I N V E S TO R P R E S E NTATION M A Y 2 0 2 0 N YS E : CIO
F ORWARD -L OOKING S TATEMENTS 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 forward- looking statements within the meaning of the federal securities laws and as such are based upon City Office REIT, Inc. ’s (“CIO” or the “Company”) current beliefs as to the outcome and timing of future events. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “approximately,” “anticipate,” “assume,” “believe,” “budget,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “hypothetical,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” or other similar words or expressions. 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 the Company’s financial performance, including under metrics such as NOI and FFO, market rental rates, national or local economic growth, estimated replacement costs of the Company’s 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, anticipated near-term acquisitions and descriptions relating to these expectations, including, without limitation, the anticipated net operating income yield and cap rates, and changes in local, regional, national and international economic conditions, including as a result of the recent COVID-19 pandemic. Forward-looking statements presented in this presentation are based on management’s beliefs and assumptions made by, and information currently available to, management. The forward-looking statements contained in this presentation are based on historical performance and management’s current plans, estimates and expectations in light of information currently available to the Company and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting the Company will be those that the Company has anticipated. Actual results may differ materially from these expectations due to the factors, risks and uncertainties described above, changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors described in the Company’s news releases and filings with the U.S. Securities and Exchange Commission (the “SEC”), including but not limited to those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 under the heading “Risk Factors” and in the Company’s subsequent reports filed with the SEC, many of which are beyond the Company’s control. Should one or more of these risks or uncertainties materialize, or should any of the Company’s assumptions prove to be incorrect, the Company’s actual results may vary in material respects from what the Company may have expressed or implied by these forward-looking statements. CIO cautions that you should not place undue reliance on any of CIO’s forward-looking statements. Any forward-looking statement made by the Company in this presentation speaks only as of the date of this presentation. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company or its management to predict all of them. The Company does not guarantee that the assumptions underlying such forward-looking statements contained in this presentation are free from errors. Unless otherwise stated, historical financial information and per share and other data are as of March 31, 2020 or relate to the quarter ended March 31, 2020. The Company has no obligation, and does not undertake, to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws. 2
Central Fairwinds, Orlando 7595 Tech, Denver 5090 N 40th St, Phoenix 2525 McKinnon, Dallas Mission City, San Diego Circle Point, Denver City Center, Tampa Park Tower, Tampa The Quad, Phoenix
C OMPANY O VERVIEW City Office invests in high-quality office properties in 18-hour cities with strong economic fundamentals in the Southern and Western United States Annualized Lease No. of NRA Gross Rent In Place Term 4% S EATTLE , WA Market Buildings (000s SF) per SF Occupancy Remaining CURRENT MARKETS (1) Phoenix, AZ 22 1,213 $27.87 90.2% 3.2 P ORTLAND , OR 1,160 Denver, CO 9 $26.27 90.2% 5.8 5% Tampa, FL 5 1,041 $25.66 93.8% 4.5 Orlando, FL 8 720 $25.95 96.8% 4.7 D ENVER , CO San Diego, CA 9 582 $34.62 88.4% 3.4 S AN D IEGO , CA 18% Dallas, TX 4 577 $29.18 87.9% 3.1 14% P HOENIX , AZ O RLANDO , FL Portland, OR 5 331 $25.78 99.0% 4.0 D ALLAS , TX 21% 12% Seattle, WA 3 207 $29.84 100.0% 8.8 9% T AMPA , FL Total 65 5,831 $27.58 92.2% 4.4 17% Experienced Targeted Diversified Strong Dedicated High Growth, Tenant Base Management Team Balance Sheet Class A & B Office with High Liquidity 18-Hour Cities Owner Note: All information as of March 31, 2020 Percentages based on management’s estimate of aggregate gross asset value in each market (1) 4
CIO T ARGETS L EADING “18 -H OUR C ITIES ” N ATION -L EADING O FFICE D EMAND D RIVERS (1) N EW S UPPLY B ELOW H ISTORICAL A VERAGES (2) % PROJECTED EMPLOYMENT % PROJECTED POPULATION CONSTRUCTION DELIVERIES IN CIO CURRENT MARKETS 1978 - 2019 GROWTH 2020 - 2025 GROWTH 2020 - 2025 50 7.5% 45 6.7% 40 Square Feet (in Millions) 35 30 4.1% 25 3.4% 20 2.6% AVG 2.0% 15 10 5 - Gateway National CIO Gateway National CIO Markets Avg Markets Markets Avg Markets A TTRACTIVE 18-H OUR C ITY C HARACTERISTICS D OMESTIC N ET M IGRATION T O 18-H OUR C ITIES DEPICTS NET MIGRATION (PEOPLE PER YEAR) INTO CIO MARKETS (3) ✓ High-quality urban living experience in amenitized setting +64k ✓ Live, work, play environments; attractive to millennials +30k ✓ Diverse employment bases with national and international employers ✓ Educated workforces +36k ✓ Low-cost centers for businesses to operate +88k +20k ✓ Sound transportation infrastructure with lower congestion +146k ✓ Strong and stable demand generators such as state capitals or university proximity +56k +55k (1) Source: SNL Financial, as of February 1, 2020. Gateway markets represent New York, NY, Boston, MA, Chicago, IL, Los Angeles, CA, San Francisco, CA and Washington, D.C. (2) Source: CoStar Property. Construction deliveries represent Class A&B office building deliveries over 50,000 SF in CIO current markets 5 (3) Based on population change from July 2016 to July 2017 as measured by the US Census Bureau
G ROWTH AND V ALUE C REATION S TRATEGY Generate strong investor returns by driving property cash flow growth, enhancing NAV and a focused acquisition strategy I NVEST W HERE W E H AVE AN A DVANTAGE ANNOUNCED POST-IPO PROJECTED ACQUISITION CAP RATES (2) Focus on properties valued between $25 million and $100 million ❑ 8.3% Average acquisition size of $48.3 million post IPO (1) ❑ 7.6% 7.5% 7.3% 7.3% 7.2% 6.8% Less competition from larger institutional investors ❑ Leverage existing infrastructure and deep relationships in our ❑ current markets to source acquisitions and operate efficiently D ISCIPLINED R EAL E STATE U NDERWRITING Target strong and diverse tenancy, below market in-place rents ❑ 2014 2015 2016 2017 2018 2019 Avg. and acquisition prices below replacement cost The Quad, Phoenix Detailed underwriting process and due diligence; confront adverse ❑ Circle Point, Denver findings during acquisition diligence A CTIVE A PPROACH TO C REATING V ALUE Active in-house asset management with local market presence ❑ Selectively implement value-add initiatives to increase cash flows ❑ Long-term hold mentality but will selectively harvest value when ❑ capital can be redeployed accretively (1) As of March 31, 2020, excludes Circle Point land acquisition in Denver, CO (2) 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 6
Recommend
More recommend
