City Office Reit (CIO) Announces Fourth Quarter And Full Year 2024 Earnings Results

City Office REIT, Inc. (CIO) today announced its financial results for the recent quarter, revealing a challenging period for the company. The reported earnings per share (EPS) stood at -$0.31, which fell short of the analysts’ estimate of -$0.096667, resulting in a miss by $0.213333. This performance highlights the hurdles faced by City Office REIT in the current economic climate as it navigates through market uncertainties.

Key Highlights:

• Rental and other revenues for Q4 2024 were $41.9 million, with a GAAP net loss of $12.6 million.
• Core FFO for Q4 2024 was $11.7 million, or $0.28 per fully diluted share.
• In-place occupancy was 85.4%, increasing to 87.6% with signed leases not yet occupied.
• Executed approximately 205,000 square feet of new and renewal leases during Q4 2024.
• Same Store Cash NOI increased by 3.3% compared to Q4 2023.
• Disposed of the Superior Pointe property in Denver for $12.0 million.
• 2025 Core FFO per fully diluted share is expected to be between $1.10 and $1.14.
• Portfolio occupancy is expected to increase by the end of 2025.

Summary:

City Office REIT, Inc. reported its financial results for the fourth quarter and full year of 2024, highlighting a rental revenue of $41.9 million and a GAAP net loss of $12.6 million. The company achieved a Core FFO of $11.7 million, or $0.28 per fully diluted share, and an AFFO of $4.3 million, or $0.10 per fully diluted share. The company experienced strong leasing momentum, executing approximately 205,000 square feet of new and renewal leases, which increased the portfolio occupancy to 85.4%, or 87.6% including signed leases not yet occupied. Same Store Cash NOI saw a 3.3% increase compared to the same quarter in the previous year. The company also declared dividends for both common and preferred stockholders.

Looking ahead to 2025, City Office REIT expects Core FFO per fully diluted share to range between $1.10 and $1.14, with an anticipated increase in portfolio occupancy by year-end. The company plans to benefit from extensive renovation programs completed over the past few years, positioning its office assets in highly desirable markets. CEO James Farrar commented on the positive shift in the office sector, emphasizing the strong leasing performance and the company’s strategic positioning for future growth. The company also completed the sale of the Superior Pointe property in Denver for $12.0 million, which is factored into the 2025 guidance.

City Office REIT, Inc. (CIO) has experienced a rollercoaster of price changes over the past year, with a notable 15.95% increase over the last twelve months, despite a recent dip of 1.17% in the past month. The stock’s three-month performance shows a promising 5.57% rise, although it has faced a 7.10% decline over the past six months, indicating some volatility. On the fundamental side, CIO’s financial metrics paint a challenging picture. The company has a negative price-to-earnings ratio of -18.64, reflecting its struggles with profitability, as evidenced by a net profit margin of -5.61%. Additionally, the two-year compound annual growth rates (CAGR) for earnings per share and free cash flow are both negative, at -11.65% and -25.50% respectively, suggesting difficulties in generating consistent earnings and cash flow. Despite these hurdles, the return on invested capital stands at a modest 4.13%, indicating some efficiency in utilizing its capital. Overall, while CIO’s stock price has shown resilience over the past year, the underlying financial metrics suggest that the company faces significant operational challenges.

City Office REIT, Inc. (NYSE: CIO) invests in high-quality office properties in 18-hour cities with strong economic fundamentals, primarily in the Southern and Western United States. At September 30, 2020, CIO owned office complexes comprising 5.8 million square feet of net rentable area (NRA).