Company: CIO
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000950170-25-023714
Chunk: 55

Company: City Office REIT, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 6
Chunk 55
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 currently leased space and to lease currently available space and space that becomes available from lease terminations. As of December 31, 2024, the operating properties in our portfolio were 85.4% leased, without regard to renewal options. As of December 31, 2024, 9.7%, 9.9%, and 13.3% of net rentable area under our portfolio is subject to lease expiration during 2025, 2026, and 2027, respectively, without regard to renewal options (representing approximately 11.3%, 11.0% and 14.9% of our annualized base rent). The amount of rental revenue generated also depends on our ability to maintain or increase rental rates at our properties. Our leases typically include rent escalation provisions designed to provide annual growth in our rental income as well as an ability to pass through cost escalations to our tenants, and in the normal course of business we do not typically waive these rent escalation provisions. Certain leases contain termination provisions which permit the tenant to terminate the arrangement generally upon payment of a termination fee, which we believe acts as a deterrent to cancelling the lease. These early termination provisions applied to approximately 15.6% of the net rentable area in our portfolio as of December 31, 2024. In 2024, no tenant has exercised an early termination provision. Negative trends in one or more of these factors could adversely affect our rental revenue in future periods. We continually monitor our tenants’ ability to meet their lease obligations to pay us rent to determine if any adjustments should be reflected currently. Future economic downturns or regional downturns affecting our markets or submarkets or downturns in our tenants’ industries, including as a result of high interest rates and the fluctuating likelihood of a U.S. recession, that impair our ability to renew or re-let space and the ability of our tenants to fulfill their lease commitments, as in the case of tenant bankruptcies, could adversely affect our ability to maintain or increase rental rates at our properties. In addition, growth in rental revenue will also partially depend on our ability to acquire additional properties that meet our investment criteria. 

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 Leasing ActivityThe following table presents our leasing activity for the three months and year ended December 31, 2024. 

     Three Months Ended December 31, 2024 Leasing Activity
      
     New Leasing

     Renewal Leasing

     Total Leasing

     Square Feet (000