QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
Title of Each Class |
Trading Symbol(s) |
Name of each Exchange on Which Registered | ||
|
“ “ |
|
Large accelerated filer | ☐ | ☒ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
1 |
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1 |
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1 |
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2 |
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3 |
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4 |
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5 |
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6 |
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15 |
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25 |
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25 |
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26 |
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26 |
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26 |
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26 |
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26 |
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26 |
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26 |
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27 |
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28 |
June 30, 2021 |
December 31, 2020 |
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Assets |
||||||||
Real estate properties |
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Land |
$ | $ | ||||||
Building and improvement |
||||||||
Tenant improvement |
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Furniture, fixtures and equipment |
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Accumulated depreciation |
( |
) | ( |
) | ||||
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Cash and cash equivalents |
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Restricted cash |
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Rents receivable, net |
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Deferred leasing costs, net |
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Acquired lease intangible assets, net |
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Other assets |
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Assets held for sale |
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Total Assets |
$ | $ | ||||||
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Liabilities and Equity |
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Liabilities: |
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Debt |
$ | $ | ||||||
Accounts payable and accrued liabilities |
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Deferred rent |
||||||||
Tenant rent deposits |
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Acquired lease intangible liabilities, net |
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Other liabilities |
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Liabilities related to assets held for sale |
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Total Liabilities |
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Commitments and Contingencies (Note 9) |
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Equity: |
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shares issued and outstanding as of June 30, 2021 and December 31, 2020 |
||||||||
Common stock, $ par value per share, 2020, respectively |
||||||||
Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
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|||||
Total Stockholders’ Equity |
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Non-controlling interests in properties |
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Total Equity |
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Total Liabilities and Equity |
$ | $ | ||||||
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Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
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Rental and other revenues |
$ | $ | $ | $ | ||||||||||||
Operating expenses: |
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Property operating expenses |
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General and administrative |
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Depreciation and amortization |
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Total operating expenses |
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Operating income |
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Interest expense: |
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Contractual interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Amortization of deferred financing costs and debt fair value |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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|||||||||
( |
) | ( |
) | ( |
) | ( |
) | |||||||||
Net gain on sale of real estate property |
— |
— | — | |||||||||||||
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Net income |
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Less: |
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Net income attributable to non-controlling interests in properties |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Net income attributable to the Company |
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Preferred stock distributions |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Net (loss)/income attributable to common stockholders |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||
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Net (loss)/income per common share: |
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Basic |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
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Diluted |
$ | $ | ( |
) | $ | $ | ( |
) | ||||||||
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Weighted average common shares outstanding: |
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Basic |
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Diluted |
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Dividend distributions declared per common share |
$ | $ | $ | $ | ||||||||||||
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Three Months Ended June 30, |
Six Months Ended June 30, |
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2021 |
2020 |
2021 |
2020 |
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Net income |
$ | $ | $ | $ | ||||||||||||
Other comprehensive income/(loss): |
||||||||||||||||
Unrealized cash flow hedge (loss)/gain |
( |
) | ( |
) | ( |
) | ||||||||||
Amounts reclassified to interest expense |
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Other comprehensive income/(loss) |
( |
) | ( |
) | ||||||||||||
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Comprehensive income/(loss) |
( |
) | ||||||||||||||
Less: |
||||||||||||||||
Comprehensive income attributable to non-controlling interests in properties |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Comprehensive income/(loss) attributable to the Company |
$ | $ | $ | $ | ( |
) | ||||||||||
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Number of shares of preferred stock |
Preferred stock |
Number of shares of common stock |
Common stock |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive loss |
Total stockholders’ equity |
Non-controlling interests in properties |
Total equity |
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Balance—December 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ |
||||||||||||||||||||||||||||
Restricted stock award grants and vesting |
— | — | — | — | ( |
) | — | — | ||||||||||||||||||||||||||||||||
Common stock dividend distribution declared |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Preferred stock dividend distribution declared |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Distributions |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
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Balance—March 31, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||
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Restricted stock award grants and vesting |
— | — | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
Common stock dividend distribution declared |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Preferred stock dividend distribution declared |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Contributions |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Distributions |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive income |
— | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
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|||||||||||||||||||||
Balance—June 30, 2021 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||
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Number of shares of preferred stock |
Preferred stock |
Number of shares of common stock |
Common stock |
Additional paid-in capital |
Accumulated deficit |
Accumulated other comprehensive loss |
Total stockholders’ equity |
Non-controlling interests in properties |
Total equity |
|||||||||||||||||||||||||||||||
Balance—December 31, 2019 |
$ | $ | $ | $ | ( |
) | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Restricted stock award grants and vesting |
— | — | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
Common stock repurchased |
— | — | ( |
) | ( |
) | ( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||
Common stock dividend distribution declared |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Preferred stock dividend distribution declared |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Contributions |
— | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Distributions |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
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|||||||||||||||||||||
Balance—March 31, 2020 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||
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Restricted stock award grants and vesting |
— | — | ( |
) | — | — | ||||||||||||||||||||||||||||||||||
Common stock repurchased |
— | — | ( |
) | ( |
) | ( |
) | — | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||
Common stock dividend distribution declared |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Preferred stock dividend distribution declared |
— | — | — | — | — | ( |
) | — | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
Distributions |
— | — | — | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Net income |
— | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | — | ( |
) | ( |
) | — | ( |
) | |||||||||||||||||||||||||||
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Balance—June 30, 2020 |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||||||||
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Six Months Ended June 30, |
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2021 |
2020 |
|||||||
Cash Flows from Operating Activities: |
||||||||
Net income |
$ | $ | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization |
||||||||
Amortization of deferred financing costs and debt fair value |
||||||||
Amortization of above and below market leases |
( |
) | ||||||
Straight-line rent/expense |
( |
) | ||||||
Non-cash stock compensation |
||||||||
Net gain on sale of real estate property |
( |
) | — | |||||
Changes in non-cash working capital: |
||||||||
Rents receivable, net |
||||||||
Other assets |
( |
) | ( |
) | ||||
Accounts payable and accrued liabilities |
( |
) | ( |
) | ||||
Deferred rent |
||||||||
Tenant rent deposits |
( |
) | ||||||
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|
|||||
Net Cash Provided By Operating Activities |
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Cash Flows from/(to) Investing Activities: |
||||||||
Additions to real estate properties |
( |
) | ( |
) | ||||
Acquisition of real estate. |
( |
) | — | |||||
Net proceeds from sale of real estate. |
— | |||||||
Deferred leasing costs |
( |
) | ( |
) | ||||
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|
|||||
Net Cash Provided By/(Used In) Investing Activities |
( |
) | ||||||
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Cash Flows to Financing Activities: |
||||||||
Proceeds from borrowings |
||||||||
Repayment of borrowings |
( |
) | ( |
) | ||||
Dividend distributions paid to stockholder s |
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|
( |
) |
|
|
( |
) |
Distributions to non-controlling interests in properties |
( |
) | ( |
) | ||||
Shares withheld for payment of taxes on restricted stock unit vesting |
( |
) | ( |
) | ||||
Contributions from non-controlling interests in properties . |
||||||||
Repurchases of common stoc k |
|
|
— |
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( |
) |
Net Cash Used In Financing Activities |
( |
) | ( |
) | ||||
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Net Decrease in Cash, Cash Equivalents and Restricted Cash |
( |
) | ( |
) | ||||
Cash, Cash Equivalents and Restricted Cash, Beginning of Period |
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Cash, Cash Equivalents and Restricted Cash, End of Period |
$ | $ | ||||||
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Reconciliation of Cash, Cash Equivalents and Restricted Cash: |
||||||||
Cash and Cash Equivalents, End of Period |
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Restricted Cash, End of Period |
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Cash, Cash Equivalents and Restricted Cash, End of Period |
$ | $ | ||||||
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Supplemental Disclosures of Cash Flow Information: |
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Cash paid for interest |
$ | $ | ||||||
Purchase of additions in real estate properties included in accounts payable |
$ | $ | ||||||
Purchase of deferred leasing costs included in accounts payable |
$ | $ |
Property |
Date Acquired |
Percentage Owned |
||||||
5910 Pacific Center and 9985 Pacific Heights (1) |
% |
|
(1) |
5910 Pacific Center and 9985 Pacific Heights have been added to the existing Sorrento Mesa portfolio of properties (collectively “Sorrento Mesa”). |
5910 Pacific Center and 9985 Pacific Heights |
||||
Land |
$ | |||
Building and improvement |
||||
Tenant improvement |
||||
Lease intangible assets |
||||
Other assets |
||||
Accounts payable and other liabilities |
( |
) | ||
Lease intangible liabilities |
( |
) | ||
|
|
|||
Net assets acquired |
$ | |||
|
|
Cherry Creek |
December 31, 2020 |
|||
Real estate properties, net |
$ | |||
Deferred leasing costs, net |
||||
Acquired lease intangible assets, net |
||||
Rents receivable, prepaid expenses and other assets |
||||
|
|
|||
Assets held for sale |
$ | |||
|
|
|||
Accounts payable, accrued expenses, deferred rent and tenant rent deposits |
$ | ( |
||
|
|
|||
Liabilities related to assets held for sale |
$ | ( |
||
|
|
Lease Intangible Assets |
Lease Intangible Liabilities |
|||||||||||||||||||||||||||
June 30, 2021 |
Above Market Leases |
In Place Leases |
Leasing Commissions |
Total |
Below Market Leases |
Below Market Ground Lease |
Total |
|||||||||||||||||||||
Cost |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||
Accumulated amortization |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||
Lease Intangible Assets |
Lease Intangible Liabilities |
|||||||||||||||||||||||||||
December 31, 2020 |
Above Market Leases |
In Place Leases |
Leasing Commissions |
Total |
Below Market Leases |
Below Market Ground Lease |
Total |
|||||||||||||||||||||
Cost |
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||
Accumulated amortization |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
$ | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||||||||||||
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
$ |
||||
Property |
June 30, 2021 |
December 31, 2020 |
Interest Rate as of June 30, 2021 (1) |
Maturity |
||||||||||||
Unsecured Credit Facility (2)(3) |
$ | $ | % (4) |
|||||||||||||
Term Loan (3) |
% (4) |
|||||||||||||||
Mission City |
% | |||||||||||||||
Canyon Park (5) |
% | |||||||||||||||
190 Office Center |
% | |||||||||||||||
Circle Point |
% | |||||||||||||||
SanTan |
% | |||||||||||||||
Intellicenter |
% | |||||||||||||||
The Quad |
% | |||||||||||||||
FRP Collection |
% | |||||||||||||||
2525 McKinnon |
% |
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Greenwood Blvd |
% |
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Cascade Station |
% |
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5090 N. 40th St |
% |
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AmberGlen |
% |
|||||||||||||||
Lake Vista Pointe |
% |
|||||||||||||||
Central Fairwinds |
% |
|||||||||||||||
FRP Ingenuity Drive |
% |
|||||||||||||||
Carillon Point |
% |
|||||||||||||||
Midland Life Insurance (6) |
— |
— |
— |
|||||||||||||
Total Principal |
||||||||||||||||
Deferred financing costs, net |
( |
) |
( |
) |
||||||||||||
Unamortized fair value adjustments |
||||||||||||||||
Total |
$ |
$ |
||||||||||||||
(1) |
All interest rates are fixed interest rates with the exception of the Unsecured Credit Facility (the “Unsecured Credit Facility”) and the Term Loan (the “Term Loan”), as explained in footnotes 2 and 3 below. |
(2) |
In March 2018, the Company entered into the Credit Agreement for the Unsecured Credit Facility that provides for commitments of up to $ |
(3) |
In September 2019, the Company entered into a five-year $ 30-day LIBOR payments. |
(4) |
As of June 30, 2021, the one-month LIBOR rate was |
(5) |
The mortgage loan anticipated repayment date (“ARD”) is March 1, 2027. The final scheduled maturity date can be extended up to 5 years beyond the ARD. If the loan is not paid off at ARD, loan’s interest rate shall be adjusted to the greater of (i) the initial interest rate plus |
(6) |
The mortgage loan was cross-collateralized by Cherry Creek, City Center and 7595 Tech (formerly “DTC Crossroads”). In February 2021, the loan balance of $ |
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
||||
$ | ||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||
Fixed payments |
$ |
$ |
$ |
$ |
||||||||||||
Variable payments |
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|
|
|
|||||||||
$ |
$ |
$ |
$ |
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|
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|
2021 |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Thereafter |
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|
|||
$ | ||||
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|
June 30, 2021 |
December 31, 2020 |
|||||||
Right-of-use |
$ | $ | ||||||
Lease liability – operating leases |
$ | $ | ||||||
Right-of-use |
$ | $ | ||||||
Lease liability – financing leases |
$ | $ |
Operating Leases |
Financing Leases |
|||||||
2021 |
$ | $ | ||||||
2022 |
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2023 |
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2024 |
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2025 |
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Thereafter |
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|||||
Total future minimum lease payments |
||||||||
Discount |
( |
) | ( |
) | ||||
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Total |
$ | $ | ||||||
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|
• | adverse economic or real estate developments in the office sector or the markets in which we operate; |
• | changes in local, regional, national and international economic conditions, including as a result of the ongoing coronavirus disease 2019 (“COVID-19”) pandemic; |
• | requests from tenants for rent deferrals, rent abatement or relief from other contractual obligations, or a failure to pay rent, as a result of changes in business behavior stemming from the ongoing COVID-19 pandemic or the availability of government assistance programs; |
• | our inability to compete effectively; |
• | our inability to collect rent from tenants or renew tenants’ leases on attractive terms if at all; |
• | demand for and market acceptance of our properties for rental purposes, including as a result of near-term market fluctuations or long-term trends that result in an overall decrease in the demand for office space; |
• | defaults on or non-renewal of leases by tenants, including as a result of the ongoing COVID-19 pandemic; |
• | increased interest rates and any resulting increase in financing or operating costs; |
• | decreased rental rates or increased vacancy rates, including as a result of the ongoing COVID-19 pandemic; |
• | our failure to obtain necessary financing or access the capital markets on favorable terms or at all; |
• | changes in the availability of acquisition opportunities; |
• | availability of qualified personnel; |
• | our inability to successfully complete real estate acquisitions or dispositions on the terms and timing we expect, or at all; |
• | our failure to successfully operate acquired properties and operations; |
• | changes in our business, financing or investment strategy or the markets in which we operate; |
• | our failure to generate sufficient cash flows to service our outstanding indebtedness; |
• | environmental uncertainties and risks related to adverse weather conditions and natural disasters; |
• | our failure to qualify and maintain our status as a real estate investment trust (“REIT”); |
• | government approvals, actions and initiatives, including the need for compliance with environmental requirements or actions in response to the COVID-19 pandemic; |
• | outcome of claims and litigation involving or affecting us; |
• | financial market fluctuations; |
• | changes in real estate, taxation and zoning laws and other legislation and government activity and changes to real property tax rates and the taxation of REITs in general; and |
• | other factors described in our news releases and filings with the SEC, including but not limited to those described in our Annual Report on Form 10-K for the year ended December 31, 2020 under the sections captioned “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” and in our subsequent reports filed with the SEC. |
Metropolitan Area |
Property |
Economic Interest |
NRA (000s Square Feet) |
In Place Occupancy |
Annualized Base Rent per Square Foot |
Annualized Gross Rent per Square Foot (1) |
Annualized Base Rent (2) ($000s) |
|||||||||||||||||||
Phoenix, AZ (21.8% of NRA) |
Pima Center | 100.0 | % | 272 | 67.9 | % | $ | 27.87 | $ | 27.87 | $ | 5,145 | ||||||||||||||
SanTan |
100.0 | % | 267 | 97.5 | % | $ | 29.68 | $ | 29.68 | $ | 7,713 | |||||||||||||||
5090 N 40 th St |
100.0 | % | 175 | 90.5 | % | $ | 30.27 | $ | 30.27 | $ | 4,799 | |||||||||||||||
Camelback Square |
100.0 | % | 174 | 77.3 | % | $ | 32.19 | $ | 32.19 | $ | 4,332 | |||||||||||||||
The Quad |
100.0 | % | 163 | 100.0 | % | $ | 30.37 | $ | 30.68 | $ | 4,950 | |||||||||||||||
Papago Tech |
100.0 | % | 163 | 96.3 | % | $ | 23.29 | $ | 23.29 | $ | 3,650 | |||||||||||||||
Tampa, FL |
Park Tower | 94.8 | % | 470 | 87.4 | % | $ | 27.16 | $ | 27.16 | $ | 11,155 | ||||||||||||||
City Center |
95.0 | % | 243 | 93.0 | % | $ | 27.03 | $ | 27.03 | $ | 6,102 | |||||||||||||||
Intellicenter |
100.0 | % | 204 | 100.0 | % | $ | 25.09 | $ | 25.09 | $ | 5,105 | |||||||||||||||
Carillon Point |
100.0 | % | 124 | 100.0 | % | $ | 29.39 | $ | 29.39 | $ | 3,650 | |||||||||||||||
Denver, CO |
Denver Tech (3) |
100.0 | % | 383 | 93.8 | % | $ | 23.41 | $ | 27.52 | $ | 8,349 | ||||||||||||||
Circle Point |
100.0 | % | 272 | 81.6 | % | $ | 18.75 | $ | 32.62 | $ | 4,162 | |||||||||||||||
Superior Pointe |
100.0 | % | 152 | 94.0 | % | $ | 18.18 | $ | 31.18 | $ | 2,592 | |||||||||||||||
Orlando, FL |
Florida Research Park (4) |
96.6 | % | 397 | 95.2 | % | $ | 23.96 | $ | 27.45 | $ | 9,026 | ||||||||||||||
Central Fairwinds |
97.0 | % | 168 | 90.5 | % | $ | 26.36 | $ | 26.36 | $ | 4,012 | |||||||||||||||
Greenwood Blvd |
100.0 | % | 155 | 100.0 | % | $ | 23.75 | $ | 23.75 | $ | 3,682 | |||||||||||||||
San Diego, CA |
Sorrento Mesa (5) |
100.0 | % | 400 | 83.5 | % | $ | 33.30 | $ | 38.60 | $ | 11,112 | ||||||||||||||
Mission City |
100.0 | % | 281 | 75.8 | % | $ | 37.28 | $ | 37.28 | $ | 7,951 | |||||||||||||||
Dallas, TX |
190 Office Center | 100.0 | % | 303 | 76.1 | % | $ | 26.63 | $ | 26.63 | $ | 6,146 | ||||||||||||||
Lake Vista Pointe |
100.0 | % | 163 | 100.0 | % | $ | 17.00 | $ | 26.00 | $ | 2,777 | |||||||||||||||
2525 McKinnon |
100.0 | % | 111 | 91.6 | % | $ | 29.28 | $ | 48.28 | $ | 2,987 | |||||||||||||||
Portland, OR |
AmberGlen | 76.0 | % | 203 | 98.4 | % | $ | 22.66 | $ | 25.20 | $ | 4,517 | ||||||||||||||
Cascade Station |
100.0 | % | 128 | 95.5 | % | $ | 27.80 | $ | 29.81 | $ | 3,385 | |||||||||||||||
Seattle, WA |
Canyon Park | 100.0 | % | 207 | 100.0 | % | $ | 22.49 | $ | 27.49 | $ | 4,650 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total / Weighted Average – June 30, 2021 (6) |
|
5,578 |
89.7 |
% |
$ |
26.40 |
$ |
29.35 |
$ |
131,949 |
||||||||||||||||
|
|
|
|
(1) | Annualized gross rent per square foot includes adjustment for estimated expense reimbursements of triple net leases. |
(2) | Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended June 30, 2021 by (ii) 12. |
(3) | Denver Tech is comprised of 7601 Tech and 7595 Tech (formerly “DTC Crossroads”). |
(4) | Florida Research Park is comprised of FRP Collection and FRP Ingenuity Drive. |
(5) | Sorrento Mesa includes 5910 Pacific Center and 9985 Pacific Heights, which were acquired during the second quarter of 2021. |
(6) | Averages weighted based on the property’s NRA, adjusted for occupancy. |
Payments Due by Period (in thousands) |
||||||||||||||||||||
Contractual Obligations |
Total |
2021 |
2022-2023 |
2024-2025 |
More than 5 years |
|||||||||||||||
Principal payments on mortgage loans |
$ | 615,617 | $ | 2,967 | $ | 151,078 | $ | 216,733 | $ | 244,839 | ||||||||||
Interest payments (1) |
100,122 | 11,011 | 40,538 | 30,751 | 17,822 | |||||||||||||||
Tenant-related commitments |
20,196 | 19,984 | 212 | — | — | |||||||||||||||
Lease obligations |
31,568 | 315 | 1,838 | 1,540 | 27,875 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
$ | 767,503 | $ | 34,277 | $ | 193,666 | $ | 249,024 | $ | 290,536 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Contracted interest on the floating rate borrowings under our Unsecured Credit Facility was calculated based on the balance and interest rate at June 30, 2021. Contracted interest on the Term Loan was calculated based on the Interest Rate Swap rate fixing the LIBOR component of the borrowing rate to approximately 1.27%. |
By: | /s/ James Farrar | |
James Farrar | ||
Chief Executive Officer and Director (Principal Executive Officer) |
By: | /s/ Anthony Maretic | |
Anthony Maretic | ||
Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer) |
Exhibit 10.1
AMENDMENT NO. 2
TO
EXECUTIVE EMPLOYMENT AGREEMENT
OF
CITY OFFICE REIT, INC.
This Amendment No. 2 (the Amendment), dated as of August 4, 2021, to the Executive Employment Agreement (the Agreement) between City Office Management ULC (the Company), a wholly-subsidiary of City Office REIT, Inc. (the REIT), and Mr. James Farrar, as Chief Executive Officer of the REIT, dated as of February 1, 2018, is entered into by the Company pursuant to Section 17 of the Agreement. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Agreement. Unless otherwise indicated, all section references in this Amendment refer to sections of the Agreement.
WHEREAS, the Committee determined that it is advisable and in the best interest of the REIT that the Agreement between the Company and Mr. Farrar, as Chief Executive Officer, be amended as set forth below in order to clarify certain provisions of the Agreement;
NOW, THEREFORE, for good and adequate consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Mr. Farrar hereby agree as follows:
1.01 Amendment of Agreement. The Agreement is hereby amended as follows:
Section 9(c) is hereby amended and restated in its entirety as follows:
Voluntary Termination by the Executive without Good Reason. If the Executive resigns or otherwise voluntarily terminated his employment (other than for Good Reason), the Executive shall be entitled to receive, and the Company shall pay or provide the Executive, the Accrued Obligations but shall not be entitled to receive any other compensation or benefits on or after the date of termination, other than as expressly set forth in Section 9(d).
Section 9(d) is hereby amended and restated in its entirety as follows:
Death or HRC Disability. (i) If the Executive dies before the termination of the Executives employment as provided herein, the Executives surviving spouse or if there is no surviving spouse, the Executives estate, shall be entitled to receive, and the Company shall pay or provide the Executives surviving spouse or if there is no surviving spouse, the Executives estate, the Accrued Obligations. In addition, if the administrator of the Executives estate provides a release and waiver of claims in a form reasonably prescribed by the Company, outstanding options, restricted stock units and other awards granted under the Plan shall become fully vested and, in the case of options, exercisable, in whole or in part, notwithstanding the terms of the Plan relating to the vesting of awards. (ii) If the Executive becomes unable to perform his employment obligations as a result of a Disability which cannot be reasonably accommodated in accordance with obligations
under the British Columbia Human Rights Code (an HRC Disability), the Executive shall be entitled to receive, and the Company shall pay the Accrued Obligations. In addition, if the Executive or the Executives legal guardian (applicable in the event that the Executive becomes legally incapacitated as a result of an HRC Disability) provides a release and waiver of claims in a form reasonably prescribed by the Company, outstanding options, restricted stock units and other awards granted under the Plan shall continue to vest as though the Executive remained actively employed with the Company throughout such Disability, provided, however, that if the Executive becomes employed as an officer with another employer engaged in the Business, then (A) all continued vesting shall cease as of the date the Executive becomes employed with such employer (such date being determined in the sole discretion of the Company without any duty of inquiry imposed upon the Company), and (B) to the extent the Executive received a benefit in contradiction of the foregoing (A), then the Company has the unilateral right to effectuate a clawback (and offset of other compensation or property otherwise owned by the Executive or owed by the Company to the Executive) of such ill-gotten benefit.
2.01 Counterparts. This Amendment may be executed in counterparts, all of which together shall constitute an agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart.
3.01 Ratification. Except as expressly amended by this Amendment, the Agreement is in all respects ratified and confirmed and all of the terms and conditions and provisions of the Agreement shall remain in full force and effect.
4.01 Applicable Law. This Amendment shall be construed in accordance with and governed by the laws of the province of British Columbia, without regard to the principles of conflicts of law.
[Signature Pages Follow.]
2
IN WITNESS WHEREOF, the parties hereto execute this Amendment, to be effective as of the date first set forth above.
CITY OFFICE MANAGEMENT ULC | ||
By: | City Office REIT, Inc. | |
By: | /s/ John McLernon | |
Name: | John McLernon | |
Title: | Chairman of the Board of Directors |
/s/ James Farrar |
James Farrar |
[Signature Page to Amendment No. 2 to the Executive Employment Agreement of City Office REIT, Inc.]
Exhibit 10.2
AMENDMENT NO. 2
TO
EXECUTIVE EMPLOYMENT AGREEMENT
OF
CITY OFFICE REIT, INC.
This Amendment No. 2 (the Amendment), dated as of August 4, 2021, to the Executive Employment Agreement (the Agreement) between City Office Management ULC (the Company), a wholly-subsidiary of City Office REIT, Inc. (the REIT), and Mr. Greg Tylee, as Chief Operating Officer and President of the REIT, dated as of February 1, 2018, is entered into by the Company pursuant to Section 17 of the Agreement. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Agreement. Unless otherwise indicated, all section references in this Amendment refer to sections of the Agreement.
WHEREAS, the Committee determined that it is advisable and in the best interest of the REIT that the Agreement between the Company and Mr. Tylee, as Chief Operating Officer and President, be amended as set forth below in order to clarify certain provisions of the Agreement;
NOW, THEREFORE, for good and adequate consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Mr. Tylee hereby agree as follows:
1.01 Amendment of Agreement. The Agreement is hereby amended as follows:
Section 9(c) is hereby amended and restated in its entirety as follows:
Voluntary Termination by the Executive without Good Reason. If the Executive resigns or otherwise voluntarily terminated his employment (other than for Good Reason), the Executive shall be entitled to receive, and the Company shall pay or provide the Executive, the Accrued Obligations but shall not be entitled to receive any other compensation or benefits on or after the date of termination, other than as expressly set forth in Section 9(d).
Section 9(d) is hereby amended and restated in its entirety as follows:
Death or HRC Disability. (i) If the Executive dies before the termination of the Executives employment as provided herein, the Executives surviving spouse or if there is no surviving spouse, the Executives estate, shall be entitled to receive, and the Company shall pay or provide the Executives surviving spouse or if there is no surviving spouse, the Executives estate, the Accrued Obligations. In addition, if the administrator of the Executives estate provides a release and waiver of claims in a form reasonably prescribed by the Company, outstanding options, restricted stock units and other awards granted under the Plan shall become fully vested and, in the case of options, exercisable, in whole or in part, notwithstanding the terms of the Plan relating to the vesting of awards. (ii) If the Executive becomes unable to perform his employment obligations as a result of a Disability which cannot be reasonably accommodated in accordance with obligations
under the British Columbia Human Rights Code (an HRC Disability), the Executive shall be entitled to receive, and the Company shall pay the Accrued Obligations. In addition, if the Executive or the Executives legal guardian (applicable in the event that the Executive becomes legally incapacitated as a result of an HRC Disability) provides a release and waiver of claims in a form reasonably prescribed by the Company, outstanding options, restricted stock units and other awards granted under the Plan shall continue to vest as though the Executive remained actively employed with the Company throughout such Disability, provided, however, that if the Executive becomes employed as an officer with another employer engaged in the Business, then (A) all continued vesting shall cease as of the date the Executive becomes employed with such employer (such date being determined in the sole discretion of the Company without any duty of inquiry imposed upon the Company), and (B) to the extent the Executive received a benefit in contradiction of the foregoing (A), then the Company has the unilateral right to effectuate a clawback (and offset of other compensation or property otherwise owned by the Executive or owed by the Company to the Executive) of such ill-gotten benefit.
2.01 Counterparts. This Amendment may be executed in counterparts, all of which together shall constitute an agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart.
3.01 Ratification. Except as expressly amended by this Amendment, the Agreement is in all respects ratified and confirmed and all of the terms and conditions and provisions of the Agreement shall remain in full force and effect.
4.01 Applicable Law. This Amendment shall be construed in accordance with and governed by the laws of the province of British Columbia, without regard to the principles of conflicts of law.
[Signature Pages Follow.]
2
IN WITNESS WHEREOF, the parties hereto execute this Amendment, to be effective as of the date first set forth above.
CITY OFFICE MANAGEMENT ULC | ||
By: | City Office REIT, Inc. | |
By: | /s/ John McLernon | |
Name: | John McLernon | |
Title: | Chairman of the Board of Directors | |
/s/ Greg Tylee | ||
Greg Tylee |
[Signature Page to Amendment No. 2 to the Executive Employment Agreement of City Office REIT, Inc.]
Exhibit 10.3
AMENDMENT NO. 2
TO
EXECUTIVE EMPLOYMENT AGREEMENT
OF
CITY OFFICE REIT, INC.
This Amendment No. 2 (the Amendment), dated as of August 4, 2021, to the Executive Employment Agreement (the Agreement) between City Office Management ULC (the Company), a wholly-subsidiary of City Office REIT, Inc. (the REIT), and Mr. Anthony Maretic, as Chief Financial Officer, Secretary and Treasurer of the REIT, dated as of February 1, 2018, is entered into by the Company pursuant to Section 17 of the Agreement. Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Agreement. Unless otherwise indicated, all section references in this Amendment refer to sections of the Agreement.
WHEREAS, the Committee determined that it is advisable and in the best interest of the REIT that the Agreement between the Company and Mr. Maretic, as Chief Financial Officer, Secretary and Treasurer, be amended as set forth below in order to clarify certain provisions of the Agreement;
NOW, THEREFORE, for good and adequate consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Mr. Maretic hereby agree as follows:
1.01 Amendment of Agreement. The Agreement is hereby amended as follows:
Section 9(c) is hereby amended and restated in its entirety as follows:
Voluntary Termination by the Executive without Good Reason. If the Executive resigns or otherwise voluntarily terminated his employment (other than for Good Reason), the Executive shall be entitled to receive, and the Company shall pay or provide the Executive, the Accrued Obligations but shall not be entitled to receive any other compensation or benefits on or after the date of termination, other than as expressly set forth in Section 9(d).
Section 9(d) is hereby amended and restated in its entirety as follows:
Death or HRC Disability. (i) If the Executive dies before the termination of the Executives employment as provided herein, the Executives surviving spouse or if there is no surviving spouse, the Executives estate, shall be entitled to receive, and the Company shall pay or provide the Executives surviving spouse or if there is no surviving spouse, the Executives estate, the Accrued Obligations. In addition, if the administrator of the Executives estate provides a release and waiver of claims in a form reasonably prescribed by the Company, outstanding options, restricted stock units and other awards granted under the Plan shall become fully vested and, in the case of options, exercisable, in whole or in part, notwithstanding the terms of the Plan relating to the vesting of awards. (ii) If the Executive becomes unable to perform his employment obligations as a result of a Disability
which cannot be reasonably accommodated in accordance with obligations under the British Columbia Human Rights Code (an HRC Disability), the Executive shall be entitled to receive, and the Company shall pay the Accrued Obligations. In addition, if the Executive or the Executives legal guardian (applicable in the event that the Executive becomes legally incapacitated as a result of an HRC Disability) provides a release and waiver of claims in a form reasonably prescribed by the Company, outstanding options, restricted stock units and other awards granted under the Plan shall continue to vest as though the Executive remained actively employed with the Company throughout such Disability, provided, however, that if the Executive becomes employed as an officer with another employer engaged in the Business, then (A) all continued vesting shall cease as of the date the Executive becomes employed with such employer (such date being determined in the sole discretion of the Company without any duty of inquiry imposed upon the Company), and (B) to the extent the Executive received a benefit in contradiction of the foregoing (A), then the Company has the unilateral right to effectuate a clawback (and offset of other compensation or property otherwise owned by the Executive or owed by the Company to the Executive) of such ill-gotten benefit.
2.01 Counterparts. This Amendment may be executed in counterparts, all of which together shall constitute an agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart.
3.01 Ratification. Except as expressly amended by this Amendment, the Agreement is in all respects ratified and confirmed and all of the terms and conditions and provisions of the Agreement shall remain in full force and effect.
4.01 Applicable Law. This Amendment shall be construed in accordance with and governed by the laws of the province of British Columbia, without regard to the principles of conflicts of law.
[Signature Pages Follow.]
2
IN WITNESS WHEREOF, the parties hereto execute this Amendment, to be effective as of the date first set forth above.
CITY OFFICE MANAGEMENT ULC | ||
By: City Office REIT, Inc. | ||
By: | /s/ John McLernon | |
Name: John McLernon | ||
Title: Chairman of the Board of Directors |
/s/ Anthony Maretic |
ANTHONY MARETIC |
[Signature Page to Amendment No. 2 to the Executive Employment Agreement of City Office REIT, Inc.]
Exhibit 31.1
Certification
I, James Farrar, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2021 of City Office REIT, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
August 5, 2021 | /s/ James Farrar | |||||
Date | James Farrar | |||||
Chief Executive Officer and Director | ||||||
(Principal Executive Officer) |
Exhibit 31.2
Certification
I, Anthony Maretic, certify that:
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2021 of City Office REIT, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a15(e) and 15d15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
August 5, 2021 | /s/ Anthony Maretic | |||||
Date | Anthony Maretic | |||||
Chief Financial Officer, Secretary and Treasurer | ||||||
(Principal Financial Officer and Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Quarterly Report on Form 10-Q for the period ended June 30, 2021 of City Office REIT, Inc. (the Company) as filed with the Securities and Exchange Commission on the date hereof (the Report), I, James Farrar, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 5, 2021 | /s/ James Farrar | |||||
Date | James Farrar | |||||
Chief Executive Officer and Director | ||||||
(Principal Executive Officer) |
This written report is being furnished to the Securities and Exchange Commission as an exhibit to the Report. A signed original of this written statement required by Section 906 has been provided to City Office REIT, Inc. and will be retained by City Office REIT, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this Quarterly Report on Form 10-Q for the period ended June 30, 2021 of City Office REIT, Inc. (the Company) as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Anthony Maretic, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
August 5, 2021 | /s/ Anthony Maretic | |||||
Date | Anthony Maretic | |||||
Chief Financial Officer, Secretary and Treasurer | ||||||
(Principal Financial Officer and Principal Accounting Officer) |
This written report is being furnished to the Securities and Exchange Commission as an exhibit to the Report. A signed original of this written statement required by Section 906 has been provided to City Office REIT, Inc. and will be retained by City Office REIT, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Consolidated Balance Sheets (Parenthetical) - $ / shares |
6 Months Ended | 12 Months Ended |
---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
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Statement of Financial Position [Abstract] | ||
Preferred stock, Dividend rate percentage | 6.625% | 6.625% |
Preferred stock, par value per share | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,600,000 | 5,600,000 |
Preferred stock, shares issued | 4,480,000 | 4,480,000 |
Preferred stock, shares outstanding | 4,480,000 | 4,480,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 43,554,375 | 43,397,117 |
Common stock, shares outstanding | 43,554,375 | 43,397,117 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
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Income Statement [Abstract] | ||||
Rental and other revenues | $ 39,964 | $ 39,617 | $ 79,480 | $ 79,739 |
Operating expenses: | ||||
Property operating expenses | 14,179 | 14,084 | 28,297 | 28,780 |
General and administrative | 3,068 | 2,697 | 5,868 | 5,480 |
Depreciation and amortization | 14,954 | 15,080 | 29,369 | 30,032 |
Total operating expenses | 32,201 | 31,861 | 63,534 | 64,292 |
Operating income | 7,763 | 7,756 | 15,946 | 15,447 |
Interest expense: | ||||
Contractual interest expense | (5,639) | (6,792) | (11,883) | (13,153) |
Amortization of deferred financing costs and debt fair value | (272) | (341) | (602) | (665) |
Interest expense, net | (5,911) | (7,133) | (12,485) | (13,818) |
Net gain on sale of real estate property | 47,400 | |||
Net income | 1,852 | 623 | 50,861 | 1,629 |
Net income attributable to non-controlling interests in properties | (190) | (179) | (382) | (361) |
Net income attributable to the Company | 1,662 | 444 | 50,479 | 1,268 |
Preferred stock distributions | (1,855) | (1,855) | (3,710) | (3,710) |
Net (loss)/income attributable to common stockholders | $ (193) | $ (1,411) | $ 46,769 | $ (2,442) |
Net (loss)/income per common share: | ||||
Basic | $ 0.00 | $ (0.03) | $ 1.08 | $ (0.05) |
Diluted | $ 0.00 | $ (0.03) | $ 1.06 | $ (0.05) |
Weighted average common shares outstanding: | ||||
Basic | 43,482 | 47,542 | 43,440 | 50,993 |
Diluted | 43,482 | 47,542 | 44,080 | 50,993 |
Dividend distributions declared per common share | $ 0.15 | $ 0.15 | $ 0.30 | $ 0.30 |
Consolidated Statements of Comprehensive Income/(Loss) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 1,852 | $ 623 | $ 50,861 | $ 1,629 |
Other comprehensive income/(loss): | ||||
Unrealized cash flow hedge (loss)/gain | (47) | (394) | 480 | (3,084) |
Amounts reclassified to interest expense | 147 | 96 | 289 | 45 |
Other comprehensive income/(loss) | 100 | (298) | 769 | (3,039) |
Comprehensive income/(loss) | 1,952 | 325 | 51,630 | (1,410) |
Comprehensive income attributable to non-controlling interests in properties | (190) | (179) | (382) | (361) |
Comprehensive income/(loss) attributable to the Company | $ 1,762 | $ 146 | $ 51,248 | $ (1,771) |
Organization and Description of Business |
6 Months Ended |
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Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business City Office REIT, Inc. (the “Company”) was organized in the state of Maryland on November 26, 2013. On April 21, 2014, the Company completed its initial public offering (“IPO”) of shares of the Company’s common stock. The Company contributed the net proceeds of the IPO to City Office REIT Operating Partnership, L.P., a Maryland limited partnership (the “Operating Partnership”), in exchange for common units of limited partnership interest in the Operating Partnership (“common units”). The Company’s interest in the Operating Partnership entitles the Company to share in distributions from, and allocations of profits and losses of, the Operating Partnership in proportion to the Company’s percentage ownership of common units. As the sole general partner of the Operating Partnership, the Company has the exclusive power under the Operating Partnership’s partnership agreement to manage and conduct the Operating Partnership’s business, subject to limited approval and voting rights of the limited partners. The Company has elected to be taxed and will continue to operate in a manner that will allow it to continue to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to qualification as a REIT, the Company will be permitted to deduct dividend distributions paid to its stockholders, eli m inating the U.S. federal taxation of income represented by such distributions at the Company level. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and, for tax years beginning before 2018, any applicable alternative minimum tax. |
Summary of Significant Accounting Policies |
6 Months Ended |
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Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Preparation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial stateme n ts have been prepared by the Company in accordance with Securities and Exchange Commission (“SEC”) rules and regulations and generally accepted accounting principles in the United States of America (“US GAAP”) and in the opinion of management contain all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (the “FASB”) established Topic 848, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, by issuing Accounting Standards Update (“ASU”)
No. 2020-04 (“ASU 2020-04”). ASU 2020-04 provides companies with optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. For contracts affected by reference rate reform, if certain criteria are met, companies can elect to not remeasure contracts at the modification date or reassess a previous accounting conclusion. Companies can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met. Further, in January 2021, the FASB issued ASU No. 2021-01 (“ASU 2021-01”), Topic 848, Reference Rate Reform (“Topic 848”). ASU 2021-01 clarifies the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848.2020-04 and ASU 2021-01 can be applied as of the beginning of the interim period that includes March 12, 2020, however, the guidance will only be available for optional use through December 31, 2022. The new standard applies prospectively to contract modifications and hedging relationships and may be elected over time as reference rate reform activities occur. The Company has not yet adopted the standard and continues to evaluate the impact of ASU 2020-04 and ASU 2021-01 on its condensed consolidated financial statements and may elect optional expedients in future periods as reference rate reform activities occur. |
Real Estate Investments |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate Investments | 3. Real Estate Investments Acquisitions During the six months ended June 30, 2021 and 2020 the Company acquired the following properties:
The foregoing acquisition was accounted for as an asset acquisition. The following table summarizes the Company’s allocation of the purchase price of assets acquired and liabilities assumed during the six months ended June 30, 2021 (in thousands):
Sale of Real Estate Property On February 10, 2021, the Company sold the Cherry Creek property in Denver, Colorado for a gross sales price of $95.0 million, resulting in an aggregate gain of $47.4 million net of disposal-related costs, which has been classified as net gain on sale of real estate property in the condensed consolidated statements of operations. Assets Held for Sale On November 18, 2020, the Company entered into a purchase and sale agreement to sell the Cherry Creek property for a gross sales price of $95.0 million. The Company determined that the property met the criteria for classification as held for sale as of December 31, 2020. On February 10, 2021, the Company completed the sale of the Cherry Creek property.The property was classified as held for sale as of December 31, 2020 (in thousands):
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Lease Intangibles |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Intangibles | 4. Lease Intangibles Lease intangibles and the value of assumed lease obligation s as of June 30, 2021 and December 31, 2020 were comprised of the following (in thousands):
The estimated aggregate amortization expense for lease intangibles for the next five years and in the aggregate are as follows (in thousands):
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Debt |
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Debt | 5. Debt The following table summarizes the indebtedness as of June 30, 2021 and December 31, 2020 (dollars in thousands):
The scheduled principal repayments of debt as of June 30, 2021 are as follows (in thousands):
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Fair Value of Financial Instruments |
6 Months Ended |
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Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 6. Fair Value of Financial Instruments Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy for inputs used in measuring fair value is as follows: Level 1 Inputs – quoted prices in active markets for identical assets or liabilities Level 2 Inputs – observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3 Inputs – unobservable inputs In September 2019, the Company entered into the Interest Rate Swap for a notional amount of $50 million. Pursuant to the Interest Rate Swap, the Company will pay a fixed rate of approximately 1.27% of the notional amount annually, payable monthly, and receive floating rate 30-day LIBOR payments. Accordingly, the fair value of the Interest Rate Swap has been classified as a Level 2 fair value measurement. The Interest Rate Swap has been designated and qualifies as a cash flow hedge and has been recognized on the condensed consolidated balance sheets at fair value. Gains and losses resulting from changes in the fair value of derivatives that have been designated and qualify as cash flow hedges are reported as a component of other comprehensive income/(loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings. As of June 30, 2021, the Interest Rate Swap was reported as a liabili t y at its fair value of approximately $1.2 million, which is included in other liabilities on the Company’s condensed consolidated balance sheet. For the six months ended June 30, 2021, approximately $0.3 million of realized losses were reclassified to interest expense due to payments made to the swap counterparty. For the six months ended June 30, 2020, the amount of realized losses reclassified to interest expense due to payments received by the swap counterparty were nominal. As of December 31, 2020, the Interest Rate Swap was reported as a liability at its fair value of approximately $2.0 million, which is included in other liabilities on the Company’s condensed consolidated balance sheet. Cash, Cash Equivalents, Restricted Cash, Rents Receivable, Accounts Payable and Accrued Liabilities The Company estimates that the fair value approximates carrying value due to the relatively short-term nature of these instruments. Fair Value of Financial Instruments Not Carried at Fair Value With the exception of fixed rate mortgage loans payable, the carrying amounts of the Company’s financial instruments approximate their fair value. The Company determines the fair value of its fixed rate mortgage loan payable based on a discounted cash flow analysis using a discount rate that approximates the current borrowing rates for instruments of similar maturities. Based on this, the Company has determined that the fair value of these instruments was $476.4 million and $573.6 million (compared to a carrying value of $469.6 million and $556.0 million) as of June 30, 2021 and December 31, 2020, respectively. Accordingly, the fair value of mortgage loans payable have been classified as Level 3 fair value measurements . |
Related Party Transactions |
6 Months Ended |
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Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. Related Party Transactions Administrative Services Agreement For the six months ended June 30, 2021 and 2020, the Company earned $0.3 million and $0.3 million, respectively, in administrative services performed for Second City Real Estate II Corporation (“Second City”), Clarity Real Estate Ventures GP, Limited Partnership (“Clarity”) and their affiliates. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | 8. Leases Lessor Accounting The Company is focused on acquiring, owning and operating high-quality office properties for lease to a stable and diverse tenant base. Our properties have both full-service gross and net leases which are generally classified as operating leases. Rental income related to such leases is recognized on a straight-line basis over the remaining lease term. The Company’s total revenue includes fixed base rental payments provided under the lease and variable payments which principally consist of tenant expense reimbursements for certain property operating expenses. The Company recognized fixed and variable lease payments for the three and six months ended June 30, 2021 and the three and six months ended June 30, 2020 as follows (in thousands):
Future minimum lease payments to be received by the Company as of June 30, 2021 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):
The Company’s leases may include various provisions such as scheduled rent increases, renewal options and termination options. The majority of the Company’s leases include defined rent increase s rather than variable payments based on an index or unknown rate. Lessee Accounting As a lessee, the Company has ground and office leases which are classified as operating and financing leases. As of June 30, 2021, these leases had remaining terms of 1 to 67 years and a weighted average remaining lease term of 49 years. Right-of-use
Lease liabilities are measured at the commencement date based on the present value of future lease payments. One of the Company’s operating ground leases includes rental payment increases over the lease term based on increases in the Consumer Price Index (“CPI”). Changes in the CPI were not estimated as part of the measurement of the operating lease liability. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The Company used a weighted average discount rate of 6.2% in determining its lease liabilities. The discount rates were derived from the Company’s assessment of the credit quality of the Company and adjusted to reflect secured borrowing, estimated yield curves and long-term spread adjustments. Right-of-use Operating lease expenses for the three and six months ended June 30, 2021 were $0.3 million and $0.5 million , respectively. Operating lease expenses for the three and six months ended June 30, 2020 were $0.2 million and $0.4 million, respectively. Financing lease expenses for the three and six months ended June 30, 2021 and 2020 were nominal. Future minimum lease payments to be paid by the Company as a lessee for operating and financing leases as of June 30, 2021 for the next five years and thereafter are as follows (in thousands):
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies The Company is obligated under certain tenant leases to fund tenant improvements and the expansi o n of the underlying leased properties. Under various federal, state and local laws, ordinances and regulations relating to the protection of the environment, a current or previous owner or operator of real estate may be liable for the cost of removal or remediation of certain hazardous or toxic substances disposed, stored, generated, released, manufactured or discharged from, on, at, under, or in a property. As such, the Company may be potentially liable for costs associated with any potential environmental remediation at any of its formerly or currently owned properties. The Company believes that it is in compliance in all material respects with all federal, state and local ordinances and regulations regarding hazardous or toxic substances. Management is not aware of any environmental liability that it believes would have a material adverse impact on the Company’s financial position or results of operations. Management is unaware of any instances in which the Company would incur significant environmental costs if any or all properties were sold, disposed of or abandoned. However, there can be no assurance that any such non-compliance, liability, claim or expenditure will not arise in the future. The Company is involved from time to time in lawsuits and other disputes which arise in the ordinary course of business. As of June 30, 2021, management believes that these matters will not have a material adverse effect, individually or in the aggregate, on the Company’s financial position or results of operations. |
Stockholder's Equity |
6 Months Ended |
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Jun. 30, 2021 | |
Federal Home Loan Banks [Abstract] | |
Stockholder's Equity | 10. Stockholders’ Equity Share Repurchase Plan On March 9, 2020, the Company’s Board of Directors approved a share repurchase plan authorizing the Company to repurchase up to $100 million of its outstanding shares of common stock. In July 2020, the Company completed the full March 2020 share repurchase plan. On August 5, 2020, the Company’s Board of Directors approved an additional share repurchase plan authorizing the Company to repurchase up to an additional aggregate amount of $50 million of its outstanding shares of common stock. Under the share repurchase programs, the shares may be repurchased from time to time using a variety of methods, which may include open market transactions, privately negotiated transactions or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements. Repurchased shares of common stock will be classified as authorized and unissued shares. The Company recognizes the cost of shares of common stock it repurchases, including direct costs incurred, as a reduction in stockholders’ equity. Such reductions of stockholders equity due to the repurchases of shares of common stock will be applied first, to reduce common stock in the amount of the par value associated with the shares of common stock repurchased and second, to reduce additional paid-in capital by the amount that the purchase price for the shares of common stock repurchased exceed the par value. There were no shares repurchased during the six months ended June 30, 2021. During the six months ended June 30, 2020, the Company completed the repurchase of 10,249,655 shares of its common stock for approximately $89.3 million Common Stock and Common Unit Distributions On June 15, 2021, the Company’s Board of Directors approved and the Company declared a cash dividend distribution of $0.15 per common share for the quarterly period ended June 30, 2021. The dividend was paid subsequent to quarter end on July 23, 2021 to common stockholders and common unitholders of record as of the close of business on July 9, 2021, resulting in an aggregate payment of $6.5 million. Preferred Stock Distributions On June 15, 2021, the Company’s Board of Directors approved and the Company declared a cash dividend distribution of $0.4140625 per share of the Company’s 6.625% Series A Preferred Stock (“Series A Preferred Stock”) for an aggregate amount of $1.9 million for the quarterly period ended June 30, 2021. The dividend was paid subsequent to quarter end on July 23, 2021 to the holders of record of Series A Preferred Stock as of the close of business on July 9, 2021. Equity Incentive Plan The Company has an equity incentive plan (“Equity Incentive Plan”) for executive officers, directors and certain (the “Plan Administrator”). 2,263,580 shares of common stock may be issued under the Equity Incentive Plan. non-executive employees, and with approval of the Board of Directors, for subsidiaries and their respective affiliates. The Equity Incentive Plan provides for grants of restricted common stock, restricted stock units, phantom shares, stock options, dividend equivalent rights and other equity-based awards (including LTIP Units), subject to the total number of shares available for issuance under the plan. The Equity Incentive Plan is administered by the compensation committee of the Board of Directors On January 27, 2020, each of the Board of Directors and the Compensation Committee approved a new form of performance-based restricted unit award agreement (the “Performance RSU Award Agreement”) that will be used to grant performance-based restricted stock unit awards (“Performance RSU Awards”) pursuant to the Equity Incentive Plan. The Performance RSU Awards are based upon the total stockholder return (“TSR”) of the Company’s common stock over a three-year measurement period beginning January 1, 2020 and ending on December 31, 2022 (the “Measurement Period”) relative to the TSR of the companies in the SNL US REIT Office index as of January 2, 2020 (the “2020 RSU Peer Group”). The payouts under the Performance RSU Awards are evaluated on a sliding scale as follows: TSR below the 30th percentile of the 2020 RSU Peer Group would result in a 50% payout; TSR at the 50th percentile of the 2020 RSU Peer Group would result in a 100% payout; and TSR at or above the 75th percentile of the 2020 RSU Peer Group would result in a 150% payout. Payouts are mathematically interpolated between these stated percentile targets, subject to a 150% maximum. To the extent earned, the payouts of the Performance RSU Awards are intended to be settled in the form of shares of the Company’s common stock, pursuant to the Equity Incentive Plan. Upon satisfaction of the vesting conditions, dividend equivalents in an amount equal to all regular and special dividends declared with respect to the Company’s common stock during each annual measurement period during the Measurement Period are determined and paid on a cumulative, reinvested basis over the term of the applicable Performance RSU Award, at the time such award vests and based on the number of shares of the Company’s common stock that are earned. During the six months ended June 30, 2021, 169,500 restricted stock units (“RSUs”) were granted to executive officers, directors and certain non-executive employees with a fair value of $1.6 million. The RSU awards will vest in three equal, annual installments on each of the first anniversaries of the date of grant. For the three and six months ended June 30, 2021, the Company recognized net compensation expense of $0.5 million and $0.9 million, respectively, related to the RSUs. For the three and six months ended June 30, 2020, the Company recognized net compensation expense of $0.5 million and $1.0 million, respectively, related to the RSUs. During the six months ended June 30, 2021, 120,000 Performance RSU Awards were granted to executive officers with a fair value of $1.2 million. The Performance RSU Awards will vest on the last day of the three-year measurement period of January 1, 2021 through December 31, 2023. For the three and six months ended June 30, 2021, the Company recognized net compensation expense of $0.2 million and $0.4 million, respectively, related to the Performance RSU Awards. For the three and six months ended June 30, 2020, the Company recognized net compensation expense of $0.1 million and $0.2 million, respectively, related to the Performance RSU Awards. |
Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Preparation and Summary of Significant Accounting Policies | Basis of Preparation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial stateme
n ts have been prepared by the Company in accordance with Securities and Exchange Commission (“SEC”) rules and regulations and generally accepted accounting principles in the United States of America (“US GAAP”) and in the opinion of management contain all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (the “FASB”) established Topic 848, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, by issuing Accounting Standards Update (“ASU”)
No. 2020-04 (“ASU 2020-04”). ASU 2020-04 provides companies with optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. For contracts affected by reference rate reform, if certain criteria are met, companies can elect to not remeasure contracts at the modification date or reassess a previous accounting conclusion. Companies can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform if certain criteria are met. Further, in January 2021, the FASB issued ASU No. 2021-01 (“ASU 2021-01”), Topic 848, Reference Rate Reform (“Topic 848”). ASU 2021-01 clarifies the scope of Topic 848 so that derivatives affected by the discounting transition are explicitly eligible for certain optional expedients and exceptions in Topic 848.2020-04 and ASU 2021-01 can be applied as of the beginning of the interim period that includes March 12, 2020, however, the guidance will only be available for optional use through December 31, 2022. The new standard applies prospectively to contract modifications and hedging relationships and may be elected over time as reference rate reform activities occur. The Company has not yet adopted the standard and continues to evaluate the impact of ASU 2020-04 and ASU 2021-01 on its condensed consolidated financial statements and may elect optional expedients in future periods as reference rate reform activities occur. |
Real Estate Investments (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Properties | During the six months ended June 30, 2021 and 2020 the Company acquired the following properties:
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Schedule of Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | The following table summarizes the Company’s allocation of the purchase price of assets acquired and liabilities assumed during the six months ended June 30, 2021 (in thousands):
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Schedule of Property Classified as Held for Sale | The property was classified as held for sale as of December 31, 2020 (in thousands):
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Lease Intangibles (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Intangibles and Value of Assumed Lease Obligations | Lease intangibles and the value of assumed lease obligation s as of June 30, 2021 and December 31, 2020 were comprised of the following (in thousands):
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Estimated Aggregate Amortization Expense for Lease Intangibles | The estimated aggregate amortization expense for lease intangibles for the next five years and in the aggregate are as follows (in thousands):
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Outstanding Indebtness | The following table summarizes the indebtedness as of June 30, 2021 and December 31, 2020 (dollars in thousands):
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Schedule of Principal Repayments of Mortgage Payable | The scheduled principal repayments of debt as of June 30, 2021 are as follows (in thousands):
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Leases (Tables) |
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease Lease Income | The Company recognized fixed and variable lease payments for the three and six months ended June 30, 2021 and the three and six months ended June 30, 2020 as follows (in thousands):
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Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments to be received by the Company as of June 30, 2021 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):
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Schedule Of Supplemental Balance Sheet Information Related To Leases | Right-of-use
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Schedule future minimum lease payments to be paid | Future minimum lease payments to be paid by the Company as a lessee for operating and financing leases as of June 30, 2021 for the next five years and thereafter are as follows (in thousands):
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Organization and Description of Business - Additional Information (Detail) |
6 Months Ended |
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Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company formation date | Nov. 26, 2013 |
Operation commencement date | Apr. 21, 2014 |
Real Estate Investments - Schedule of Acquired Properties through Operating Partnership (Detail) - 5910 Pacific Center and 9985 Pacific Heights [Member] |
6 Months Ended |
---|---|
Jun. 30, 2021 | |
Acquisitions [Line Items] | |
Real estate property, date acquired, asset acquisitions | 2021-05 |
Real estate property, percentage owned, asset acquisitions | 100.00% |
Real Estate Investments - Schedule of Allocation of Purchase Price of Assets Acquired and Liabilities Assumed (Detail) - 5910 Pacific Center and 9985 Pacific Heights [Member] $ in Thousands |
Jun. 30, 2021
USD ($)
|
---|---|
Acquisitions [Line Items] | |
Land | $ 37,294 |
Buildings and improvements | 2,979 |
Tenant improvements | 917 |
Lease intangible assets | 2,469 |
Other assets | 19 |
Accounts payable and other liabilities | (319) |
Lease intangible liabilities | (103) |
Net assets acquired | $ 43,256 |
Real Estate Investments - Additional Information (Detail) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Feb. 10, 2021 |
Nov. 18, 2020 |
Jun. 30, 2021 |
|
Real Estate [Line Items] | |||
Net gain on sale of real estate property | $ 47,400 | ||
Cherry Creek [Member] | |||
Real Estate [Line Items] | |||
Proceeds of sale of property | $ 95,000 | $ 95,000 | |
Net gain on sale of real estate property | $ 47,400 |
Lease Intangibles - Estimated Aggregate Amortization Expense for Lease Intangibles (Detail) $ in Thousands |
Jun. 30, 2021
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 6,112 |
2022 | 8,941 |
2023 | 5,914 |
2024 | 3,118 |
2025 | 2,720 |
Thereafter | 5,206 |
Total | $ 32,011 |
Debt - Schedule of Principal Repayments of Mortgage Payable (Detail) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Disclosure [Abstract] | ||
2021 | $ 2,967 | |
2022 | 102,539 | |
2023 | 48,539 | |
2024 | 124,736 | |
2025 | 91,997 | |
Thereafter | 244,839 | |
Total | $ 615,617 | $ 680,962 |
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Administrative Services Agreement [Member] | Second City Funds [Member] | Clarity Real Estate Ventures GP, Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Annual payment receivable for services | $ 0.3 | $ 0.3 |
Leases - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Lease cost | $ 0.3 | $ 0.2 | $ 0.5 | $ 0.4 |
Operating Lease, Weighted Average Remaining Lease Term | 49 years | 49 years | ||
Operating Lease, Weighted Average Discount Rate, Percent | 6.20% | 6.20% | ||
Maximum [Member] | ||||
Remaining lease terms | 67 years | 67 years | ||
Minimum [Member] | ||||
Remaining lease terms | 1 year | 1 year |
Leases - Schedule of Operating Leases (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
Fixed payments | $ 34,311 | $ 33,907 | $ 67,862 | $ 67,999 |
Variable payments | 5,629 | 5,697 | 11,536 | 11,713 |
Operating Lease, Lease Income | $ 39,940 | $ 39,604 | $ 79,398 | $ 79,712 |
Leases - Schedule of Future Minimum Lease Payments under Non-cancellable Operating Leases (Detail) $ in Thousands |
Jun. 30, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
2021 | $ 61,009 |
2022 | 108,545 |
2023 | 88,167 |
2024 | 68,482 |
2025 | 55,089 |
Thereafter | 160,172 |
Total future minimum lease payments to be received | $ 541,464 |
Leases - Schedule of Operating Right-of-Use Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Lease liability – operating leases | $ 9,447 | |
Lease liability – financing leases | 43 | |
Other Assets [Member] | ||
Right-of-use asset - operating leases | 14,362 | $ 12,739 |
Right-of-use asset – financing leases | 43 | 55 |
Other Liabilities [Member] | ||
Lease liability – operating leases | 9,447 | 7,719 |
Lease liability – financing leases | $ 43 | $ 55 |
Leases - Schedule Future Minimum Lease Payments To Be Paid (Detail) $ in Thousands |
Jun. 30, 2021
USD ($)
|
---|---|
2021 | $ 301 |
2022 | 971 |
2023 | 836 |
2024 | 770 |
2025 | 770 |
Thereafter | 27,875 |
Total future minimum lease payments | 31,523 |
Discount | (22,076) |
Total | 9,447 |
2021 | 14 |
2022 | 27 |
2023 | 4 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Total future minimum lease payments | 45 |
Discount | (2) |
Total | $ 43 |
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