INVESTOR
P R E S E N TAT I O N
JUNE 2020
N Y S E : CIO
FORWARD-LOOKING STATEMENTS
This presentation contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements contained in this
presentation, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forwardlooking statements within the meaning of the federal securities laws and as such are based upon City Office REIT, Inc.’s (“CIO” or the “Company”)
current beliefs as to the outcome and timing of future events. Forward-looking statements are generally identifiable by use of forward-looking
terminology such as “approximately,” “anticipate,” “assume,” “believe,” “budget,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,”
“hypothetical,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” or other similar words or expressions.
There can be no assurance that actual forward-looking statements, including projected capital resources, projected profitability and portfolio
performance, estimates or developments affecting the Company will be those anticipated by the Company. Examples of forward-looking statements
include those pertaining to expectations regarding the Company’s financial performance, including under metrics such as NOI and FFO, market rental
rates, national or local economic growth, estimated replacement costs of the Company’s properties, the Company’s expectations regarding tenant
occupancy, re-leasing periods, projected capital improvements, expected sources of financing, expectations as to the likelihood and timing of closing
of acquisitions, dispositions, or other transactions, the expected operating performance of the Company’s current properties, anticipated near-term
acquisitions and descriptions relating to these expectations, including, without limitation, the anticipated net operating income yield and cap rates, and
changes in local, regional, national and international economic conditions, including as a result of the recent COVID-19 pandemic. Forward-looking
statements presented in this presentation are based on management’s beliefs and assumptions made by, and information currently available to,
management.
The forward-looking statements contained in this presentation are based on historical performance and management’s current plans, estimates and
expectations in light of information currently available to the Company and are subject to uncertainty and changes in circumstances. There can be no
assurance that future developments affecting the Company will be those that the Company has anticipated. Actual results may differ materially from
these expectations due to the factors, risks and uncertainties described above, changes in global, regional or local political, economic, business,
competitive, market, regulatory and other factors described in the Company’s news releases and filings with the U.S. Securities and Exchange
Commission (the “SEC”), including but not limited to those described in the Company’s Annual Report on Form 10-K for the year ended December 31,
2019 under the heading “Risk Factors” and in the Company’s subsequent reports filed with the SEC, many of which are beyond the Company’s control.
Should one or more of these risks or uncertainties materialize, or should any of the Company’s assumptions prove to be incorrect, the Company’s
actual results may vary in material respects from what the Company may have expressed or implied by these forward-looking statements. CIO
cautions that you should not place undue reliance on any of CIO’s forward-looking statements. Any forward-looking statement made by the Company
in this presentation speaks only as of the date of this presentation. Factors or events that could cause the Company’s actual results to differ may
emerge from time to time, and it is not possible for the Company or its management to predict all of them. The Company does not guarantee that the
assumptions underlying such forward-looking statements contained in this presentation are free from errors. Unless otherwise stated, historical
financial information and per share and other data are as of March 31, 2020 or relate to the quarter ended March 31, 2020. The Company has no
obligation, and does not undertake, to publicly update any forward-looking statement, whether as a result of new information, future developments or
otherwise, except as may be required by applicable securities laws.
2
Central Fairwinds, Orlando
7595 Tech, Denver
5090 N 40th St, Phoenix
2525 McKinnon, Dallas
Mission City, San Diego
Circle Point, Denver
City Center, Tampa
Park Tower, Tampa
The Quad, Phoenix
COMPANY OVERVIEW
City Office owns high-quality office properties in 18-hour cities in the Southern and Western United States
4%
SEATTLE, WA
No. of
Buildings
NRA
(000s SF)
Annualized
Gross Rent
per SF
Phoenix, AZ
22
1,213
$27.87
90.2%
3.2
Denver, CO
9
1,160
$26.27
90.2%
5.8
Tampa, FL
5
1,041
$25.66
93.8%
4.5
Orlando, FL
8
720
$25.95
96.8%
4.7
San Diego, CA
9
582
$34.62
88.4%
3.4
Dallas, TX
4
577
$29.18
87.9%
3.1
Portland, OR
5
331
$25.78
99.0%
4.0
Seattle, WA
3
207
$29.84
100.0%
8.8
65
5,831
$27.58
92.2%
4.4
Market
CURRENT MARKETS (1)
Lease
In Place
Term
Occupancy Remaining
PORTLAND, OR
5%
DENVER, CO
SAN DIEGO, CA
18%
14% PHOENIX, AZ
DALLAS, TX
ORLANDO, FL
21%
12%
9%
TAMPA, FL
Total
17%
(1)
Dedicated
Targeted
Diversified
Experienced
Strong
Class A & B Office
Owner
High Growth,
18-Hour Cities
Tenant Base
Management Team
Balance Sheet
with High Liquidity
Note: All information as of March 31, 2020
Percentages based on management’s estimate of aggregate gross asset value in each market
4
CIO TARGETS LEADING “18-HOUR CITIES”
NATION-LEADING OFFICE DEMAND DRIVERS (1)
% PROJECTED EMPLOYMENT
GROWTH 2020 - 2025
NEW SUPPLY BELOW HISTORICAL AVERAGES
CONSTRUCTION DELIVERIES IN CIO CURRENT MARKETS 1978 - 2019
% PROJECTED POPULATION
GROWTH 2020 - 2025
50
7.5%
45
Square Feet (in Millions)
6.7%
4.1%
3.4%
2.6%
(2)
2.0%
40
35
30
25
20
AVG
15
10
5
Gateway
Markets
National
Avg
CIO
Markets
Gateway
Markets
National
Avg
CIO
Markets
ATTRACTIVE 18-HOUR CITY CHARACTERISTICS
✓ High-quality urban living experience in amenitized setting
✓ Live, work, play environments; attractive to millennials
-
DOMESTIC NET MIGRATION TO 18-HOUR CITIES
+64k
DEPICTS NET MIGRATION (PEOPLE PER YEAR) INTO CIO MARKETS
(3)
+30k
✓ Diverse employment bases with national and international employers
✓ Educated workforces
+36k
✓ Low-cost centers for businesses to operate
✓ Sound transportation infrastructure with lower congestion
✓ Strong and stable demand generators such as state capitals or
university proximity
(1)
(2)
(3)
+20k
+88k
+146k
Source: SNL Financial, as of February 1, 2020. Gateway markets represent New York, NY, Boston, MA, Chicago, IL, Los Angeles, CA, San Francisco, CA and Washington, D.C.
Source: CoStar Property. Construction deliveries represent Class A&B office building deliveries over 50,000 SF in CIO current markets
Based on population change from July 2016 to July 2017 as measured by the US Census Bureau
+56k
+55k
5
VALUE CREATION STRATEGY
Generate strong returns by driving property cash flow growth, enhancing NAV and a focused growth strategy
ACTIVE APPROACH TO CREATING VALUE
Circle Point, Denver
❑
Active in-house asset management with local market presence
❑
Selectively implement value-add initiatives to increase cash flows
❑
Long-term hold mentality but will selectively harvest value when
capital can be redeployed accretively
2020 ADAPTED STRATEGIC PRIORITIES
❑
Pause property acquisitions
❑
Allocate capital to $100 million share repurchase program
❑
Operate with lower leverage and higher levels of liquidity
❑
Focus on property operations, rent collection and driving property
ANNOUNCED POST-IPO PROJECTED ACQUISITION CAP RATES (1)
8.3%
7.5%
7.6%
cash flow
7.2%
7.3%
7.3%
6.8%
LONG TERM: INVEST WHERE WE HAVE AN ADVANTAGE
❑
Focus on properties valued between $25 million and $100 million
❑
Less competition from larger institutional investors
❑
Leverage existing infrastructure and deep relationships in our
current markets to source acquisitions and operate efficiently
(1)
2014
2015
2016
2017
Includes all acquisitions since IPO; represents the weighted average cap rate for each year of announced, projected year one cap rates at the time of acquisition
2018
2019
Avg.
The Quad, Phoenix
6
SUCCESSFUL EXECUTION OF GROWTH STRATEGY
$1.5B IN TOTAL REAL ESTATE ACQUIRED (1)
GAINING ECONOMIES OF SCALE IN ALL MARKETS
NET RENTABLE AREA
$1.5B
$1,500
5.8M SF
6
$1,200
4
$900
2.3M SF
$600
2
$387M
$300
$0
-
($M)
(M SF)
2014
2015
2016
2017
2018
2019
GROWTH AND DIVERSIFICATION IN REVENUES (2)
$156M
$160
$0
($M)
(1)
(2)
2014
2015
2016
2017
2018
2016
2017
2018
2019
❑
Phoenix: Scottsdale, Tempe, Camelback Corridor, Chandler
❑
Denver: Cherry Creek / Glendale, Downtown Denver, Denver
Technology Center, Northwest Corridor
❑
Tampa: Downtown Tampa, Downtown St. Petersburg, I-75
Corridor, Carillon Office Park
❑
San Diego: Mission Valley, Sorrento Mesa
❑
Orlando: Downtown Orlando, Florida Research Park, Lake Mary
❑
Dallas: Uptown, Lewisville, Richardson/Plano
❑
Portland: Sunset Corridor, Airport Way
❑
Seattle: Eastside / Bothell
$80
$37M
2015
EXPANSION INTO LEADING SUBMARKETS
$120
$40
2014
2019
Represents implied asset value at IPO plus acquisitions at cost and does not include impact of dispositions
Represents total “Rental and other revenues”
7
EMBEDDED PORTFOLIO OPPORTUNITIES
INCREASE CASH FLOW FROM LARGEST VACANCIES
❑
❑
❑
60,000 SF of executed leases to take property to 93.7% occupancy in
Q3 2020
Camelback Square, Phoenix – 78.8% quarter end occupancy
❑
❑
Sorrento Mesa, San Diego
Denver Tech, Denver – 78.0% quarter end occupancy
$3 million value-add capital improvement plan to be completed in 2020;
post-renovation rents expected to be ~20% higher than in-place
Sorrento Mesa, San Diego – 85.3% quarter end occupancy
❑
Vacancy concentrated in a single building; in-place rents significantly
below market (14% increase in market rent since 2017 acquisition) (1)
OTHER OPERATIONAL AND VALUE-ENHANCING OPPORTUNITIES
❑
❑
❑
(1)
(2)
Future cash flow increases related to raising below-market rental
rates and the successful completion of value-add programs
Circle Point Land, Denver
Opportunity to monetize land holdings or participate in development
❑
Total of 49 acres of prime, developable land
❑
Located in Denver, Orlando, San Diego and Tampa
❑
8-acre portion of Circle Point Land under contract for sale (2)
Capital recycling opportunities if accretive to portfolio cash flow
Source: CoStar Property. Comparison of office and flex rental rates for Sorrento Mesa in Q3 2017 vs Q1 2020
Certain conditions to closing remain and the Company cannot assure that the sale will occur on the terms expected, or at all
8
SELECTIVELY HARVESTING VALUE
Prudent capital recycling: CIO’s six dispositions have generated $72 million of gains
WASHINGTON GROUP PLAZA – BOISE, ID
ALL PRIOR ASSET SALES
❑
Combined IRR of approximately 17% across six dispositions (1)
❑
The six dispositions have generated $72 million of gains
Sorrento Mesa – 10455, San Diego
Corporate Parkway, Allentown
(1)
(2)
(3)
❑
Sold in Q1 2018 for $86.5 million
❑
~5.8% disposition cap rate (2)
❑
22% IRR and $47.0 million gain (3)
❑
Renovations to common areas and mechanical systems
❑
Implemented significant operating expense savings
❑
Increased NRA by 23,000 SF through re-measurement
❑
Completed significant leasing transactions, including
148,000 SF, 10-year lease to St. Luke’s Hospital
❑
Two largest tenants competed to acquire property
Levered IRR calculated using allocated equity value at IPO or acquisition equity investment, as applicable. AmberGlen and Sorrento Mesa – 10455 were acquired as components of portfolios, and certain
values, income and expenses have been estimated in the IRR calculation based on portfolio pro rata share
Based on forward net operating income at the time the property was placed under contract for sale
IRR calculated using allocated equity value at IPO
9
RECENT COMPANY HIGHLIGHTS
FIRST QUARTER 2020
❑
Core FFO per share of $0.26 and AFFO per share of $0.14
❑
Executed approximately 221,000 SF of new and renewal leases
❑
Occupancy of 92.2%, or 94.2% including signed leases that commence after quarter end
❑
Same store cash NOI growth of 4.1% for the quarter, compared to prior year quarter
❑
Repurchased 1,451,249 shares of common stock at an average gross price of $7.99 per share for a total cost of $11.6 million
SUBSEQUENT TO QUARTER END
❑
As of May 5, 2020, repurchased an additional 5,872,328 shares of common stock. Including repurchases during the first quarter,
7,323,577 shares have been repurchased at an average gross price of $8.26 per share for a total cost of $60.5 million (1)
LEASING SUCCESS HAS STABILIZED DENVER TECH PORTFOLIO
❑
Acquired 7595 Tech in 2015 at a price reflecting significant known
future vacancy; recently completed substantial renovation of
amenities, common areas and vacant space
❑
Acquired 7601 Tech in 2019; located directly adjacent to 7595
Tech and was integrated to create a 381,000 SF campus with
complementary amenities
❑
At end of 2019, the campus was 62.7% occupied
❑
128,000 SF of recent leasing activity completed; expected to bring
campus occupancy to 93.7% after tenants take occupancy
❑
Largest was a 70,000 SF, 10-year lease signed in Q1 2020
7595 TECH
7601 TECH
(1)
“Repurchased” indicates shares that had settled by May 5, 2020
10
2020 OUTLOOK
2020 GUIDANCE (1)
Full Year 2020
COMMENTARY
Previous
Low
High
❑
No acquisitions anticipated for 2020; assumed capital is reallocated to
common share repurchase program and leverage reduction
Updated
Low
High
Net Property Acquisitions (2)
$340M
$380M
Nil
Nil
❑
Assumes elimination of new leasing assumptions for balance of 2020
December 31, 2020 Occupancy
92.0%
94.0%
88.5%
91.0%
❑
Same Store Cash NOI Change
1.0%
3.0%
(4.5)%
(1.5)%
Core FFO per Diluted Share
$1.13
$1.18
$1.07
$1.12
Guidance reflects a general provision for uncollectible rents of 1%-3%
of rental revenue in each of Q2, Q3 and Q4 related to COVID-19 and a
corresponding reduction to occupancy, Same Store Cash NOI Change
and Core FFO per Diluted Share
❑
Significant uncertainty related to the effect of COVID-19 on the
economy and CIO tenant base
Mission City, San Diego
(1)
(2)
See the Company’s Q4 2019 and Q1 2020 earnings press releases for further discussion of the material assumptions underlying the Company’s guidance. This outlook reflects management’s current view
of current and future operations and market conditions, which management cannot guarantee will occur as expected, or at all
Total property acquisitions less total property dispositions
11
DIVERSE TENANT PROFILE
DIVERSIFIED TENANT BASE
Construction
1%
Accommodation and Food
2%
Educational Services
3%
(1)
TOP TEN TENANTS OF OUR PROPERTIES (2)
Other
3%
Finance and Insurance
25%
Credit Rating
(S&P / Moody's)
Tenant
Since
NRA
(000s)
% of Net
Rentable Area
AA+
1993
319
5.5%
Seattle Genetics, Inc.
--
2019
207
3.5%
United Healthcare Services, Inc.
A+
2008
173
3.0%
Tenant / Parent
State of Colorado Dept. of Health
Real Estate
3%
Ally Financial Inc.
Health Care and
Life Sciences
12%
Professional and
Technical Services
24%
BBB-
2008
163
2.8%
HF Management Services LLC
--
2012
155
2.7%
H. Lee Moffitt Cancer Center
A3
2008
155
2.7%
Toyota Motor Credit Corporation
AA-
2011
133
2.3%
BB
2008
125
2.1%
A+
2007
122
2.1%
AA+
1998
108
1.9%
1,660
28.6%
Kaplan, Inc.
(3)
Jackson National Life Insurance Co.
GSA – US Attorneys Office (4)
Government
13%
Total
Technology and
Information
14%
LEASE MATURITIES – STABLE, LONG-TERM TENANCY PROFILE WITH WELL-STAGGERED EXPIRATIONS (1)
30%
25%
20%
15%
10%
5%
12.7%
2.0%
Contracted
12.1%
13.4%
12.3%
9.8%
8.5%
7.4%
5.4%
4.4%
6.2%
2028
2029 &
Thereafter
5.8%
0%
Vacant &
Contracted
(1)
(2)
(3)
(4)
2020
2021
As of March 31, 2020
Credit ratings as of April 30, 2020
Parent entity is Graham Holding Company
The credit rating indicated is for the United States Government
2022
2023
2024
2025
2026
2027
12
TENANT COMPOSITION AND INDUSTRY EXPOSURE
LOW EXPOSURE TO SELECT INDUSTRIES (1)
Breakdown by Size
Top 20
RENT COLLECTION AND COMMENTARY
# of
Tenants
NRA
(000s)
Avg SF
(000s)
% of
Occ SF
20
2,351
117
43.7%
20
815
41
15.2%
Remaining
298
2,211
7
41.1%
Total
338
5,377
16
100.0%
Tenants 21-40
Select Industry Exposure
Total Coworking
4
58
15
1.1%
Total Retail Related
6
47
8
0.9%
Total Restaurant & Café
11
31
3
0.6%
Total Live Event Related
3
24
8
0.4%
Total Travel & Accommodation
4
10
3
0.2%
Total Energy
Total Select Industries
-
-
-
0.0%
28
170
6
3.2%
❑
Collected approximately 99% of April contractual base
rent (2)
❑
Collected approximately 98% of May contractual base
rent (2)
❑
100% of top 40 tenants paid April and May contractual
base rent (2)
❑
Top 40 tenants represent 58.9% of occupied SF
❑
No exposure to energy-related tenants
❑
Limited coworking exposure, no exposure to WeWork
FRP Collection, Orlando
Mission City, San Diego
New Fitness Center
(1)
(2)
As of May 28, 2020
Subsequent to quarter end, as of May 5, 2020
13
CONSERVATIVE STRUCTURE WITH STRONG LIQUIDITY
LIQUIDITY AS OF MARCH 31, 2020
LEVERAGE METRICS AS OF MARCH 31, 2020
❑
38.6% leverage (1)(2)
❑
$147 million of cash and cash equivalents
❑
5.9x Net Debt / Annualized Adjusted EBITDA (2)
❑
$18 million of restricted cash at property level
❑
3.8% weighted average interest rate
❑
❑
85.9% fixed rate debt (3)
$300 million unsecured credit facility of which $50
million is a term loan and $250 million is a revolving
line of credit
❑
4.9 year weighted average debt maturity
❑
$100 million of the $250 million revolving line of
credit was drawn at March 31, 2020
WELL STAGGERED DEBT MATURITIES
$700,000
($000S)
– MARCH 31, 2020
Debt Balance: $710.8 million (4)(5)
$600,000
$500,000
$400,000
$300,000
Credit Facility
$100,000
$84,861
Interest Rate:
Interest Rate:
2.49%
4.34%
$200,000
$100,000
$44,672
Interest Rate:
3.10%
$124,215
Interest Rate:
3.54%
$190,789
Interest Rate:
4.10%
$95,964
Interest Rate:
4.36%
$70,250
Interest Rate:
4.36%
$0
2020
(1)
(2)
(3)
(4)
(5)
2021
2022
2023
2024
2025
2026
2027
Calculated as net debt to enterprise value, using common share price of last capital raise ($13.85)
Net debt calculated as debt principal less cash, cash equivalents and restricted cash
Included in fixed rate debt is $50 million of term loan debt that has been effectively fixed throughout the duration of the term loan pursuant to a swap agreement
$710.8 million represents the principal debt balance as of March 31, 2020 before deferred financing costs and unamortized fair value adjustments
$7.9 million of indebtedness attributable to non-controlling interests
2028
2029
14
COMPANY HIGHLIGHTS
FOCUSED 18-HOUR CITY INVESTMENT STRATEGY
Uptown Dallas, TX
❑
Diversified portfolio of 5.8 million SF across leading 18-hour cities in the Southern and Western US (1)
❑
Markets positioned to outperform, driven by outsized employment and population growth
❑
Focused on well-located office properties in vibrant, amenity-rich and transit-oriented submarkets
PROVEN VALUE CREATION APPROACH
Sorrento Mesa, San Diego
❑
Disciplined underwriting and active asset management to generate long-term value creation opportunities
❑
Focused on unlocking cash flow potential in the portfolio
❑
CIO’s six dispositions have generated $72 million of gains and a combined IRR of approximately 17%
WELL-POSITIONED BALANCE SHEET WITH STRONG LIQUIDITY
Mission City, San Diego
❑
Conservative balance sheet operating with lower leverage
❑
4.9 year weighted average debt maturity; no near-term maturities (1)
❑
Flexibility and consistent access to capital with $300 million unsecured credit facility
EXPERIENCED AND COMMITTED MANAGEMENT TEAM
Central Fairwinds, Orlando
(1)
As of March 31, 2020
❑
Average over 20 years of experience with over $2.5 billion of real estate acquisitions since 2010
❑
Deep relationships in CIO markets and strong reputation for execution
15
EXECUTIVES AND BOARD OF DIRECTORS
JAMIE FARRAR, CHIEF EXECUTIVE OFFICER
❑
Over 20 years of real estate, private equity and corporate finance industry experience
❑
Completed the acquisition of over $2.5 billion of real estate since 2011
❑
Prior experience with a family office focused on real estate and hospitality as well as the private equity group of the TD Bank
GREG TYLEE, CHIEF OPERATING OFFICER & PRESIDENT
❑
Over 20 years of diverse real estate experience that includes acquisitions of income-producing properties as well as high-rise
development
❑
Involved in real estate transactions, incl. development and management, with a combined enterprise value of over $3.0 billion
❑
Former President of Bosa Properties Inc., a prominent real estate development company with over 400 employees
TONY MARETIC, CHIEF FINANCIAL OFFICER, SECRETARY & TREASURER
❑
Over 20 years of experience, including over 15 years of experience in senior financial and operational roles
❑
Former Chief Operating Officer and Chief Financial Officer of Earls Restaurants Ltd., a multi-national hospitality company
❑
Held financial management positions with Bentall Kennedy and a senior living real estate company
B O AR D O F DIRE CTORS
John McLernon, Chairman
Sabah Mirza, Director ✓
✓
✓
✓
Jamie Farrar, CEO & Director
William Flatt, Director
Mark Murski, Director ✓
John Sweet, Director ✓
Indicates Independent Director
16
APPENDIX: PROPERTY OVERVIEW
Metropolitan
Area
Phoenix, AZ
Denver, CO
Tampa, FL
Economic
Interest
NRA
(000s SF)
In Place
Occupancy
Annualized
Base Rent
per SF
Annualized
Gross Rent
per SF 1
Base Rent 2
(000s)
Pima Center
100.0%
272
87.0%
$27.44
$27.44
$6,491
First American Title Insurance
SanTan
100.0%
267
91.7%
$28.11
$28.11
$6,868
Toyota Motor Credit
5090 N 40th St
100.0%
174
94.6%
$28.58
$28.58
$4,714
Bar-S-Foods Co.
Camelback Square
100.0%
174
78.8%
$31.25
$31.25
$4,284
Digital Air Strike
The Quad
100.0%
163
100.0%
$29.20
$29.51
$4,759
Opendoor Labs, Inc.
Papago Tech
100.0%
163
90.9%
$22.46
$22.46
$3,322
Regional Acceptance Corp.
Cherry Creek
100.0%
356
100.0%
$18.59
$19.31
$6,612
State of Colorado Department of Health
100.0%
272
94.3%
$17.88
$31.76
$4,583
Epsilon Data Management, LLC
Property
Circle Point
3
100.0%
381
78.0%
$22.96
$27.02
$6,591
Jackson National Life Insurance Company
100.0%
151
96.5%
$18.08
$30.55
$2,641
KeyBank National Association
Park Tower
94.8%
471
89.8%
$25.58
$25.58
$10,820
GSA US Attorneys Office
City Center
95.0%
242
93.1%
$25.83
$25.83
$5,814
Kobie Marketing, Inc.
Intellicenter
100.0%
204
100.0%
$23.99
$23.99
$4,881
H. Lee Moffitt Cancer Center
100.0%
124
100.0%
$28.36
$28.36
$3,522
Paychex, Inc.
96.6%
397
96.9%
$23.93
$27.39
$9,171
GSA - PEO STRI (US Dept of Defence)
Central Fairwinds
97.0%
168
93.7%
$25.10
$25.10
$3,956
Fairwinds Credit Union
Greenwood Blvd
100.0%
155
100.0%
$23.25
$23.25
$3,605
HF Management Services LLC
Sorrento Mesa
100.0%
296
85.3%
$25.77
$33.77
$6,507
Genopis, Inc.
Mission City
100.0%
286
91.6%
$35.43
$35.43
$9,276
Midland Credit Mgmt, Inc.
190 Office Center
100.0%
303
81.2%
$25.55
$25.55
$6,288
United Healthcare Services, Inc.
Lake Vista Pointe
100.0%
163
100.0%
$16.00
$25.00
$2,613
Ally Financial Inc.
2525 McKinnon
100.0%
111
88.5%
$28.23
$45.23
$2,782
The Retail Connection
AmberGlen
76.0%
203
98.4%
$21.78
$24.32
$4,342
Planar Systems, Inc.
Cascade Station
100.0%
128
100.0%
$26.69
$28.06
$3,403
Wells Fargo Bank, N.A.
Canyon Park
100.0%
207
100.0%
$21.84
$29.84
$4,515
Seattle Genetics Inc.
5,831
92.2%
$24.66
$27.58
$132,360
Florida Research Park
San Diego, CA
Dallas, TX
Portland, OR
Seattle, WA
4
Total / Weighted Average - March 31, 2020 ⁵
(1)
(2)
(3)
(4)
(5)
Largest Tenant by NRA
Superior Pointe
Denver Tech
Carillon Point
Orlando, FL
Annualized
Annualized gross rent per square foot includes adjustment for estimated expense reimbursements of triple net leases for the year ended March 31, 2020
Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended March 31, 2020 by (ii) 12
Denver Tech is comprised of 7601 Tech, which was acquired during the third quarter of 2019, and 7595 Tech (formerly “DTC Crossroads”)
Florida Research Park is comprised of FRP Collection and FRP Ingenuity Drive
Averages weighted based on the property’s NRA, adjusted for occupancy
17
APPENDIX: FINANCIAL HIGHLIGHTS
(in thousands, except per share data)
Q1 2020
INCOME ITEMS
Net income/(loss)
NOI
Same Store Cash NOI Growth
Net (loss)/income per share - diluted
Core FFO / Share
AFFO / Share
EBITDA (CIO share)
CAPITALIZATION
Common shares
Unvested restricted shares
Total shares
Weighted average common shares outstanding - diluted
Share price at quarter end
Market value of common equity
Total Series A preferred shares outstanding
Liquidation preference per preferred share
Aggregate liquidation preference of preferred shares
Net debt - CIO share
Total enterprise value (including net debt)
DEBT STATISTICS AND RATIOS
Total principal debt (CIO share)
Weighted average maturity
Weighted average interest rate
1
Fixed rate debt as a percentage of total debt
LEASING STATISTICS
In-Place occupancy
Weighted average remaining lease term
(1)
$
$
$
$
$
$
$
$
$
$
$
$
$
1,006
25,428
4.1%
(0.02)
0.26
0.14
22,798
53,175
545
53,720
54,966
7.23
388,393
4,480
25.00
112,000
539,017
1,039,410
702,846
4.9 years
3.8%
85.9%
92.2%
4.4 years
Q4 2019
$
$
$
$
$
$
$
$
$
$
$
$
$
2,988
24,499
3.9%
0.02
0.25
0.14
21,919
54,591
335
54,926
54,416
13.52
742,606
4,480
25.00
112,000
517,762
1,372,368
604,369
5.6 years
4.0%
100.0%
91.9%
4.4 years
Q3 2019
$
$
$
$
$
$
$
$
$
$
$
$
$
(947)
24,562
5.8%
(0.07)
0.29
0.22
21,830
47,647
416
48,063
43,005
14.39
691,629
4,480
25.00
112,000
617,518
1,421,147
649,114
5.6 years
4.0%
93.4%
91.2%
4.5 years
Q2 2019
$
$
$
$
$
$
$
$
$
$
$
$
$
1,321
26,645
5.9%
(0.02)
0.34
0.26
23,327
39,647
408
40,055
40,054
11.99
480,262
4,480
25.00
112,000
677,017
1,269,279
707,047
5.4 years
4.2%
79.0%
93.4%
4.5 years
Q1 2019
$
$
$
$
$
$
$
$
$
$
$
$
$
(920)
23,276
1.8%
(0.07)
0.29
0.21
21,027
39,636
413
40,049
40,017
11.31
452,949
4,480
25.00
112,000
657,080
1,222,029
693,248
5.7 years
4.2%
77.5%
92.6%
4.7 years
The fixed rate debt percentage for Q1 2020, Q4 2019, and Q3 2019 factors in an interest rate swap applied against the $50 million term loan which effectively fixes the 30 day LIBOR rate component of the term loan at 1.27% throughout
the duration of the loan
18
APPENDIX: FFO, CORE FFO AND AFFO
(in thousands, except per share data)
Q1 2020
Net (loss)/income attributable to common stockholders
(+) Depreciation and amortization
(-) Net gain on sale of real estate property
Non-controlling interests in properties:
(+) Share of net income
(-) Share of FFO
Funds from Operations ("FFO")
(+) Stock based compensation
Core FFO
(+) Net recurring straight line rent/expense adjustment
(+) Net amortization of above and below market leases
(+) Net amortization of deferred financing costs and debt fair value
(-) Net recurring tenant improvements and incentives
(-) Net recurring leasing commissions
(-) Net recurring capital expenditures
Adjusted Funds from Operations ("AFFO")
$
(1,031)
14,953
13,922
$
182
(342)
13,762
569
14,331
(361)
16
321
(2,475)
(2,464)
(1,455)
7,913
Core FFO per common share
AFFO per common share
$
$
Dividends per common share
Core FFO Payout Ratio
AFFO Payout Ratio
$
Weighted average common shares outstanding - diluted
$
$
Q4 2019
$
987
15,102
(2,934)
13,155
$
146
(305)
12,996
432
13,428
(52)
40
330
(3,147)
(1,521)
(1,221)
7,857
0.26
0.14
$
$
0.150
58%
104%
$
54,966
$
$
Q3 2019
$
(2,966)
15,035
12,069
$
164
(310)
11,923
431
12,354
(127)
24
318
(1,723)
(971)
(526)
9,349
0.25
0.14
$
$
0.235
95%
163%
$
54,416
$
$
Q2 2019
$
(699)
14,604
(478)
13,427
$
165
(312)
13,280
435
13,715
(850)
(66)
331
(1,694)
(592)
(496)
10,348
0.29
0.22
$
$
0.235
82%
108%
$
43,005
$
$
Q1 2019
$
(2,944)
14,417
11,473
$
169
(316)
11,326
444
11,770
(978)
(29)
334
(1,298)
(918)
(542)
8,339
0.34
0.26
$
$
0.29
0.21
0.235
69%
91%
$
0.235
80%
113%
40,054
$
$
40,017
19
C I T Y O F F I C E R E I T, I N C .
E: investorrelations@cityofficereit.com | T: 604 806 3366
Suite 3210
666 Burrard Street
Vancouver, BC V6C 2X8
Suite 2960
500 North Akard Street
Dallas, TX 75201