May 1, 2017 - This presentation contains certain âforward-looking statementsâ within the ... underlying assumptions
INVESTOR P R E S E N TAT I O N M AY 2 0 1 7
N Y S E : CIO
FORWARD-LOOKING STATEMENTS This presentation 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 presentation, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forwardlooking statements within the meaning of the federal securities laws and as such are based upon City Office REIT, Inc. (“CIO” or the “Company”) and its 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 market rental rates, national or local economic growth, estimated replacement costs of our properties, projected capital improvements, expected sources of financing, expectations as to the timing of closing of acquisitions, dispositions, or other transactions, the expected operating performance of anticipated near-term acquisitions and dispositions and descriptions relating to these expectations, including, without limitation, the anticipated net operating income yield and cap rates. Forward-looking statements presented in this presentation 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 presentation 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 presentation 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, 2016, 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 presentation. 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 is as of March 31, 2017. 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.
2
EXECUTIVES AND BOARD OF DIRECTORS JAMIE FARRAR, CHIEF EXECUTIVE OFFICER
Over 20 years of real estate, private equity and corporate finance industry experience
Completed the acquisition of over $1.7 billion of real estate since 2011
Prior experience with a family office focused on real estate and hospitality and the private equity group of the TD Bank
GREG TYLEE, CHIEF OPERATING OFFICER & PRESIDENT
Over 20 years of diverse real estate experience that includes acquisitions of income-producing properties as well as high-rise development
Involved in real estate transactions, incl. development and management, with a combined enterprise value of over $2.0 billion
Former President of Bosa Properties Inc., a prominent real estate development company with over 400 employees
TONY MARETIC, CHIEF FINANCIAL OFFICER, SECRETARY & TREASURER
Over 20 years of experience, including over 15 years of experience in senior financial and operational roles, of which 12 years were spent within the real estate industry
Former Chief Operating Officer and Chief Financial Officer of Earls Restaurants Ltd., a multi-national hospitality company
Held financial management positions with a U.S. based senior living real estate company and Bentall Kennedy
B O AR D O F DIRECTOR S John McLernon, Chairman Jeffrey Kohn, Director
Indicates Independent Director
Jamie Farrar, CEO & Director
Mark Murski, Director
William Flatt, Director
Stephen Shraiberg, Director
John Sweet, Director
3
COMPANY OVERVIEW City Office invests in high-quality office properties in mid-sized metropolitan areas with strong economic fundamentals, primarily in the Southern and Western United States
CURRENT MARKETS (1) PORTLAND, OR 7%
BOISE, ID (2) 10% DENVER, CO 19%
PHOENIX, AZ DALLAS, TX 12%
ORLANDO, FL
13% TAMPA, FL
% OF PORTFOLIO
(1) (2) (3)
ABR(3)
14%
26%
19
38
4.5mm SF
90.2%
Properties
Buildings
Total NRA
Occupancy
6
5.2 yrs
$88.0mm
States
Avg Lease Term
ABR
(3)
$22.98 Annualized Gross Rent /SF
Current markets map and information in the table below are as of March 31, 2017 Washington Group Plaza in Boise is under contract for disposition; this property is CIO’s only property in Boise Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended March 31, 2017 by (ii) 12
4
ATTRACTIVE MARKET CHARACTERISTICS % PROJECTED JOB GROWTH FROM 2017 TO 2022 10.0%
9.0% 7.2%
8.0% 6.0% 4.0%
7.3%
9.2%
9.4%
9.6%
8.1%
Strong economic fundamentals and demographics
Diverse employment base with national and international employers
Educated workforce
Low-cost center for businesses to operate
Strong and stable demand generators such as state capitals or university proximity
Demonstrated recovery in local real estate conditions
4.7%
4.0% 2.0% 0.0% Gateway National Markets (1) Average
Tampa, FL
Portland, Phoenix, OR AZ
Denver, CO
Boise, ID
Orlando, FL
Dallas, TX
% PROJECTED POPULATION GROWTH FROM 2017 TO 2022 10.0% 8.0%
6.4%
6.5%
7.1%
7.6%
8.1%
8.1%
8.3%
6.0% 4.0%
3.4%
4.0%
2.0% 0.0% Gateway National Portland, Markets (1) Average OR
Tampa, FL
Phoenix, AZ
Boise, ID
Denver, CO
Dallas, TX
Orlando, FL
Source: SNL Financial as of May 1, 2017
(1)
Gateway markets represent New York, NY, Boston, MA, Chicago, IL, Los Angeles, CA, San Francisco, CA and Washington, D.C.
5
MIGRATION TRENDS FAVORING CIO MARKETS NET DOMESTIC MIGRATION 2015-2016
Maricopa County (Phoenix) added over 222 people per day in 2016, more than any other county in the US Dallas MSA experienced largest total gain, increasing by 100,000+
Represents CIO current or pipeline market
Source: United States Census Bureau, data release from 3/23/2017
6
OUR STRATEGY CIO’s strategy is to produce attractive returns through a focused acquisition strategy and increasing property cash flows
OUTPERFORMANCE OF NON-GATEWAY OFFICE MARKETS
Less competition from larger institutional investors
Local real estate operators lack the capital to compete
Outsized population and employment growth catalysts
CIO ranked #1 in market exposure to job-related demand in Deutsche Bank’s REIT Job Tracker (1)
INVEST WHERE WE HAVE AN ADVANTAGE
Focus on properties valued between $25-100 million
Supply-constrained market dynamics
High credit tenancy, below market in-place rents and
Announced Post – IPO Acquisition Cap Rates (2) 8.3% 7.5%
7.6%
7.7%
2015
2016
Avg.
acquisition prices below replacement cost
Leverage local property manager relationships to source acquisition opportunities and efficiently operate 2014
(1) (2)
As of March 31, 2017 for the trailing 12 months. For REITs under coverage by Deutsche Bank Equity Research – North America. Ranking based on weighted average year over year non-seasonally adjusted job growth rate for each REIT under coverage Includes all acquisitions since IPO; represents the weighted average cap rate for each year of announced, projected year one cap rates at the time of acquisition
7
PROVEN GROWTH STRATEGY MORE THAN $550 MILLION INVESTED SINCE IPO
Multiple properties in nearly all current markets; creating significant economies of scale Increased net rentable square footage to 4.5 million from 1.9 million at IPO
$863 Million Q1 2017
(1)
Operating revenue increased to $81.6 million from $32.6 million at IPO
Increased average annualized base rent/SF to $21.57 from $17.95 at IPO (1)
$816 Million
(2)
EFFICIENT ACCESS TO CAPITAL
$216 million in common stock follow-on offerings
$112 million Series A preferred stock offering
$279 million in property-level debt financings (3)
$559 Million
$387 Million
$307 Million
April 2014 IPO
Q4 2014
Q4 2015
Q4 2016
TOTAL REAL ESTATE (4)
(1) (2) (3) (4)
As of March 31, 2017 Represents total revenue on a pro forma basis for the City Office Predecessor for the year ended December 31, 2013 and for the trailing 12 months ended March 31, 2017 Financings subsequent to IPO, as of March 31, 2017 adjusted for the property-level debt financing at AmberGlen subsequent to quarter end Represents implied asset value at IPO plus acquisitions at cost
8
PROVEN VALUE CREATION CIO’s three dispositions, including one under contract, are expected to generate in excess of $65 million of gains
(1)
WASHINGTON GROUP PLAZA – BOISE, ID Under contract for $86.5 million
(2)
Greater than $40 million potential gain on sale
(3)
~5.8% anticipated disposition cap rate Completed numerous leasing transactions and implemented
extensive operational improvements and cost savings Opportunistic sale to largest tenant in the complex
CORPORATE PARKWAY – ALLENTOWN, PA $15.9 million gain on sale ~6.6% disposition cap rate Completed an early 10 year lease extension and secured the
investment grade parent as the tenant Sale of this non-strategic asset enabled us to align our portfolio
entirely within our target markets Disposition closed on June 15, 2016
(1) (2) (3)
Represents the two properties described above and the sale of two buildings at the AmberGlen property, which were sold for a net gain of approximately $9 million for CIO’s 76% ownership The potential buyer has completed its due diligence review, waived certain conditions precedent for closing and made a $5 million non-refundable deposit. Customary conditions to closing remain outstanding, and there can be no assurance that the terms and timing of the disposition, if any, will meet our expectations Estimated accounting gain on sale based on an approximately $38 million net book value as of March 31, 2017
9
RECENT COMPANY HIGHLIGHTS FIRST QUARTER 2017
Executed approximately 262,000 square feet of new and renewal leases during the quarter
Property NOI increased to $15.8 million, a 24% increase over the prior quarter
Raised total gross proceeds of $71.3 million in a public follow-on offering of 5,750,000 shares of common stock
Completed the acquisition of 2525 McKinnon, a 111,334 square foot Class A property in Dallas, Texas for $46.8 million
Completed three ten-year secured property financings for aggregate borrowing proceeds of $84.1 million
Appointed John W. Sweet to the Board of Directors, effective March 1, 2017
HIGHLIGHTS SUBSEQUENT TO QUARTER END
Completed the sale of two of the five buildings at the AmberGlen property in Portland, Oregon for a combined sales price of $18.9 million, representing a net gain on sale of approximately $9 million for the Company’s 76% ownership
Refinanced the remaining three buildings at AmberGlen with a $20 million ten-year secured property loan with a fixed interest rate of 3.7%
10
EXECUTION AND PIPELINE Advanced acquisition pipeline with over $400 million of potential investment opportunities
(1)
Concentrated in high growth markets, including Dallas, Denver, Orlando, Phoenix and Salt Lake City Focus on cap rates ranging from 7% to 8%; potential upside through below market rental rates
RECENT ACQUISITION HIGHLIGHTS 5090 N 40TH ST
SANTAN CORPORATE CENTER
2525 MCKINNON
November 2016
December 2016
January 2017
Phoenix, Arizona
Phoenix, Arizona
Dallas, Texas
$42.6 million / 175,835 SF
$58.5 million / 266,531 SF
$46.8 million / 111,334 SF
Recently renovated and institutionally maintained property in the Camelback Corridor submarket
Prominently located complex in the Chandler submarket, 55% leased to investment grade tenants
Premier location in Uptown submarket, high-end finishes and rents approximately 30%+ below market
(1)
As of May 1, 2017
11
TENANT PROFILE Approximately 52.4% of CIO’s base rental revenue is derived from tenants that are government agencies, investment grade
companies or their subsidiaries (1) Portfolio in-place occupancy of 90.2% (1) Benefit from low in-place rental rates with weighted average gross rental rate per square foot of $22.98
(1)
TOP TEN TENANTS OF OUR PROPERTIES Tenant / Parent State of Colorado
Aa1
Tenant since
NRA (000s)
% of Net Rentable Area
Cherry Creek
1993
319
7.1%
Property
United Healthcare Services, Inc.
A+
190 Office Center
2008
198
4.4%
St. Luke's Regional Medical Center
A3
Washington Group Plaza
2015
175
3.9%
Lake Vista Pointe
2008
163
3.6%
Ally Financial Inc.
BB+
H. Lee Moffitt Cancer Center
A3
Intellicenter
2008
155
3.4%
GSA – US Attorneys Office (2)
AA+
Multiple
1998
144
3.2%
Toyota Motor Credit Corporation
AA-
SanTan Corporate Center
2011
133
2.9%
Kaplan, Inc. (3)
BB+
FRP Ingenuity Drive
2008
125
2.8%
Idaho State Tax Commission
Aa1
Washington Group Plaza
1992
111
2.5%
Amberglen
2002
110
2.4%
Planar Systems, Inc. Total (1) (2) (3)
Credit Rating (S&P / Moody's)
As of March 31, 2017 The credit rating indicated is for the United States Government Lease is to Kaplan, Inc. which is a subsidiary of Graham Holdings Company
--
36.2%
12
LEASE EXPIRATIONS Stable, long-term tenancy profile with well-staggered expirations 5.2 year weighted average remaining lease term (1)
LEASE MATURITY SCHEDULE (2) – MARCH 31, 2017
30%
25%
20% 16.2%
15.2% 15% 11.5% 10%
9.8%
8.6%
7.7% 6.0%
5.6%
5.3%
5.9%
5.7%
5% 2.5% 0% Vacant & Contracted
(1) (2)
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
Thereafter
As of March 31, 2017 Percentage represents the square footage of the leases divided by the total square footage of the portfolio, as of March 31, 2017
13
GROWTH-ORIENTED BALANCE SHEET Conservative debt structure at favorable interest rates as of March 31, 2017 41.8% leverage 4.3% weighted average interest rate 100% fixed rate debt 6.5 year average debt maturity
$100 million authorized under Secured Credit Facility with an additional $50 million accordion feature
DEBT MATURITY SCHEDULE
($000S)
– MARCH 31, 2017
$400,000
Debt Balance: $405.6 million (1)(2)
$300,000
$200,000
$100,000
$89,745 Interest Rate: 4.34%
$32,817 (3) (4) Interest Rate: $24,165 Interest Rate: 3.85% 4.38%
$47,518 $35,460 Interest Rate: Interest Rate: 3.73% 4.36%
$91,813 Interest Rate: 4.61%
$84,100 Interest Rate: 4.29%
$2017
(1) (2) (3) (4)
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
$8.5 million of indebtedness attributable to non-controlling interests $405.6 million represents the debt balance as of March 31, 2017 before deferred financing costs Debt relates to the Washington Group Plaza property, which is under contract for sale Debt relates to the AmberGlen property and was repaid on May 2, 2017 in conjunction with the sale of two of the five buildings at the property. A new loan maturing in 2027 in the amount of $20 million with a fixed interest rate of 3.7% closed on May 2, 2017.
14
STRONG AND STABLE PERFORMANCE NET OPERATING INCOME
CORE FFO / SHARE
$18
$0.35 $15.8
$15
$0.27
$0.26 $0.23
$0.22
$0.20
$11.4 $10.1
$0.30 $0.25
$12.8
$12
$0.32
$0.15
$9.9
$0.10
$9
$0.05 $6 ($M)
$0.00 Q1 2016
Q2 2016
Q3 2016
NET DEBT TO ENTERPRISE VALUE 70%
Q4 2016
Q1 2017
(1)
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
QUARTERLY COMMON DIVIDENDS PAID $0.25
64%
$0.235
$0.235
$0.235
$0.235
$0.235
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
60% 46%
50%
48%
45%
$0.20 42%
$0.15
40% 30%
$0.10
20% $0.05
10% 0%
$0.00 Q1 2016
(1)
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Net Debt to Enterprise Value calculated as CIO share of debt less CIO share of unrestricted cash divided by market value as of quarter end
15
COMPANY HIGHLIGHTS High Quality Properties with Strong Tenants
Proven Value Creation and Markets Positioned for Growth
Strong Balance Sheet with Consistent Cash Flow Generation
Experienced and Committed Management
(1) (2)
Well-located office properties in amenity-rich and transit-oriented locations
Approximately 52.4% of CIO’s base rental revenue is derived from tenants that are government agencies, investment grade companies or their subsidiaries
(1)
Staggered lease maturities with a 5.2 year weighted average remaining lease term (1)
Core markets are located in high growth areas within the Southern and Western US
National leaders in employment growth and population growth
CIO’s three dispositions are expected to generate in excess of $65 million of gains (2)
CIO ranked #1 in Deutsche Bank’s REIT Job Tracker (1)
Conservative leverage profile with Net Debt / Enterprise Value of 41.8% (1)
Primarily fixed rate debt with a weighted average interest rate of 4.3% (1)
6.5 year average debt maturity (1)
Predictable earnings model with built-in rental rate growth
Management has an average of over 20 years of experience with over $1.7 billion of real estate acquisitions since 2011
Internalized management team in February 2016
As of March 31, 2017 Corporate Parkway was sold on June 15, 2016, two buildings at AmberGlen were sold on May 2, 2017 and Washington Group Plaza is currently under contract for sale
16
APPENDIX: PROPERTY OVERVIEW Metropolitan Area
NRA (000s SF)
In Place Occupancy
Annualized Base Rent per SF
Annualized Gross Rent
Annualized
Date Acquired
Economic Interest
per SF
Base Rent2 (000s)
Park Tower
Nov-16
94.8%
473
86.7%
$23.31
$23.31
$9,549
GSA - US Attorneys Office
City Center
Apr-14
95.0%
241
95.7%
$24.28
$24.28
$5,600
Kobie Marketing, Inc.
Intellicenter
Sep-15
100.0%
204
100.0%
$22.37
$22.37
$4,552
H. Lee Moffitt Cancer Center
Carillon Point
Jun-16
100.0%
124
100.0%
$26.29
$26.29
$3,265
Paychex, Inc.
Property
1
Largest Tenant by NRA
Tampa, FL
Denver, CO
Boise, ID
Dallas, TX
Orlando, FL
Cherry Creek
Apr-14
100.0%
356
100.0%
$17.61
$17.61
$6,262
State of Colorado Department of Health
Plaza 25
Jun-14
100.0%
196
55.0%
$21.12
$21.12
$2,271
NTT America Inc.
DTC Crossroads
Jun-15
100.0%
191
92.4%
$23.36
$23.36
$4,120
ProBuild Holdings, Inc.
Superior Pointe
Jun-15
100.0%
149
95.8%
$17.08
$27.08
$2,439
KeyBank National Association
Logan Tower
Feb-15
100.0%
70
95.5%
$19.73
$19.73
$1,321
State of Colorado Governor's Energy
Washington Group Plaza
Apr-14
100.0%
581
83.0%
$17.35
$17.35
$8,362
St. Luke's Regional Medical Center
190 Office Center
Sep-15
100.0%
303
88.6%
$23.87
$23.87
$6,416
United Healthcare Services, Inc.
Lake Vista Pointe
Jul-14
100.0%
163
100.0%
$14.50
$22.50
$2,368
Ally Financial Inc.
2525 McKinnon
Jan-17
100.0%
111
97.8%
$24.93
$34.68
$2,716
The Retail Connection, Inc.
FRP Collection
Jul-16
95.0%
272
81.1%
$24.56
$26.94
$5,408
GSA - PEO STRI (US Dept of Defence)
Central Fairwinds
Apr-14
90.0%
170
89.8%
$26.11
$26.11
$3,975
Fairwinds Credit Union
FRP Ingenuity Drive
Nov-14
100.0%
125
100.0%
$20.50
$28.50
$2,552
Kaplan, Inc.
SanTan
Dec-16
100.0%
267
100.0%
$25.08
$25.08
$6,683
Toyota Motor Credit
5090 N 40th St
Nov-16
100.0%
176
89.0%
$27.49
$27.49
$4,304
Bar-S-Foods Co.
AmberGlen
Apr-14
76.0%
353
90.8%
$18.23
$19.66
$5,851
Planar Systems, Inc.
4,525
90.2%
$21.57
$22.98
$88,014
Phoenix, AZ
Portland, OR
Total / Weighted Average - March 31, 2017
(1)
(2) (3)
3
Net leases have been grossed up by $10 for Superior Pointe, $8 for Lake Vista Pointe and $8 for FRP Ingenuity Drive. Amberglen has a net lease for one tenant which has been grossed up by $7 on a pro-rata basis. FRP Collection has net leases for three tenants which have been grossed up by $8 on a pro-rata basis. 2525 McKinnon has net leases for seven tenants which have been grossed up by $14 on a prorata basis Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended March 31, 2017 by (ii) 12 Averages weighted based on the property’s NRA, adjusted for occupancy
17
APPENDIX: FINANCIAL HIGHLIGHTS (in thousands, except share and per share data) INCOME ITEMS
Q1 2017
Q4 2016
Q3 2016
Q2 2016
Q1 2016
NOI Same Store Cash NOI Growth
$
15,787 0.7%
$
12,778 5.1%
$
11,406 N/A
$
9,856 N/A
$
10,117 N/A
Portfolio adjusted cash NOI
$
14,971
$
13,053
$
10,456
$
8,156
$
9,006
Adjusted Cash NOI (CIO share) Net (loss)/income per share- fully diluted
$ $
14,497 (0.11)
$ $
12,641 (0.21)
$ $
10,155 (0.08)
$ $
7,862 0.48
$ $
8,752 (0.56)
Core FFO / Share
$
0.26
$
0.23
$
0.27
$
0.22
$
0.32
AFFO / Share
$
0.20
$
0.17
$
0.19
$
0.13
$
0.22
Portfolio EBITDA
$
14,421
$
11,537
$
10,284
$
8,927
$
9,309
EBITDA (CIO share) Annualized dividend Dividend yield
$ $
13,947 0.94 7.7%
$ $
11,125 0.94 7.1%
$ $
9,983 0.94 7.4%
$ $
8,633 0.94 7.1%
$ $
9,055 0.94 8.2%
CAPITALIZATION Common shares Unvested restricted shares Common units Total shares and units Weighted average shares and units outstanding Share price at quarter end Market value of common equity Total Series A preferred shares Liquidation preference per preferred share Aggregate liquidation preference Net debt - CIO share Total enterprise value (including net debt ) DEBT STATISTICS AND RATIOS Total debt (CIO share) Weighted average maturity Average interest rate Fixed rate debt as percentage of total debt
$ $ $ $ $ $
$
30,257,448 303,241 1 30,560,690 29,803,715 12.15 371,312 4,480,000 25.00 112,000 347,019 830,331
397,079 6.5 years 4.3% 100.0%
$ $ $ $ $ $
$
24,382,226 268,308 40,001 24,690,535 24,689,228 13.17 325,174 4,480,000 25.00 112,000 353,121 790,295
366,332 5.3 years 4.1% 86.0%
$ $ $ $ $ $
$
24,382,226 264,105 40,001 24,686,332 24,685,252 12.73 314,257 285,951 600,208
297,591 6.1 years 4.3% 100.0%
$ $ $ $ $ $
$
21,209,472 271,045 3,201,085 24,681,602 24,234,851 12.98 320,367 278,842 599,209
285,881 6.0 years 4.3% 94.2%
$ $ $ $ $ $
$
12,982,290 413,052 3,226,085 16,621,427 16,238,684 11.40 189,484 333,574 523,058
341,259 5.6 years 4.3% 80.5%
Adjusted interest coverage (CIO share)
3.2x
3.7x
2.9x
2.8x
2.5x
Fixed charge coverage (CIO share)
2.0x
2.1x
2.7x
2.6x
2.3x
Net debt/annualized adjusted EBITDA
6.1x
6.9x
7.1x
8.1x
9.2x
90.2% 5.2 years
91.0% 5.2 years
91.5% 4.9 years
88.2% 5.0 years
87.3% 5.5 years
LEASING STATISTICS In-Place occupancy Weighted average lease term
18
APPENDIX: FFO, CORE FFO AND AFFO (in thousands, except share and per share data) Net (loss)/income attributable to common stockholders (+) Depreciation and amortization (-) Operating Partnership unitholders' noncontrolling interest
Q1 2017 $
Non-controlling interests in properties: (-) Share of net income (-) Share of FFO (-) Net gain on sale of real estate property Funds from Operations ("FFO")
$
168 (373) $
(+) Acquisition costs (+) Stock based compensation (+) Change in fair value of earn-out (+) External advisor acquisition Core FFO
(3,313) 10,498 7,185
Q4 2016
6,980
$
7,807
$
111 (303) $
827 -
(+) Net recurring straight line rent adjustment (+) Net amortization of above and below market leases (+) Net amortization of deferred financing costs (-) Net recurring tenant improvements and incentives (-) Net recurring leasing commissions (-) Net recurring capital expenditures
(5,080) 9,345 (5) 4,260
Q3 2016
4,068
$
5,570
$
65 (206) $
353 649 500 -
(129) (3) 315 (253) (1,281) (431)
(1,944) 7,763 (3) 5,816
Q2 2016
5,675
$
6,557
$
110 (211) (15,934) $
252 630 -
328 159 277 (565) (998) (568)
11,527 6,520 2,613 20,660
Q1 2016
4,625
69 (171) $
87 615 $
(967) 17 195 (674) (217) (279)
5,327
(7,119) 6,551 (1,739) (2,307)
(2,409) 542 7,044
$
(1,755) 55 245 (413) (247) (163)
5,177 (1,168) 57 216 (383) (139) (189)
Adjusted Funds from Operations ("AFFO")
$
6,025
$
4,203
$
4,632
$
3,049
$
3,571
Core FFO per common share and unit
$
0.26
$
0.23
$
0.27
$
0.22
$
0.32
AFFO per common share and unit
$
0.20
$
0.17
$
0.19
$
0.13
$
0.22
Dividends per common share and unit Core FFO Payout Ratio
$
0.235 90%
$
0.235 104%
$
0.235 88%
$
0.235 107%
$
0.235 74%
AFFO Payout Ratio Weighted average common stock and common units outstanding
116%
138%
125%
187%
107%
29,803,715
24,689,228
24,685,252
24,234,851
16,238,684
19
APPENDIX: NET OPERATING INCOME RECONCILIATION
(in thousands) Net (loss)/income Adjustments to net income/loss:
Q1 2017
$
General and administrative Contractual interest expense Amortization of deferred financing costs Depreciation and amortization Acquisition costs Change in fair value of earn-out Net gain on sale of real estate property Base management fee External advisor acquisition
(1,299)
Q4 2016
$
(3,193)
Q3 2016
$
(1,882)
Q2 2016
$
14,250
Q1 2016
$
(8,789)
2,193
1,890
1,752
1,544
1,241
4,072 323 10,498 -
3,598 285 9,345 353 500 -
3,321 200 7,763 252 -
3,139 250 6,520 87 (15,934) -
3,740 221 6,551 109 7,044
Net Operating Income ("NOI") Net straight line rent adjustment Net amortization of above and below market leases
$
15,787 (814) (3)
$
12,778 116 159
$
11,406 (967) 17
$
9,856 (1,755) 55
$
10,117 (1,168) 57
Portfolio Adjusted Cash NOI Non-controlling interests in properties - share in cash NOI
$
14,970 (474)
$
13,053 (412)
$
10,456 (301)
$
8,156 (294)
$
9,006 (254)
Adjusted Cash NOI (CIO share)
$
14,496
$
12,641
$
10,155
$
7,862
$
8,752
20
C I T Y O F F I C E R E I T, I N C . E:
[email protected] | T: 604 806 3366 Suite 2010 1075 West Georgia St Vancouver, BC V6E 3C9
Suite 2990 500 North Akard Street Dallas, TX 75201
