City Office REIT Announces Phoenix Acquisition

Rhea-AI Summary

City Office REIT (NYSE: CIO) has announced the acquisition of Block 23, a premier office building in downtown Phoenix, Arizona, for $150 million. The 307,000 square foot property is 94% leased, featuring a tenant base that is approximately 70% investment grade with a weighted average lease term of about 12 years. CEO James Farrar emphasized the acquisition's strategic fit and its potential to generate long-term cash flow for shareholders. The property is situated in a desirable area, offering extensive amenities and a modern construction completed in 2019.

Positive

• Acquisition of Block 23 enhances portfolio quality and location.
• 94% leased with approximately 70% investment grade tenants.
• Expected to generate predictable long-term cash flow.

Negative

• None.

VANCOUVER, Dec. 7, 2021 /PRNewswire/ -- City Office REIT, Inc. (NYSE: CIO) ("City Office" or the "Company") announced today that it has closed the acquisition of Block 23, a premier office building in downtown Phoenix, Arizona, for a gross purchase price of $150.0 million, exclusive of closing costs.

The 307,000 square foot property is an exceptional asset with strong tenancy.  Block 23 is located in a highly desirable live-work-play environment in downtown Phoenix, immediately adjacent to dining, entertainment and transportation alternatives.  The newly constructed property was delivered in 2019 with best-in-class finishes, modern tenant suite buildouts and floor-to-ceiling windows on every floor.  Block 23 possesses unmatched tenant amenity offerings, including an expansive rooftop amenity deck and three high-end food and grocery options.  The property is 94% leased to a tenant base that is approximately 70% investment grade, with a weighted average lease term remaining of approximately 12 years.

"Block 23 is a perfect fit to reinvest a portion of the proceeds from our recent Sorrento Mesa sale," commented James Farrar, the Company's Chief Executive Officer.  "It is situated in a top location within our footprint of growing markets in the south and west.  The vibrant location, new construction and full suite of on-site amenities has attracted an incredible base of growing tenants.  Closing this transaction has enhanced our portfolio and will generate predictable, long-term cash flow for our shareholders."

A detailed presentation regarding the transaction can be found on the Investor Relations section of the Company's website at www.cioreit.com.

About City Office REIT, Inc.

City Office REIT is an internally-managed real estate company focused on acquiring, owning and operating high-quality office properties located in leading 18-hour cities in the Southern and Western United States. City Office currently owns or has a controlling interest in 5.5 million square feet of office properties. The Company has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes.

Forward-looking Statements

This press release 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 press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements within the meaning of the federal securities laws and as such are based upon the Company's 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 will be those anticipated by the Company. They are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement, including with respect to the terms and timing of future acquisition or disposition activity, if any.  Factors that could cause actual results to differ materially include, among other things, changes to the Company's expected liquidity position, uncertainty regarding acquisitions, dispositions or our operations, and the risk factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 and subsequent filings with the United States Securities and Exchange Commission (the "SEC"). Forward-looking statements presented in this press release are based on management's beliefs and assumptions made by, and information currently available to, management. The forward-looking statements contained in this press release are based on historical performance and management's current plans, estimates and expectations in light of information currently available to us and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have 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 our news releases and filings with the SEC, including but not limited to those described in our Annual Report on Form 10-K for the year ended December 31, 2020 under the heading "Risk Factors" and in our subsequent reports filed with the SEC, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement made by us in this press release speaks only as of the date of this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. The Company does not guarantee that the assumptions underlying such forward-looking statements contained in this press release are free from errors. We undertake no obligation 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.

Contact

City Office REIT, Inc.
Anthony Maretic, CFO
+1-604-806-3366
investorrelations@cioreit.com

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SOURCE City Office REIT, Inc.

FAQ

What is the significance of City Office REIT's acquisition of Block 23?

The acquisition of Block 23 enhances City Office REIT's portfolio by adding a high-quality asset in a prime location, improving long-term cash flow.

What is the purchase price for Block 23 acquired by City Office REIT?

City Office REIT acquired Block 23 for $150 million.

How much of Block 23 is leased and what is the tenant quality?

Block 23 is 94% leased with a tenant base that is approximately 70% investment grade.

When was Block 23 constructed?

Block 23 was completed in 2019.