Company: CIO
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000950170-25-023714
Chunk: 96

Company: City Office REIT, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 6
Chunk 96
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 the exception of fixed rate mortgage loans payable, the carrying amounts of the Company’s financial instruments approximate their fair value. The Company determines the fair value of its fixed rate mortgage loans based on a discounted cash flow analysis using a discount rate that approximates the current borrowing rates for instruments of similar maturities. Based on this, the Company has determined that the fair value of these instruments was $301.8 million and $343.1 million (compared to a carrying value of $314.1 million and $357.2 million) as of December 31, 2024 and December 31, 2023, respectively. Accordingly, the fair value of mortgage loans payable have been classified as Level 3 fair value measurements.8. Related Party TransactionsAdministrative Services AgreementsOn October 29, 2018, the Company entered into the First Amendment (the “Amendment”) to the Administrative Services Agreement with real estate investment funds affiliated with Second City Capital II Corporate and Second City Real Estate II Corporation (“SCRE II”). The terms of the Amendment were effective on February 1, 2019 (the “Effective Date”). After February 1, 2019, the annual fees payable to the Company were $500,000 for the first twelve months following the Effective Date and thereafter an amount equal to 40% of the management fee paid to SCRE II by the fund managed by SCRE II. During the years ended December 31, 2024, 2023, and 2022, the Company earned $0.2 million, $0.1 million, and $0.3 million, respectively, for administrative services performed for SCRE II and its affiliates.On July 31, 2019, an indirect, wholly owned subsidiary of the Company entered into an administrative services agreement with Clarity Real Estate Ventures GP, Limited Partnership ("Clarity"), an entity affiliated with principals of Second City and officers of the Company. Pursuant to the Administrative Services Agreement, the Company will provide various administrative services and support to the related entity managing the Clarity funds. During the year ended December 31, 2024, the amounts earned by the Company for administrative services performed for Clarity were nominal. For the years ended December 31, 2023, and 2022, the Company earned $0.2 million and $0.3 million, respectively, for administrative services performed for Clarity. 9. LeasesLessor AccountingThe Company is focused on acquiring, owning and operating office properties