City Office REIT (CIO) Q3 2024 earnings summary

Executive summary

• Portfolio comprised 56 office properties totaling 5.6 million sq ft in high-growth Sun Belt markets, with 83.4% occupancy as of September 30, 2024, and 87.0% including signed but not yet commenced leases.

• Q3 2024 rental and other revenues were $42.4 million, with a GAAP net loss attributable to common stockholders of $4.5 million, or ($0.11) per diluted share.

• Executed 141,000 sq ft of new and renewal leases in Q3, including a major lease extension at Bloc 83 in Raleigh; year-to-date leasing reached 601,000 sq ft.

• Renovations at four properties are underway or completed, with $6.4 million spent through September 30 and a total expected spend of $10 million.

• Management declared a $0.10 per share quarterly dividend for common stock and $0.4140625 per share for Series A Preferred Stock.

Financial highlights

• Net operating income (NOI) for Q3 2024 was $24.6 million, down $300,000 from Q2, mainly due to the sale of Cascade Station.

• Core FFO was $11.1 million ($0.27/share), and AFFO was $4.8 million ($0.12/share), both slightly lower year-over-year.

• Rental and other revenues for Q3 2024 were $42.4 million, down from $44.2 million in Q3 2023.

• Total operating expenses for Q3 2024 were $36.2 million, up 1% year-over-year.

• Completed repayment of a $50 million term loan at maturity.

Outlook and guidance

• Updated 2024 Core FFO guidance to $1.15–$1.17 per diluted share; year-end occupancy expected between 85.0% and 86.0%.

• Same-store cash NOI change guidance updated to a range of (0.5%) to 0.5% for 2024.

• Guidance reflects healthy leasing activity, increased occupancy expectations, and risks from work-from-home trends and inflation.

• No share issuances, acquisitions, or repurchases assumed in 2024 guidance.

• Management remains focused on cost management and Sun Belt growth amid ongoing market headwinds.