Allied Properties Real Estate Investment Trust agreed to buy stakes in towers in Toronto and Vancouver from Canadian property developer Westbank Corp., adding ownership positions in two major urban properties.  

The transaction includes a deal that values Vancouver’s 400 West Georgia at $395 million and one that values Toronto’s 19 Duncan at $525.7 million, according to a statement Monday. The Vancouver tower was developed and owned by Westbank, while the Toronto building was a joint venture co-owned equally by developer Westbank and Allied. 

The tower stakes bulk up the urban portfolio for Allied, which specializes in repurposing old downtown industrial and warehouse space for tenants in industries including the technology sector. Westbank has quickly become one of Vancouver’s best known property developers for the ambitious scale and designs of its projects, occasionally dividing opinion in the process.

Allied plans to convert $130.5 million of a $198 million secured mezzanine loan to Westbank into equity, giving it 90 per cent of 400 West Georgia, and it will acquire a 95 per cent interest in 19 Duncan by converting the remainder of the loan to equity, along with a $36.3 million cash payment to Westbank.

Allied’s payments will be partly funded by sales in Montreal and a previously announced restructuring of the Telus Sky Calgary tower, which Allied and Westbank also co-own. Allied said it would seek to sell properties deemed less strategically important for proceeds of as much as $200 million over the next two years. 

Westbank describes 19 Duncan, due to be completed this year, as “an important component to our practice’s expansion in Toronto.”

The Vancouver tower contains about 345,000 square feet of office space — 82 per cent leased to companies including Deloitte and Apple Inc. — with 5,525 square feet of retail. Toronto’s 19 Duncan has more than 154,000 square feet of office space — fully leased to Thomson Reuters Corp. — with about 15,400 square feet of retail and 464 residential units.