 469 King W 478 King W 485 King W 500 King W 522 King W 540 King W 544 King W 552-560 King W 555 Richmond W 579 Richmond W 64 Spadina 61,618 12,273 — 8,701 12,339 44,130 28,850 — 16,340 6,784 296,051 26,818 — 21,598 21,863 5,935 — 17,395 1,850 — — 5,297 80-82 Spadina 60,048 16,009 96 Spadina 77,223 8,240 73,891 8,701 12,339 65,728 50,713 5,935 16,340 24,179 297,901 26,818 5,297 76,057 85,463 King Portland Centre - 602-606 King W (1) King Portland Centre - 620 King W (1) King Portland Centre - 642 King W (1) 19,208 6,364 25,572 127,658 9,170 136,828 18,485 55,406 75 .0% — — 8,701 100 .0% 12,339 100 .0% 15,326 50,402 28,850 21,863 76 .7% 43 .1% — — — 5,935 100 .0% 16,340 100 .0% 24,179 100 .0% 43,019 254,882 4,300 22,518 85 .6% 84 .0% — — 5,297 100 .0% 76,057 100 .0% 7,842 77,621 90 .8% — — 25,572 100 .0% 136,828 100 .0% King West Central 1,211,629 265,522 1,477,151 9.9% 254,207 1,222,944 82.8% 7,370 5,365 12,735 7,370 5,365 42 .1% 116 Simcoe 117 & 119 John 19 Duncan (5)(6) 121 John 125 John 179 John 180 John 200 Adelaide W 208-210 Adelaide W 15,495 — — 7,562 76,734 2,591 2,171 70,897 45,631 26,614 11,477 — 855 798 — — — — 217 Richmond W 31,200 21,670 42,763 62,420 19,048 50,786 — 5,584 3,725 — 20,275 19,040 40,069 6,846 51,140 — 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 112 15,495 7,562 76,734 3,446 2,969 70,897 45,631 26,614 11,477 52,870 42,763 68,004 22,773 50,786 39,315 46,915 51,140 — — — — — 15,495 100 .0% 7,562 100 .0% 76,734 100 .0% 3,446 2,969 100 .0% 100 .0% 1,838 69,059 97 .4% — — 6,027 2,898 16,600 22,833 45,631 100 .0% 26,614 100 .0% 5,450 49,972 26,163 45,171 47 .5% 94 .5% 61 .2% 66 .4% — 22,773 100 .0% 28,911 18,227 16,024 7,985 21,875 21,088 30,891 43,155 43 .1% 53 .6% 65 .8% 84 .4% 298,782 8,213 306,995 14,749 292,246 95 .2% ALLIED 2023 ANNUAL REPORTDECEMBER 31, 2023 PROPERTIES QRC West - 364 Richmond W, Phase I Union Centre Office GLA Retail GLA Total GLA % Total GLA Total Vacant & Unleased Total Leased Leased % 38,279 41,787 — — 38,279 41,787 6,864 4,952 31,415 36,835 82 .1% 88 .1% Entertainment District 948,159 74,293 1,022,452 6.8% 147,908 874,544 85.5% 110 Yonge (2) 175 Bloor E (3) 193 Yonge 77,910 295,913 2,376 9,177 80,286 305,090 9,087 71,199 49,259 255,831 88 .7% 83 .9% 34,349 16,898 51,247 — 51,247 100 .0% 525 University 199,115 9,392 208,507 2,429 206,078 98 .8% Downtown 607,287 37,843 645,130 4.3% 60,775 584,355 90.6% 106 Front E 184 Front E 35-39 Front E 36-40 Wellington E 41-45 Front E 45-55 Colborne 47 Front E 49 Front E 24,113 84,116 34,818 15,494 20,353 30,621 9,069 9,482 10,554 4,829 13,822 9,993 14,239 13,288 4,337 10,435 34,667 88,945 48,640 25,487 34,592 43,909 13,406 19,917 3,397 26,734 31,270 62,211 90 .2% 69 .9% — 48,640 100 .0% 8,073 17,414 68 .3% — 34,592 100 .0% 1,448 2,867 42,461 10,539 96 .7% 78 .6% — 19,917 100 .0% 50 Wellington E 22,112 12,454 34,566 3,424 31,142 90 .1% 54 Esplanade 56 Esplanade 60 Adelaide E 65 Front E 70 Esplanade — 9,038 59,270 22,137 106,438 14,339 19,590 4,608 5,922 6,109 9,038 81,407 111,046 20,261 25,699 — 9,038 100 .0% 27,296 54,111 10,494 100,552 16,356 3,905 66 .5% 90 .5% 19 .3% — 25,699 100 .0% St. Lawrence Market 449,815 141,765 591,580 4.0% 100,089 491,491 83.1% 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 2,399 1,617 2,190 — — — 2,399 1,617 2,190 — — 1,014 2,399 100 .0% 1,617 1,176 100 .0% 53 .7% 84 .5% 115,086 13,837 128,923 20,012 108,911 73,542 44,537 31,737 34,469 — 73,542 — 73,542 100 .0% 2,582 — — 47,119 31,737 34,469 10,844 36,275 77 .0% — 31,737 100 .0% 17,011 17,458 50 .6% 30,383 3,523 33,906 — 33,906 100 .0% 34,313 9,091 43,404 1,358 42,046 96 .9% 113 ALLIED 2023 ANNUAL REPORTDECEMBER 31, 2023 PROPERTIES Dominion Square - 478-496 Queen Office GLA Retail GLA Total GLA % Total GLA Total Vacant & Unleased Total Leased Leased % 6,552 33,526 40,078 3,040 37,038 92 .4% QRC East - 111 Queen E 190,953 20,732 211,685 6,165 205,520 97 .1% Queen Richmond 567,778 83,291 651,069 4.4% 59,444 591,625 90.9% Toronto 4,682,590 709,853 5,392,443 36.1% 707,067 4,685,376 86.9% 195 Joseph 20 Breithaupt (4) 25 Breithaupt (4) 51 Breithaupt (4) 72 Victoria The Tannery - 151 Charles W Kitchener 26,462 147,029 46,845 66,355 90,023 — — — — — 26,462 147,029 46,845 66,355 90,023 — — — 26,462 100 .0% 147,029 100 .0% 46,845 100 .0% 2,597 17,507 63,758 72,516 96 .1% 80 .6% 53 .8% 75.5% 306,564 25,810 332,374 153,634 178,740 683,278 25,810 709,088 4.7% 173,738 535,350 Toronto & Kitchener 5,365,868 735,663 6,101,531 40.8% 880,805 5,220,726 85.6% The Chambers - 40 Elgin 195,994 5,466 201,460 — 201,460 100 .0% The Chambers - 46 Elgin 28,054 Ottawa 224,048 1001 Boulevard Robert- Bourassa (6) 1010 Sherbrooke W 681,039 326,918 1,756 7,222 9,742 1,600 29,810 2,430 27,380 91 .8% 231,270 1.5% 2,430 228,840 98.9% 690,781 328,518 — 690,781 100 .0% 30,468 298,050 90 .7% 483,685 896 484,581 53,713 430,868 88 .9% 466,769 22,562 489,331 24,008 465,323 3510 Saint-Laurent 85,645 15,022 100,667 3530-3540 Saint-Laurent 52,321 425 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 307,201 41,374 72,855 21,044 53,397 4,008 9,146 14,147 7,251 9,983 6,298 56,329 316,347 55,521 80,106 31,027 59,695 243,788 184,510 128,690 2,221 3,933 7,421 246,009 188,443 136,111 700 Saint Antoine 107,320 17,685 125,005 700 Saint-Hubert (6) 740 Saint-Maurice 100,208 68,703 — — 100,208 68,703 114 8,807 4,780 91,860 51,549 13,555 302,792 838 54,683 21,635 58,471 8,823 1,635 22,204 58,060 91 .3% 91 .5% 95 .7% 98 .5% 73 .0% 71 .6% 97 .3% 95 .1% 99 .1% 92 .3% 96 .5% 96 .3% 2,221 243,788 14,417 174,026 131,301 120,425 4,810 4,580 — — 100,208 100 .0% 68,703 100 .0% ALLIED 2023 ANNUAL REPORTDECEMBER 31, 2023 PROPERTIES Office GLA Retail GLA Total GLA % Total GLA Total Vacant & Unleased Total Leased Leased % 747 Square-Victoria 532,549 37,752 570,301 54,527 515,774 90 .4% 85 Saint-Paul W 79,707 — 79,707 7,852 71,855 90 .1% Cité Multimédia - 111 Boulevard Robert- Bourassa Cité Multimédia - 50 Queen Cité Multimédia - 700 Wellington Cité Multimédia - 75 Queen Cité Multimédia - 80 Queen Cité Multimédia - 87 Prince El Pro Lofts - 644 Courcelle Le Nordelec - 1301-1303 Montmorency Le Nordelec - 1655 Richardson Le Nordelec - 1751 Richardson RCA Building - 1001 Lenoir (6) 359,039 12,571 371,610 146,476 225,134 60 .6% 27,072 135,232 — — 27,072 135,232 1,255 25,817 95 .4% 20,912 114,320 84 .5% 253,311 2,513 255,824 75,008 180,816 70 .7% 69,247 — 69,247 — 69,247 100 .0% 99,089 1,040 100,129 3,254 96,875 96 .8% 144,964 8,935 153,899 52,841 101,058 65 .7% 7,550 32,893 — — 7,550 32,893 — — 7,550 100 .0% 32,893 100 .0% 785,334 41,482 826,816 73,238 753,578 91 .1% 127,306 2,051 129,357 — 129,357 100 .0% Montréal 6,078,760 238,259 6,317,019 42.2% 629,653 5,687,366 90.0% Montréal & Ottawa 6,302,808 245,481 6,548,289 43.8% 632,083 5,916,206 90.3% 613 11th SW 617 11th SW Alberta Block - 805 1st SW Alberta Hotel - 808 1st SW Atrium on Eleventh - 625 11th SE Biscuit Block - 438 11th SE Burns Building - 237 8th SE Cooper Block - 809 10th SW Customs House - 134 11th SE Demcor Condo - 221 10th SE — 3,230 4,288 6,306 4,288 9,536 — 736 4,288 100 .0% 8,800 92 .3% 9,094 22,038 31,132 1,856 29,276 94 .0% 28,036 20,424 48,460 10,563 37,897 78 .2% 34,519 1,373 35,892 9,205 26,687 74 .4% 51,298 — 51,298 — 51,298 100 .0% 67,187 7,423 74,610 23,697 50,913 68 .2% 35,256 77,097 14,253 — — — 35,256 77,097 14,253 21,058 14,198 40 .3% — 77,097 100 .0% 7,021 7,232 50 .7% 115 ALLIED 2023 ANNUAL REPORTDECEMBER 31, 2023 PROPERTIES Demcor Tower - 239 10th SE Five Roses Building - 731-739 10th SW Glenbow - 802 11th SW Office GLA Retail GLA Total GLA % Total GLA Total Vacant & Unleased Total Leased Leased % 25,280 — 25,280 2,938 22,342 88 .4% Glenbow - 822 11th SW 14,037 — — 20,808 20,808 7,319 3,501 7,319 17,538 — — 20,808 100 .0% 7,319 100 .0% 4,743 12,795 73 .0% Glenbow Annex - 816 11th SW Glenbow Cornerblock - 838 11th SW Glenbow Ellison - 812 11th SW Leeson Lineham Building - 209 8th SW LocalMotive - 1240 20th SE Odd Fellows - 100 6th SW Pilkington Building - 402 11th SE Roberts Block - 603-605 11th SW Sherwin Block - 738 11th SW Telephone Building - 119 6th SW TELUS Sky - 685 Centre SW (5) Theatre Grand - 608 1st Street SW The Lougheed Building - 604 1st Street SW Vintage Towers - 322-326 11th SW Woodstone Building - 1207-1215 13th SE — 9,021 9,021 — 9,021 100 .0% 10,998 11,212 22,210 11,212 10,998 49 .5% 13,344 — 13,344 — 13,344 100 .0% 27,821 5,420 33,241 6,044 27,197 81 .8% 57,536 33,474 40,018 — — — 57,536 33,474 40,018 — 57,536 100 .0% 33,474 — —% — 40,018 100 .0% 23,624 27,499 51,123 12,082 39,041 76 .4% 18,319 8,176 26,495 5,137 21,358 80 .6% 63,064 — 63,064 25,183 37,881 60 .1% 150,784 4,353 155,137 38,951 116,186 74 .9% — 34,100 34,100 — 34,100 100 .0% 83,783 — 83,783 83,783 — —% 188,696 23,717 212,413 5,062 207,351 97 .6% 32,428 — 32,428 — 32,428 100 .0% Young Block - 129 8th SW 4,841 2,164 7,005 2,414 4,591 Calgary 1,108,017 219,142 1,327,159 8.9% 305,159 1,022,000 65 .5% 77.0% 1040 Hamilton 1050 Homer 1185 West Georgia 1220 Homer 1286 Homer 36,278 38,302 161,119 21,708 25,613 9,162 4,797 4,869 — — 45,440 43,099 165,988 21,708 25,613 1,215 44,225 97 .3% — 43,099 100 .0% 12,653 153,335 92 .4% — — 21,708 100 .0% 25,613 100 .0% 1508 West Broadway 81,809 64,271 146,080 1,362 144,718 99 .1% 116 ALLIED 2023 ANNUAL REPORTOffice GLA Retail GLA Total GLA % Total GLA Total Vacant & Unleased Total Leased Leased % DECEMBER 31, 2023 PROPERTIES 151-155 West Hastings 2233 Columbia 375 Water 840 Cambie 38,512 21,591 150,020 89,377 — 6,852 27,015 — 38,512 28,443 177,035 89,377 45,003 — — 38,512 100 .0% 28,443 100 .0% 46,503 130,532 73 .7% — — 89,377 100 .0% 45,003 100 .0% 948-950 Homer 23,245 21,758 Dominion Building - 207 West Hastings Sun Tower - 128 West Pender 60,230 12,646 72,876 4,080 68,796 94 .4% 76,436 1,693 78,129 22,587 55,542 71 .1% Vancouver 824,240 153,063 977,303 6.5% 88,400 888,903 91.0% Total Rental Portfolio 13,600,933 1,353,349 14,954,282 100.0% 1,906,447 13,047,835 87.3% 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. (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 Venture (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. 117 ALLIED 2023 ANNUAL REPORTRENTAL RESIDENTIAL UNITS PROPERTY TELUS Sky College & Manning OCCUPANCY AT DECEMBER 31, 2023 OCCUPANCY AT DECEMBER 31, 2022 79.8% 94.7% 81 .4% 96 .8% PROPERTIES UNDER DEVELOPMENT ESTIMATED GLA ON COMPLETION (SF) The Well, Toronto (1)(2)(3) 400 Atlantic, Montréal Boardwalk-Revillon Building, Edmonton (4) 185 Spadina, Toronto 342 Water, Vancouver Adelaide & Duncan, Toronto (1)(3)(5) 1001 Boulevard Robert-Bourassa, Montréal (3) RCA Building, Montréal (3) 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 (3) 3575 Saint-Laurent, Montréal 365 Railway, Vancouver Kipling Square, Calgary 810 Saint Antoine, Montréal Total Development Portfolio 763,000 87,473 297,851 55,213 21,640 230,000 298,342 215,305 10,000 93,134 100,000 102,000 144,114 184,779 60,000 48,502 380,000 3,091,353 (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 in phases since Q4 2020, and the last phase closed in January 2022. (3) A portion of the property is under development. The GLA represents the portion under development. The exceptions are The Well, 700 Saint Hubert and Adelaide & Duncan, which are ground-up developments, so the GLA includes the portion under development and in the rental portfolio. (4) The GLA components (in square feet) are as follows: 233,559 of office and 64,292 of retail. (5) 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. (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 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, and 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. 118 ALLIED 2023 ANNUAL REPORTANCILLARY PARKING FACILITIES NUMBER OF SPACES 305 Joseph, Kitchener (1) 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 (1) Perimeter/Allied Joint Arrangement. Reflected in the table above at Allied’s 50% ownership interest. 354 208 39 25 15 47 121 12 131 171 71 1,194 119 ALLIED 2023 ANNUAL REPORT120 ALLIED 2023 ANNUAL REPORTConsolidated Financial Statements For the Years Ended December 31, 2023 and 2022 121 ALLIED 2023 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 . Cecilia C . Williams, CPA, CA Nanthini Mahalingam, CPA President and Chief Executive Officer Senior Vice President and Chief Financial Officer 122 ALLIED 2023 ANNUAL REPORTIndependent Auditor’s Report TO THE SHAREHOLDERS AND THE BOARD OF DIRECTORS 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, 2023 and 2022, and the consolidated statements of (loss) income and comprehensive (loss) income, equity, and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information (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, 2023 and 2022, 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, 2023 . 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 . 123 ALLIED 2023 ANNUAL REPORTFAIR VALUE OF INVESTMENT PROPERTIES— REFER TO NOTES 2(D), 3, AND 5 OF THE FINANCIAL STATEMENTS KEY AUDIT MATTER DESCRIPTION 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 and will 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 . 124 ALLIED 2023 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 . 125 ALLIED 2023 ANNUAL REPORT— 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 . If 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 JANUARY 31, 2024 TORONTO, ONTARIO 126 ALLIED 2023 ANNUAL REPORTALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST CONSOLIDATED BALANCE SHEETS AS AT DECEMBER 31, 2023 AND DECEMBER 31, 2022 (in thousands of Canadian dollars) NOTES DECEMBER 31, 2023 DECEMBER 31, 2022 Assets Non-current assets Investment properties Residential inventory Investment in joint venture 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 Exchangeable LP Units 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 7 8 9 10 21 8 9 11 5, 6 12 13 14 17 12 14 6, 13 16 16 $9,387,032 $9,669,005 209,783 8,866 321,371 48,528 187,272 7,089 174,019 56,221 $9,975,580 $10,093,606 211,069 93,291 188,382 140,963 — $633,705 $10,609,285 20,990 113,287 258,093 65,544 1,354,830 $1,812,744 $11,906,350 $3,510,366 $3,864,256 50,639 48,784 50,851 43,438 $3,609,789 $3,958,545 238,309 149,245 476,863 — $864,417 $4,474,206 $6,135,079 — $6,135,079 $10,609,285 — 346,929 370,823 107,215 $824,967 $4,783,512 $6,581,166 541,672 $7,122,838 $11,906,350 Commitments and Contingencies (note 27) The accompanying notes are an integral part of these consolidated financial statements. Michael R . Emory Trustee Stephen L . Sender Trustee 127 ALLIED 2023 ANNUAL REPORTALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (in thousands of Canadian dollars) NOTES DECEMBER 31, 2023 DECEMBER 31, 2022 YEAR ENDED Rental revenue Property operating costs Operating income Interest income Interest expense General and administrative expenses Condominium marketing expenses Amortization of other assets Transaction costs Net loss from joint venture 19, 23 23 12 (g) 20, 26 (c) 10 4 8 $563,980 (246,949) $317,031 53,605 (107,073) (23,577) (538) (1,499) (167) (15,622) Fair value loss on investment properties and investment properties held for sale 5, 6 (772,652) $519,468 (224,260) $295,208 32,080 (72,802) (22,593) (602) (1,325) — (3,161) (73,750) — 37,343 (15,729) 28,696 (8,535) (15,376) $(545,707) $174,669 $124,991 $(420,716) $200,694 $375,363 $(425,713) 4,997 $(420,716) $368,855 6,508 $375,363 Fair value gain on Exchangeable LP Units Fair value (loss) gain on derivative instruments Impairment of residential inventory Net (loss) income and comprehensive (loss) income from continuing operations Net income and comprehensive income from discontinued operations Net (loss) income and comprehensive (loss) income 17, 26 (c) 26 (e) 7 6 Net (loss) income and comprehensive (loss) income attributable to: Unitholders’ equity Non-controlling interests The accompanying notes are an integral part of these consolidated financial statements. 128 ALLIED 2023 ANNUAL REPORTALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST CONSOLIDATED STATEMENTS OF EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 ATTRIBUTABLE TO UNITHOLDERS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS (in thousands of Canadian dollars) NOTES UNITS RETAINED EARNINGS CONTRIB- UTED SURPLUS UNIT- HOLDERS’ EQUITY EXCHANGE- ABLE LP UNITS RETAINED EARNINGS EXCHANGE- ABLE LP UNITS’ EQUITY TOTAL EQUITY 16 $3,902,655 $2,491,956 $31,161 $6,425,772 $— $— $— $6,425,772 — 368,855 9,184 — — — 368,855 — 6,508 6,508 375,363 9,184 550,660 — 550,660 559,844 16 16 — (223,867) — (223,867) Unit Option Plan – options exercised 16, 18 (a) 200 Contributed surplus – Unit Option Plan 18 (a) — 16, 18 (b) (2,661) — — — — 200 876 2,807 876 146 — — — — (15,496) (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 ATTRIBUTABLE TO UNITHOLDERS ATTRIBUTABLE TO NON-CONTROLLING INTERESTS NOTES UNITS RETAINED EARNINGS CONTRIB- UTED SURPLUS UNIT- HOLDERS’ EQUITY EXCHANGE- ABLE LP UNITS RETAINED EARNINGS (DEFICIT) EXCHANGE- ABLE LP UNITS’ EQUITY TOTAL EQUITY 16 $3,909,378 $2,636,944 $34,844 $6,581,166 $550,660 $(8,988) $541,672 $7,122,838 — — (425,713) (291,740) — (425,713) — (291,740) 639,780 (639,780) — — 16 16 18 (a) — 16, 18 (b) (2,250) — — 389 389 2,420 170 — — — — — 4,997 4,997 (420,716) (8,857) (8,857) (300,597) — — — — — — — 389 170 2 (d) — 270,807 — 270,807 (550,660) 12,848 (537,812) (267,005) $4,546,908 $1,550,518 $37,653 $6,135,079 $— $— $— $6,135,079 The accompanying notes are an integral part of these consolidated financial statements. 129 Balance at January 1, 2022 Net income and comprehensive income Unit issuance (net of costs) Distributions Restricted Unit Plan (net of forfeitures) Balance at December 31, 2022 Balance at January 1, 2023 Net (loss) income and comprehensive (loss) income Distributions Distributions in Units Contributed surplus – Unit Option Plan Restricted Unit Plan (net of forfeitures) Reclassification of Exchangeable LP Units Balance at December 31, 2023 ALLIED 2023 ANNUAL REPORTALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (in thousands of Canadian dollars) NOTES DECEMBER 31, 2023 DECEMBER 31, 2022 YEAR ENDED Operating activities Net (loss) income for the year Fair value loss (gain) on investment properties and investment properties held for sale Fair value gain on Exchangeable LP Units Fair value loss (gain) on derivative instruments Impairment of residential inventory Interest expense (excluding the impact of capitalization) 5 17, 26 (c) 26 (e) 7 12 (g) Interest paid (excluding the impact of capitalization) 5, 7, 13, 17, 21 Interest income Interest received Net loss from joint venture Amortization of other assets Amortization of improvement allowances Amortization of straight-line rent Amortization of discount on debt Amortization of lease liabilities Amortization of net financing costs Unit-based compensation expense Settlement of unit-based compensation liabilities Additions to residential inventory Change in other non-cash operating items Cash provided by operating activities Financing activities Proceeds from new mortgage payable Repayment of mortgages payable 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) Repayment of promissory note payable Proceeds from Unsecured Revolving Operating Facility Repayments of Unsecured Revolving Operating Facility Proceeds from construction loan Proceeds from unsecured term loan (net of financing costs) Financing costs Cash (used in) provided by financing activities 130 8 10 5 5 12 (g) 5, 13 12 (g) 18, 26 (c) 18 (c) 7 9, 11, 14, 21 12 (a) 12 (a) 13 16 16 16, 18 (a) 16, 18 (b) 12 (c) 12 (d) 12 (d) 12 (b) 12 (f) $(420,716) $375,363 663,803 (28,696) 8,535 15,376 111,506 (97,379) (53,605) 41,201 15,622 1,499 31,456 (9,579) 3,976 — 2,865 4,137 (127) (37,887) 68,899 $320,886 15,034 (15,347) (212) (229,783) — — (2,250) (200,000) 310,000 (750,000) 83,288 — (1,390) $(790,660) (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 — (16,932) (200) (223,312) 9,184 200 (2,661) — 545,000 (470,000) 91,029 399,300 (10) $331,598 ALLIED 2023 ANNUAL REPORT(in thousands of Canadian dollars) NOTES DECEMBER 31, 2023 DECEMBER 31, 2022 YEAR ENDED Investing activities Acquisition of investment properties 4 Deposits on acquisitions — — Additions to investment properties (including capitalized interest) 5, 12 (g) (438,957) Net proceeds on disposition of investment properties held for sale Net proceeds on disposition of properties under development Net distributions from equity accounted investments 4 4 8 1,277,055 — 2,597 (190,753) (928) (398,174) 74,437 15,254 1,253 Loans receivable issued to third-parties 9 (a), 21 (70,398) (58,345) Proceeds from loans receivable Proceeds from notes receivable 9 (a) 9 (b) Advances on note receivable from holder of Exchangeable LP Units 12 (g), 17 Additions to equipment and other assets Leasing commissions Improvement allowances 10 5 5 — 24 (21,207) (1,836) (16,580) (70,845) 343 22 (13,774) (859) (20,603) (62,222) Cash provided by (used in) investing activities $659,853 $(654,349) Increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 190,079 20,990 $211,069 (1,558) 22,548 $20,990 Note 21 contains supplemental cash flow information. The accompanying notes are an integral part of these consolidated financial statements. 131 ALLIED 2023 ANNUAL REPORTALLIED PROPERTIES REAL ESTATE INVESTMENT TRUST NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (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 open-end real estate investment trust created pursuant to the Declaration of Trust dated October 25, 2002, as most recently amended June 12, 2023 . 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”) . On June 12, 2023, Allied completed its conversion from a “closed-end” trust to an “open-end” trust . 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 . MATERIAL ACCOUNTING POLICY INFORMATION 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, 2023 and 2022, 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, 2023 and 2022, were approved and authorized for issue by the Board of Trustees (the “Board”) on January 31, 2024 . 132 ALLIED 2023 ANNUAL REPORT(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: — — 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); — Exchangeable LP Units which are exchangeable for Units at the option of the holder as described in note 17; — interest rate swaps as described in note 2 (i); and — unit-based compensation liabilities as described in note 18 (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 . (c) Basis of consolidation 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 . 133 ALLIED 2023 ANNUAL REPORTInvestment 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 . Where Allied has completed 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 . At the time of the disposition of a property, Allied recognizes any directly attributable expenditures that are non-reimbursable as an expense in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income . Directly attributable expenditures include transaction costs such as due diligence costs, appraisal fees, environmental fees, legal fees, and brokerage fees . Investment properties are externally appraised quarterly and are reported in the Consolidated Balance Sheets at their fair values . Allied’s determination of fair value is supported by valuations prepared by a nationally recognized and qualified third-party 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 (Loss) Income and Comprehensive (Loss) 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 costs 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, operating costs, realty taxes and borrowing costs attributable to the development . See 2 (g) below for further information regarding Allied’s accounting for borrowing costs . 134 ALLIED 2023 ANNUAL REPORT(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 . Joint 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 Statements of (Loss) Income and Comprehensive (Loss) Income . Under the equity method, an investment in a joint venture is recognized initially in the Consolidated Balance Sheets 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 rent receivable . 135 ALLIED 2023 ANNUAL REPORTLease 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 . (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) . 136 ALLIED 2023 ANNUAL REPORT(i) Financial instruments Cash and cash equivalents include cash on hand, balances with banks and short-term deposits with maturities of six 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 Exchangeable LP Units Debt Accounts payable and other liabilities Interest rate swaps CLASSIFICATION/MEASUREMENT Amortized cost Amortized cost Amortized cost Fair value Amortized cost Amortized cost Fair value Allied 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 Sheets 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 amortized cost 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, with the exception of those classified as at fair value through profit or loss, are accounted for as part of the respective asset’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 classified as at fair value through profit or loss are recognized immediately in net income . 137 ALLIED 2023 ANNUAL REPORTImpairment 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 (loss) 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 . Allied measures its Exchangeable LP Units at fair value through profit or loss (note 2(l)) . Allied 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 (Loss) Income and Comprehensive (Loss) Income and are included within ‘Interest expense’, except for those interest-related charges capitalized to qualifying properties under development, rental properties or residential inventory . 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 . 138 ALLIED 2023 ANNUAL REPORTAllied 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 (Loss) Income and Comprehensive (Loss) Income . (j) Unitholders’ equity 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) Units Units represent the initial value of Units that have been issued . Any transaction costs associated with the issuing of Units are deducted from Unit proceeds . On the conversion of Allied to an open-end trust on June 12, 2023, the Units of Allied are redeemable at the option of the holder in accordance with the Declaration of Trust, and, therefore, are considered puttable instruments in accordance with IAS 32, “Financial Instruments - Presentation” (“IAS 32”) . Puttable instruments are required to be accounted for as financial liabilities, except where certain conditions are met in accordance with IAS 32, in which case, the puttable instruments may be presented as equity . The attributes of the Units meet the exemption conditions set out in IAS 32, and are, therefore, presented as equity in the consolidated financial statements . (l) 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 . Prior to Allied’s conversion to an open-end trust, the Exchangeable LP Units were presented within non-controlling interests in the Consolidated Balance Sheets . In addition, net income and other comprehensive income was attributable to unitholders and to non-controlling interests, with the latter equivalent to the amount allocated to the Partnership for income tax purposes . On Allied’s conversion to an open-end trust on June 12, 2023, the Exchangeable LP Units were reclassified to financial liabilities in the Consolidated Balance Sheets as they can be exchanged for Units which are puttable instruments . Allied recognized in equity the difference between the carrying value of the equity instrument and the fair value of the financial liabilities at the date of reclassification . Subsequent to the conversion, at the end of each period, the Exchangeable LP Units are measured at fair value through profit or loss . The fair value of the Exchangeable LP Units is determined by using the quoted trading price of Units, as the Exchangeable LP Units are exchangeable into Units at the option of the holder . 139 ALLIED 2023 ANNUAL REPORTDistributions payable to holders of Exchangeable LP Units are included in ‘Accounts payable and other liabilities’ when the distributions have been approved and declared prior to the reporting date, but have yet to be paid . Prior to Allied’s conversion to an open-end trust, the distributions paid on Exchangeable LP Units were recognized as reductions to equity that is attributable to non-controlling interests . On Allied’s conversion to an open-end trust on June 12, 2023, the distributions paid on Exchangeable LP Units are recognized as interest expense on the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income . (m) Short-term employee benefits Allied does not provide pension plan benefits . Short-term employee benefits are expensed as a period expense . (n) 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 18 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 their 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 . (o) 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 . 140 ALLIED 2023 ANNUAL REPORTThe 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 . (p) 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 . (q) Residential inventories Residential inventories are assets that are developed by Allied for sale in the ordinary course of business and are 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 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 related to residential inventories are accounted for under IAS 23, Borrowing Costs (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 . 141 ALLIED 2023 ANNUAL REPORTRefer below to the various lease types identified and their respective financial statement classification . TYPE OF LEASE Ground Leases Management office Other ROU ASSET CLASSIFICATION ROU LIABILITY CLASSIFICATION Investment properties Other assets Other assets Lease liability Lease liability 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 . 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 . The 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” . 142 ALLIED 2023 ANNUAL REPORTWhen 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 the Consolidated Statements of (Loss) Income and Comprehensive (Loss) 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 (Loss) Income and Comprehensive (Loss) Income . (t) Accounting standards effective in the year In February 2021, the IASB issued narrow-scope amendments to IAS 1, “Presentation of Financial Statements”, IFRS Practice Statement 2, “Making Materiality Judgements” and IAS 8, “Accounting Polices, Changes in Accounting Estimates and Errors” . Allied has adopted these amendments effective January 1, 2023 . The amendments require the disclosure of material accounting policy information rather than disclosing significant accounting policies and clarify how to distinguish changes in accounting policies from changes in accounting estimates . Allied’s financial disclosure is currently not materially affected by the application of the amendments . (u) Accounting standards issued but not yet effective in the year In January 2020, the IASB issued an amendment to IAS 1, “Presentation of Financial Statements” to clarify its requirements for the presentation of liabilities in the statement of financial position . The limited scope amendment affected only the presentation of liabilities in the statement of financial position and not the amount or timing of its recognition . The amendment clarified that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period and specified that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability . It also introduced a definition of ‘settlement’ to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services . On October 31, 2022, the IASB issued Non-Current Liabilities with Covenants (Amendments to IAS 1) . These amendments specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date . The amendments are effective for January 1, 2024, with early adoption permitted and the amendments are to be applied retrospectively . Allied does not expect Amendments to IAS 1 to have any material impact on its financial disclosures . 143 ALLIED 2023 ANNUAL REPORT3 . 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 material accounting policy information 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 . Key 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 or may not ultimately be realized . 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 . 144 ALLIED 2023 ANNUAL REPORTIncome 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 . 4 . ACQUISITIONS AND DISPOSITIONS Acquisitions During the year ended December 31, 2023, Allied did not acquire any properties . During the year ended December 31, 2022, Allied completed the following property acquisitions: 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 April 8, 2022 Retail 121 John, Toronto 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% 100% 100% 100% 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 . 145 ALLIED 2023 ANNUAL REPORTSix 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 matured on December 29, 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 . Dispositions During the year ended December 31, 2023, Allied completed the following property dispositions: On August 16, 2023, Allied closed on the disposition of the Urban Data Centre (“UDC”) portfolio to KDDI Canada Inc ., a wholly owned subsidiary of KDDI Corporation (“KDDI”) for total gross cash proceeds of $1,350,000, which represented the fair value of these investment properties at the time of disposition net of the lease liability at 250 Front Street W . Therefore, there was no gain or loss recorded on closing . The UDC portfolio includes 151 Front Street W, 905 King Street W and 250 Front Street W and the lease liability at 250 Front Street W . Allied incurred net working capital adjustments of $79,380 and selling costs of $13,246, resulting in total net cash consideration of $1,257,374 . On December 15, 2023, Allied closed on the disposition of an investment property held for sale, 8 Place du Commerce in Montréal, at a selling price of $20,000, which represented the fair value of the investment property at the time of disposition, accordingly there was no gain or loss recorded on closing . In addition, Allied incurred net working capital adjustments of $152 and selling costs of $167, resulting in the total net cash consideration of $19,681 . During the year ended December 31, 2022, Allied completed the following property 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 . 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 (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 . 146 ALLIED 2023 ANNUAL REPORTOn 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 total net cash consideration of $25,492 . 5 . 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, 2023 YEAR ENDED DECEMBER 31, 2022 RENTAL PROPERTIES PROPERTIES UNDER DEVELOPMENT (“PUD”) TOTAL RENTAL PROPERTIES PROPERTIES UNDER DEVELOPMENT (“PUD”) TOTAL Balance, beginning of year $9,494,395 $1,529,440 $11,023,835 $8,374,535 $1,238,830 $9,613,365 Additions: Acquisitions Improvement allowances Leasing commissions — 61,424 16,253 — 9,421 327 — 805,757 165,747 971,504 70,845 60,494 16,580 14,714 1,728 5,889 62,222 20,603 Capital expenditures 210,902 228,055 438,957 134,630 263,544 398,174 Dispositions (1,477,000) — (1,477,000) (74,945) (15,254) (90,199) Transfers from PUD 688,540 (688,540) Transfers to PUD (89,320) 89,320 — — 376,730 (376,730) (293,542) 293,542 Transfers (to) from other assets Lease liabilities Amortization of straight- line rent and improvement allowances Fair value (loss) gain on investment properties and investment properties held for sale (1) (505) — — — (505) 3,900 — 561 — — (25,016) 3,139 (21,877) (26,866) 1,389 (25,477) (510,801) (153,002) (663,803) 118,427 (49,245) 69,182 — — 3,900 561 Balance, end of year $8,368,872 $1,018,160 $9,387,032 $9,494,395 $1,529,440 $11,023,835 Investment properties $8,368,872 $1,018,160 $9,387,032 $8,139,565 $1,529,440 $9,669,005 Investment properties held for sale — — — 1,354,830 — 1,354,830 $8,368,872 $1,018,160 $9,387,032 $9,494,395 $1,529,440 $11,023,835 (1) Includes a fair value gain on investment properties held for sale for discontinued operations for the year ended December 31, 2023, of $108,849 ( for the year ended December 31, 2022 - $142,932) which is presented separately in the net income from discontinued operations (note 6). 147 ALLIED 2023 ANNUAL REPORTAs at December 31, 2023, Allied did not classify any investment properties as held for sale . 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 . The decrease of $1,354,830 in the year ended December 31, 2023, is primarily due to the sale of the UDC portfolio on August 16, 2023 (note 4) . For the year ended December 31, 2023, Allied capitalized $61,671 (December 31, 2022 - $47,606) of borrowing costs to qualifying investment properties . Included in the investment properties amounts noted above are right-of-use assets with a fair value of $138,760 (December 31, 2022 - $162,400) representing the fair value of Allied’s interest in four investment properties with corresponding lease liabilities . The leases’ maturities range from 20 .8 years to 78 .5 years (December 31, 2022 - 21 .8 years to 79 .5 years) . In addition, Allied has a prepaid land leasehold interest on a property with a fair value of $173,240 (December 31, 2022 - $178,020) and a maturity of 72 .6 years (December 31, 2022 - 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: (i) 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-GAAP measure, in the terminal year . This method is primarily used to value the rental portfolio, and, in some cases, investment properties held for sale . (ii) 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 . (iii) 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 . 148 ALLIED 2023 ANNUAL REPORTAllied determines the fair value of its investment property portfolio every quarter and at year-end with the support of a third-party appraiser . The fair value of each investment property is determined based on various factors, including rental income from current leases, assumptions about rental income and cash outflows related to future leases reflecting market conditions, and recent market transactions . Allied’s valuation of its investment properties considers both asset-specific and market-specific factors, as well as observable transactions for similar assets . The determination of fair value requires the use of estimates, which are determined with the support of a third-party appraiser and compared with market data, third-party reports, and research, as well as observable market conditions . Significant inputs There are significant unobservable inputs used, such as the discount rates and terminal capitalization rates, which are incorporated to derive the overall 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 measurement date . Overall capitalization rates are inherently uncertain and may be impacted by various factors, including movements in interest rates in the geographies, markets where the assets are located, and may vary with different classes of buildings . Changes in estimates of overall capitalization rates across different geographies, markets, and building classes often occur independently of each other and do not necessarily move in the same direction or with the same magnitude . Fair values are most sensitive to changes in overall capitalization rates . Generally, an increase in overall 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, 2023 DECEMBER 31, 2022 5.98% 5.18% 4.82% 10 5 .93% 4 .99% 4 .64% 10 149 ALLIED 2023 ANNUAL REPORTThe analysis below shows the maximum impact on fair values of possible changes in overall capitalization rates, assuming no changes in NOI: CHANGE IN OVERALL CAPITALIZATION RATE OF Increase (decrease) in fair value -0.50% -0.25% +0.25% +0.50% Investment Properties $1,086,462 $513,514 $(462,871) $(882,240) 6 . DISCONTINUED OPERATIONS Allied completed the sale of the properties in the Urban Data Centre segment on August 16, 2023 (note 4) . The Urban Data Centre segment was classified as discontinued operations in the fourth quarter of 2022 and the disposal group comprised of three investment properties and a related lease liability . The three investment properties were 151 Front Street W, 905 King Street W and 250 Front Street W and the lease liability was 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 Transaction costs Net income from discontinued operations YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $54,539 (20,718) $33,821 (4,433) 108,849 (13,246) $124,991 $96,669 (32,375) $64,294 (6,532) 142,932 — $200,694 150 ALLIED 2023 ANNUAL REPORTThe following table summarizes the cash flows of the discontinued operations: YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $15,598 — 1,307,854 $1,323,452 $53,521 — (29,318) $24,203 Cash provided by (used in): Operating activities Financing activities Investing activities 7 . RESIDENTIAL INVENTORY Residential inventory is as follows: KING Toronto $209,783 $187,272 DECEMBER 31, 2023 DECEMBER 31, 2022 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, 2023 DECEMBER 31, 2022 $187,272 37,887 (15,376) $209,783 $170,980 32,021 (15,729) $187,272 151 ALLIED 2023 ANNUAL REPORTResidential 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, 2023, Allied recorded an impairment of $15,376 (December 31, 2022 - $15,729) on KING Toronto . Residential inventory carrying value is calculated as the estimated gross proceeds less estimated costs to complete . The impairment during the years ended December 31, 2023 and 2022, reflect higher estimated costs to complete . For the year ended December 31, 2023, Allied capitalized $9,215 (December 31, 2022 - $6,204) of borrowing costs to qualifying residential inventory . 8 . INVESTMENT IN JOINT VENTURE AND LOAN RECEIVABLE Investment in joint venture and the associated loan receivable is comprised of the following: DECEMBER 31, 2023 DECEMBER 31, 2022 $8,866 93,291 $102,157 $93,291 8,866 $102,157 $7,089 113,287 $120,376 $113,287 7,089 $120,376 Investment in joint venture Loan receivable from joint venture Current Non-current 152 ALLIED 2023 ANNUAL REPORTOn 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 to TELUS Sky, with the loan having a maximum limit of $114,000 . The loan bears interest at bank prime plus 45 basis points or bankers’ acceptance rate plus 145 basis points . On July 14, 2023, TELUS Sky amended the construction loan agreement to extend the maturity date from July 15, 2023 to July 12, 2024, and repaid $19,996 of the construction loan . As a result, the construction loan’s maximum limit was reduced to $94,000 and the loan receivable outstanding after the repayment is $93,291 . As at December 31, 2023, the loan receivable outstanding is $93,291 (December 31, 2022 - $113,287) . Allied is providing a joint and several guarantee up to the amount of $94,000 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 Net assets of TELUS Sky at 100% Net assets of TELUS Sky at Allied’s share Revenue Expenses 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 DECEMBER 31, 2023 DECEMBER 31, 2022 $5,715 310,746 (289,863) $26,598 $8,866 $5,658 366,006 (350,397) $21,267 $7,089 YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $25,356 (13,260) 69 (59,031) $(46,866) $(15,622) $20,313 (11,529) 36 (18,303) $(9,483) $(3,161) 153 ALLIED 2023 ANNUAL REPORT Investment in joint venture, beginning of year Net loss Contributions (1) Distributions Investment in joint venture, end of year DECEMBER 31, 2023 DECEMBER 31, 2022 $7,089 (15,622) 24,482 (7,083) $8,866 $11,503 (3,161) 3,192 (4,445) $7,089 (1) For the year ended December 31, 2023, Allied made a non-cash contribution to TELUS Sky for $19,996 (December 31, 2022 - $nil), resulting in a reduction to its loan receivable from joint venture by the same amount. 9 . LOANS AND NOTES RECEIVABLE Loans and notes receivable are as follows: Loans receivable (a) Notes and other receivables (b) Current Non-current DECEMBER 31, 2023 DECEMBER 31, 2022 $509,697 56 $509,753 $188,382 321,371 $509,753 $432,032 80 $432,112 $258,093 174,019 $432,112 154 ALLIED 2023 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, 2023, the loan receivable outstanding is $21,173 (December 31, 2022 - $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, plus interest and on August 18, 2022, the facility was further increased to $175,000, plus interest . 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 extended to February 29, 2024 . On December 6, 2023, the maturity date of the facility was further extended to August 20, 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, 2023, the loan receivable outstanding including interest is $188,355 (December 31, 2022 - $161,032) . On November 30, 2018, Allied entered into a joint arrangement with Westbank to develop KING Toronto . As part of the arrangement, Allied advanced a loan (the “Original Facility”), originally in the principal amount of $67,030, to Westbank for its purchase of a 50% undivided interest in the property . Further advances were made to Westbank under the Original Facility and the aggregate principal amount of the loan was increased to $73,414 . Interest accrues to the Original Facility at a rate of 7 .00% per annum for the period up to and including November 30, 2023 . Thereafter, interest accrues to the Original Facility at the greater of (i) 7 .00% per annum; and (ii) prime plus 3 .00% per annum . During the fourth quarter of 2023, the loan was further amended to (i) add an additional credit facility in an aggregate principal amount not to exceed $40,000 (the “Additional Facility”); and (ii) extend the maturity date of the Original Facility to the earlier of December 31, 2026, or the closing of the condominium units (this maturity date also applies to the Additional Facility) . The maturity date of the Original Facility was previously the earlier of November 30, 2023, or the closing of the condominium units . Interest accrues to the Additional Facility at a rate of prime plus 8 .00% per annum . As at December 31, 2023, the total loan receivable outstanding including interest is $112,161 (December 31, 2022 - $97,037) . 155 ALLIED 2023 ANNUAL REPORT 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 . As at December 31, 2023, the loan receivable outstanding is $9,913 (December 31, 2022 - $9,913) . 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 in Vancouver . The facility is 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, 2023, the loan receivable outstanding is $178,095 (December 31, 2022 - $142,877) . 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, construction and leasing status on the development projects, timing of rent commencement on leases, 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, 2023 (December 31, 2022 - $nil) . (b) As at December 31, 2023, and December 31, 2022, 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, 2023 DECEMBER 31, 2022 $4,065 20,597 23,866 $48,528 $3,323 20,497 32,401 $56,221 (1) During the year ended December 31, 2023, Allied recorded amortization of equipment and other assets of $1,094 (December 31, 2022 - $1,101). (2) Property, plant and equipment relates to owner-occupied property. During the year ended December 31, 2023, Allied recorded amortization of owner-occupied property of $405 (December 31, 2022 - $224). 156 ALLIED 2023 ANNUAL REPORT 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) (a) User trade receivables DECEMBER 31, 2023 DECEMBER 31, 2022 $17,067 8,197 24,218 91,481 $140,963 $19,864 5,950 22,979 16,751 $65,544 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 period Allowance for expected credit loss, end of year YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $11,336 3,063 (1,632) (1,045) $11,722 $9,177 3,117 (829) (129) $11,336 157 ALLIED 2023 ANNUAL REPORT(b) Other user receivables Other user receivables pertain to unbilled operating costs such as common area maintenance and property tax recoveries and chargebacks . (c) Miscellaneous receivables Miscellaneous receivables consist primarily of HST receivables from the government, interest rate swap receivables due from financial institutions, 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, 2023, 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 taxes, interest and a deposit on disposition . 12 . DEBT Debt consists of the following items, net of financing costs: DECEMBER 31, 2023 DECEMBER 31, 2022 $111,875 307,013 — — 2,591,569 649,154 $3,659,611 $149,245 3,510,366 $3,659,611 $112,822 223,725 195,673 440,000 2,589,939 649,026 $4,211,185 $346,929 3,864,256 $4,211,185 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 158 ALLIED 2023 ANNUAL REPORT(a) Mortgages payable Mortgages payable have a weighted average contractual interest rate of 3 .38% as at December 31, 2023 (December 31, 2022 - 3 .37%) . The mortgages are secured by a first registered charge over specific investment properties and first general assignments of leases, insurance and registered chattel mortgages . PRINCIPAL REPAYMENTS BALANCE DUE AT MATURITY DECEMBER 31, 2023 DECEMBER 31, 2022 $2,676 $46,669 $49,345 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 6,578 1,553 655 469 183 5,191 199 208 107 — 20,443 — 14,457 — — — — 13,289 $94,858 6,578 21,996 655 14,926 183 5,191 199 208 13,396 $112,677 233 (1,035) $111,875 $112,990 584 (752) $112,822 Mortgages, principal $17,819 Net premium on assumed mortgages Net financing costs (b) Construction loans payable As at December 31, 2023, and December 31, 2022, Allied’s obligations under the construction loans are as follows: JOINT ARRANGEMENT OWNERSHIP DATE OF MATURITY DECEMBER 31, 2023 DECEMBER 31, 2022 Adelaide & Duncan Breithaupt Phase III KING Toronto 108 East 5th Avenue 50% 50% 50% 50% August 11, 2025 $110,046 $85,485 March 31, 2025 December 17, 2024 December 6, 2025 58,005 99,900 39,062 50,472 71,762 16,006 $307,013 $223,725 159 ALLIED 2023 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 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 . On August 11, 2023, the loan maturity was extended from August 11, 2023, to August 11, 2025, and the facility limit was increased from $270,000 to $295,000, in which Allied’s 50% share is $147,500 . Allied is providing a joint and several guarantee of the entire facility and is earning a related guarantee fee on up to $147,500 of the facility . On August 23, 2019, the Adelaide & Duncan joint arrangement entered into a swap agreement to fix approximately 75% of the construction loan up to $209,572 at 2 .86% . The swap matured on March 31, 2023, so the construction loan is no longer fixed and is subject to the facility’s variable rate . 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 up to $69,000 of the facility . On May 31, 2023, the loan maturity was extended to September 29, 2023 . On September 27, 2023, the loan maturity was further extended to March 31, 2025, and the interest rate was updated to bank prime plus 25 basis points or bankers’ acceptance rate plus 145 basis points with a standby fee of 20 basis points and a letter of credit fee of 100 basis points . On December 17, 2020, Allied and Westbank obtained a $465,000 green construction lending facility for the KING Toronto joint arrangement from a syndicate of Canadian banks, in which Allied’s 50% share is $232,500 . Up to $120,000 of the deposits paid by the purchasers of the KING Toronto condominium units can be released to the KING Toronto joint arrangement to fund the construction of the condominium units (“Purchaser Deposits”) . As at December 31, 2023, $92,402 of the Purchaser Deposits was released . When the release of the Purchaser Deposits exceeds $80,000, the facility limit is reduced . As such, on November 6, 2023, the facility limit was decreased from $465,000 to $452,598, in which Allied’s 50% share is $226,299 . 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 up to $226,299 of the facility . 160 ALLIED 2023 ANNUAL REPORTOn 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 up to $75,000 of the facility . On January 13, 2023, the 108 East 5th Avenue joint arrangement entered into a swap agreement to fix approximately 75% of the construction loan up to $110,175 at 4 .90% . (c) Promissory 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 (note 4) . The promissory note was secured by a first registered charge on five of the six properties acquired and was fully repaid on December 29, 2023 . CONTRACTUAL INTEREST RATE DATE OF MATURITY FREQUENCY OF INTEREST PAYMENT DECEMBER 31, 2023 DECEMBER 31, 2022 Promissory note payable Net discount on promissory note payable 1 .00% for 2022, 2 .00% for 2023 December 29, 2023 Quarterly $— — $— $200,000 (4,327) $195,673 161 ALLIED 2023 ANNUAL REPORT(d) Unsecured revolving operating facility As at December 31, 2023, and December 31, 2022, 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, 2023 Unsecured Facility limit $800,000 (1) January 30, 2025 Prime + 0 .45% or Bankers’ acceptance + 1 .45% (2) 0.29% $800,000 $— $(14,906) $785,094 (1) This Unsecured Facility contains a $100,000 accordion feature, allowing Allied to increase the amount available under the facility to $900,000. (2) The interest rates for this facility were subject to certain conditions being met up to August 15, 2023. On March 31, 2023, Allied amended the Unsecured Facility to increase the limit by $100,000 to $700,000 and on June 26, 2023, Allied amended the Unsecured Facility to increase the limit by $100,000 to $800,000 . On January 26, 2024, Allied updated the Unsecured Facility of $800,000 by extending the maturity date to January 26, 2027, and the facility is now provided by a syndicate of lenders . The Unsecured Facility bears interest at a variable rate of either prime plus 45 basis points or the Canadian overnight repo rate average (“CORRA”) plus 145 basis points per annum with a standby fee of 29 basis points and a letter of credit fee rate of 145 basis points . 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 conditions on the interest rates for this facility were met for the year ended December 31, 2022 162 ALLIED 2023 ANNUAL REPORT(e) Senior unsecured debentures As at December 31, 2023, and December 31, 2022, 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 CONTRACTUAL INTEREST RATE DATE OF MATURITY INTEREST PAYMENT DATE DECEMBER 31, 2023 DECEMBER 31, 2022 3 .636% 3 .394% 3 .113% 3 .117% 3 .131% 1 .726% 3 .095% April 21, 2025 April 21 and October 21 $200,000 $200,000 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 February 6, 2032 February 6 and August 6 300,000 300,000 400,000 300,000 600,000 500,000 300,000 300,000 400,000 300,000 600,000 500,000 Unsecured Debentures, principal Net financing costs $2,600,000 $2,600,000 (8,431) (10,061) $2,591,569 $2,589,939 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 (note 12 (g)) . (f ) Unsecured term loans As at December 31, 2023, and December 31, 2022, Allied’s obligations under the unsecured term loans are as follows: CONTRACTUAL INTEREST RATE DATE OF MATURITY FREQUENCY OF INTEREST PAYMENT DECEMBER 31, 2023 DECEMBER 31, 2022 Unsecured term loan 3 .496% January 14, 2026 Monthly $250,000 $250,000 Unsecured term loan 4 .865% October 22, 2025 Monthly 400,000 400,000 Unsecured term loans, principal Net financing costs $650,000 $650,000 (846) (974) $649,154 $649,026 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)) . 163 ALLIED 2023 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% . On February 3, 2023, Allied extended the maturity date on its $250,000 unsecured term loan from January 14, 2024, to January 14, 2026, by exercising two one-year extension options . Debt financing costs of $300 were incurred for these extensions . (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 Distributions on Exchangeable LP Units (2) Interest capitalized to qualifying investment properties and residential inventory Interest expense excluding financing prepayment costs Financing prepayment costs (3) Interest expense YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $3,528 16,675 3,967 23,841 74,710 28,007 2,322 3,976 2,865 18,068 $177,959 (70,886) $107,073 — $107,073 $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 (1) For the year ended December 31, 2023, excludes interest on a lease liability held for sale of $4,433, respectively (December 31, 2022 - $6,532) that is presented separately in the net income from discontinued operations (note 6). (2) The distributions declared on Exchangeable LP Units are recognized as interest expense due to Allied’s conversion to an open-end trust on June 12, 2023. (3) For the year ended December 31, 2023, financing prepayment costs include $nil of accelerated amortization of premium on debt (December 31, 2022 - $564). Borrowing costs have been capitalized to qualifying investment properties and residential inventory at a weighted average effective rate of 3 .47% per annum (December 31, 2022 – 3 .11%), which excludes directly attributable borrowing costs . 164 ALLIED 2023 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, 2023: 2024 2025 2026 2027 2028 THEREAFTER TOTAL $2,676 $6,578 $1,553 $655 $469 $5,888 $17,819 Mortgages payable, principal repayments Mortgages payable, balance due at maturity Construction loans payable 99,900 207,113 46,669 — 20,443 — — — — — — 14,457 13,289 — — — — 94,858 307,013 — Promissory note payable Unsecured Debentures Unsecured Term Loans — — — 200,000 600,000 300,000 300,000 1,200,000 2,600,000 400,000 250,000 — — — 650,000 Total $149,245 $813,691 $871,996 $300,655 $314,926 $1,219,177 $3,669,690 A description of Allied’s risk management objectives and policies for financial instruments is provided in note 26 . 13 . LEASE LIABILITIES Allied’s future minimum lease liability payments as a lessee are as follows: 2024 (1) 2025 - 2028 (1) THEREAFTER DECEMBER 31, 2023 DECEMBER 31, 2022 Future minimum lease payments $3,373 $13,694 $136,733 $153,800 $477,983 Interest (paid) accrued on lease obligations Less: amounts representing interest payments (227) (1,283) — (1,510) (992) (3,146) (12,411) (86,094) (101,651) (318,925) Present value of lease payments $— $— $50,639 $50,639 $158,066 Current (2) Non-current $— $107,215 50,639 50,851 $50,639 $158,066 (1) The future minimum lease payments prior to 2028 are less than the effective interest on the lease liabilities. (2) The current lease liability of $107,215 as at December 31, 2022, was disposed in 2023 as part of the sale of the properties in the Urban Data Centres segment (note 6). 165 ALLIED 2023 ANNUAL REPORTSome of Allied’s lease agreements contain contingent rent clauses . Contingent rental payments are recognized in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) 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, 2023, minimum lease payments of $7,616 (December 31, 2022 - $9,689) were paid by Allied . 14 . ACCOUNTS PAYABLE AND OTHER LIABILITIES Accounts payable and other liabilities consists of the following: Trade payables and other liabilities $283,346 $245,675 DECEMBER 31, 2023 DECEMBER 31, 2022 Prepaid user rents Accrued interest payable on Unsecured Debentures Distributions payable on Units (note 16) Distributions payable on Exchangeable LP Units (note 17) Residential deposits (1) Unit-based compensation liabilities (note 18(c)) Current Non-current (2) 81,560 23,238 80,612 7,440 47,513 1,938 81,489 23,281 18,656 1,722 42,700 738 $525,647 $414,261 $476,863 48,784 $525,647 $370,823 43,438 $414,261 (1) Residential deposits related to the residential condominium units at KING Toronto. (2) Non-current liabilities as at December 31, 2023, are composed of residential deposits totaling $47,513 and unit-based compensation liabilities totaling $1,271 (December 31, 2022 - $42,700 and $738, respectively). 166 ALLIED 2023 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, 2023 DECEMBER 31, 2022 CLASSIFICATION/ MEASUREMENT CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE Financial Assets: Loan receivable from joint venture (note 8) Amortized cost $93,291 $93,291 $113,287 $113,287 Loans and notes receivable (note 9) Amortized cost 509,753 502,004 432,112 422,999 FVTPL 23,866 23,866 32,401 32,401 Interest rate swap derivative assets (note 10) Accounts receivable, prepaid expenses and deposits (note 11) Cash and cash equivalents (note 21) Amortized cost 211,069 211,069 Amortized cost 140,963 140,963 65,544 20,990 65,544 20,990 Financial Liabilities: Debt (note 12) Mortgages Amortized cost $111,875 $107,755 $112,822 $107,030 Construction loans payable Amortized cost 307,013 307,013 Promissory note payable Amortized cost Unsecured Facility Amortized cost — — — — 223,725 195,673 223,725 194,145 440,000 440,000 Unsecured Debentures Amortized cost 2,591,569 2,266,700 2,589,939 2,255,528 Unsecured Term Loans Amortized cost 649,154 641,686 649,026 628,450 Accounts payable and other liabilities (note 14) Unit-based compensation liabilities (notes 14 and 18(c)) Exchangeable LP Units (note 17) Amortized cost 523,709 523,709 413,523 413,523 FVTPL FVTPL 1,938 1,938 238,309 238,309 738 — 738 — 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 Sheets 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 . 167 ALLIED 2023 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: Financial Assets: DECEMBER 31, 2023 DECEMBER 31, 2022 LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 1 LEVEL 2 LEVEL 3 Loan receivable from joint venture (note 8) $— $93,291 $— $— $113,287 $— Loans and notes receivable (note 9) Interest rate swap derivative assets (note 10) Accounts receivable, prepaid expenses and deposits (note 11) — — — 502,004 23,866 140,963 Cash and cash equivalents (note 21) 211,069 — — — — — — — — 422,999 32,401 65,544 20,990 — — — — — 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) Unit-based compensation liabilities (notes 14 and 18(c)) Exchangeable LP Units (note 17) $— $107,755 $— $— $107,030 $— — — — — — — — — 307,013 — — 2,266,700 641,686 523,709 1,938 238,309 — — — — — — — — — — — — — — — — 223,725 194,145 440,000 2,255,528 628,450 413,523 738 — — — — — — — — — There were no transfers between levels of the fair value hierarchy in either year . 168 ALLIED 2023 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 the derivative contracts is determined using forward interest rates observable in the market (Level 2) . Unit-based compensation liabilities The fair value of Allied’s unit-based compensation liabilities is based on the market value of the underlying Units (Level 2) . For the performance trust units, the performance market conditions are also taken into consideration . Exchangeable LP Units The fair value of Exchangeable LP Units is based on the closing market trading price of Units as at each year end (Level 2) . Debt and 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 year end market rates for instruments of similar terms and credit risks that are observable in the market (Level 2) . 16 . EQUITY 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 . The following represents the number of Units issued and outstanding, and the related carrying value of equity, for the years ended December 31, 2023, and December 31, 2022 . NUMBER ISSUED AND OUTSTANDING AMOUNT Balance at January 1, 2022 127,737,851 $3,902,655 Restricted Unit Plan (net of forfeitures) (note 18(b)) Unit Option Plan - options exercised (note 18(a)) Unit issuance (net of costs) Balance at December 31, 2022 Restricted Unit Plan (net of forfeitures (note 18(b)) Distribution in Units Consolidation of Units Balance at December 31, 2023 — 6,332 211,800 (2,661) 200 9,184 127,955,983 $3,909,378 — 31,703,663 (31,703,663) 127,955,983 (2,250) 639,780 — $4,546,908 169 ALLIED 2023 ANNUAL REPORTIn 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 26(a) . Allied does not hold any of its own Units, nor does Allied reserve any Units for issue under options and contracts . Distributions On December 15, 2023, Allied declared a special distribution of $5 .48 per Unit, comprised of $0 .48 per Unit payable in cash and $5 .00 per Unit payable by the issuance of Units of Allied to Unitholders of record as at December 29, 2023 (the “Special Distribution”) . The Special Distribution was made primarily to distribute to Unitholders a portion of the capital gain realized by Allied during the year ended December 31, 2023, from the sale of the UDC Portfolio . On December 29, 2023, 31,703,663 Units were distributed at a price of $20 .18 per Unit, for an aggregate value of $639,780 . Immediately following the Special Distribution of Units, the outstanding Units of Allied were consolidated such that each Unitholder held, after the consolidation, the same number of Units as held immediately prior to the Special Distribution . For the year ended December 31, 2023, the issuance of Units pursuant to the Special Distribution was recorded to Units in the Consolidated Statements of Equity in accordance with IAS 32, “Financial Instruments: Presentation”, with a corresponding reduction to retained earnings as a result of the Special Distribution declared . The remaining portion of the Special Distribution of $61,419 will be paid in cash on January 15, 2024 . On January 15, 2024, Allied declared a distribution for the month of January 2024 of $0 .15 per Unit, representing $1 .80 per Unit on an annualized basis to Unitholders of record as at January 31, 2024 . Normal course issuer bid On February 22, 2023, 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 12,582,628 of its outstanding Units, representing approximately 10% of its public float as at February 10, 2023 . The NCIB commenced February 24, 2023, and will expire on February 23, 2024, 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, 2023, Allied purchased 76,959 Units for $2,250 at a weighted average price of $29 .25 per Unit under its NCIB program, of which 76,450 Units were purchased for delivery to participants under Allied’s Restricted Unit Plan and 509 Units were purchased for certain employee rewards outside of Allied’s Restricted Unit Plan . 170 ALLIED 2023 ANNUAL REPORT17 . EXCHANGEABLE LP UNITS 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 . The 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 . On each of June 30, 2023, September 30, 2023, and December 31, 2023, the lock-up expired on 2,952,286 Exchangeable LP Units . The following Exchangeable LP Units are subject to lock-up and the expiration is based on the following schedule: LOCK-UP EXPIRATION DATE NUMBER OF EXCHANGEABLE LP UNITS ELIGIBLE FOR RELEASE March 31, 2024 2,952,287 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 . The following represents the number of Exchangeable LP Units issued and outstanding, and the related carrying value, for the years ended December 31, 2023, and December 31, 2022 . Balance at January 1, 2022 Unit issuance (net of costs) Distributions Retained Earnings Balance at December 31, 2022 Distributions Retained Earnings Reclassification of Exchangeable LP Units (note 2(d)) Fair value gain on Exchangeable LP Units NUMBER ISSUED AND OUTSTANDING — 11,809,145 — — 11,809,145 — — — — Balance at December 31, 2023 11,809,145 AMOUNT $— 550,660 (15,496) 6,508 $541,672 (8,857) 4,997 (270,807) (28,696) $238,309 171 ALLIED 2023 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 January 1, 2023, to December 31, 2023, was $26,925, which includes a special cash distribution of $5,668, which is $0 .48 per Exchangeable LP Unit, for which Choice Properties elected to receive a loan in lieu of all of the distributions . The loan in lieu of distributions issued to Choice Properties for the cash advances made during the year ended December 31, 2023, was a note receivable of $21,207 and $7,440 was advanced to Choice Properties as a note receivable on January 15, 2024 . 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 2, 2024, $21,207 of the note receivable due from Choice Properties was settled on a net basis against the distributions payable to Choice Properties . On January 15, 2024, the Partnership declared a distribution for the month of January 2024 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, 2024, for which Choice Properties elected to receive a loan in lieu of the distribution . 172 ALLIED 2023 ANNUAL REPORT18 . 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 . The term of the options do not exceed ten years . 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) (23,204) 166,445 166,445 February 22, 2017 February 22, 2027 279,654 $35 .34 (23,576) February 14, 2018 February 14, 2028 198,807 $40 .30 (14,685) — — 256,078 256,078 184,122 184,122 February 13, 2019 February 13, 2029 323,497 February 5, 2020 February 5, 2030 352,230 February 3, 2021 February 3, 2031 442,233 $47 .53 $54 .59 $36 .55 (2,717) (4,330) 316,450 316,450 — (1,594) 350,636 272,943 (1,533) (1,460) 439,240 240,985 2,136,901 (393,342) (30,588) 1,712,971 1,437,023 YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 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 5.14 $31 .56-54 .59 6 .13 173 ALLIED 2023 ANNUAL REPORTYEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 NUMBER OF UNITS WEIGHTED AVERAGE EXERCISE PRICE NUMBER OF UNITS WEIGHTED AVERAGE EXERCISE PRICE 1,717,043 (4,072) — 1,712,971 $41.98 $31.56 $— $42.01 1,726,381 (3,006) (6,332) 1,717,043 $41 .95 $43 .28 $31 .56 $41 .98 1,437,023 $42.08 1,151,274 $41 .32 Balance, beginning of year Forfeited Exercised Balance, end of year Units exercisable at the end of the year 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 . The underlying expected volatility was determined by reference to historical data of Allied’s Units over 10 years . For the year ended December 31, 2023, Allied recorded a unit-based compensation expense of $389 (December 31, 2022 - $876) in general and administrative expense in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) 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 . 174 ALLIED 2023 ANNUAL REPORTThe 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, 2023 DECEMBER 31, 2022 322,411 76,450 (104,607) — 294,254 296,810 61,148 (35,444) (103) 322,411 For the year ended December 31, 2023, Allied recorded a unit-based compensation expense of $2,421, (December 31, 2022 - $2,807) in general and administrative expense in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income . (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 Settled Forfeited Distribution equivalents Plan Units, end of year YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 179,193 170,461 (7,274) — 28,897 371,277 — 172,500 — (1,035) 7,728 179,193 175 ALLIED 2023 ANNUAL REPORTFor the year ended December 31, 2023, Allied recorded a unit-based compensation expense of $1,327 (December 31, 2022 - $738), including the mark-to-market adjustment, in general and administrative expense in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income . During the year ended December 31, 2023, 7,274 Plan Units vested and were settled in cash resulting in a decrease of $127 to the unit-based compensation liabilities . 19 . RENTAL REVENUE Rental revenue includes the following: Rental revenue (1) Tax and insurance recoveries Miscellaneous revenue (2) Operating cost recoveries Total rental revenue YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $272,034 109,172 23,601 159,173 $563,980 $252,650 99,633 21,937 145,248 $519,468 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. Future minimum rental income from continuing operations is as follows: 2024 2025 2026 2027 2028 THEREAFTER TOTAL Future minimum rental income $300,867 $282,915 $253,845 $220,301 $187,565 $770,030 $2,015,523 20 . GENERAL AND ADMINISTRATIVE EXPENSES YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $21,197 6,749 6,897 $34,843 (11,266) $23,577 $21,119 6,051 5,549 $32,719 (10,126) $22,593 Salaries and benefits Professional and trustee fees Office and general expenses Capitalized to qualifying investment properties Total general and administrative expenses 176 ALLIED 2023 ANNUAL REPORT21 . SUPPLEMENTAL CASH FLOW INFORMATION Cash and cash equivalents include the following components: Cash Short-term deposits Total cash and cash equivalents DECEMBER 31, 2023 DECEMBER 31, 2022 $51,366 159,703 $211,069 $20,990 — $20,990 The following summarizes supplemental cash flow information in operating activities: Supplemental Interest paid on debt (including capitalized interest and financing prepayment costs (note 12)) YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $168,265 $131,537 The following summarizes supplemental cash flow information in investing activities: Supplemental Mortgages assumed (note 4) The following summarizes the change in non-cash operating items: 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 YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $— $13,625 YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $(75,419) (77,641) 111,386 110,573 $68,899 $(8,483) (64,350) 66,176 45,565 $38,908 177 ALLIED 2023 ANNUAL REPORT22 . 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 . OWNERSHIP DECEMBER 31, 2023 DECEMBER 31, 2022 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% DECEMBER 31, 2023 DECEMBER 31, 2022 $2,071,022 $709,396 $2,016,405 $570,821 PROPERTIES LOCATION CURRENT STATUS 642 King W Toronto, ON Rental Property Adelaide & Duncan Toronto, ON Breithaupt Block Kitchener, ON College & Manning Toronto, ON College & Palmerston Toronto, ON Rental Property and Property Under Development Rental Property Rental Property Rental Property KING Toronto Toronto, ON Property Under Development and Residential Inventory 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 Rental Property Total assets Total liabilities 178 ALLIED 2023 ANNUAL REPORTRevenue Expenses Income before impairment and fair value adjustment on investment properties Impairment of KING Toronto Fair value (loss) gain on investment properties Net (loss) income 23 . SEGMENTED INFORMATION YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $70,333 (28,354) $41,979 (15,376) (197,774) $(171,171) $35,071 (13,669) $21,402 (15,729) 10,416 $16,089 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 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, interest income, general and administrative expenses, condominium marketing expenses, amortization of other assets, transaction costs, net loss from joint venture, fair value gain (loss) on investment properties and investment properties held for sale, fair value gain (loss) on Exchangeable LP units, fair value gain (loss) derivative instruments and impairment of residential inventory are not allocated to operating segments . The Urban Data Centre segment is classified as discontinued operations (note 6) and is therefore excluded from the following tables, which present a reconciliation of operating income to net (loss) income from continuing operations for the years ended December 31, 2023 and 2022 . 179 ALLIED 2023 ANNUAL REPORTSEGMENTED CONSOLIDATED STATEMENTS OF (LOSS) INCOME FROM CONTINUING OPERATIONS YEAR ENDED DECEMBER 31, 2023 MONTRÉAL & OTTAWA TORONTO & KITCHENER CALGARY & EDMONTON (1) VANCOUVER JOINT VENTURE (TELUS SKY) (2) TOTAL Rental revenue $220,826 $258,911 $41,452 $51,243 $(8,452) $563,980 Property operating costs (112,565) (97,970) (22,423) (18,411) 4,420 (246,949) Operating income $108,261 $160,941 $19,029 $32,832 $(4,032) $317,031 Interest income Interest expense General and administrative expenses Condominium marketing expenses Amortization of other assets Transaction costs Net loss from joint venture Fair value loss on investment properties and investment properties held for sale Fair value gain on Exchangeable LP Units Fair value loss on derivative instruments Impairment of residential inventory Net loss from continuing operations 53,605 (107,073) (23,577) (538) (1,499) (167) (15,622) (772,652) 28,696 (8,535) (15,376) $(545,707) 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. 180 ALLIED 2023 ANNUAL REPORTYEAR 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) Operating income $102,778 $145,222 $19,144 $30,992 $(2,928) $295,208 Interest income Interest expense General and administrative expenses Condominium marketing expenses Amortization of other assets Net loss from joint venture Fair value loss on investment properties and investment properties held for sale Fair value gain on derivative instruments Impairment of residential inventory Net income from continuing operations 32,080 (72,802) (22,593) (602) (1,325) (3,161) (73,750) 37,343 (15,729) $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. 181 ALLIED 2023 ANNUAL REPORT24 . INCOME TAXES Allied qualifies as a Real Estate Investment Trust and Mutual Fund Trust 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 . 25 . 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 personnel and their close family members . Allied engages in third-party property management business, including the provision of services for properties in which a former trustee of Allied has an ownership interest . For the year ended December 31, 2023, real estate service revenue earned from these properties was $395 (December 31, 2022 - $405) . As of May 2, 2023, Allied engaged a private company controlled by a trustee to provide consulting services . For the year ended December 31, 2023, Allied incurred $712 (December 31, 2022 - $nil) . As at December 31, 2023, the loan to the TELUS Sky joint venture has a balance outstanding of $93,291 (December 31, 2022 - $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 related parties . Related party transactions were made on terms equivalent to those that prevail in arm’s length transactions . Key management personnel are comprised of the Board of Trustees and certain members of the executive team who have the authority and responsibility for planning, directing, and controlling the activities of Allied, directly or indirectly . The compensation for key management personnel are summarized in the table below: YEAR ENDED DECEMBER 31, 2023 DECEMBER 31, 2022 $4,154 3,062 $7,216 $4,452 4,328 $8,780 Salary, bonus and other short-term employee benefits Unit-based compensation Total 182 ALLIED 2023 ANNUAL REPORT26 . RISK MANAGEMENT (a) Capital management Allied defines capital as the aggregate of equity, Exchangeable LP Units, 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) . As at December 31, 2023, the debt to gross book value ratio was 34 .7% (December 31, 2022 - 35 .6%) . 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 was valid for a 25-month period ending on July 2, 2023 . 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 were 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 was determined in Allied’s sole discretion . The ATM Program was effective until July 2, 2023 . 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, 2023 . 183 ALLIED 2023 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, 2023, 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, 2023, the Unsecured Facility, which is at a floating interest rate and is exposed to changes in interest rates, had a balance outstanding of $nil (December 31, 2022 - $440,000) . Also, Allied has construction loans payable, of which $267,951 (December 31, 2022 - $138,240) is subject to floating interest rates and is exposed to changes in interest rates . 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 . This includes mortgages payable due within one year which have a fixed rate as at the reporting date, but are subject to interest rate risk upon refinancing . All other variables are held constant . AS AT DECEMBER 31, 2023 CARRYING AMOUNT INCOME IMPACT INCOME IMPACT Construction loans payable (1) Mortgages payable due within one year $267,951 $49,345 $2,680 $493 $(2,680) $(493) -1.0% +1.0% (1) Includes a variable rate construction loan of $90,900 due within one year. 184 ALLIED 2023 ANNUAL REPORT(c) Unit price risk Unit price risk arises from the unit-based compensation liabilities and Exchangeable LP Units which are recorded at fair value at each quarter-end date . Allied’s unit-based compensation liabilities and Exchangeable LP Units negatively impact net income and comprehensive income when the Unit price rises and positively impact net (loss) income and comprehensive (loss) income when the Unit price declines . The following table illustrates the sensitivity of net (loss) income and comprehensive (loss) income and equity to a reasonably possible change in Unit price of +/- $1 .00 . These changes are considered to be reasonably possible based on observation of current market conditions . The calculations are based on a change in the Unit price for each period, and the financial instruments held at each reporting date that are sensitive to changes in the Unit price . All other variables are held constant . AS AT DECEMBER 31, 2023 CARRYING AMOUNT INCOME IMPACT INCOME IMPACT -$1.00 +$1.00 Unit-based compensation liabilities Exchangeable LP Units $1,938 $238,309 $371 $11,809 $(371) $(11,809) (d) 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, 2023, Allied had $509,697 outstanding in loans receivable (December 31, 2022 - $432,032) and $93,291 outstanding in joint venture loan receivable (December 31, 2022 - $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, 2023, are $nil (December 31, 2022 - $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, 2023, are $11,722 (December 31, 2022 - $11,336) (note 11 (a)) . 185 ALLIED 2023 ANNUAL REPORTAllied 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 as follows: Less than 30 days 30 to 60 days More than 60 days Total (e) Liquidity risk DECEMBER 31, 2023 DECEMBER 31, 2022 $1,702 1,318 14,047 $17,067 $1,677 3,129 15,058 $19,864 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 .29% for December 31, 2023 (December 31, 2022 - 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 loans and $39,062 of its construction loans (December 31, 2022 - $650,000 and $85,485, respectively) . Allied does not have any variable rate mortgages . Gains or losses arising from the change in fair values of the interest rate derivative contracts are recognized in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income . For the year ended December 31, 2023, Allied recognized as part of the change in fair value adjustment on derivative instruments a fair value loss of $(8,535) (December 31, 2022 - fair value gain of $37,343) . 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 . 186 ALLIED 2023 ANNUAL REPORT(f ) Maturity analysis The undiscounted future principal and interest payments on Allied’s debt instruments are as follows: 2024 2025 2026 2027 2028 THEREAFTER TOTAL Mortgages payable $52,537 $8,625 $23,982 $1,870 $15,875 $21,811 $124,700 Construction loans payable 119,950 214,486 — — — — 334,436 Unsecured Debentures 74,485 270,849 662,035 352,188 342,822 1,283,047 2,985,426 Unsecured Term Loans 28,200 424,521 250,359 — — — 703,080 Total $275,172 $918,481 $936,376 $354,058 $358,697 $1,304,858 $4,147,642 27 . COMMITMENTS AND CONTINGENCIES Allied has entered into commitments relating to development and upgrade activity . The commitments as at December 31, 2023, were $168,071 (December 31, 2022 - $247,819) . Commitments as at December 31, 2023, of $406 (December 31, 2022 - $510) were held within equity accounted investments . 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 $23,226 as at December 31, 2023 (December 31, 2022 - $23,952) . 187 ALLIED 2023 ANNUAL REPORTCorporate Profile About Us Allied is a leading owner-operator of distinctive urban workspace in Canada’s major cities . Allied’s mission is to provide knowledge-based organizations with workspace 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 . 188 ALLIED 2023 ANNUAL REPORTBoard of Trustees Matthew Andrade (1)(2) Michael Emory (3) Kay Brekken (1)(2) Toni Rossi (2) Tom Burns Stephen Sender (1) Hazel Claxton (2) Jennifer Tory (2)(4) Lois Cormack (1)(2) Cecilia Williams HEAD OFFICE 134 Peter Street, Suite 1700 Toronto, Ontario M5V 2H2 TRANSFER AGENT & REGISTRAR TSX Trust Company P .O . Box 700, Postal Station B T . 416 .977 .9002 | F . 416 .306 .8704 Montréal, Quebec H3B 3K3 STOCK EXCHANGE LISTING AND SYMBOL Toronto Stock Exchange Units - AP .UN AUDITORS Deloitte LLP (1) Audit Committee (2) Governance, Compensation and Nomination Committee (3) Executive Chair (4) Lead Trustee 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 189 ALLIED 2023 ANNUAL REPORT190 ALLIED 2023 ANNUAL REPORT

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