# EDGAR Filing Document

**Accession Number:** 0001593222
**File Stem:** 0001193125-23-045558
**Filing Date:** 2023-2
**Character Count:** 42790
**Document Hash:** 17f998584e190dc5b584e34beda012dd
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001193125-23-045558.hdr.sgml**: 20230223

**ACCESSION NUMBER**: 0001193125-23-045558

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230223

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230223

**DATE AS OF CHANGE**: 20230223

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** City Office REIT, Inc.
- **CENTRAL INDEX KEY:** 0001593222
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **IRS NUMBER:** 981141883
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-36409
- **FILM NUMBER:** 23655822

**BUSINESS ADDRESS:**
- **STREET 1:** SUITE 3210 - 666 BURRARD STREET
- **CITY:** VANCOUVER
- **STATE:** A1
- **ZIP:** V6C 2X8
- **BUSINESS PHONE:** 1-604-806-3353

**MAIL ADDRESS:**
- **STREET 1:** SUITE 3210 - 666 BURRARD STREET
- **CITY:** VANCOUVER
- **STATE:** A1
- **ZIP:** V6C 2X8

?xml version="1.0" encoding="utf-8" ? 8-K

------

### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION

#### Washington, D.C. 20549

------

### FORM 8-K

------

#### CURRENT REPORT

#### Pursuant to Section 13 or 15(d)

#### of The Securities Exchange Act of 1934

#### Date of Report (Date of earliest event reported): February 23, 2023

------

## City Office REIT, Inc.

#### (Exact Name of Registrant as Specified in Its Charter)

------

---

| | | |
|:---|:---|:---|
| **Maryland** | **001-36409** | **98-1141883** |
| **(State or other jurisdiction of<br>incorporation)** | **(Commission<br>File Number)** | **(I.R.S. Employer<br>Identification No.)** |

---

---

| | |
|:---|:---|
| **666 Burrard Street, Suite 3210,**<br> **Vancouver, British Columbia,** | **V6C 2X8** |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

(604) 806-3366

#### (Registrant's telephone number, including area code)

#### Not Applicable

#### (Former name or former address, if changed since last report)

------

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (<u>see</u> General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of Each Class** | **Ticker<br>Symbols:** | **Name of Each Exchange<br>on Which Registered** |
| Common Stock, $0.01 par value | CIO | New York Stock Exchange |
| 6.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share | CIO.PrA | New York Stock Exchange |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

------

#### Item 2.02 Results of Operations and Financial Condition.
City Office REIT, Inc. (the "Company") issued a press release on February 23, 2023 announcing its financial results for the fiscal year ended December 31, 2022. A copy of the press release is attached hereto as Exhibit 99.1.

The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished pursuant to Item 9.01, shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 furnished pursuant to Item 9.01, shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933, as amended.

#### Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers, Compensatory Arrangements of Certain Officers.
On February 23, 2023, the Company announced that, effective on February 23, 2023, Mr. William Flatt will resign from his position as a member of the Board of Directors (the "Board") of the Company and all committees thereof. Mr. Flatt's resignation does not involve any disagreement with the Company on any matter relating to the Company's operations, policies, practices or otherwise.

In connection with Mr. Flatt's resignation from the Board and in recognition of his efforts and contributions to the Company, the Board on February 22, 2023 approved the accelerated vesting of 11,687 restricted stock units previously granted to Mr. Flatt under the Company's equity incentive plan (the "EIP"), effective on February 23, 2023.

On February 23, 2023, the Company announced that, effective on February 23, 2023, at the recommendation of the Board's Nominating and Corporate Governance Committee (the "NCG Committee"), the Board will fill the vacancy caused by Mr. Flatt's resignation by appointing Mr. Michael Mazan to the Board to serve until the next annual meeting of stockholders of the Company and until his successor is duly elected and qualified. Mr. Mazan will also be appointed as a member and Chairman of the Audit Committee of the Board and as a member of the NCG Committee. At the recommendation of the NCG Committee, the Company also announced that, effective concurrent with Mr. Flatt's resignation, Mr. Mark Murski will be appointed as a member of the Board's Investment Committee (the "Investment Committee").

Mr. Mazan joins the Board with over 30 years of experience in investing, management consulting and investment banking. He currently serves as a founding partner of KingsPeak Partners, a boutique private equity investment firm focused on investing in and developing market-leading small to mid-sized businesses. Prior to that, from 1999 to 2018, Mr. Mazan was a partner at Birch Hill Equity Partners, a leading private equity firm, where he was responsible for all parts of the investment lifecycle, with a focus on portfolio company building and governance. From 1997 to 1999, Mr. Mazan was an investment banking associate at Credit Suisse First Boston, one of the world's premier investment banks. From 1995 to 1997, he was Director of Finance and Corporate Development at Rogers Wave, a pioneering division of Rogers Communications. From 1992 to 1995, Mr. Mazan was a consulting associate at McKinsey & Company, the world's leading management consulting firm. He also has extensive experience serving as a director for various private and publicly listed companies, having served on 12 boards across various industries during his career. Mr. Mazan has a bachelor of commerce degree from Carleton University and a master of business administration degree from the University of Western Ontario.

The Board determined that Mr. Mazan is "independent" under 303A.02 of the New York Stock Exchange Listed Company Manual and the Company's Corporate Governance Guidelines. In connection with his appointment, the Company will enter into an indemnification agreement with Mr. Mazan, substantially in the form of the indemnification agreement the Company has entered into with all other directors and previously filed by the Company with the Securities and Exchange Commission.

Mr. Mazan will receive the same fees for his service as our other directors. Annual cash compensation will be pro-rated from the date of Mr. Mazan's election to the Board. In addition, Mr. Mazan will participate in the Company's EIP under the same terms as our other directors.

Effective February 23, 2023, Mr. John Sweet will step down from his position as Chairman of the Investment Committee but remain a member of the Investment Committee, and Mr. John McLernon will step down from his position as Chairman of the Board. On February 23, 2023, the Company announced that, effective February 23, 2023, at the recommendation of the NCG Committee, the Board will fill the vacancy caused by Mr. Sweet's stepping down from his position as Chairman of the Investment Committee by appointing Mr. McLernon to the position. The Company also announced that, effective February 23, 2023 and at the recommendation of the NCG Committee, the Board will fill the vacancy caused by Mr. McLernon's stepping down from his position as Chairman of the Board by appointing Mr. Sweet as Chairman of the Board.

------

#### Item 9.01 Financial Statements and Exhibits.

---

| | |
|:---|:---|
| **Exhibit<br>Number** | **Description** |
| 99.1 | [City Office REIT, Inc. Press Release, dated February 23, 2023.](d464894dex991.htm) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |

---

------

#### SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | CITY OFFICE REIT, INC. | CITY OFFICE REIT, INC. |
| Date: February 23, 2023 | By: | /s/ James Farrar |
|  | Name: | James Farrar |
|  | Title: | Chief Executive Officer and Director |

---

## Exhibit 99.1

**Exhibit 99.1**![LOGO](g464894g0222082600908.jpg)

**City Office REIT Reports Fourth Quarter and Full Year 2022 Results** 

VANCOUVER— February 23, 2023—City Office REIT, Inc. (NYSE: CIO) (the "Company," "City Office," "we" or "our") today announced its results for the quarter and full year ended December 31, 2022.

**Fourth Quarter Highlights** 

• Rental and other revenues were $44.6 million. GAAP net loss attributable to common stockholders was
approximately $14.3 million, or ($0.36) per fully diluted share;

• Core FFO was approximately $15.4 million, or $0.38 per fully diluted share;

• AFFO was approximately $5.0 million, or $0.12 per fully diluted share;

• In-place occupancy was 86.2% as of quarter end;

• Executed approximately 108,000 square feet of new and renewal leases during the quarter;

• Declared a fourth quarter dividend of $0.20 per share of common stock, paid on January 24, 2023; and

• Declared a fourth quarter dividend of $0.4140625 per share of Series A Preferred Stock, paid on January 24,
2023. **Highlights Subsequent to Quarter End** 

• Increased the total authorized borrowings under the Company's unsecured credit facility (the "Unsecured
Credit Facility") from $350 million to $375 million by entering into a three-year $25 million term loan. The variable interest rate on the term loan was effectively fixed at 5.9% by entering into an interest rate swap; and

• Entered into an interest rate swap effectively fixing the variable interest rate on $140 million of the
Unsecured Credit Facility at 5.6%. These two interest rate swap transactions effectively fixed over 90% of the Company's total debt.

"Our active approach to asset management and value creation led to strong operating results in the fourth quarter and 2022 as a whole," commented James Farrar, the Company's Chief Executive Officer. "For the year, we generated the highest annual Core FFO per share in the Company's history and, in doing so, increased Core FFO per share 15% over the prior year. This was a result of, among other initiatives, our integration and stabilization of the three major acquisitions in Raleigh, Phoenix and Dallas that we made in December 2021."

"2022 also posed significant challenges, with rapidly rising interest rates, challenging conditions in the capital markets and headwinds across the office industry. Our 2023 strategic plan focuses on enhancing occupancy, driving operating performance, repositioning select assets and pruning non-core properties, which we believe will position us for long term growth and value creation. Our goal is to enhance the composition of our portfolio while positioning ourselves with capital that can be invested to drive performance. Overall, our high-quality Sun Belt market footprint continues to underpin our confidence in our ability to outperform."

------

![LOGO](g464894g0222082600908.jpg)

A reconciliation of certain non-GAAP financial measures, including FFO, Core FFO, AFFO, NOI, Same Store NOI, Same Store Cash NOI, Adjusted Cash NOI and their equivalent per share measures, to the most directly comparable financial measure under U.S. generally accepted accounting principles ("GAAP") can be found at the end of this release.

**Portfolio Operations** 

The Company reported that its total portfolio as of December 31, 2022 contained 6.0 million net rentable square feet and was 86.2% occupied.

Net Operating Income was approximately $27.6 million and Adjusted Cash NOI (CIO share) was approximately $26.2 million for the fourth quarter of 2022.

Same Store Cash NOI decreased 1.2% for the three months ended December 31, 2022 as compared to the same period in the prior year. Same Store Cash NOI decreased 4.4% for the twelve months ended December 31, 2022 as compared to the prior year.

**Leasing Activity** 

The Company's total leasing activity during the fourth quarter of 2022 was approximately 108,000 square feet, which included 68,000 square feet of new leasing and 40,000 square feet of renewals. Approximately 97,000 square feet of leases signed within the quarter will commence subsequent to quarter end. The Company's total leasing activity during the full year 2022 was approximately 777,000 square feet.

*New Leasing* – New leases were signed with a weighted average lease term of 5.9 years at a weighted average annual rent of $33.16 per square foot and at a weighted average cost of $7.79 per square foot per year.

*Renewal Leasing* – Renewal leases were signed with a weighted average lease term of 3.8 years at a weighted average annual rent of $32.58 per square foot and at a weighted average cost of $2.46 per square foot per year.

**Capital Structure** 

As of December 31, 2022, the Company had total principal outstanding debt of approximately $693.8 million. Approximately 71.1% of the Company's debt was fixed rate or effectively fixed rate due to an interest rate swap. City Office's total principal outstanding debt had a weighted average maturity of approximately 3.2 years and a weighted average interest rate of 4.4%.

Subsequent to quarter end, the Company entered into an amendment to the Unsecured Credit Facility and entered into a three-year $25 million term loan. The term loan increased the Company's total authorized borrowings under the Unsecured Credit Facility from $350 million to $375 million. In conjunction with the $25 million term loan, the Company also entered into a three-year interest rate swap for a notional amount of $25 million, effectively fixing the rate of the term loan at approximately 5.9% for the three-year term.

------

![LOGO](g464894g0222082600908.jpg)

Subsequent to quarter end, the Company entered into an interest rate swap effectively fixing the variable interest rate on $140 million of the Unsecured Credit Facility at approximately 5.6% through November 16, 2025. These two interest rate swap transactions effectively fixed over 90% of the Company's total debt.

**Impairment of Real Estate** 

During the quarter, the Company recorded an impairment of real estate for $13.4 million. The non-cash impairment was related to the write down of the book value of 190 Office Center in Dallas, Texas and Cascade Station in Portland, Oregon for $6.9 million and $6.5 million, respectively, to the fair value for each property.

**Dividends** 

On December 15, 2022, the Company's Board of Directors approved and the Company declared a cash dividend of $0.20 per share of the Company's common stock for the three months ended December 31, 2022. The dividend was paid on January 24, 2023 to common stockholders and unitholders of record as of January 10, 2023.

On December 15, 2022, the Company's Board of Directors approved and the Company declared a cash dividend of $0.4140625 per share of the Company's 6.625% Series A Preferred Stock for the three months ended December 31, 2022. The dividend was paid on January 24, 2023 to preferred stockholders of record as of January 10, 2023.

**2023 Outlook** 

The Company is introducing its full year 2023 guidance. 2023 guidance assumes no share issuances and no share repurchase activity. Further, guidance does include the impact of a modest amount of speculative leasing, generally weighted towards the second half of the year.

---

| | | |
|:---|:---|:---|
| **Full Year 2023 Guidance** | **Low** | **High** |
|  Acquisitions | $0.0M | $0.0M |
|  Dispositions | $25.0M | $75.0M |
|  Net Operating Income | $109.0M | $111.0M |
|  General & Administrative Expenses | $14.5M | $15.5M |
|  Interest Expense | $32.0M | $33.0M |
|  2023 Core FFO per diluted share | $1.38 | $1.43 |
|  Net Recurring Straight-Line Rent Adjustment | $4.5M | $5.5M |
|  Same Store Cash NOI Change | 2.0% | 4.0% |
|  December 31, 2023 Occupancy | 85.0% | 87.0% |

---

------

![LOGO](g464894g0222082600908.jpg)

Material Considerations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. The General and Administrative Expenses guidance includes approximately $4.2 million for stock-based
compensation. Our Core FFO definition excludes stock-based compensation. Excluding stock-based compensation, General and Administrative Expenses guidance for Full Year 2023 would have been $10.3 million – $11.3 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Annual weighted average fully diluted shares of common stock outstanding are assumed to be approximately
40.8 million.

The Company's guidance is based on current plans and assumptions and subject to the risks and uncertainties more fully described in the Company's filings with the United States Securities and Exchange Commission. This outlook reflects management's view of current and future market conditions, including assumptions such as timing and magnitude of future acquisitions and dispositions, if any, rental rates, occupancy levels, leasing activity, our ability to renew expiring leases, uncollectible rents, operating and general administrative expenses, weighted average diluted shares outstanding and rising interest rates. The Company reminds investors that the impacts of the COVID-19 pandemic, inflation and general market conditions are uncertain and impossible to predict. See "Forward-looking Statements" below.

**Webcast and Conference Call Details** 

City Office's management will hold a conference call at 11:00 am Eastern Time on February 23, 2023.

The webcast will be available under the "Investor Relations" section of the Company's website at <u>www.cioreit.com</u>. The conference call can be accessed by dialing 1-844-200-6205 for domestic callers and 1-929-526-1599 for international callers. The passcode for the conference call is 421891.

A replay of the call will be available later in the day on February 23, 2023, continuing through May 24, 2023 and can be accessed by dialing 1-866-813-9403 for domestic callers and 44-204-525-0658 for international callers. The passcode for the replay is 140203. A replay will also be available for twelve months following the call at "Webcasts & Events" in the "Investor Relations" section of the Company's website.

A supplemental financial information package to accompany the discussion of the results will be posted on <u>www.cioreit.com</u> under the "Investor Relations" section.

**Non-GAAP Financial Measures** 

**Funds from Operations ("FFO")** – The National Association of Real Estate Investment Trusts ("NAREIT") states FFO should represent net income or loss (computed in accordance with GAAP) plus real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments of unconsolidated partnerships and joint ventures, gains or losses on the sale of property and impairments to real estate.

The Company uses FFO as a supplemental performance measure because the Company believes that FFO is beneficial to investors as a starting point in measuring the Company's operational performance. We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare the Company's operating performance with that of other REITs.

------

![LOGO](g464894g0222082600908.jpg)

However, because FFO excludes depreciation and amortization and captures neither the changes in the value of the Company's properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of the Company's properties, all of which have real economic effects and could materially impact the Company's results from operations, the utility of FFO as a measure of the Company's performance is limited. In addition, other equity REITs may not calculate FFO in accordance with the NAREIT definition as the Company does, and, accordingly, the Company's FFO may not be comparable to such other REITs' FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of the Company's performance.

**Core Funds from Operations ("Core FFO")** – We calculate Core FFO by using FFO as defined by NAREIT and adjusting for certain other non-core items. We also exclude from our Core FFO calculation acquisition costs, loss on early extinguishment of debt, changes in the fair value of earn-outs, changes in fair value of contingent consideration and the amortization of stock based compensation.

We believe Core FFO provides a useful metric in comparing operations between reporting periods and in assessing the sustainability of our ongoing operating performance. Other equity REITs may calculate Core FFO differently or not at all, and, accordingly, the Company's Core FFO may not be comparable to such other REITs' Core FFO.

**Adjusted Funds from Operations ("AFFO")** – We compute AFFO by adding to Core FFO the non-cash amortization of deferred financing fees and non-real estate depreciation and then subtracting cash paid for recurring tenant improvements, leasing commissions, and capital expenditures, and eliminating the net effect of straight-line rent / expense, deferred market rent and debt fair value amortization. Recurring capital expenditures exclude development / redevelopment activities, capital expenditures planned at acquisition and costs to reposition a property. We exclude first generation leasing costs within the first two years of acquisition, which are generally to fill vacant space in properties we acquire or were planned at acquisition. We have further excluded all costs associated with tenant improvements, leasing commissions and capital expenditures which were funded by the entity contributing the properties at closing.

Along with FFO and Core FFO, we believe AFFO provides investors with appropriate supplemental information to evaluate the ongoing operations of the Company. Other equity REITs may calculate AFFO differently, and, accordingly, the Company's AFFO may not be comparable to such other REITs' AFFO.

**Net Operating Income ("NOI"), Adjusted Cash NOI (CIO share)** – We define NOI as rental and other revenues less property operating expenses. We define Adjusted Cash NOI as NOI less the effect of recurring straight-line rent / expense, deferred market rent, and any amounts which are funded by the selling entities and NCI in properties.

We consider NOI and Adjusted Cash NOI to be appropriate supplemental performance measures to net income because we believe they provide information useful in understanding the core operations and operating performance of our portfolio.

**Same Store Net Operating Income ("Same Store NOI") and Same Store Cash Net Operating Income ("Same Store Cash NOI")** – Same Store NOI and Same Store Cash NOI are calculated as the NOI attributable to the properties continuously owned and operated for the entirety of the reporting periods presented. The Company's definition of Same Store NOI and Same Store Cash NOI excludes properties that were not stabilized during both of the applicable reporting periods. These exclusions may include, but are not limited to, acquisitions, dispositions and properties undergoing repositioning or significant renovations.

------

![LOGO](g464894g0222082600908.jpg)

We believe Same Store NOI and Same Store Cash NOI are important measures of comparison because it allows for comparison of operating results of stabilized properties owned and operated for the entirety of both applicable periods and therefore eliminates variations caused by acquisitions, dispositions or repositionings during such periods. Other REITs may calculate Same Store NOI and Same Store Cash NOI differently and our calculation should not be compared to that of other REITs.

**Forward-looking Statements** 

This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements within the meaning of the federal securities laws and as such are based upon the Company's current beliefs as to the outcome and timing of future events. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "approximately," "anticipate," "assume," "believe," "budget," "contemplate," "continue," "could," "estimate," "expect," "future," "hypothetical," "intend," "may," "outlook," "plan," "potential," "predict," "project," "seek," "should," "target," "will" or other similar words or expressions. There can be no assurance that actual forward-looking statements, including projected capital resources, projected profitability and portfolio performance, estimates or developments affecting the Company will be those anticipated by the Company. Examples of forward-looking statements include those pertaining to expectations regarding our financial performance, including under metrics such as NOI and FFO, market rental rates, national or local economic growth, including the impact of inflation, estimated replacement costs of our properties, the Company's expectations regarding tenant occupancy, re-leasing periods, the Company's ability to renew expiring leases, tenant compliance with contractual lease obligations, projected capital improvements, expected sources of financing, expectations as to the likelihood and timing of closing of acquisitions, dispositions, or other transactions, the expected operating performance of the Company's current properties, anticipated near-term acquisitions and descriptions relating to these expectations, including, without limitation, the anticipated net operating income yield and cap rates, lower than expected yields, increased interest rates and operating costs, and changes in local, regional, national and international economic conditions, including as a result of the ongoing COVID-19 pandemic. Forward-looking statements presented in this press release are based on management's beliefs and assumptions made by, and information currently available to, management.

The forward-looking statements contained in this press release are based on historical performance and management's current plans, estimates and expectations in light of information currently available to us and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to the factors, risks and uncertainties described above, changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors described in our news releases and filings with the SEC, including but not limited to those described in our Annual Report on Form 10-K for the year ended December 31, 2022 under the heading "Risk Factors" and in our subsequent reports filed with the SEC, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement made by us in this press release speaks only as of the date of this press release. Factors or events that could cause our actual results to differ may emerge from time to time, and it

------

![LOGO](g464894g0222082600908.jpg)

is not possible for us to predict all of them. The Company does not guarantee that the assumptions underlying such forward-looking statements contained in this press release are free from errors. Unless otherwise stated, historical financial information and per share and other data are as of December 31, 2022 or relate to the quarter ended December 31, 2022. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.

------

![LOGO](g464894g0222082600908.jpg)

**City Office REIT, Inc.** 

**Consolidated Balance Sheets** 

*(In thousands, except par value and share data)*

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2022** | **December 31,<br>2021** |
|  **Assets** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Real estate properties |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Land | $199537 | $204801 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Building and improvement | 1215000 | 1244177 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tenant improvement | 139365 | 119011 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Furniture, fixtures and equipment | 689 | 664 |
|  | 1554591 | 1568653 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated depreciation | (175720) | (157356) |
|  | 1378871 | 1411297 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Cash and cash equivalents | 28187 | 21321 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Restricted cash | 16075 | 20945 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Rents receivable, net | 44429 | 30415 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred leasing costs, net | 21989 | 20327 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquired lease intangible assets, net | 55438 | 68925 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other assets | 29450 | 28283 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Assets | $1574439 | $1601513 |
|  **Liabilities and Equity Liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Debt | $690099 | $653648 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accounts payable and accrued liabilities | 35753 | 27101 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Deferred rent | 9147 | 11600 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Tenant rent deposits | 7040 | 6165 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquired lease intangible liabilities, net | 9150 | 10872 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other liabilities | 20076 | 21532 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Liabilities | 771265 | 730918 |
|  **Commitments and Contingencies Equity:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.625% Series A Preferred stock, $0.01 par value per share, 5,600,000 shares authorized, 4,480,000 issued and outstanding as of December 31, 2022 and December 31, 2021 | 112000 | 112000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common stock, $0.01 par value, 100,000,000 shares authorized, 39,718,767 and 43,554,375 shares issued and outstanding as of December 31, 2022 and December 31, 2021 | 397 | 435 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional paid-in capital | 436161 | 482061 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Retained earnings | 251542 | 275502 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Accumulated other comprehensive income/(loss) | 2731 | (382) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Stockholders' Equity | 802831 | 869616 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interests in properties | 343 | 979 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Equity | 803174 | 870595 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total Liabilities and Equity | $1574439 | $1601513 |

---

------

![LOGO](g464894g0222082600908.jpg)

**City Office REIT, Inc.** 

**Consolidated Statements of Operations** 

*(In thousands, except per share data)* 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Years Ended<br>December 31,** | **Years Ended<br>December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  **Rental and other revenues** | $44613 | $39672 | $180485 | $164041 |
|  **Operating expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Property operating expenses | 17003 | 14529 | 67739 | 58005 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 3207 | 1721 | 13782 | 15489 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 15423 | 13299 | 62495 | 57317 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment of real estate | 13444 |  | 13444 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total operating expenses | 49077 | 29549 | 157460 | 130811 |
|  Operating (loss)/income | (4464) | 10123 | 23025 | 33230 |
|  Interest expense: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contractual interest expense | (7473) | (5736) | (25784) | (23268) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of deferred financing costs and debt fair value | (301) | (462) | (1218) | (1332) |
|  | (7774) | (6198) | (27002) | (24600) |
|  Net gain on sale of real estate property |  | 429250 | 21658 | 476651 |
|  **Net (loss)/income** | (12238) | 433175 | 17681 | 485281 |
|  Less: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net income attributable to non-controlling interests in properties | (181) | (126) | (691) | (886) |
|  **Net (loss)/income attributable to the Company** | (12419) | 433049 | 16990 | 484395 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Preferred stock distributions | (1855) | (1855) | (7420) | (7420) |
|  **Net (loss)/income attributable to common stockholders** | $(14274) | $431194 | $9570 | $476975 |
|  Net (loss)/income per common share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | $(0.36) | $9.90 | $0.23 | $10.97 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | $(0.36) | $9.76 | $0.22 | $10.80 |
|  Weighted average common shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Basic | 39719 | 43554 | 42052 | 43498 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Diluted | 39719 | 44162 | 42866 | 44145 |
|  Dividend distributions declared per common share | $0.20 | $0.20 | $0.80 | $0.65 |

---

------

![LOGO](g464894g0222082600908.jpg)

**City Office REIT, Inc.** 

**Reconciliation of Net Income to Net Operating Income and Adjusted Cash NOI** 

**(Unaudited)** 

*(In thousands)* 

---

| | |
|:---|:---|
|  | **Three Months Ended**<br>**December 31, 2022** |
|  Net loss | $(12238) |
|  Adjustments to net loss: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; General and administrative | 3207 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Contractual interest expense | 7473 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Amortization of deferred financing costs and debt fair value | 301 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Depreciation and amortization | 15423 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Impairment of real estate | 13444 |
|  Net Operating Income ("NOI") | $27610 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net recurring straight-line rent/expense adjustment | (994) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Net amortization of above and below market leases | 5 |
|  Portfolio Adjusted Cash NOI | $26621 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NCI in properties – share in cash NOI | (443) |
|  Adjusted Cash NOI (CIO share) | $26178 |

---

------

![LOGO](g464894g0222082600908.jpg)

**City Office REIT, Inc.** 

**Reconciliation of Net Income to FFO, Core FFO and AFFO** 

**(Unaudited)** 

*(In thousands, except per share data)* 

---

| | |
|:---|:---|
|  | **Three Months Ended**<br>**December 31, 2022** |
|  Net loss attributable to common stockholders | $(14274) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (+) Depreciation and amortization | 15423 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (+) Impairment of real estate | 13444 |
|  | 14593 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Non-controlling interests in properties: |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (+) Share of net income | 181 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (-) Share of FFO | (337) |
|  FFO attributable to common stockholders | $14437 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (+) Stock based compensation | 992 |
|  Core FFO attributable to common stockholders | $15429 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (-) Net recurring straight-line rent/expense adjustment | (994) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (+) Net amortization of above and below market leases | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (+) Net amortization of deferred financing costs and debt fair value | 299 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (-) Net recurring tenant improvements and incentives | (6478) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (-) Net recurring leasing commissions | (834) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (-) Net recurring capital expenditures | (2462) |
|  AFFO attributable to common stockholders | $4965 |
|  FFO per common share | $0.36 |
|  Core FFO per common share | $0.38 |
|  AFFO per common share | $0.12 |
|  Dividends distributions declared per common share | $0.20 |
|  FFO Payout Ratio | 56% |
|  Core FFO Payout Ratio | 53% |
|  AFFO Payout Ratio | 163% |
|  Weighted average common shares outstanding - diluted | 40502 |

---

------

![LOGO](g464894g0222082600908.jpg)

**City Office REIT, Inc.** 

**Reconciliation of Rental and Other Revenues to Same Store NOI and Same Store Cash NOI** 

**(Unaudited)** 

*(In thousands)* 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended<br>December 31,** | **Three Months Ended<br>December 31,** | **Years Ended<br>December 31,** | **Years Ended<br>December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  Rental and other revenues | $44613 | $39672 | $180485 | $164041 |
|  Property operating expenses | 17003 | 14529 | 67739 | 58005 |
|  Net operating income ("NOI") | $27610 | $25143 | $112746 | $106036 |
|  Less: NOI of properties not included in same store | (8148) | (6073) | (31975) | (19754) |
|  Same store NOI | $19462 | $19070 | $80771 | $86282 |
|  Less: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Termination fee income | (254) | (366) | (2959) | (7139) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Straight-line rent/expense adjustment | (598) | 30 | (1304) | 674 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Above and below market leases | 36 | 55 | 67 | 430 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; NCI in properties – share in cash NOI | (443) | (365) | (1660) | (1860) |
|  Same store cash NOI | $18203 | $18424 | $74915 | $78387 |

---

------

![LOGO](g464894g0222082600908.jpg)

**City Office REIT, Inc.** 

**Reconciliation of Net Income to Core FFO Guidance** 

**(Unaudited)** 

*(In thousands, except per share data)* 

---

| | | |
|:---|:---|:---|
|  | **Full Year 2023 Outlook** | **Full Year 2023 Outlook** |
|  | Low | High |
|  Net loss attributable to common stockholders | $(12150) | $(6150) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (+) Depreciation and amortization | 65000 | 66000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (-) Net gain on sale of real estate property |  | (5000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (-) Non-controlling interests in properties | (600) | (600) |
|  FFO attributable to common stockholders | $52250 | $54250 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (+) Stock based compensation | 4250 | 4250 |
|  Core FFO attributable to common stockholders | $56500 | $58500 |
|  FFO per common share | $1.28 | $1.33 |
|  Core FFO per common share | $1.38 | $1.43 |
|  Weighted average shares of common stock | 40800 | 40800 |

---

**Contact** 

City Office REIT, Inc.

Anthony Maretic, CFO

+1-604-806-3366

investorrelations@cityofficereit.com