Allied REIT seeks leadership change amid $4-billion debt, Westbank loan uncertainty | Daily Hive

Allied Properties REIT faces leadership change while tackling $4-billion debt and Westbank loan uncertainty

2026 concept of the 10-storey Telus AI data centre at 150 West Georgia St., Vancouver. (Westbank/Telus)

Allied Properties Real Estate Investment Trust (REIT) is looking for a new leader as it confronts falling earnings, billions of dollars in debt, and the need to sell more properties to strengthen its finances.

The major commercial landlord — with assets in Vancouver, Calgary, Toronto, and Kitchener — announced on Nov. 11, 2026, that its board of trustees has started the process of searching for a new president and CEO, replacing Cecilia Williams.

Williams will continue running the REIT while that search takes place. No replacement or departure date was announced.

The change comes just two weeks after Allied released its 2026 third quarter financial results that included a 90 per cent reduction in its monthly payments to investors, lower earnings forecasts, and another delay in recovering money tied to a Downtown Vancouver project.

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“The Board continues to help management work through some very challenging business situations and make some very difficult decisions, laying the groundwork for rebuilding value for unitholders over time,” said Donald Clow, who has been appointed vice-chair of the REIT’s board of trustees.

Jennifer Tory, the outgoing chair of Allied’s board of trustees, added, “Collectively, we have been taking steps to resolve significant issues and to strengthen the foundation of the company for this next phase, and we appreciate her continuing to lead the business while we select a successor.”

Clow is expected to replace Tory as board chair after Allied’s annual meeting in May 2027, subject to his re-election as a trustee and board approval.

“Together, with my fellow trustees and management, we will continue this progress towards an improved financial performance,” continued Clow.

Allied Properties REIT signage outside an office building in Downtown Toronto. (JHVEPhoto/Shutterstock)

For investors, the most immediate financial change is a sharp reduction in distributions — the regular payments a real estate investment trust makes to its unitholders.

Starting with its distribution for November 2026, Allied will pay investors 90 per cent less each month — falling from six cents to 0.6 cents for every unit they own. At that rate, the yearly payment would drop from 72 cents to 7.2 cents per unit. Allied expects this cut will enable it to reallocate its resources to improve its overall financial position for the foreseeable future, enabling about $126 million more each year for debt repayment.

Before the newly announced cut, Allied’s third quarter distributions to investors equalled about $1.76 for every $1 of earnings under the second measure. That means its investor payouts substantially exceeded what those earnings could cover.

Its third quarter results for the period from July to September 2026 help explain the decision for the cut.

Rental revenue fell 6.6 per cent from the same quarter in 2025 to $138.1 million, while property operating costs increased. Operating income declined 15.3 per cent to $68.4 million.

The decline was not just because Allied sold some of its buildings. Even when comparing the same rental properties it owned and operated in both periods, the income left after paying building operating costs fell 7.7 per cent from a year earlier to over $71 million.

One measure commonly used to track a property company’s underlying earnings, called funds from operations, fell by about 43 per cent to $36.5 million. Another measure, which also factors in routine leasing and maintenance costs, dropped by 66 per cent to $20 million.

Despite earning less from its properties, Allied reported an overall third quarter profit of nearly $22 million, compared with a loss of more than $113 million a year earlier. Smaller drops in the estimated value of its properties and other favourable accounting adjustments helped improve the result.

But across the first nine months of 2026, the broader picture was considerably worse, as Allied recorded a net loss of about $870 million — compared with approximately $316 million in the same period of 2025.

The nine-month result included approximately $932 million in reductions to the estimated value of investment properties, $44 million in additional expected loan losses, and $48.1 million in residential inventory write-downs.

Debt remained a major concern despite repayments. As of the end of September 2026, Allied owed approximately $4.08 billion — down from $4.68 billion in the same month in 2025.

Allied’s total indebtedness ratio reached 50.2 per cent at the end of September 2026 — up from 45.2 per cent in September 2025. This means its debt and related credit commitments amounted to roughly half the recorded value of its assets. Although Allied reduced its debt, the total value of its assets fell more sharply, pushing the ratio higher over the span of a year.

Allied is responding to this financial pressure by planning to sell more properties and use the proceeds to pay down debt.

In its 2026 third quarter update, it raised its expected gross sale proceeds for 2026 to between $650 million and $700 million, which is up from approximately $500 million.

At that point, $321 million in property sales had closed, with approximately $340 million more covered by firm agreements expected to close in the fourth quarter of 2026 — bringing completed and agreed sales to approximately $660 million.

The largest transaction is the $325-million sale of the 2024-built tower that contains Toronto House and 19 Duncan in Downtown Toronto, which was announced in October 2026. That price covers both building components together, with completion still subject to regulatory approval.

Toronto House and 19 Duncan are the residential and commercial portions of the same 58-storey tower development. Toronto House at 225 Adelaide St. West contains 464 secured purpose-built rental homes, while the commercial portion at 19 Duncan St. includes approximately 149,000 sq. ft. of office space and ground-level retail/restaurant uses. The project’s office use is best known for being anchored by Thomson Reuters.

This mixed-use project was originally developed jointly by Allied and Vancouver-based developer Westbank, whose financial challenges in recent years have unfolded alongside a series of high-profile property sales and ownership transfers, especially in its main market of Vancouver. For Toronto House and 19 Duncan, Allied acquired Westbank’s remaining ownership interest in 2024, increasing its stake from 50 per cent to 100 per cent.

2024 condition of Toronto House/19 Duncan. (Westbank/Allied REIT)

After 2026, Allied plans another $750 million to $1.5 billion in property sales over several years. It intends to direct the sale proceeds to debt repayment.

An approaching test is $700 million in bonds maturing in April 2027. Allied’s plan calls for using property sale proceeds to repay at least $350 million and refinancing the remainder.

There is also uncertainty over money owed to Allied in connection with other projects by Westbank.

During the third quarter of 2026, Allied stopped counting interest on its loans tied to Westbank as income in its financial results. Its total reported interest income fell to $539,000, which is down from approximately $10 million in the third quarter of 2025.

In Downtown Vancouver, Allied had expected to recover $125 million in December 2026 as partial repayment of a loan backed by Westbank’s redevelopment site at 150 West Georgia St. at the prominent southeast corner of the intersection of Beatty Street and West Georgia Street, immediately adjacent to BC Place Stadium.

Westbank has approved plans to build a major office tower complex at 150 West Georgia St. After considering a pivot to a mixed-use tower with hotel, residential, and data centre uses, the project later shifted to the alternative singular-use industrial development concept of a major artificial intelligence (AI) data centre, in partnership with Telus. Ever since the May 2026 announcement on Telus’ sovereign AI data centre plans for the site, there has been immense political and public backlash, sparking protests and rallies against this particular project and other AI data centre projects in the city.

At 150 West Georgia St, Allied cited construction delays and ongoing discussions with potential buyers, and now expects to recover at least some of the money in 2027. This is a highly unconventional development site, as it is also home to Creative Energy’s steam plant for providing the bulk space and water heating needs for hundreds of buildings across Downtown Vancouver, with this utility currently undergoing expansion and renewal construction at the location. To support the expansion and electrification of the steam plant, the project includes upgraded BC Hydro electrical connections.

“With entitlement and power-allocation for a large-scale AI data centre in place, the property is marketed for development and operation by others. Allied also has additional collateral as part of this loan facility in the form of a pledge of shares in a subsidiary partially owned by Westbank,” reads the third-quarter financial results.

Allied has hired advisers to help recover what it is owed from 150 West Georgia St. It says its plans to pay operating costs, fund construction commitments, and repay debts coming due do not rely on receiving that money in 2026.

720 beatty street 150 west georgia street vancouver steam plant creative energy

The existing Creative Energy steam plant at 150 West Georgia St. (720 Beatty St.), Vancouver. (Kenneth Chan)

telus ai data centre facility 150 west georgia street vancouver westbank

2026 concept of the 10-storey Telus AI data centre at 150 West Georgia St., Vancouver. (Westbank/Telus)

150 west georgia street vancouver westbank telus allied reit ai data centre concept

2026 concept of the 10-storey Telus AI data centre at 150 West Georgia St., Vancouver. (Westbank/Telus)

The figures show substantial financial pressure, although Allied still has cash and access to borrowing to help meet its commitments.

Earlier this fall, Allied reported about $633 million in available funding. This included over $75 million in cash and about $792 million it could borrow, after excluding roughly $234 million that lenders require it to keep available to finish building the landmark KING Toronto complex — another project in partnership with Westbank.

Designed by Bjarke Ingels Group (BIG), the same internationally renowned architectural firm behind Vancouver House, KING Toronto is conceived as a cluster of terraced, glass-clad mountains inspired by Montreal’s Habitat 67. It will contain 440 condominium homes, 46,000 sq. ft. of office space, and 122,000 sq. ft. of retail space anchored by Whole Foods Market. Allied’s latest schedule anticipates completion of the commercial space in the second and third quarters of 2027, with condominium occupancy occurring in stages between the second and fourth quarters of 2027.

As of the end of September 2026, it is estimated that about $117 million is still needed to finish the construction of KING Toronto, including $71 million for the condominiums and $46 million for the office and retail/restaurant uses. The total construction cost is pegged at $545 million.

Earlier in 2026, Allied disclosed that it had taken over operational control and development management of KING Toronto from Westbank.

Allied emphasizes that KING Toronto is the only active construction project it remains committed to completing, and it does not expect to begin any new projects anywhere for the foreseeable future. The REIT’s next CEO will face the task of filling existing buildings and paying down debt.

October 2026 construction progress on King Toronto. (Westbank)

The figures in the third-quarter financial results show the REIT is trying to get its finances back on track, but do not establish that Allied is unable to pay its debts. Its recovery still depends on selling properties, securing new financing for debts coming due, limiting spending, and earning more rental income from its buildings.

There were some positive signs. At the end of the third quarter of 2026, nearly 85 per cent of its rental space was occupied, while leases had been signed for almost 87 per cent, which exceeded the REIT’s internal expectations. Allied signed new leases and renewals covering approximately 427,000 sq. ft. across its rental properties and development projects during the quarter.

It now expects roughly 86 per cent of its rental space to be occupied by the end of 2026. However, most of the extra rental income from the stronger leasing activity is expected to arrive in 2027.

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