Shares of Toronto-based real estate investment trust Allied Properties REIT had their target price raised to $40 from $39 by Desjardins Capital Markets Friday, after earlier in the week reporting earnings in line with analyst expectations and backed by its commercial portfolio in Canada’s biggest city.

The stock will open Friday on the Toronto Stock Exchange at $36.89.

Some 40 percent of Allied’s rental portfolio is in downtown Toronto, where analysts Michael Markidis and David Chrystal said “strong office fundamentals… should be a tailwind for same-property growth and support leasing efforts at several important development sites.”

On Wednesday, Allied reported a net income of $79.8 million in the first quarter of 2017, and adjusted earnings before taxes of $59.9 million, up from $37.5 million and $55.5 million respectively in the same period last year. The company generated funds from operations at a rate of $0.53 per unit, which fell in line with analyst predictions.

Allied said it expects its operating and development environment to be favourable for the rest of 2017 and through 2018, forecasting mid-single-digit percentage growth in its same-asset net operating income, boosted by rising rents in Toronto and occupancy gains in Montreal, Edmonton and Vancouver to offset erosion at its properties in Calgary.

A 10,000 square foot lease at 250 Front Street in Toronto for Allied now has a committed occupancy of 60 per cent. “More importantly, a cloud interconnect node belonging to an existing tenant is now operational,” said Markidis and Chrystal. “This should drive a material increase in ancillary revenue over the next 12–24 months, and be a catalyst for additional leasing.”