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Jun 30
City Office Q2 2025 Earnings Report
City Office REIT, Inc. announced its second quarter 2025 results, reporting a significant net loss primarily due to a real estate impairment charge, while also detailing portfolio operations, leasing activity, and capital structure.
Key Takeaways
City Office REIT experienced a substantial net loss of $105.309 million in Q2 2025, largely driven by a $102.229 million impairment of real estate related to the classification of the Phoenix Portfolio as held for sale. Despite this, the company saw positive Same Store Cash NOI growth and active leasing, with total leasing activity reaching 355,000 square feet. The company also declared common and preferred stock dividends for the quarter but announced the suspension of future common stock dividends due to a pending merger.
City Office REIT reported a net loss of $105.309 million for Q2 2025, primarily due to a $102.229 million impairment charge on real estate.
Same Store Cash NOI increased by 1.8% for the three months ended June 30, 2025, compared to the same period in the prior year.
Total leasing activity for the quarter was approximately 355,000 square feet, comprising 163,000 square feet of new leases and 192,000 square feet of renewals.
The company declared a common stock dividend of $0.10 per share and a preferred stock dividend of $0.4140625 per share for Q2 2025, but will suspend future common stock dividends due to a pending merger.
City Office
City Office
Forward Guidance
Due to the pending merger, City Office REIT will no longer provide or affirm future guidance.
Positive Outlook
- The company is actively pursuing a merger transaction, which could provide strategic benefits.
- The Phoenix Portfolio Sale Transaction is expected to close in the third quarter, potentially improving the company's financial position.
- The company successfully extended the term of its Greenwood Blvd property loan by three years to May 2028.
- The company will continue to pay regular quarterly dividends on its Preferred Stock.
- The company entered into an interest rate swap agreement, effectively fixing the interest rate of the Greenwood Blvd loan at 6.34% for three years.
Challenges Ahead
- The company recognized a significant impairment of $102.2 million on the Phoenix Portfolio, impacting net income.
- Future quarterly common stock dividend payments have been suspended through the expected close of the Merger.
- The company will not host a conference call with analysts and investors to discuss Q2 2025 results due to the pending merger.
- The weighted average debt maturity is relatively short at 1.4 years, indicating potential refinancing needs in the near term.
- The company is no longer providing forward guidance, which may create uncertainty for investors.