Investor Presentaiton
CIO STOCK REPURCHASE PROGRAM
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CITY OFFICE REIT
Highly attractive investment profile. Investing in great assets at steep discount to value
Year to date, CIO has repurchased 2,302,694 shares of common stock at an average price of $13.11 per share
The average repurchase price represents a significant discount to CIO's view of the value of the portfolio
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The repurchases translate to CIO purchasing its own portfolio at a 7.9% implied portfolio cap rate / $221 per SF
☐ Excluding the three recent acquisitions, repurchases translate to a 10.9% implied cap rate / $142 per SF on the balance of portfolio (1)
As of June 30, 2022
VALUATION DISCONNECT - ILLUSTRATION
At 52-Week
(in millions)
Share Price
High
$21.70
Repurchase
Avg Price
$13.11
Lake Vista Sale Versus CIO Balance of Portfolio
Fully Diluted Shares Outstanding - June 30, 2022
Implied Equity Value
44.052
44.052
$
955.9
$
577.5
Net Debt
$
589.2
$
589.2
Liquidation Value of Preferred Stock
112.0
112.0
Value of Development Land (2)
(4.5)
(4.5)
Working Capital Adjustment
(3)
36.0
36.0
(4)
Estimated Minority Interest Value
14.5
14.5
Implied Enterprise Value of Portfolio
1,703.2
1,324.8
2022 Cash NOI (5)
$
105.0
$
105.0
Implied Cap Rate - Portfolio
6.2%
7.9%
Implied Cap Rate - Three Recent Acquisitions (6)(7)
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4.5%
4.5%
Implied Cap Rate - Balance of Portfolio
(8)
7.1%
10.9%
Implied Price per SF - Portfolio
$
284
$
221
Implied Price per SF - Three Recent Acquisitions
Implied Price per SF - Balance of Portfolio
(1)
$
629
$
629
217
$
142
Lake Vista sale in June 2022 represented one of CIO's lowest
quality, suburban properties relative to its portfolio:
Longer property WALT of 10 years was offset by suburban
location and cheaper tilt-up construction
Nonetheless, the Lake Vista sale achieved a 6.1% exit I
cap rate and $268 per SF. CIO's Balance of Portfolio
properties are generally superior in quality but trading |
at inferior implied valuations
Calculated using recent acquisitions at December 2021 cost of $613.5 million
(2) Deducts the development land book value at FRP Collection, Intellicenter and Circle Point to isolate the value of the Company's office properties
(1)
FOTO
(3)
(4)
(5)
(6)
(7)
(8)
Working capital adjustment - Add: Rents Receivable & Other Assets; Less: Straight Line Rent Receivable, Accounts Payable and Accrued Liabilities, Deferred Rent, Tenant Rent Deposits and Other Liabilities
Estimated minority interest value in five properties as of June 30, 2022
Calculated as $112.0 million midpoint of 2022 NOI Guidance, less $3.4 million of non-recurring termination fees, less $9.9 million of non-cash GAAP adjustments, plus $6.3 million of 2022 free rent and bridge rent credits paid by the sellers of
Bloc 83, Block 23 and The Terraces
Recent acquisitions projected to stabilize to a blended cap rate of approximately 5.4% (shown here at 4.5% due to certain leases not having a full year of paying rent in 2022 and the timing of projected vacant space lease-up)
Cap rate calculated as $27.7 million of Cash NOI (including 2022 free rent and bridge rent credits paid by the sellers at the time of acquisition) / December 2021 cost of $613.5 million
Cap rate calculated as $77.3 million of Cash NOI/(Implied Enterprise Value of Portfolio less recent acquisitions at cost of $613.5 million)
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