Allied Real Estate Investment Trust - s. 74(1)

Headnote

Section 74 -- exemption from registration andprospectus requirements granted for the issuance by the issuerof units to the vendor in part consideration for certain commercialreal estate where the purchase price for the real estate isover $10 million.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as am.,sections 25, 53, 74(1).

Rules Cited

Rule 45-501 Exempt Distributions.

Multilateral Instrument 45-102 Resale of Securities.

IN THE MATTER OF

THE SECURITIES ACT

R.S.O. 1990, CHAPTER S.5,AS AMENDED (the "Act")

AND

IN THE MATTER OF

ALLIED PROPERTIES REAL ESTATEINVESTMENT TRUST

RULING

(Section 74(1))

UPON the application of Allied Real EstateInvestment Trust (the "REIT") to the Ontario SecuritiesCommission (the "Commission') for a ruling pursuant tosubsection 74(1) of the Act that the issuance by the REIT ofunits of the REIT ("Units") to The 93-99 Spadina LimitedPartnership (the "Vendor") in part consideration forthe purchase by Allied Properties REIT Acquisition Corporation("Allied Acquisition") of a certain parcel of realproperty in the City of Toronto (the "Property") fromthe Vendor, shall not be subject to section 25 or 53 of theAct.

AND UPON considering the applicationand the recommendation of the staff of the Commission;

AND UPON the applicant having representedto the Commission that:

1. The REIT was created by Declaration ofTrust under, and is governed by, the laws of the Provinceof Ontario. The principal executive offices of the REIT arelocated in Toronto, Ontario.

2. The principal business of the REIT is theownership and management for a portfolio of class I officerevenue properties located in the City of Toronto. The REITis also focused on adding to its portfolio by acquiring andredeveloping additional class 1 office properties situatedin the City of Toronto.

3. The Units are listed on the Toronto StockExchange under the symbol "AP".

4. The REIT is a reporting issuer or the equivalentin each province of Canada and is not in default of any requirementunder the Act.

5. Allied Acquisition was incorporated pursuantto the Business Corporations Act (Ontario) on April20, 1993 and is wholly-owned by the REIT. The principal executiveoffices of Allied Acquisition are located in Toronto, Ontario.

6. The Vendor is a limited partnership formedunder the Limited Partnerships Act (Ontario) on September7, 2000. The Vendor is a sole purpose limited partnershipwhose only business is the ownership and management of theProperty. The general partner of the Vendor is 1395109 OntarioInc. and the Vendor has seven limited partners.

7. The Property, municipally known as 93-99Spadina Avenue in the City of Toronto, is a revenue propertycomprised of mixed of office and commercial space.

8. Allied Acquisition and the Vendor enteredinto a purchase agreement made as of August 28, 2003 (the"Agreement") providing for the purchase by AlliedAcquisition from the Vendor of the Property. Allied Acquisitionand the REIT are acting at arm's length with the Vendor inthe proposed acquisition.

9. The purchase price for the Property is$10,850,000, which is to be satisfied in part by the REITissuing 110,000 Units to the Vendor. The remainder of thepurchase price is being satisfied as to $350,000 in cash andthe balance through the assumption by Allied Acquisition ofan existing mortgage on the Property that will have a principalbalance of $6,690,000 as at September 30, 2003.

10. The Vendor is not an "accreditedinvestor", as such term is defined in Rule 45-501 ExemptDistributions, since its "net assets" are lessthan $5 million. Of the seven limited partners of the Vendor,five are "accredited investors" and two are not.

AND UPON the Commission being satisfiedthat to do so would not be prejudical to the public interest;

IT IS RULED, pursuant to subsection 74(1)of the Act, that the issuance by the REIT of 110,000 Units tothe Vendor in connection with the purchase of the Property shallnot be subject to section 25 or 53 of the Act, provided thatthe first trade by the Vendor in any of the Units acquired inreliance on this Ruling shall be a distribution unless suchtrade is made in accordance with subsection 2.5(2) or (3) ofMultilateral Instrument 45-102 Resale of Securities.

September 30, 2003.