VANCOUVER, June 18, 2015 /PRNewswire/ -- City Office REIT,
Inc. (NYSE: CIO), announced today that it has completed two leasing
transactions at its Washington Group Plaza property in Boise, Idaho and its Corporate Parkway
property in Allentown,
Pennsylvania. The two ten year leases, which account
for all of the Corporate Parkway property and for the entire Plaza
I building at Washington Group Plaza, total 325,987 square feet of
NRA, and renewal rates at the properties represent a weighted
average increase of approximately 2.3% over the current rental
income. These leases, in addition to improving the long term value
of the properties, extend the average remaining lease term of the
City Office portfolio from 4.6 years reported on March 31, 2015 to 6.1 years, assuming the leases
were in-place at that time.
At its Washington Group Plaza property, City Office completed a
ten year, 147,657 square foot lease with St. Luke's Regional
Medical Center, Ltd. ("St. Luke's"). St. Luke's is a wholly
owned subsidiary of St. Luke's Health System, the largest health
care system in Idaho which employs
over 12,000 people. The lease is for the Plaza I building,
which is currently occupied by another tenant whose lease expires
December 31, 2015. Although, the St.
Luke's lease has received preliminary lender approval, it remains
subject to final lender approval. It is expected to commence
by July 1, 2016 upon the completion
of tenant improvements. Additional terms of the transaction
include a one-time purchase option for the Plaza I building, which
may be exercised by St. Luke's in 2021 at a $22.5 million purchase price. If exercised,
this sale would imply a 6.4% capitalization rate on Plaza I's
projected 2021 net operating income.
The Corporate Parkway lease represents the entire 178,330 square
foot property and extends its lease maturity until January 31, 2027. As part of the
transaction, The Dun & Bradstreet Corporation, which is the
investment grade parent entity, replaced its subsidiary as the
tenant on the lease.
"By acquiring well-located office properties at attractive
metrics, leveraging strong relationships with our tenants and
securing long term leases at improving rental rates, City Office
believes it can create value for its shareholders," said
James Farrar, Chief Executive
Officer. "The completion of these two transactions validates this
investment philosophy by demonstrating the growing demand for
office space in our markets and delivering long-term leases with
credit tenants."
"We are very pleased to expand St. Luke's presence at our
Washington Group Plaza property and complete the Dun &
Bradstreet Corporation lease extension. Both tenants are leading
employers in their states and ideal long-term tenants," said
Greg Tylee, President and Chief
Operating Officer of City Office REIT.
About City Office REIT, Inc.
City Office REIT is a real estate company focused on owning
high-quality office properties in attractive markets primarily in
the Southern and Western United States. Including previously
announced acquisitions that have not yet closed, City Office REIT
will own 2.7 million square feet of office properties.
Additional information about City Office REIT is available on the
company's website at www.cityofficereit.com. The Company
intends to elect to be taxed as a real estate investment trust for
U.S. federal income tax purposes.
Forward-looking Statements
This press release contains "forward looking statements" within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 and other federal
securities laws. All statements that are not statements of
historical facts are, or may be deemed to be, forward looking
statements. Forward looking statements reflect our current
expectations concerning future results, objectives, plans and
goals, and involve known and unknown risks, uncertainties and other
factors that are difficult to predict and which may cause future
results, performance or achievements to differ. These risks,
uncertainties and other factors include factors described in our
news releases and filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K for the year
ended December 31, 2014, which has
been filed with the Securities and Exchange Commission.
Readers of this press release are cautioned to consider these risks
and uncertainties and not to place undue reliance on any
forward-looking statements. The Company does not undertake
any obligation to publicly update any forward-looking statement,
whether written or oral, relating to matters discussed in this
press release, except as may be required by applicable securities
laws.
Contact
City Office REIT, Inc.
Anthony Maretic, CFO
+1-604-806-3366
investorrelations@cityofficereit.com
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SOURCE City Office REIT, Inc.