Company: CIO
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000950170-25-023714
Chunk: 97

Company: City Office REIT, Inc.
Filing Date: 2025-02-20
Form: 10-K
Item: Item 6
Chunk 97
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 for lease to a stable and diverse tenant base. The Company’s properties have both full-service gross and net leases which are generally classified as operating leases.  Rental income related to such leases is recognized on a straight-line basis over the remaining lease term. The Company’s total revenue includes fixed base rental payments provided under the lease and variable payments, which principally consist of tenant expense 

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 reimbursements for certain property operating expenses as provided under the lease. The Company elected the practical expedient to account for its lease and non-lease components as a single combined operating lease component under ASC 842. As a result, rental income, expense reimbursement, and other were aggregated into a single line within rental and other revenues on the consolidated statements of operations. The Company recognized fixed and variable lease payments for operating leases for the years ended December 31, 2024 and December 31, 2023 as follows (in thousands): 

         Years Ended December 31,

         2024

         2023

         Fixed payments
          
         $
         146,189

         $
         149,203

         Variable payments

         24,507

         26,826

         $
         170,696

         $
         176,029

        The Company ceased recognizing rental lease income with respect to the Cascade Station property on the deconsolidation of the entity on June 27, 2024. The Company ceased recognizing rental lease income with respect to the 190 Office Center property on the deconsolidation of the entity on May 15, 2023. Refer to Note 4 for further details. The Company recognized interest income of $0.6 million and variable lease payments of $0.2 million for the sales-type lease at the Lake Vista Pointe property for the year ended December 31, 2022. Future minimum lease payments to be received by the Company as of December 31, 2024 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):  

         2025
          
         $
         127,005

         2026

         120,679

         2027

         102,956

         2028

         87,582

         2029

         66,703

         Thereafter

         137,258

         $
         642,183

        The Company’s leases may include various