Units of Canada’s largest pure-play office real estate investment trust (REIT) fell more than 25 per cent on Wednesday after Allied Properties Real Estate Investment Trust (AP-UN.TO) announced a $500-million equity offering and the departure of its founder.
Allied owns a large portfolio of urban office buildings in Canada, with more than half located in Toronto. Calgary and Montreal are the company’s next-largest markets.
In a news release on Tuesday, Allied announced plans to sell $350 million worth of units to investors in a marketed offering. The Toronto-based company also plans to raise an additional $150 million by selling units in a private placement. Allied says the proceeds will be allocated to debt repayment. Financial filings show the company owed $4.7 billion at the end of 2025.
Allied units closed 27.83 per cent lower at $10.14 on the Toronto Stock Exchange on Wednesday, setting a new 52-week low. Units have fallen more than 72 per cent over the past five years as Allied faced significant disruptions in the office real estate market following the COVID-19 pandemic.
Allied president and CEO Cecilia Williams told investors on Wednesday that 2025 was a challenging year for the company, marked by unmet financial targets, and slower-than-expected leasing activity.
“Those factors weighed on earnings, and delayed balance sheet improvement,” she said on a post-earnings conference call with analysts. “These results are unsatisfactory and below our expectations.”
For fiscal 2025, Allied reported a $1.33 billion net loss. That’s down from the $342 million loss booked in the same quarter last year. At year-end, the company says occupied and leased area remained steady at 85.3 per cent and 87.4 per cent, respectively.
Last December, Allied slashed its monthly payout by 60 per cent. The company is also aggressively selling non-core real estates assets. It aims to sell about $500 million worth of property.
On Wednesday, the company said it sold $140 million worth of non-core, low-yielding property in 2025.
“While asset sales are underway, and additional potential sales continue to be evaluated, the timing of such transactions is not entirely within our control,” Williams said.
“While we recognize that the equity offering, if completed, will have a diluted impact, based on our assessment of available options, we determined that proceeding with the offering was an appropriate step,” she added. “Our action plan is straightforward and well underway.”
Allied also announced its founder, Micheal Emory, will depart his executive chairman role after May 2.