VANCOUVER, June 15, 2016 /PRNewswire/ -- City Office
REIT, Inc. (NYSE: CIO) ("City Office" or the "Company") announced
today that it has completed the previously announced sale of its
Corporate Parkway property in Allentown,
Pennsylvania for a gross sale price of $44.9 million before customary closing and
transaction costs. The transaction was completed at an
expected 6.6% net operating income yield. The Company
previously announced that it had extended the lease for the entire
178,330 square foot property until January
2027, and as part of the transaction, replaced the tenant
with its investment grade parent as the lessee. The property was
contributed to City Office as part of the initial public offering
in April 2014. With the sale of this non-strategic asset, the
Company has been able to align its portfolio entirely within its
target markets.
Proceeds from the sale were used to repay approximately
$4 million of mortgage debt.
The Company intends to acquire assets as part of a like-kind
exchange under Section 1031 of the Internal Revenue Code, as
amended (the "Code").
"The closing of the Corporate Parkway sale highlights the
success of our value enhancing strategy. By completing an
early 10 year lease extension and enhancing the lease credit, we
positioned the property for sale at a premium valuation.
These efforts allowed us to realize an exceptional 51.0% IRR and a
2.2x equity multiple on our investment," said James Farrar, Chief Executive Officer of City
Office.
About City Office REIT, Inc.
City Office REIT is an internally-managed real estate company
focused on acquiring, owning and operating high-quality office
properties located in leading markets in the Southern and Western
United States. City Office currently owns or has an interest
in 3.1 million square feet of office properties. Additional
information about City Office is available on the Company's website
at www.cityofficereit.com. The Company has elected 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. These factors include, but are not limited to,
the Company's ability to source and acquire properties, including
properties appropriate for like-kind exchange under the Code, on
attractive terms, or at all; the Company's expectations and
forecasts of future leasing activity at its current and future
properties, and the Company's ability to accurately model the
income yield, net operating income, IRR, equity multiple,
capitalization rate, and other financial metrics used to evaluate
its properties. These and other material risks are described in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2015 and any other
documents filed by the Company from time to time, which are
available from the Company and from the SEC, and you should read
and understand these risks when evaluating any forward-looking
statement. The Company does not have any obligation to publicly
update any forward looking statements to reflect subsequent events
or circumstances.
Contact
City Office REIT, Inc.
Anthony Maretic, CFO
+1-604-806-3366
investorrelations@cityofficereit.com
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SOURCE City Office REIT, Inc.