VANCOUVER, Feb. 27, 2019 /PRNewswire/ -- City Office
REIT, Inc. (NYSE: CIO) (the "Company" or "City Office"), today
announced its results for the quarter and full year ended
December 31, 2018.
Fourth Quarter Highlights
- GAAP net loss attributable to common stockholders was
approximately $8.7 million, or
($0.22) per fully diluted share;
- Core FFO was approximately $10.4
million, or $0.26 per fully
diluted share;
- AFFO was approximately $7.4
million, or $0.19 per fully
diluted share;
- In-place occupancy closed the quarter at 90.4%; the Company
executed approximately 152,000 square feet of new and renewal
leases during the quarter;
- Acquired a 155,000 square foot property in Orlando, Florida for $34.5 million ("Greenwood Blvd");
- Acquired a 173,000 square foot property in Phoenix, Arizona for $53.2 million ("Camelback Square");
- Same Store Cash NOI increased 0.7% as compared to the fourth
quarter 2017;
- Declared a fourth quarter dividend of $0.235 per share of common stock, paid on
January 25, 2019; and
- Declared a fourth quarter dividend of $0.4140625 per share of Series A Preferred Stock,
paid on January 25, 2019.
Highlights Subsequent to Quarter End
- Acquired a 207,000 square foot complex in Seattle, Washington for $63.0 million ("Canyon Park");
- Waived due diligence conditions on a $32.5 million acquisition in Portland, Oregon; and
- Closed on the disposition of the Plaza 25 property in
Denver, Colorado for $17.9 million.
"We ended the year with a flourish of activity that we believe
positions us very well headed into 2019," commented James Farrar, the Company's Chief Executive
Officer. "Since our last earnings report, we have acquired
$156 million of high-quality office
properties, including a development site adjacent to one of
our properties, with an additional $33
million under contract and pending closing. With
these acquisitions, we have entered the long-targeted Seattle market and expanded our footprint in
vibrant submarkets of Denver,
Orlando, Phoenix and Portland."
"With our year end results, we also achieved key operational
progress. We ended the year at 90.4% occupancy, a substantial
improvement from the 87.7% at the end of the previous year. We also
posted positive same store cash NOI growth in the fourth quarter, a
trend that we expect to strengthen in 2019. Overall, we are
pleased with our results and will continue to focus on leasing the
remaining attractive blocks of space in our portfolio, growing
earnings per share and unlocking value through strategic value-add
programs and capital recycling."
A reconciliation of certain non-GAAP financial measures,
including FFO, Core FFO, AFFO, NOI, Same Store NOI, Same Store Cash
NOI and Adjusted Cash NOI, to the most directly comparable GAAP
financial measure can be found at the end of this release.
Portfolio Operations
The Company reported that its total portfolio as of December 31, 2018 contained 5.7 million net
rentable square feet and was 90.4% occupied, or 91.5% occupied
excluding the Plaza 25 property that was sold after year end.
City Office's NOI was approximately $20.9
million, or approximately $20.0
million on an adjusted cash basis, during the fourth quarter
of 2018. NOI for the quarter benefited from approximately
$131,000 of termination fee
income.
Fourth quarter Same Store Cash NOI increased 0.7% as
compared to the fourth quarter 2017 and full year Same Store Cash
NOI decreased 0.7% as compared to the full year 2017.
Investment and Disposition Activity
During the quarter, the Company completed the acquisition of
Greenwood Blvd, a five-story office building comprised of
approximately 155,000 square feet, located in the Lake Mary submarket of Orlando, Florida. The purchase price was
$34.5 million, exclusive of closing
costs, and the acquisition is anticipated to generate an initial
full-year net operating income yield of approximately 7.4%.
The Class A property features a strategic location in Lake Mary, a well-amenitized submarket known
for its Fortune 500 employment presence, low office vacancy and
affluent residential base. Greenwood Blvd has excellent
connectivity at the Lake Mary exit
along I-4, the central thoroughfare for the Orlando market. The property is expected
to provide cash flow stability and was 100% leased at close to a
strong and growing healthcare management services provider, with
its lease expiration in 2028.
During the quarter, the Company completed the acquisition of
Camelback Square, an exceptionally located, value-add office
building comprised of approximately 173,000 square feet, located in
the Oldtown Scottsdale submarket of Phoenix, Arizona. The purchase price was
$53.2 million, exclusive of closing
costs, and the acquisition is anticipated to generate a stabilized
yield to cost in excess of 7%, with an initial full year net
operating income yield of approximately 5.1%, including anticipated
capital improvement and renovation costs. The Oldtown
Scottsdale submarket is a dense, mixed-use pocket with a radius of
approximately one mile that features world-class amenities in a
walkable environment. Camelback Square's premium location on
Camelback Road and Goldwater Blvd is directly across from
Scottsdale Fashion Square, one of the highest grossing shopping
centers in the US and is currently undergoing a $200 million renovation. The Company is
planning a substantial renovation to add amenities, activate the
courtyard and common areas, improve curb appeal and signage with
the property's 1,000 square feet of premium frontage and convert
traditional office spaces into creative suites. Low in-place
rents approximately 20% below anticipated post-renovation market
rental rates and low 81% occupancy at year end provide the
opportunity for the Company to create value through a substantial
increase in cash flow.
During the quarter, the Company completed the strategic
acquisition of a 20 acre development land site ("Circle Point
Land") in Denver, Colorado.
The site is contiguous with the Company's existing investment in
the two office buildings at Circle Point, which City Office
acquired in July 2018. The purchase price for Circle Point
Land was $5.1 million, exclusive of
closing costs. Approximately ten acres of the site is
designated for office use and approximately ten acres of the site
is designated for mixed uses, including multifamily
residential. The acquisition of the office portion of the
site benefits City Office through control of a potential competing
site to its existing office buildings, while providing upside
through potential build-to-suit development to capture strong
market demand in the Northwest
Denver submarket. The Company intends to dispose of
the valuable mixed use and multifamily portion of the site for near
term development, which the Company believes will enhance the
vibrancy, amenities and density of the Circle Point campus.
Subsequent to quarter end, the Company completed the acquisition
of Canyon Park, a three-building office campus comprised of
approximately 207,000 square feet, located in the Eastside/Bothell submarket of Seattle, Washington. The purchase price
was $63.0 million, exclusive of
closing costs, and the acquisition is anticipated to generate an
initial full-year net operating income yield of approximately 7.1%.
The property is located within a premier master-planned
business park in the Eastside/Bothell submarket, which contains the largest
concentration of life sciences companies in Seattle. Canyon
Park is 100% leased through 2028 to an established, leading
biotechnology company. Canyon Park provides high quality
tenancy, expected stable cash flow and an entry into the
Seattle market, which features a
diversified economy anchored by ten Fortune 500 companies, a
well-educated workforce, superior population and economic growth
prospects and high quality of life.
Subsequent to quarter end, the Company waived due diligence
conditions on the acquisition of a two-building property located in
the Airport Way submarket of Portland,
Oregon. The purchase price is $32.5
million, exclusive of closing costs. The closing of
the property remains subject to the assumption of an existing loan
on the property and customary closing conditions and is anticipated
to generate an initial full-year net operating income yield of
approximately 8.1%.
Subsequent to quarter end, the Company completed the disposition
of its Plaza 25 property in Denver,
Colorado for a sales price of $17.9
million. The Company used the proceeds from the sale
to repay amounts outstanding under its unsecured credit facility
and intends to accretively recycle the disposition proceeds into
the Company's acquisition pipeline. At year end, the
Company recorded an Impairment of Real Estate on its Consolidated
Statements of Operations for the three and twelve months ended
December 31, 2018 to reflect the
contracted sale price.
Leasing Activity
The Company's total leasing activity during the fourth quarter
of 2018 was 152,000 square feet, which included 107,000 square feet
of new leasing and 45,000 square feet of renewals. 132,000 square
feet of leases signed within the quarter will commence subsequent
to quarter end. Notably, the Company completed 31,000 of new
leases and 30,000 of renewals at the FRP Collection property in
Orlando, Florida bringing that
property's occupancy to 93.1%, including signed leases that will
commence subsequent to quarter end.
New Leasing – New leases were signed with a weighted
average lease term of 6.1 years at a weighted average annual rent
per square foot of $21.50 and at a
weighted average cost of $4.76 per
square foot per year.
Renewal Leasing – Renewal leases were signed with a
weighted average lease term of 1.6 years at a weighted average
annual rent per square foot of $25.27
and at a weighted average cost of $1.68 per square foot per year.
Capital Structure
As of December 31, 2018, the
Company had total principal outstanding debt of approximately
$651.4 million. 77.4% of the
Company's outstanding debt was fixed rate, with a weighted average
maturity of 5.8 years and a weighted average interest rate of
4.1%.
During the fourth quarter, the Company completed a $22.4 million seven-year financing for the
Greenwood Blvd property with a fixed interest rate of 4.6%.
Subsequent to quarter end, the Company completed a $41.0 million eight-year financing with a
five-year extension option for the Canyon Park property with a
fixed interest rate of 4.3%.
Dividends
On December 21, 2018, the
Company's board of directors approved and the Company declared a
cash dividend of $0.235 per share of
the Company's common stock for the three months ended December 31, 2018. The dividend was paid on
January 25, 2019 to common
stockholders and unitholders of record as of January 11, 2019.
On December 21, 2018, 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. The
dividend was paid on January 25, 2019
to preferred stockholders of record as of January 11, 2019.
2019 Outlook
For full year 2019, the Company expects Core FFO in the range of
$1.15 to $1.20 per diluted share based on current plans
and assumptions and subject to the risks and uncertainties more
fully described in the Company's Securities and Exchange Commission
filings. This outlook reflects management's view of current
and future market conditions, including assumptions such as the
pace of future acquisitions and dispositions, rental rates,
occupancy levels, operating and general administrative expenses,
weighted average diluted shares outstanding and interest
rates. Reconciliation items are noted below.
Full year 2019 Guidance:
|
|
|
|
Low
|
|
High
|
|
Net Property
Acquisitions:
|
|
$78M
|
|
$90M
|
|
Net Operating
Income:
|
$95.0M
|
|
$96.5M
|
|
General &
Administrative Expenses ("G&A"):
|
$9.0M
|
|
$10.0M
|
|
Interest
Expense:
|
|
$32.5M
|
|
$33.5M
|
|
Core FFO per Diluted
Share:
|
|
$1.15
|
|
$1.20
|
|
Net Recurring
Straight Line Rent Adjustment:
|
$2.5M
|
|
$3.5M
|
|
Same Store Cash NOI
Change:
|
2.0%
|
|
4.0%
|
|
December 31, 2019
Occupancy:
|
91.0%
|
|
94.0%
|
|
The expected range of the Company's 2019 Core FFO is primarily
driven by the pace and timing of acquisitions and dispositions as
well as potential gains in occupancy. The low end of the
range for Net Property Acquisitions, which is defined as total
property acquisitions less total property dispositions, represents
all closed or contracted transactions described below.
Throughout the year, the Company may dispose of additional assets
and acquire incremental properties. The recycling of assets
and incremental acquisitions, if they occur, are generally expected
to be accretive to the Company's Core FFO and have minimal impact
to interest and debt levels. Further, the Company is actively
engaged in leasing its remaining blocks of attractive, vacant space
and these potential gains in occupancy and Same Store Cash NOI
could have a material impact on Core FFO.
Material Considerations:
- The $63.0 million Canyon Park
acquisition, closed in February 2019,
and the $32.5 million Portland acquisition, expected to close in the
second quarter 2019, have been included in 2019 guidance.
- The disposition of Plaza 25, closed in February 2019, has been included in 2019
guidance. If the Company were to dispose of any additional
properties, there could be a material impact on guidance estimates
based on the terms and timing of the redeployment of proceeds.
- The 2019 G&A guidance includes approximately $1.7 – $1.9 million
for stock-based compensation. Our Core FFO definition excludes
stock based compensation. Excluding stock-based compensation,
G&A guidance would have been $7.3
– $8.1 million.
- 2019 annual weighted average fully diluted shares of common
stock outstanding are assumed to be 40.0 – 40.2 million.
- No future capital offerings or share repurchases have been
assumed.
Webcast and Conference Call Details
City Office's management will hold a conference call at
11:00 am Eastern Time on February 27, 2019.
The webcast will be available under the "Investor Relations"
section of the Company's website at www.cityofficereit.com.
The conference call can be accessed by dialing 1-866-262-0919 for
domestic callers and 1-412-902-4106 for international
callers.
A replay of the call will be available later in the day on
February 27, 2019, continuing through
11:59 pm Eastern Time on May 27, 2019 and can be accessed by dialing
1-877-344-7529 for domestic callers and 1-412-317-0088 for
international callers. The passcode for the replay
is 10128624. 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 package to accompany the discussion of
the results will be posted on www.cityofficereit.com 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.
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 the earn-out,
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 rents, 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 our initial public offering or 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 – We
define NOI as total revenues less property operating
expenses. We define Adjusted Cash NOI as NOI less the effect
of recurring straight-line rents, deferred market rent, and any
amounts which are funded by the selling entities.
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 Cash Net Operating Income ("Same Store Cash
NOI") – Same Store Cash NOI is 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 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
signification renovations.
We believe Same Store Cash NOI is an important measure 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 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. 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, estimated replacement costs of
our properties, the Company's expectations regarding tenant
occupancy, re-leasing periods, 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 and anticipated near-term acquisitions and
descriptions relating to these expectations, including, without
limitation, the anticipated net operating income yield and cap
rates. Forward-looking statements presented in this press release
are based on management's beliefs and assumptions made by, and
information currently available to, management.
Forward-looking statements are generally identifiable by use of
forward-looking terminology such as "may," "will," "should,"
"potential," "intend," "expect," "seek," "anticipate," "estimate,"
"believe," "could," "project," "predict," "hypothetical,"
"continue," "future" or other similar words or expressions. All
forward-looking statements included in this press release are based
upon information available to the Company on the date hereof and
the Company is under no duty to update any of the forward-looking
statements after the date of this press release to conform these
statements to actual results. The forward-looking statements
involve a number of significant risks and uncertainties. Factors
that could have a material adverse effect on the Company's
operations and future prospects are set forth in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and subsequent reports filed
from time to time with the U.S. Securities and Exchange Commission,
including the sections entitled "Risk Factors" contained therein.
The factors set forth in the Risk Factors section and otherwise
described in the Company's filings with SEC could cause the
Company's actual results to differ significantly from those
contained in any forward-looking statement contained in this press
release. The Company does not guarantee that the assumptions
underlying such forward-looking statements are free from errors.
Unless otherwise stated, historical financial information and per
share and other data are as of December 31,
2018.
Should one or more of these risks or uncertainties occur, or
should underlying assumptions prove incorrect, the Company's
business, financial condition, liquidity, cash flows and results
could differ materially from those expressed in any forward-looking
statement. While forward-looking statements reflect our good faith
beliefs, they are not guarantees of future performance. Any
forward-looking statement speaks only as of the date on which it is
made. New risks and uncertainties arise over time, and it is not
possible for us to predict the occurrence of those matters or the
manner in which they may affect us. We disclaim any obligation to
publicly update or revise any forward-looking statement to reflect
changes in underlying assumptions or factors, of new information,
data or methods, future events or other changes. Use caution in
relying on past forward-looking statements, which were based on
results and trends at the time they were made, to anticipate future
results or trends.
City Office REIT,
Inc.
Consolidated
Balance Sheets
|
|
(In thousands,
except par value and share data)
|
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
Assets
|
|
|
|
Real estate
properties
|
|
|
|
Land
|
$
223,789
|
|
$
188,110
|
Building and
improvement
|
704,113
|
|
534,473
|
Tenant
improvement
|
77,426
|
|
53,427
|
Furniture, fixtures
and equipment
|
319
|
|
291
|
|
1,005,647
|
|
776,301
|
Accumulated
depreciation
|
(70,484)
|
|
(48,234)
|
|
935,163
|
|
728,067
|
|
|
|
|
Cash and cash
equivalents
|
16,138
|
|
12,301
|
Restricted
cash
|
17,007
|
|
22,713
|
Rents receivable,
net
|
26,095
|
|
20,087
|
Deferred leasing
costs, net
|
10,402
|
|
7,793
|
Acquired lease
intangible assets, net
|
75,501
|
|
65,088
|
Prepaid expenses and
other assets
|
2,755
|
|
2,013
|
Assets held for
sale
|
17,370
|
|
38,427
|
Total
Assets
|
$
1,100,431
|
|
$
896,489
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Liabilities:
|
|
|
|
Debt
|
$
645,354
|
|
$
489,509
|
Accounts payable and
accrued liabilities
|
25,892
|
|
17,605
|
Deferred
rent
|
5,331
|
|
4,223
|
Tenant rent
deposits
|
4,564
|
|
3,523
|
Acquired lease
intangible liabilities, net
|
8,887
|
|
8,649
|
Dividend
distributions payable
|
11,148
|
|
10,318
|
Liabilities related
to assets held for sale
|
878
|
|
2,830
|
Total
Liabilities
|
702,054
|
|
536,657
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
Equity:
|
|
|
|
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,
2018 and 2017
respectively
|
112,000
|
|
112,000
|
Common stock, $0.01
par value, 100,000,000 shares authorized, 39,544,073 and
36,012,086 shares issued and outstanding as of December 31, 2018
and 2017
respectively
|
395
|
|
360
|
Additional paid-in
capital
|
377,126
|
|
334,241
|
Accumulated
deficit
|
(92,108)
|
|
(86,977)
|
Total
Stockholders' Equity
|
397,413
|
|
359,624
|
Non-controlling
interests in properties
|
964
|
|
208
|
Total
Equity
|
398,377
|
|
359,832
|
Total Liabilities
and Equity
|
$
1,100,431
|
|
$
896,489
|
City Office REIT,
Inc.
Consolidated
Statements of Operations
|
|
(In thousands,
except per share data)
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Rental
income
|
$
28,987
|
|
$
26,956
|
|
$
110,076
|
|
$
92,357
|
Expense
reimbursement
|
4,314
|
|
3,482
|
|
15,906
|
|
11,164
|
Other
|
866
|
|
743
|
|
3,502
|
|
2,966
|
Total
Revenues
|
34,167
|
|
31,181
|
|
129,484
|
|
106,487
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
Property operating
expenses
|
13,246
|
|
11,908
|
|
49,872
|
|
42,886
|
General and
administrative
|
2,344
|
|
1,556
|
|
8,137
|
|
6,792
|
Depreciation and
amortization
|
15,308
|
|
12,499
|
|
52,352
|
|
41,594
|
Impairment of real
estate
|
3,497
|
|
-
|
|
3,497
|
|
-
|
Total Operating
Expenses
|
34,395
|
|
25,963
|
|
113,858
|
|
91,272
|
|
|
|
|
|
|
|
|
Operating
(loss)/income
|
(228)
|
|
5,218
|
|
15,626
|
|
15,215
|
Interest
Expense:
|
|
|
|
|
|
|
|
Contractual interest
expense
|
(6,132)
|
|
(5,780)
|
|
(22,316)
|
|
(18,721)
|
Amortization of
deferred financing costs
|
(324)
|
|
(425)
|
|
(1,621)
|
|
(1,452)
|
|
(6,456)
|
|
(6,205)
|
|
(23,937)
|
|
(20,173)
|
Change in fair value
of contingent consideration
|
-
|
|
-
|
|
-
|
|
2,000
|
Net gain on sale of
real estate property
|
-
|
|
-
|
|
46,980
|
|
12,116
|
Net
(loss)/income
|
(6,684)
|
|
(987)
|
|
38,669
|
|
9,158
|
Less:
|
|
|
|
|
|
|
|
Net income
attributable to non-controlling interests in properties
|
(117)
|
|
(78)
|
|
(501)
|
|
(3,402)
|
Net (loss)/income
attributable to the Company
|
(6,801)
|
|
(1,065)
|
|
38,168
|
|
5,756
|
Preferred stock
distributions
|
(1,855)
|
|
(1,855)
|
|
(7,420)
|
|
(7,411)
|
Net (loss)/income
attributable to common stockholders
|
$
(8,656)
|
|
$
(2,920)
|
|
$
30,748
|
|
$
(1,655)
|
|
|
|
|
|
|
|
|
Net (loss)/income per
common share:
|
|
|
|
|
|
|
|
Basic
|
$
(0.22)
|
|
$
(0.09)
|
|
$
0.82
|
|
$
(0.05)
|
Diluted
|
$
(0.22)
|
|
$
(0.09)
|
|
$
0.82
|
|
$
(0.05)
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
39,544
|
|
30,887
|
|
37,321
|
|
30,198
|
Diluted
|
39,544
|
|
30,887
|
|
37,670
|
|
30,198
|
|
|
|
|
|
|
|
|
Dividend
distributions declared per common share
|
$
0.235
|
|
$
0.235
|
|
$
0.940
|
|
$
0.940
|
City Office REIT,
Inc.
Reconciliation of
Net Operating Income and Adjusted Cash NOI to Net
Income
(Unaudited)
|
|
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2018
|
|
|
|
|
|
|
Net loss
|
$
|
(6,684)
|
Adjustments to net
loss:
|
|
|
General and
administrative
|
2,344
|
|
Contractual interest
expense
|
6,132
|
|
Amortization of
deferred financing costs
|
324
|
|
Depreciation and
amortization
|
15,308
|
|
Impairment of real
estate
|
3,497
|
Net Operating Income
("NOI")
|
$
|
20,921
|
|
Net recurring
straight line rent adjustment
|
(553)
|
|
Net amortization of
above and below market leases
|
(41)
|
Portfolio Adjusted
Cash NOI
|
$
|
20,327
|
|
NCI in properties -
share in cash NOI
|
(343)
|
Adjusted Cash NOI
(CIO share)
|
$
|
19,984
|
City Office REIT,
Inc.
Reconciliation of
Net Income to FFO, Core FFO and AFFO
(Unaudited)
|
|
|
(In thousands,
except per share data)
|
|
|
|
|
Three Months
Ended
|
|
|
|
December 31,
2018
|
|
|
|
|
Net loss attributable
to common stockholders
|
|
$
|
(8,656)
|
|
(+) Depreciation and
amortization
|
|
15,308
|
|
(+) Impairment of
real estate
|
|
|
3,497
|
|
|
|
10,149
|
|
Non-controlling
interests in properties:
|
|
|
|
(+) Share of net
income
|
|
117
|
|
(-) Share of
FFO
|
|
(263)
|
FFO attributable to
common stockholders
|
|
$
|
10,003
|
|
(+) Stock based
compensation
|
|
356
|
Core FFO attributable
to common stockholders
|
|
$
|
10,359
|
|
(+) Net recurring
straight line rent adjustment
|
|
(553)
|
|
(+) Net amortization
of above and below market leases
|
|
(41)
|
|
(+) Net amortization
of deferred financing costs
|
|
320
|
|
(-) Net recurring
tenant improvement and incentives
|
|
(1,242)
|
|
(-) Net recurring
leasing commissions
|
|
(447)
|
|
(-) Net recurring
capital expenditures
|
|
(962)
|
AFFO attributable to
common stockholders
|
|
$
|
7,434
|
|
|
|
|
Core FFO per common
share
|
|
$
|
0.26
|
AFFO per common
share
|
|
$
|
0.19
|
|
|
|
|
Dividends per common
share
|
|
$
|
0.235
|
Core FFO Payout
Ratio
|
|
91%
|
AFFO Payout
Ratio
|
|
126%
|
|
|
|
|
Weighted average
common shares outstanding
|
|
39,896
|
City Office REIT,
Inc.
Reconciliation of
Same Store Cash NOI to Total Revenues
(Unaudited)
|
|
(In
thousands)
|
|
|
|
Three Months
Ended
December 31,
|
|
Years Ended
December 31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Total
revenues
|
|
$
34,167
|
|
$
31,181
|
|
$
129,484
|
|
$
106,487
|
Property operating
expenses
|
|
13,246
|
|
11,908
|
|
49,872
|
|
42,886
|
Net operating income
("NOI")
|
|
$
20,921
|
|
$
19,273
|
|
$
79,612
|
|
$
63,601
|
Less: NOI of
properties not included in same store
|
|
(5,945)
|
|
(3,353)
|
|
(29,171)
|
|
(12,957)
|
Same store
NOI
|
|
$
14,976
|
|
$
15,920
|
|
$
50,441
|
|
$
50,644
|
Less:
|
|
|
|
|
|
|
|
|
Termination fee
income
|
|
(52)
|
|
(732)
|
|
(236)
|
|
(755)
|
Straight line rent adjustment
|
93
|
|
(92)
|
|
(972)
|
|
(237)
|
Above and below market leases
|
|
(93)
|
|
(247)
|
|
(275)
|
|
(401)
|
NCI in properties - cash NOI
|
|
(261)
|
|
(284)
|
|
(1,165)
|
|
(1,142)
|
Same store cash
NOI
|
|
$
14,663
|
|
$
14,565
|
|
$
47,793
|
|
$
48,109
|
City Office REIT,
Inc.
Reconciliation of
Net Income to Core FFO Guidance
(Unaudited)
|
|
(In thousands,
except per share data)
|
|
|
|
|
|
Full year 2019
Outlook
|
|
|
|
|
Low
|
|
High
|
Net loss attributable
to common stockholders
|
$
(17,400)
|
|
$
(15,800)
|
|
(+) Depreciation and
amortization
|
62,400
|
|
62,600
|
|
(-) Non-controlling
interest in properties
|
(600)
|
|
(600)
|
|
(+) Stock based
compensation
|
1,700
|
|
1,900
|
Core FFO attributable
to common stockholders
|
46,100
|
|
48,100
|
|
|
|
|
|
|
|
Core FFO per common
share
|
$
1.15
|
|
$
1.20
|
|
|
|
|
|
|
|
Weighted average
shares of common stock
|
40,100
|
|
40,100
|
Contact
City Office REIT, Inc.
Anthony Maretic, CFO
+1-604-806-3366
investorrelations@cityofficereit.com
View original
content:http://www.prnewswire.com/news-releases/city-office-reit-reports-fourth-quarter-and-full-year-2018-results-300802863.html
SOURCE City Office REIT, Inc.