City Office REIT's 2024 Performance Highlights and Future Prospects
City Office REIT Announces Significant Fourth Quarter and Yearly Results
City Office REIT, Inc. (NYSE: CIO) reported its results for the fourth quarter and the full year, showcasing a positive trend in the office sector.
Fourth Quarter Highlights
The company recorded rental and other revenues of $41.9 million. Despite this, there was a GAAP net loss attributable to common stockholders of approximately $12.6 million, translating to a loss of $0.31 per fully diluted share.
In terms of performance metrics, the Core Funds from Operations (FFO) stood at approximately $11.7 million or $0.28 per fully diluted share, while Adjusted Funds from Operations (AFFO) were around $4.3 million, at $0.10 per fully diluted share. Notably, same-store cash net operating income (NOI) increased by 3.3% compared to the previous fourth quarter. The company declared a quarterly dividend of $0.10 per share and $0.4140625 for its Series A Preferred Stock.
Key Activities Post-Quarter End
Following the quarter's conclusion, City Office REIT successfully sold the Superior Pointe property for a gross sale price of $12 million. The CEO, James Farrar, expressed optimism about the continued leasing momentum and the renovated portfolio's positioning in desirable markets.
Portfolio Operations Overview
As of December 31, 2024, the total portfolio encompassed 5.6 million net rentable square feet, achieving an occupancy rate of 85.4%. This figure rises to 87.6% when including signed leases not yet occupied. The company executed around 205,000 square feet of new and renewal leases during the fourth quarter, marking a robust lease activity year.
Leasing Activity
The total leasing activity for the quarter comprised approximately 205,000 square feet, consisting of 81,000 square feet in new leases and 124,000 square feet in renewals. Between January 1 and December 31, 2024, the company completed approximately 806,000 square feet of leasing, indicating a substantial 35% increase year-over-year.
Financial Structure Details
As of December 31, 2024, City Office REIT had approximately $649.5 million in outstanding principal debt, of which approximately 82.3% was fixed rate or effectively fixed due to interest rate swaps. The weighted average maturity of total principal outstanding debt was around 1.9 years, with an average interest rate of 5.1%.
Dividend Announcements
The Board of Directors announced cash dividends of $0.10 for common stockholders and $0.4140625 for Series A Preferred Stock for results up to December 31, 2024, both paid out on January 23, 2025.
2025 Financial Outlook
Looking ahead into 2025, City Office expects Core FFO per fully diluted share between $1.10 and $1.14. The company anticipates an increase in portfolio occupancy by year-end compared to 2024 as active leases take occupancy.
Key assumptions related to the outlook include projected general and administrative expenses ranging between $14.5 million and $15.5 million and net operating income expected in the range of $102.5 million to $104.5 million.
Conclusion on Recent Performance Trends
City Office REIT is navigating a changing office landscape with strategic leasing and dispositions, reflecting a foundational shift towards more consistent occupancy and stronger operational performance. With a robust queue of signed leases and ongoing renovations, management is optimistic about leveraging these assets in 2025 and beyond.
Frequently Asked Questions
What were the key financial metrics for City Office REIT in 2024?
In 2024, City Office REIT reported rental revenues of $41.9 million, a net loss of $12.6 million, and Core FFO of $11.7 million.
What is City Office REIT's occupancy rate as of year-end 2024?
As of December 31, 2024, the company achieved an in-place occupancy rate of 85.4%, increasing to 87.6% when including signed leases not yet occupied.
What dividends were declared by City Office REIT?
The company declared a cash dividend of $0.10 per common share and $0.4140625 per share of preferred stock, both paid on January 23, 2025.
What is the anticipated Core FFO for City Office REIT in 2025?
The company projects Core FFO per fully diluted share to range between $1.10 and $1.14 for 2025.
Who is the Chief Executive Officer of City Office REIT?
James Farrar serves as the Chief Executive Officer of City Office REIT.
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