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City Office REIT Reports First Quarter 2025 Results

City Office REIT, Inc. has disclosed its financial results for the first quarter of 2025, showcasing significant movements in leasing activities and strategy implementation. The company's total revenues for this quarter were reported at approximately $42.3 million, marking a contrast to the previous year's figures as they had a net loss attributable to common stockholders of about $3.5 million.

Performance Highlights

During the first quarter, City Office achieved a Core Funds from Operations (Core FFO) of about $12.3 million, translating to $0.30 per fully diluted share. Meanwhile, the Adjusted Funds from Operations (AFFO) was around $6.5 million, equivalent to $0.16 per share. Notably, the occupancy level at the end of the quarter stood at 84.9%, which rises to 87.6% when considering signed leases that are yet to be occupied.

Furthermore, City Office successfully executed approximately 144,000 square feet of new and renewal leasing during this period. This reflects a 4.4% increase in Same Store Cash Net Operating Income (NOI) compared to the first quarter of the previous year.

The company declared a cash dividend of $0.10 per share to common shareholders, which was distributed on April 24, 2025. Notable also was the dividend of $0.4140625 per share for Series A Preferred Stock, which was similarly paid on the same date.

Strategic Developments

In an important strategic move, City Office entered into an agreement with an affiliate of Property Markets Group (PMG) concerning the redevelopment of a segment of its City Center property located in St. Petersburg, Florida. This agreement proposes the creation of a 49-story residential condominium and mixed-use tower, which is set to be marketed as part of the Waldorf Astoria Residences brand. Although presales are anticipated to start soon, the project will hinge upon meeting specific conditions before construction begins, demonstrating the company's ambition to enhance its portfolio further.

CEO James Farrar expressed optimism about the results, noting the encouraging leasing activity coupled with improving real estate fundamentals across their operational regions. He stated, “We continue to see improving leasing activity and year-over-year strengthening of office real estate fundamentals across our Sun Belt markets.”

Financial Structure and Outlook

As of the quarter-end, the company's total debt amounted to approximately $648.1 million, with around 82.3% being fixed-rate debt or effectively fixed due to interest rate swaps. City Office's management has also reaffirmed its guidance for the full-year 2025, suggesting that their operations are built on firm assumptions despite market volatility.

Looking at the leasing metrics, new leases were inked at an effective annual rent of $29.97 per square foot for a weighted average lease term of 5.9 years, while renewal leases had a slightly higher average effective rent of $33.87 per square foot for a lease term averaging 5.1 years.

Overall, City Office REIT showcases resilient operations amidst challenges and proactive planning for future growth, particularly with the progressive redevelopment project in Florida. Investors remain watchful as the company navigates an evolving commercial real estate landscape, reflecting both confidence in its existing ventures and future projects.

Webcast and Call Details

City Office REIT will hold a conference call to discuss these results on May 2, 2025, at 11:00 AM Eastern Time. This session will also be accessible through a webcast on their Investor Relations website.