TORONTO, Ontario — February 10, 2026 — Leads & Copy —
Allied Properties Real Estate Investment Trust (TSX: AP.UN) has announced its fourth-quarter and year-end results for 2025, along with its outlook for 2026 through 2028. The company is also launching a $350 million marketed public offering and a $150 million concurrent private placement of units, with the proceeds aimed at debt repayment.
According to Allied President and CEO Cecilia Williams, the return to historical occupancy levels has been slower than anticipated, but an increase in demand and limited new supply are on the horizon. Williams said the company is executing an action plan to strengthen its balance sheet and improve financial flexibility. This plan includes a previously announced distribution reset, advancing a growing non-core disposition pipeline, and pursuing a $500 million equity offering, which Williams said will position Allied to benefit from the market recovery expected in 2026 and beyond.
In May 2023, Allied implemented a leadership renewal and succession plan. As part of this plan, Cecilia Williams was appointed President and CEO, and Michael Emory transitioned to Executive Chair, with his term scheduled to conclude on May 2, 2026. However, the Independent Trustees have decided not to renew Mr. Emory’s employment agreement, citing confidence in Allied’s CEO and senior management team. Mr. Emory will step back from his day-to-day Executive Chair duties and will not stand for re-election as a trustee at the upcoming annual meeting of Unitholders.
Lead Trustee Jennifer Tory thanked Michael Emory for his vision, leadership, and lasting contributions as Allied’s Founder, noting that he shaped Allied’s culture and long-term strategy and built Allied into one of Canada’s leading owner-operators of distinctive, high-quality urban workspace.
In 2025, Allied executed several strategic initiatives, but certain operating and deleveraging targets were not met due to slower lease finalization and higher debt and interest expenses related to development projects.
Key highlights from 2025 include:
Rental revenue remained steady at approximately $592 million.
Operating income declined to $317 million from $328 million, mainly due to dispositions, non-renewals, and lower development fees, partially offset by contributions from acquisitions and rent commencement from development completions.
Allied delivered 801,000 square feet of new leasing activity in the second half of 2025, the strongest second half since 2020. Total leasing activity increased 16% in 2025 versus 2024.
Occupied and leased area remained steady at 85.3% and 87.4%, respectively, at the end of 2025.
An expected credit loss of $128 million was recorded in relation to two remaining loans receivable.
An IFRS valuation adjustment of $1.4 billion was recorded due to the expansion of capitalization rates and adjustments to cash flow assumptions.
$140 million of non-core, low-yielding property dispositions were closed in 2025, with net proceeds allocated to debt reduction.
Allied is implementing an action plan to strengthen its balance sheet. This includes a 60% distribution reset in December 2025, with cash conserved being reallocated to debt reduction. The company is also pursuing non-core, low-yielding property dispositions, with a pipeline of approximately $500 million. $29 million closed in Q1 2026 and $17 million is firm and expected to close by the end of Q1 2026. The remaining pipeline totals ~$454 million and is at various stages of marketing, with dispositions targeted to close by year-end 2026.
The company is launching a $500 million offering of units ($350 million via a marketed public offering and $150 million via private placement), with net proceeds primarily used to repay its Series H debentures. Allied expects to remain investment-grade rated upon successful execution of the Action Plan.
Looking beyond 2026, Allied anticipates improved operating metrics driven by occupancy rates approaching historical averages. Key assumptions include no new development projects initiated and the completion of the public offering and concurrent private placement in February 2026.
The company will hold a conference call on February 11, 2026, to discuss the financial results for the quarter ended December 31, 2025. Due to the marketed public offering of Units, there will be no question-and-answer period during this call.
At the end of 2025, Allied’s occupied and leased area was 85.3% and 87.4%, respectively. Space available for sublease in Allied’s portfolio represented 2.6% of GLA (381,801 square feet), down from 5.7% of GLA (815,107 square feet) at the end of 2024.
Allied leased a total of 2,709,797 square feet of GLA in 2025, 2,464,763 square feet in its rental portfolio and 245,034 square feet in its development portfolio. Of the 2,464,763 square feet Allied leased in its rental portfolio, 760,921 square feet were vacant at the beginning of the year, 973,040 square feet matured in the year, representing a 60% renewal rate, and 730,802 square feet mature in 2026 and 2027.
Average in-place net rent per occupied square foot ended 2025 at $25.23, down slightly from $25.41 at the end of 2024. The weighted average term to maturity of the portfolio at the end of 2025 was 5.7 years, up slightly from 5.6 years at the end of 2024.
In 2025, Allied completed the sale of nine properties, generating total gross proceeds of $140 million.
The completion of Allied’s development pipeline resulted in increased capital intensity during 2024 and 2025 and elevated debt. The final committed development, KING Toronto at 489-539 King Street West, will comprise 440 condominium units of which 92% are pre-sold, 46,000 square feet of office space, and 122,000 square feet of retail space. Completion is expected in the first half of 2027.
Management does not intend to initiate any new development projects in the foreseeable future.
Allied extended Westbank’s loan on 150 West Georgia to December 31, 2026.
Net loss and comprehensive loss for the year ended December 31, 2025, was $(1,327,532) compared to $(342,530) in 2024.
Net debt as a multiple of Annualized Adjusted EBITDA was 12.9x as of December 31, 2025, compared to 10.8x as of December 31, 2024.
Source: Allied Properties REIT
