After acquiring controlling stakes in the two properties from Vancouver-based developer Westbank last spring, Toronto-based Allied Properties REIT (TSX: AP.UN) has since acquired the remaining interest in both Deloitte Summit in Vancouver and Toronto House in Toronto, giving the REIT full control of both properties.
Deloitte Summit is a 24-storey office tower located at 400 W Georgia Street (also known as 410 W Georgia Street) in the heart of downtown Vancouver, directly across the street from the central branch of the Vancouver Public Library. The property was fully owned by Westbank.
Toronto House is a 57-storey mixed-use tower located at 19 Duncan Street (also known as 225 Adelaide Street W) in Toronto, a few blocks north from CN Tower. The property was evenly co-owned by Westbank and Allied Properties REIT.
After providing Westbank with a $198 million secured mezzanine loan for the development of Deloitte Summit, Allied Properties REIT announced last March that it was converting $130.5 million of that loan into equity in exchange for a 90% interest in Deloitte Summit. It simultaneously announced that it was converting the remaining $67.5 million of that mezzanine loan and making a cash contribution of $36.3 million in exchange for a 45% interest in Toronto House, bringing its stake to 95%.
Following the transaction, Westbank was left with a 10% stake in Deloitte Summit and a 5% stake in Toronto House, both of which were then acquired by Allied Properties REIT on December 20.
According to its 2024 annual report published on February 4, Allied acquired the remaining 10% interest in Deloitte Summit for $37,436,000 and the remaining 5% interest in Toronto House for $23,122,000, for a total of $60,558,000.
The annual report also details the full financial details of the transactions, with the total acquisition costs coming in at $394,961,000 for 100% of Deloitte Summit and $271,504,000 for 50% of Toronto House, for a total of $666,465,000.
Acquisitions made by Allied Properties REIT in the year ending December 31, 2024. / Allied Properties REIT
In addition to the transactions in Vancouver and Toronto, Allied Properties REIT and Westbank were also involved in a transaction in Calgary, pertaining to TELUS Sky, a 60-storey mixed-use tower also known as Calgary House that's located at 685 Centre Street SW, two blocks north of the Calgary Tower.
Last February, Allied announced that it, Westbank, and Telus had reached an agreement to reorganize the ownership structure of TELUS Sky. After developing the project with each partner holding a one-third interest, the restructuring saw Allied and Westbank sell their stake in the commercial component and Telus sell its stake in the residential component, resulting in Allied and Westbank owning 100% of the residential component and Telus owning 100% of the commercial component.
The restructuring was originally scheduled to be completed in Q2, then was delayed to Q3, before finally completing on December 19, resulting in Allied's stake increasing by 16.7% to a total of 50%.
Westbank
The transactions with Allied Properties REIT bookend a busy year of selling for Westbank.
Following the TELUS Sky, Deloitte Summit, and Toronto House transactions, Westbank then sold The Pendrell rental tower to CAPREIT (TSX: CAR.UN) for $137 million, the M2 office building to Spear Street Capital for $115 million, and its remaining 50% interest in The Zephyr to Crombie REIT (TSX: CRR.UN) for $133 million.
Additionally, Westbank also sold 8588 Cornish Street and 8475 Granville Street, two airspace parcels located around its Granville at 70th project in Vancouver, for $12.5 million, and at some point prior to June 2024 also sold its stake in The Lauren to Peterson Group, who then sold it to Starlight Investment for around $120 million.
Entering 2025, the industry will now be waiting to see if Westbank makes any further sales, as well as whether pre-sale purchasers who bought at high prices years ago will close on their purchases — at The Butterfly, in particular.
This year, Westbank is expected to complete construction on the M4 office building, the Joyce II rental building, as well as components of Oakridge Park and Sen̓áḵw.
