ALLIED PROPERTIES REIT ANNUAL INFORMATION FORM FOR THE YEAR ENDED DECEMBER 31, 2012 03.28.13 TABLE OF CONTENTS GLOSSARY ................................................................................................................................................. 3 FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS ...................................... 6 FORWARD-LOOKING STATEMENTS ........................................................................................................ 6 MARKET STATISTICS ................................................................................................................................ 6 TARGET MARKETS .................................................................................................................................... 7 URBAN OFFICE ENVIRONMENTS ............................................................................................................ 8 OUTLOOK .................................................................................................................................................... 8 THE REIT ..................................................................................................................................................... 9 RECENT DEVELOPMENTS ...................................................................................................................... 10 PROPERTY PORTFOLIO .......................................................................................................................... 16 THE OPTION AGREEMENT ..................................................................................................................... 37 RISK FACTORS ......................................................................................................................................... 37 MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION ............................................................................................................................................... 42 MANAGEMENT OF THE REIT .................................................................................................................. 42 NON-COMPETITION ARRANGEMENTS ................................................................................................. 46 INVESTMENT GUIDELINES AND OPERATING POLICIES .................................................................... 47 DECLARATION OF TRUST AND DESCRIPTION OF UNITS .................................................................. 52 PRICE RANGE AND TRADING VOLUME OF THE UNITS ...................................................................... 52 UNITS SUBJECT TO CONTRACTUAL RESTRICTIONS ON TRANSFER .............................................. 53 DISTRIBUTIONS AND DISTRIBUTION POLICY ...................................................................................... 53 UNITHOLDERS’ RIGHTS PLAN ............................................................................................................... 54 EXPERTS................................................................................................................................................... 58 AUDITORS, TRANSFER AGENT AND REGISTRAR ............................................................................... 58 AUDIT FEES .............................................................................................................................................. 58 MATERIAL CONTRACTS .......................................................................................................................... 59 ADDITIONAL INFORMATION ................................................................................................................... 59 TERMS OF REFERENCE ......................................................................................................................... 60 - 2 - GLOSSARY As used in this Annual Information Form, the following acronyms and terms have the respective meanings set out below: “2003 Non-Competition Agreements” means the non-competition agreements dated February 20, 2003, entered into between the REIT and each of Allied Canadian Development Corporation, Michael R. Emory, the President and Chief Executive Officer of the REIT, and Wayne L. Jacobs, the Executive Vice President, Acquisitions of the REIT. “2005 Non-Competition Agreements” means the non-competition agreements dated July 1, 2005, entered into between APM GM, in its capacity as general partner of APM LP, and each of the Allied Canadian Development Corporation, Michael R. Emory, the President and Chief Executive Officer of the REIT, and Wayne L. Jacobs, the Executive Vice President, Acquisitions of the REIT. “Adjusted Unitholders’ Equity” means, at any time, the aggregate of the amount of Unitholders’ equity and the amount of accumulated depreciation and amortization recorded in the books and records of the REIT in respect of its properties calculated in accordance with IFRS. “Affiliate” means, with respect to any person, any other person directly or indirectly controlling, controlled by or under direct or indirect common control with, such person. “APM LP” means Allied Properties Management Limited Partnership. “APM GP” means Allied Properties Management GP Limited. “Associate” has the meaning ascribed thereto in the Securities Act (Ontario), as amended. “Change in Control” has the meaning described in the Non-Competition Agreements or the Option Plan, as applicable, and includes, with respect to an entity, at any time any change, through the issue, transfer, acquisition, conversion, exchange of securities or otherwise, as a result of which, a person or group of persons acting jointly or in concert, acting at arm’s length to such entity, either individually or together with its or their associates and affiliates, beneficially own greater than fifty percent (50%) of the outstanding voting interests in such entity. “Declaration of Trust” means the trust declaration dated October 25, 2002, and amended and restated on February 6, 2003, May 14, 2008, May 11, 2010 and May 15, 2012, governed by the laws of the Province of Ontario, pursuant to which the REIT was created, as the same may be amended, supplemented or varied from time to time. “Development Property” means any Office Property that is not a Stabilized Property or any undeveloped land which is best developed into an Office Property or which is best used as a parking lot for an Office Property. “Distribution Date” means, in respect of a month, on or about the 15th day of the following month except for the month of December in respect of which the Distribution Date shall be December 31. “Distribution Reinvestment Plan” means the distribution reinvestment plan established by the REIT. “GLA” or “Gross Leasable Area” in relation to a building means the area of the premises that are intended to be leased to tenants in such building, measured using accepted industry standards of measurement. “Gross Book Value” means, at any time, the book value of the assets of the REIT shown on the then most recent interim balance sheet of the REIT, plus the amount of accumulated depreciation and amortization included therein or in the notes thereto. - 3 - “Independent Trustee” means a Trustee who is both “independent” (as defined in National Instrument 58-101 Disclosure of Corporate Governance Practices) and not related within the meaning of the Tax Act to Allied Canadian Development Corporation and its affiliates. “Initial Properties” means the 14 properties acquired by the REIT pursuant to the IPO. “IFRS” or “International Financial Reporting Standards” means accounting principles so described and promulgated by the Canadian Institute of Chartered Accountants which are applicable as at the date on which any calculation hereunder is to be effective. “IPO” means the initial public offering of the REIT completed on February 20, 2003. “LTIP” means the long-term incentive plan of the REIT that permits the Trustees, officers and employees of the REIT and the officers and employees of Allied Canadian Development Corporation and of any subsidiary of the REIT, as selected by the Governance, Compensation and Nomination Committee, to purchase Units on an instalment basis. “Mortgages” means the mortgages to which the Properties are subject. “Non-Competition Agreements” means, collectively, the 2003 Non-Competition Agreements and the 2005 Non-Competition Agreements. “Office Property” means, at any time, a building or real property in Canada in which not less than 50% of the GLA is used or is reasonably capable of being used as office space. “Option Agreement” means the option agreement dated February 20, 2003, between the REIT, Allied Canadian Development Corporation, Toronto Realty Growth Fund I, Toronto Realty Growth Fund II, Toronto Realty Growth Fund III and certain Related Parties pursuant to which the REIT has been granted certain rights to purchase Office Properties from Allied Canadian Development Corporation and the other Related Parties from time to time. “Person” shall include any individual, firm, partnership, association, trust, trustee, executor, administrator, legal personal representative, body corporate, corporation, unincorporated organization, syndicate, governmental entity or other entity. “Properties” means, collectively, all properties owned by the REIT as at the date hereof and “Property” means any one of them. “PUD” means a property under development, as designated by the REIT. “Related Parties” means