VANCOUVER, March 15, 2024 /PRNewswire/ -- City Office REIT, Inc. (NYSE: CIO) ("City Office," "CIO" or the "Company") announced today that its Board of Directors has authorized a quarterly dividend amount of $0.10 per share of common stock and common unit of partnership interest for the first quarter of 2024. Additionally, the Board of Directors authorized a regular quarterly dividend of $0.4140625 per share of the Company's 6.625% Series A Cumulative Redeemable Preferred Stock.  The dividends will be payabl ...

John Webb/iStock via Getty Images This article was coproduced with Leo Nelissen. I don’t think anyone has ever used “dumpster diving” in a positive context. However, did you know some people make decent money dumpster diving? Last year, Business Insider published an article with the interesting title: “We met dumpster diving 14 years ago and now make up to $3,000 a month selling our trash treasures.” $3,000 a month is $36,000 a year. The median household income in the U.S. is roughly $74,600. However, i ...

Alex Potemkin/iStock via Getty Images City Office REIT's (NYSE:CIO) preferreds (NYSE:CIO.PR.A) are a buy and I've taken a significant position after first considering the commons when I last covered the internally managed office REIT. While rising office vacancies across the US will continue to form a fundamental headwind for office owners, CIO's fiscal 2023 fourth quarter occupancy rate at 84.5% remains healthy albeit dipping by roughly 90 basis points sequentially. Critically, the dip was mainly led b ...

Financial Data and Key Metrics - Total debt as of December 31 was $670 million, with net debt to EBITDA at 6.6x [7] - Cash and restricted cash stood at $43 million as of quarter-end [7] - Core FFO per share for 2023 was $1.39, within the guidance range, with a total AFFO payout ratio of 66% [40] - Fourth quarter NOI was $26.9 million, $300k higher than Q3, impacted by $1.4 million write-off related to WeWork lease at Block 23 [30][69] - Same-store cash NOI grew by 3% for 2023 compared to the prior year, but Q4 same-store cash NOI was down 0.5% year-over-year [70] Business Line Data and Key Metrics - Executed 599,000 square feet of new and renewal leasing in 2023, with Q4 seeing 109,000 square feet of new leases, the highest in 2023 [23] - Portfolio occupancy ended the year at 84.5%, with 114,000 square feet of signed leases not yet commenced [32] - Retention rate in Q4 was 21%, significantly impacted by 70,000 square feet of lease departures in Portland [32] - Spec suite and vacancy conditioning program investments totaled $900,000 in Q4, or $0.02 per share [31] Market Data and Key Metrics - Office market sales volumes in 2023 were down 57% year-over-year, with many transactions aided by seller financing or assumable debt [24] - New office construction in Q4 2023 was the lowest in over 20 years, with most projects being build-to-suit or pre-leased [25] - Subleasing is moderating, with Q4 indicating a decrease in sublease availability across many office markets [25] - 60% of total office vacancy is concentrated in just 10% of buildings, with demand highest for premier, well-located buildings [43] Company Strategy and Industry Competition - Focus on leasing to drive cash flow and enhance borrowing capacity [1] - Prioritizing liquidity, capital protection, and prudent debt maturity management [29] - Advancing spec suite and property renovation programs to align with market demands [46] - Exploring creative ways to unlock value at properties, including potential asset sales or unique buyer opportunities [82] Management Commentary on Operating Environment and Future Outlook - Corporate return-to-office policies are gaining momentum, with major companies requiring employees to attend the office at least three days a week [13][42] - Leasing momentum from Q4 2023 carried into 2024, with a pipeline exceeding 200,000 square feet, including larger corporate tenants [26] - Challenges in the investment sales market and frozen debt capital for new originations are being closely monitored [24] - 2024 guidance assumes no acquisitions, $21 million in dispositions, and a core FFO per share range of $1.18 to $1.22 [51][73] Other Important Information - WeWork lease at Block 23 was rejected, with $1 million letter of credit being drawn against costs and lost income [6] - Negotiations with a high-quality co-working operator for Block 23 are in late stages [6] - WeWork withheld rent payments at Block 23 and Terraces, but agreed to repay overdue amounts by end of February [45] - Cascade Station property in Portland may transition back to the lender due to challenging market conditions [71] Q&A Session Summary Question: Cascade Station marketability and impact on occupancy [53] - Response: Cascade Station is a small asset (128,000 square feet), and its exit is expected mid-2024, with a slight uptick in occupancy by year-end [54] Question: Same-store cash NOI growth expectations for 2024 [55] - Response: Same-store cash NOI is expected to be flat in 2024, with new leasing offsetting negatives from lease departures [56][76] Question: Leasing momentum and market trends [9] - Response: Leasing momentum is driven by larger corporate tenants, with active negotiations for four leases averaging over 40,000 square feet each [26][58] Question: Potential transition of WeWork space at Block 23 to a corporate tenant [80] - Response: Transitioning to a corporate tenant is possible, but continuing as a co-working space is the logical choice due to existing build-out [62] Question: Asset sales and leverage reduction [63] - Response: Selling assets in the current environment is challenging due to limited buyers and frozen debt markets, but the company remains open to compelling opportunities [64][65] Question: Mortgage assumptions and market activity [66] - Response: Assumable mortgages are complex, and muted activity is expected until debt markets open up [83]

❑ Acquisition of three properties in Raleigh, Phoenix and Dallas for $614 million in December 2021 enhanced and diversified the portfolio 2525 McKinnon Dallas, TX Irreplaceable location in the heart of Uptown The Terraces Dallas, TX New building in desirable Preston Center The Square Phoenix, AZ Irreplaceable location in Old Town Scottsdale OVER $560 MILLION OF GAINS ACROSS 11 DISPOSITIONS Lake Vista Pointe, Dallas $33.01 $19.78 SUCCESSFUL EXECUTION ON PROPERTY REPOSITIONINGS ACTIVE STEPS TO POSITION FOR LO ...

City Office REIT (CIO) came out with quarterly funds from operations (FFO) of $0.33 per share, in line with the Zacks Consensus Estimate. This compares to FFO of $0.38 per share a year ago. These figures are adjusted for non-recurring items.A quarter ago, it was expected that this real estate investment trust would post FFO of $0.33 per share when it actually produced FFO of $0.34, delivering a surprise of 3.03%.Over the last four quarters, the company has surpassed consensus FFO estimates two times.City Of ...

Part I [Business](index=5&type=section&id=ITEM%201.%20BUSINESS) City Office REIT, Inc. is an internally-managed REIT focused on acquiring and operating high-quality office properties in Sun Belt markets, with a portfolio of 58 buildings totaling 5.7 million square feet and an 84.5% occupancy rate as of December 31, 2023 - The company is an internally-managed REIT focused on owning, operating, and acquiring high-quality office properties predominantly in **Sun Belt markets**[20](index=20&type=chunk) Portfolio Snapshot as of December 31, 2023 | Metric | Value | | :--- | :--- | | Office Buildings | 58 | | Net Rentable Area (NRA) | ~5.7 million sq. ft. | | Occupancy Rate | 84.5% | | Weighted Average Remaining Lease Term | 4.6 years | - Key business strategies include driving value through dispositions, accretive capital redeployment, rent growth, new acquisitions, leasing vacant space, and property enhancements[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk)[31](index=31&type=chunk) - 2023 highlights include completing approximately **599,000 square feet of leasing**, increasing the unsecured credit facility to **$375 million**, and renewing two property loans[28](index=28&type=chunk)[33](index=33&type=chunk) - As of December 31, 2023, the company had **20 full-time employees** and focuses on diversity, employee development, and fair compensation[39](index=39&type=chunk) [Risk Factors](index=9&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces diverse risks across its business operations, properties, REIT status, organizational structure, and general operations, including market conditions, tenant defaults, debt, tax compliance, and cybersecurity [Risks Related to Our Business and Our Properties](index=12&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Our%20Properties) This section details risks inherent to the company's real estate operations, including lease expirations, tenant concentration, work-from-home impacts, substantial indebtedness, and environmental liabilities Scheduled Lease Expirations (as % of Annualized Base Rent) | Year | % of Annualized Base Rent Expiring | | :--- | :--- | | 2024 | 11.0% | | 2025 | 10.6% | | 2026 | 9.9% | - The company is exposed to tenant concentration risk, with its ten largest tenants accounting for approximately **25.4% of its base rental revenue** as of December 31, 2023[63](index=63&type=chunk) - The work-from-home trend poses a significant risk, potentially leading to a long-term decrease in demand for office space, impacting leasing activity and rental rates[57](index=57&type=chunk)[65](index=65&type=chunk) - Following WeWork's Chapter 11 bankruptcy filing, the company wrote off a **$1.4 million** straight-line receivable and a **$1.5 million** intangible asset for the Block 23 lease, with remaining exposure across two properties totaling **$1.4 million** in receivables, **$2.8 million** in tenant improvements, and **$8.5 million** in intangible assets[58](index=58&type=chunk)[59](index=59&type=chunk)[113](index=113&type=chunk) - The company has substantial outstanding indebtedness, totaling approximately **$672.7 million** as of December 31, 2023, which could affect its ability to pay distributions and exposes it to default risk[72](index=72&type=chunk) - As of December 31, 2023, lenders for three mortgage borrowings have directed property cash flows into restricted accounts, totaling **$9.3 million**, until certain financial thresholds are met[77](index=77&type=chunk) [Risks Related to Our Status as a REIT](index=30&type=section&id=Risks%20Related%20to%20Our%20Status%20as%20a%20REIT) This section outlines risks associated with maintaining REIT status, including severe tax consequences for non-compliance and the potential need to borrow funds to meet the 90% taxable income distribution requirement - Failure to maintain REIT qualification would lead to severe tax consequences, including taxation at regular corporate rates and inability to deduct dividends paid to stockholders[132](index=132&type=chunk)[133](index=133&type=chunk) - To maintain REIT status, the company must distribute at least **90% of its taxable income annually**, which may necessitate borrowing funds during unfavorable market conditions to cover distributions and capital needs[4](index=4&type=chunk)[61](index=61&type=chunk)[136](index=136&type=chunk) - Compliance with complex REIT asset and income tests may force the company to liquidate attractive investments or forego certain opportunities to avoid disqualification[143](index=143&type=chunk)[149](index=149&type=chunk) [Risks Related to Our Organizational Structure](index=32&type=section&id=Risks%20Related%20to%20Our%20Organizational%20Structure) The company's holding company structure, operating through its Operating Partnership, presents risks including structural subordination of stockholder claims, potential conflicts of interest, and anti-takeover provisions that may deter a change of control - As a holding company, the company relies on distributions from its Operating Partnership, and stockholder claims are structurally subordinated to all liabilities of the Operating Partnership[153](index=153&type=chunk) - The company's charter imposes a **9.8% ownership limit** on its capital stock to protect its REIT status, which may delay or prevent a change of control transaction[163](index=163&type=chunk) - Provisions of Maryland law, including 'business combination' and 'control share' rules, could inhibit a third-party acquisition proposal, even though the company has currently opted out of some[165](index=165&type=chunk)[167](index=167&type=chunk) [General Risk Factors](index=37&type=section&id=General%20Risk%20Factors) This section covers broader operational risks, including adverse effects from climate change, litigation risks, and significant disruptions from cybersecurity breaches that could compromise data and reputation - Climate change poses risks through extreme weather, potential water supply issues in markets like Arizona, and increased costs to comply with environmental legislation[176](index=176&type=chunk) - The company faces risks from security breaches and cyber-attacks that could result in unauthorized access to confidential information, disruption of building systems, and damage to its reputation[182](index=182&type=chunk)[183](index=183&type=chunk)[187](index=187&type=chunk) - Deficiencies in disclosure controls and internal controls over financial reporting could lead to misstatements or restatements of financial results[180](index=180&type=chunk) [Unresolved Staff Comments](index=39&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS) The company reports no unresolved staff comments from the SEC - None[190](index=190&type=chunk) [Cybersecurity](index=39&type=section&id=ITEM%201C.%20CYBERSECURITY) The company integrates cybersecurity risk management into its overall risk framework, with oversight from the Audit Committee and management by the CFO and CEO, reporting no material incidents during the period - Cybersecurity risk management is integrated into the company's overall risk framework, with the CFO working with an IT service provider and internal auditors to manage threats[191](index=191&type=chunk) - The Audit Committee has primary responsibility for overseeing cybersecurity risks, receiving briefings from the CFO and CEO at least annually[193](index=193&type=chunk)[194](index=194&type=chunk) - The company has not been materially affected by any cybersecurity incidents for the reporting period and has not experienced any material threats or incidents in recent years[186](index=186&type=chunk) [Properties](index=41&type=section&id=ITEM%202.%20PROPERTIES) As of December 31, 2023, the company's portfolio comprised 58 office buildings totaling approximately 5.7 million square feet of NRA with an 84.5% occupancy rate, with 9.7% of NRA subject to lease expiration in 2024 Portfolio Overview by Metropolitan Area (Top 3 by NRA) | Metropolitan Area | % of Total NRA | NRA (000s sq. ft.) | In-Place Occupancy | Annualized Base Rent ($000s) | | :--- | :--- | :--- | :--- | :--- | | Phoenix, AZ | 26.7% | 1,519 | 76.9% (Weighted Avg) | $33,844 | | Tampa, FL | 18.5% | 1,052 | 93.0% (Weighted Avg) | $28,202 | | Denver, CO | 14.1% | 805 | 87.6% (Weighted Avg) | $14,847 | | **Total Portfolio** | **100.0%** | **5,694** | **84.5%** | **$141,953** | Lease Expiration Schedule (% of NRA) | Year of Lease Expiration | % of NRA | | :--- | :--- | | 2024 | 9.7% | | 2025 | 8.8% | | 2026 | 9.0% | | 2027 | 12.6% | | 2028 | 11.3% | | 2029 & Thereafter | 34.1% | | Vacant / Contracted | 15.5% | [Legal Proceedings](index=43&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company is not currently subject to any material litigation, with ongoing proceedings being routine actions not expected to have a material adverse effect - The company is not presently subject to any material litigation, other than routine actions not expected to have a material adverse effect[205](index=205&type=chunk) [Mine Safety Disclosures](index=43&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not Applicable[206](index=206&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on the NYSE under "CIO", with a new $50 million share repurchase program authorized in May 2023, though no shares were repurchased in 2023 - The company's common stock has been listed on the NYSE under the symbol **"CIO"** since April 15, 2014[209](index=209&type=chunk) - On May 4, 2023, the Board of Directors approved a new share repurchase program authorizing the company to repurchase up to **$50 million** of its outstanding common or Series A Preferred Stock[215](index=215&type=chunk) - No shares were repurchased during the year ended December 31, 2023, while in 2022, the company repurchased **4,006,897 shares** for approximately **$50.0 million**[217](index=217&type=chunk) [Reserved](index=46&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved - This item is marked as [RESERVED][223](index=223&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial performance, analyzing operating results, liquidity, capital resources, and debt structure, while highlighting the impact of economic conditions and work-from-home trends [Factors That May Influence Our Operating Results and Financial Condition](index=49&type=section&id=Factors%20That%20May%20Influence%20Our%20Operating%20Results%20and%20Financial%20Condition) The company's operating results are influenced by the volatile economic environment, including inflation, rising interest rates, the ongoing work-from-home trend, and the specific impact of the WeWork bankruptcy - The volatile economic environment, marked by inflation and rising interest rates, has increased the company's cost of capital and made private market debt financing more challenging[237](index=237&type=chunk) - Evolving remote and hybrid work trends continue to impact the business through tenant uncertainty, potentially reducing anticipated rental revenues and increasing subleasing[239](index=239&type=chunk)[240](index=240&type=chunk) - The company is monitoring the impact of the WeWork bankruptcy, with the lease at its Block 23 property having been rejected subsequent to year-end[245](index=245&type=chunk) [Results of Operations](index=54&type=section&id=Results%20of%20Operations) For the year ended December 31, 2023, rental revenues decreased by 0.8% to $179.1 million, while operating expenses decreased by 6.2% to $147.8 million, and interest expense rose 23% to $33.2 million Comparison of Operating Results (Year Ended Dec 31, in millions) | Line Item | 2023 (millions) | 2022 (millions) | Change (millions) | % Change | | :--- | :--- | :--- | :--- | :--- | | Rental and other revenues | $179.1 | $180.5 | ($1.4) | -0.8% | | Total operating expenses | $147.8 | $157.5 | ($9.7) | -6.2% | | Operating income | $31.3 | $23.0 | $8.3 | +36.1% | | Interest expense | $33.2 | $27.0 | $6.2 | +23.0% | | Impairment of real estate | $0.0 | $13.4 | ($13.4) | -100.0% | | Net (loss)/income | ($2.0) | $17.7 | ($19.7) | -111.3% | [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2023, the company had $30.1 million in cash, $13.3 million in restricted cash, and $672.7 million in total indebtedness, with primary liquidity from operations and its $375 million unsecured credit facility - As of December 31, 2023, the company had **$30.1 million** of cash and cash equivalents and **$13.3 million** of restricted cash[343](index=343&type=chunk) - The company's Unsecured Credit Facility has total authorized borrowings of **$375 million**, with **$200.0 million** outstanding under the facility and **$75.0 million** under related term loans as of year-end 2023[322](index=322&type=chunk) Consolidated Indebtedness as of December 31, 2023 | Type | Amount (millions) | | :--- | :--- | | Total Principal Indebtedness | $672.7 | | Effectively Fixed Rate Debt | 91.1% | Contractual Obligations Summary (in thousands) | Obligation | Total (thousands) | Due in 2024 (thousands) | | :--- | :--- | :--- | | Principal payments on mortgage loans | $672,720 | $107,675 | | Interest payments | $83,938 | $31,323 | | Tenant-related commitments | $12,104 | $12,104 | | Lease obligations | $36,264 | $658 | | **Total** | **$805,026** | **$151,760** | [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate risk, managed with interest rate swaps, resulting in 91.1% of debt at fixed or effectively fixed rates, with a 1% SOFR change impacting annual interest costs by $0.6 million - The company's primary market risk exposure is to interest rate changes[285](index=285&type=chunk) - As of December 31, 2023, approximately **91.1%** of the company's **$672.7 million** in debt had fixed or effectively fixed interest rates through interest rate swaps[284](index=284&type=chunk)[287](index=287&type=chunk) - A hypothetical **1% increase** in the SOFR rate would result in a **$0.6 million** increase in annual interest costs on the company's variable-rate debt outstanding as of December 31, 2023[287](index=287&type=chunk) [Financial Statements and Supplementary Data](index=60&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section indicates that the required financial statements and supplementary data are included in Item 15 of the Annual Report - The information required by Item 8 is included in Item 15, "Exhibits, Financial Statement Schedules"[289](index=289&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=60&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[289](index=289&type=chunk) [Controls and Procedures](index=60&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2023, a conclusion affirmed by KPMG LLP - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[292](index=292&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2023, based on the COSO framework[294](index=294&type=chunk) - The effectiveness of internal control over financial reporting was audited by KPMG LLP, which issued an unqualified opinion[295](index=295&type=chunk) [Other Information](index=61&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) The company reports that no director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the fourth quarter of 2023 - During the three months ended December 31, 2023, no director or officer adopted or terminated a Rule 10b5-1 trading arrangement[269](index=269&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=61&type=section&id=ITEM%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS) This item is not applicable to the company - Not applicable[297](index=297&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=62&type=section&id=ITEM%2010.%20DIRECTORS%2C%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE) The information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2024 annual stockholders' meeting - The information required by Item 10 is incorporated by reference to the company's definitive Proxy Statement for its 2024 annual stockholders' meeting[272](index=272&type=chunk) [Executive Compensation](index=62&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) The information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2024 annual stockholders' meeting - The information required by Item 11 is incorporated by reference to the company's definitive Proxy Statement for its 2024 annual stockholders' meeting[273](index=273&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=62&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) The information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2024 annual stockholders' meeting - The information required by Item 12 is incorporated by reference to the company's definitive Proxy Statement for its 2024 annual stockholders' meeting[273](index=273&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=62&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS%2C%20AND%20DIRECTOR%20INDEPENDENCE) The information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2024 annual stockholders' meeting - The information required by Item 13 is incorporated by reference to the company's definitive Proxy Statement for its 2024 annual stockholders' meeting[274](index=274&type=chunk) [Principal Accountant Fees and Services](index=62&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) The information for this item is incorporated by reference from the company's definitive Proxy Statement for its 2024 annual stockholders' meeting - The information required by Item 14 is incorporated by reference to the company's definitive Proxy Statement for its 2024 annual stockholders' meeting[275](index=275&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=62&type=section&id=ITEM%2015.%20EXHIBITS%2C%20FINANCIAL%20STATEMENT%20SCHEDULES) This section contains the index to the company's consolidated financial statements, financial statement schedules, and a list of all exhibits filed with the Form 10-K, including the independent auditor's report [Report of Independent Registered Public Accounting Firm](index=64&type=section&id=REPORT%20OF%20INDEPENDENT%20REGISTERED%20PUBLIC%20ACCOUNTING%20FIRM) KPMG LLP issued unqualified opinions on the company's consolidated financial statements and internal control over financial reporting, noting a critical audit matter regarding revenue recognition for new and modified lease arrangements - KPMG LLP issued an unqualified opinion, stating that the consolidated financial statements present fairly, in all material respects, the financial position of the company as of December 31, 2023 and 2022[265](index=265&type=chunk) - KPMG LLP also issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2023[266](index=266&type=chunk)[371](index=371&type=chunk) - A critical audit matter was identified concerning the assessment of revenue recognition for new and modified lease arrangements, which required complex auditor judgment regarding the ownership of tenant improvements[350](index=350&type=chunk)[351](index=351&type=chunk) [Form 10-K Summary](index=96&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY) This item is noted as 'None' in the exhibit index, indicating no summary is provided here - None[553](index=553&type=chunk)

Leasing Activity - New leasing activity in Q4 2023 was the highest of any quarter in 2023, with a weighted average lease term of 8.0 years and an average annual rent of $38.04 per square foot[6] - The company executed approximately 134,000 square feet of new and renewal leases during Q4 2023, with total leasing activity for the year reaching approximately 599,000 square feet[12] Financial Performance - Total rental and other revenues for Q4 2023 were $44.3 million, with a GAAP net loss of approximately $4.5 million, or ($0.11) per fully diluted share[7] - Core FFO for Q4 2023 was approximately $13.5 million, or $0.33 per fully diluted share, while AFFO was approximately $9.3 million, or $0.23 per fully diluted share[7] - Same Store Cash NOI decreased by 0.5% for Q4 2023 compared to the same period in the prior year, but increased by 3.0% for the full year 2023[5] - Operating income for the three months ended December 31, 2023, was $5,864 thousand, compared to a loss of $4,464 thousand in the same period of 2022[43] - Net loss attributable to common stockholders for the three months ended December 31, 2023, was $(4,518) thousand, an improvement from $(14,274) thousand in the same period of 2022[43] - Funds from Operations (FFO) attributable to common stockholders for the three months ended December 31, 2023, was $12,510 thousand, with FFO per common share at $0.31[45] - Core FFO attributable to common stockholders was $13,533 thousand for the three months ended December 31, 2023, with Core FFO per common share at $0.33[45] - AFFO attributable to common stockholders for the three months ended December 31, 2023, was $9,273 thousand, with AFFO per common share at $0.23[45] - Net operating income (NOI) for the full year 2023 was $109,099, down 3.0% from $112,746 in 2022[46] - Rental and other revenues for the three months ended December 31, 2023, were $44,321 thousand, slightly down from $44,613 thousand in the same period of 2022[43] - Rental and other revenues for Q4 2023 were $44,321, a slight decrease of 0.7% from $44,613 in Q4 2022[46] Guidance and Projections - The company expects Core FFO per fully diluted share for 2024 to be in the range of $1.18 to $1.22, reflecting anticipated higher interest expenses and the departure of WeWork[18] - The 2024 guidance includes a Same Store Cash NOI change expectation of between -1.0% and 1.0%[20] - Core FFO attributable to common stockholders is projected to be between $48,750 and $50,500 for the full year 2024[49] - FFO per common share for the full year 2024 is expected to range from $1.12 to $1.22[49] - The company reported a net loss attributable to common stockholders of $(15,150) for the full year 2024 outlook[49] Balance Sheet and Debt - As of December 31, 2023, total principal outstanding debt was approximately $672.7 million, with a weighted average interest rate of 4.8%[14] - Total assets decreased to $1,511,376 thousand as of December 31, 2023, down from $1,574,439 thousand in 2022, representing a decline of approximately 4%[36] - Total liabilities decreased to $738,743 thousand as of December 31, 2023, down from $771,265 thousand in 2022, a reduction of approximately 4%[36] - Cash and cash equivalents increased to $30,082 thousand as of December 31, 2023, compared to $28,187 thousand in 2022, reflecting a growth of approximately 7%[36] Dividends and Distributions - The company declared a cash dividend of $0.10 per share of common stock for Q4 2023, paid on January 24, 2024[15] - Preferred stock distributions remained consistent at $(1,855) thousand for both the three months ended December 31, 2023, and 2022[43] Other Income and Expenses - Property operating expenses for Q4 2023 were $17,387, an increase of 2.3% from $17,003 in Q4 2022[46] - Non-recurring other income for the full year 2023 was $2,005, with no such income reported in 2022[46] - Above and below market leases contributed $1,009 in Q4 2023, compared to $33 in Q4 2022[46]

VANCOUVER, Jan. 26, 2024 /PRNewswire/ -- City Office REIT, Inc. (NYSE: CIO) ("the Company"), today announced the tax treatment of its 2023 distributions to holders of the Company's common stock and 6.625% Series A Cumulative Redeemable Preferred Stock ("Preferred Stock").  The tax information provided below should not be construed as tax advice and shareholders are encouraged to consult with their tax advisors as to their specific tax treatment of the Company's distributions. This information is being provi ...

csfotoimages/iStock Editorial via Getty Images The sustained collapse of equity office REITs since 2022 has likely opened up some opportunities to acquire highly distressed assets with decent underlying fundamentals despite the bleak backdrop posed by the tripartite of high interest rates, work-from-home trends, and the specter of a recession. City Office REIT (NYSE:CIO) is down roughly 70% over this time frame, now trading hands at a 67% discount to a book value of $16.83 per share at the end of its la ...