City Office REIT (CIO) Q4 2024 earnings summary

Executive summary

• 2024 marked a turning point for the office sector, with positive net absorption and leasing volumes nearing pre-pandemic levels, especially in Sunbelt markets, which led performance at 95% of pre-pandemic volume.

• Owns 5.4–5.6 million sq ft of office properties, 88% in high-growth Sunbelt markets, with 85.4%–85.8% portfolio occupancy as of year-end 2024.

• Portfolio strategy focused on high-growth Sunbelt markets, with significant property upgrades and amenity enhancements completed at multiple properties since 2021.

• Management has generated $550M in gains from 13 dispositions, including a $429M gain from a 2021 life science portfolio sale.

• Disposed of Superior Pointe in Denver for $12 million post-year-end, reallocating focus to stronger markets.

Financial highlights

• Q4 2024 net operating income (NOI) was $25.5M, up $900,000 sequentially from Q3, with Core FFO at $11.7M ($0.28/share) and AFFO at $4.3M ($0.10/share).

• Q4 rental and other revenues were $41.9M; GAAP net loss was $12.6M, or ($0.31) per share.

• Same-store cash NOI increased 3.3% year-over-year in Q4, led by strong performance in Raleigh.

• Portfolio occupancy ended Q4 at 85.4%, or 87.6% including signed but not commenced leases.

• Q4 FFO payout ratio: 39%; Core FFO payout ratio: 35%; AFFO payout ratio: 97%.

Outlook and guidance

• 2025 Core FFO per share guidance: $1.10–$1.14, in line with Q4 2024 annualized.

• 2025 NOI guidance: $102.5M–$104.5M; interest expense: $37M–$38M.

• Projected year-end 2025 occupancy: 85.0%–87.0%; Same-store cash NOI growth: 2.5%–4.5%.

• Guidance includes Superior Pointe disposition; assumes no further acquisitions or dispositions.

• No share issuances or repurchases assumed in 2025 guidance.