0001193125-22-053172.txt : 20220225 0001193125-22-053172.hdr.sgml : 20220225 20220225065758 ACCESSION NUMBER: 0001193125-22-053172 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20211231 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20220225 DATE AS OF CHANGE: 20220225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: City Office REIT, Inc. CENTRAL INDEX KEY: 0001593222 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 981141883 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-36409 FILM NUMBER: 22674340 BUSINESS ADDRESS: STREET 1: SUITE 3210 - 666 BURRARD STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 2X8 BUSINESS PHONE: 1-604-806-3353 MAIL ADDRESS: STREET 1: SUITE 3210 - 666 BURRARD STREET CITY: VANCOUVER STATE: A1 ZIP: V6C 2X8 8-K/A 1 d301435d8ka.htm 8-K/A 8-K/A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K/A

(Amendment No. 1)

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 31, 2021

 

 

City Office REIT, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Maryland   001-36409   98-1141883

(State or other jurisdiction of

incorporation or organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

666 Burrard Street, Suite 3210

Vancouver, British Columbia,

  V6C 2X8
(Address of principal executive offices)   (Zip Code)

(604) 806-3366

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class

 

Ticker

Symbols:

 

Name of Each Exchange

on Which Registered

Common Stock, $0.01 par value   CIO   New York Stock Exchange
6.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share   CIO.PrA   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 

 


Explanatory Note

This Form 8-K/A amends and supplements the Form 8-K filed by City Office REIT, Inc. (the “Company”) on January 3, 2022 (the “Original Filing”) reporting the acquisition of the property known as Bloc 83, an approximately 495,000 square foot office complex in Raleigh, North Carolina, to include the historical financial statements and pro forma information required by Item 9.01(a) and (b) of Form 8-K. This Form 8-K/A should be read in conjunction with the Original Filing.

 

Item 9.01

Financial Statements and Exhibits.

(a) Financial Statements of Property Acquired.

The following Statements of Revenues and Certain Expenses for Bloc 83 are set forth in Exhibit 99.1, which is incorporated herein by reference.

Report of Independent Auditors.

Statements of Revenues and Certain Expenses for the nine months ended September 30, 2021 and the year ended December 31, 2020.

Notes to Statements of Revenues and Certain Expenses for the nine months ended September 30, 2021 and the year ended December 31, 2020.

(b) Pro Forma Financial Information.

The following pro forma financial statements for the Company are set forth in Exhibit 99.2, which is incorporated herein by reference.

Unaudited Pro Forma Consolidated Balance Sheet as of September 30, 2021.

Unaudited Pro Forma Consolidated Statement of Operations for the nine months ended September 30, 2021 and the year ended December 31, 2020.

Unaudited Pro Forma Consolidated Statement of Comprehensive Income for the nine months ended September 30, 2021 and the year ended December 31, 2020.

Notes to Unaudited Pro Forma Consolidated Financial Statements.

(d) Exhibits.

 

Exhibit
Number

  

Description

23.1    Consent of KPMG LLP.
99.1    Statements of Revenues and Certain Expenses for Bloc 83 for the nine months ended September 30, 2021 and the year ended December 31, 2020.
99.2    Unaudited Pro Forma Financial Information for the Company.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   

CITY OFFICE REIT, INC.

Date: February 25, 2022     By:  

/s/ James Farrar

    Name:   James Farrar
    Title:   Chief Executive Officer and Director
EX-23.1 2 d301435dex231.htm EX-23.1 EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

City Office REIT, Inc.

We consent to the incorporation by reference in the following registration statements (No. 333-254966) on Form S-3 and (No. 333-233043) on Form S-8 of City Office REIT, Inc. of our report dated February 25, 2022, with respect to the statement of revenues and certain expenses for the year ended December 31, 2020 for Bloc 83, which report appears in Form 8-K/A of City Office REIT, Inc. dated February 25, 2022.

/s/ KPMG LLP

Chartered Professional Accountants

Vancouver, Canada

February 25, 2022

EX-99.1 3 d301435dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

INDEPENDENT AUDITORS’ REPORT

To the Stockholders and Board of Directors

City Office REIT, Inc.

We have audited the accompanying statement of revenues and certain expenses of Bloc 83 (the Property) for the year ended December 31, 2020, and the related notes (the Statement).

Management’s Responsibility for the Statement

Management is responsible for the preparation and fair presentation of the Statement in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the Statement that is free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Statement is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statement. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Statement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the Statement referred to above presents fairly, in all material respects, the revenues and certain expenses described in Note 2 to the Statement for the year ended December 31, 2020, in accordance with U.S. generally accepted accounting principles.

Emphasis of Matter

We draw attention to Note 2 to the Statement, which describes that the Statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission (for inclusion in the filing of Form 8-K/A of City Office REIT, Inc.) and is not intended to be a complete presentation of Bloc 83’s revenues and expenses. Our opinion is not modified with respect to this matter.

/s/ KPMG LLP

Chartered Professional Accountants

Vancouver, Canada

February 25, 2022

 

1


BLOC 83

STATEMENTS OF REVENUES AND CERTAIN EXPENSES

(in thousands)

 

     Year Ended
December 31, 2020
     Nine Months Ended
September 30, 2021
(unaudited)
 

Revenues:

     

Rental and other revenues

   $ 9,177      $ 8,700  
  

 

 

    

 

 

 

Total Revenues

     9,177        8,700  
  

 

 

    

 

 

 

Certain Expenses:

     

Property operating expenses

     2,402        2,362  
  

 

 

    

 

 

 

Total Certain Expenses

     2,402        2,362  
  

 

 

    

 

 

 

Revenues in Excess of Certain Expenses

   $ 6,775      $ 6,338  
  

 

 

    

 

 

 

See accompanying notes to statement of revenues and certain expenses.

 

2


BLOC 83

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

1. Organization

The accompanying statements of revenues and certain expenses include the operations of Bloc 83 (the “Property”). The Property is a two-building office complex located in the Glenwood South submarket in Raleigh, North Carolina. During the periods presented, one of the office buildings was under development.

2. Basis of Presentation and Significant Accounting Policies

The accompanying statement of revenues and certain expenses (the “statement”) has been prepared for the purpose of complying with Rule 3-14 of Regulation S-X promulgated under the Securities Act of 1933, as amended. The statement is not intended to be a complete presentation of the revenues and expenses of the Property. Accordingly, the statements exclude expenses not directly related to the future operations of the Property such as depreciation and amortization, amortization of intangible assets and liabilities, asset management fees, finance costs, and other costs not directly related to the proposed future operations of the property.

Revenue Recognition

Minimum rental revenue is recognized on a straight-line basis over the term of the leases. The leases provide for the reimbursement by the tenants of real estate taxes, insurance and certain property operating expenses to the owner of the Property. These reimbursements are recognized as revenue in the period the expenses are incurred.

To record revenue on a straight-line basis during the year ended December 31, 2020 and nine months ended September 30, 2021, rental income increased $853,551 and $1,570,812 (unaudited), respectively.

Use of Estimates

The preparation of the statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the statement and accompanying notes. Actual results could differ from those estimates.

3. Rental and other revenues

The Property’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 Property is leased to tenants classified as operating leases with expiration dates ranging from 2026 to 2035. Rental income related to such leases is recognized on a straight-line basis over the remaining lease term. For the year ended December 31, 2020 and nine months ended September 30, 2021, four tenants accounted for approximately 81% and 82% (unaudited) of the Property’s rental income, respectively. The minimum rental amounts due under the leases are subject to scheduled fixed increases.

 

3


BLOC 83

NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES

The future minimum rents to be received over each of the next five years and thereafter under the non-cancelable operating leases in effect as of September 30, 2021 are as follows (in thousands):

 

2021 (three months ending December 31, 2021)

   $ 2,360  

2022

     10,741  

2023

     11,616  

2024

     11,909  

2025

     12,210  

Thereafter

     87,933  
  

 

 

 

Total

   $ 136,769  
  

 

 

 

Leases generally require reimbursement of the tenant’s proportional share of common area, real estate taxes and other operating expenses which are in excess of a base year operating expense amount. These reimbursements are excluded from the amounts above.

4. Commitments and Contingencies

The Property is obligated under certain tenant leases to fund tenant improvements and the expansion of the underlying leased properties.

5. Subsequent Events

We have evaluated subsequent events through to February 25, 2022. The Property was acquired by City Office REIT, Inc. on December 31, 2021, from a non-affiliated third party for approximately $330.0 million.

 

4

EX-99.2 4 d301435dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

Pro Forma Consolidated Financial Statements

(Unaudited)

On December 31, 2021, City Office REIT, Inc. (the “Company,” “we,” “our” or “us”) closed on the acquisition of Bloc 83 in Raleigh, North Carolina for a gross purchase price of $330.0 million. The Company does not have a material relationship with the seller of Bloc 83 and the acquisition is not an affiliated transaction. As previously announced, on December 2, 2021, the Company closed on the sale of the Sorrento Mesa Portfolio (“Sorrento Mesa”) in San Diego, California for a gross sales price of $576.0 million.

The accompanying unaudited Pro Forma Consolidated Balance Sheet is presented as of September 30, 2021 and the unaudited Pro Forma Consolidated Statements of Operations and unaudited Pro Forma Consolidated Statements of Comprehensive Income are presented for the nine-month period ended September 30, 2021 and the year ended December 31, 2020 and include certain pro forma adjustments to illustrate the estimated effect of the Company’s acquisition of Bloc 83 and disposition of Sorrento Mesa. The City Office REIT, Inc. Historical columns have been derived from the audited financial statements for the year ended December 31, 2020 and from the unaudited interim financial statements as of and for the nine-month period ended September 30, 2021.

On the unaudited Pro Forma Consolidated Balance Sheet, the pro forma adjustments reflect the addition of the acquired property and removal of the disposed property as if the transactions had occurred on September 30, 2021. On the unaudited Pro Forma Consolidated Statement of Operations, for the nine-month period ended September 30, 2021 and the year ended December 31, 2020, the pro forma adjustments reflect the addition of historical revenue and expenses of the acquired property and removal of historical revenues and expenses of the disposed property for the periods presented as if the transaction had occurred on January 1, 2020. The unaudited Pro Forma Consolidated Statements of Operations exclude any nonrecurring charges or credits directly attributable to the acquisition or disposition.

The unaudited Pro Forma Consolidated Financial Statements set forth below are not fact and there can be no assurance that the Company’s results would not have differed significantly from those set forth below if the acquisition or disposition had actually occurred on January 1, 2020. Accordingly, the unaudited Pro Forma Consolidated Financial Statements are presented for illustrative purposes only and do not purport to represent, and are not necessarily indicative of, what our actual financial position and results of operations would have been had the disposition of the property occurred on the date indicated, nor are they indicative of our future financial position or results of operations. Readers are cautioned not to place undue reliance on such information and the Company makes no representations regarding the information set forth below or the Company’s ultimate performance compared to it.

Pro forma information is intended to provide investors with information about the impact of transactions by showing how specific transactions might have affected historical financial statements, illustrating the scope of the change in the historical financial position and results of operations. This pro forma consolidated information should not be viewed as indicative of the Company’s financial results in the future and should be read in conjunction with the Company’s financial statements as filed on Form 10-K for the year ended December 31, 2020 and on Form 10-Q for the nine-month period ended September 30, 2021. The adjustments made to historical financial information give effect to events that are directly attributable to the acquisition Bloc 83 and disposition of Sorrento Mesa and are factually supportable. The unaudited Pro Forma Consolidated Financial Statements are prepared in accordance with Article 11 of Regulation S-X.


City Office REIT, Inc.

Pro Forma Consolidated Balance Sheet

As of September 30, 2021

(Unaudited)

(In thousands, except par value and share data)

 

     City Office REIT,
Inc. Historical
    Acquisition of
Bloc 83
(A)
    Disposition of
Sorrento Mesa
(B)
    City Office REIT,
Inc. Pro Forma
 

Assets

        

Real estate properties, net

   $ 868,248     $ 304,344     $ —       $ 1,172,592  

Cash and cash equivalents

     17,697       —         42,439       60,136  

Restricted cash

     52,484       (320,718     505,253       237,019  

Rents receivable, net

     29,221       —         —         29,221  

Deferred leasing costs, net

     18,415       —         —         18,415  

Acquired lease intangible assets, net

     30,183       19,560       —         49,743  

Other assets

     17,753       291       —         18,044  

Assets held for sale

     118,382       —         (118,382     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Assets

   $  1,152,383     $ 3,477     $ 429,310     $  1,585,170  
  

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and Equity

        

Liabilities:

        

Debt

   $ 603,334     $ —       $ —       $ 603,334  

Accounts payable and accrued liabilities

     32,096       —         —         32,096  

Deferred rent

     10,460       140       —         10,600  

Tenant rent deposits

     5,542       323       —         5,865  

Acquired lease intangible liabilities, net

     3,868       3,014       —         6,882  

Other liabilities

     47,662       —         —         47,662  

Liabilities related to assets held for sale

     2,873       —         (2,873     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Liabilities

     705,835       3,477       (2,873     706,439  
  

 

 

   

 

 

   

 

 

   

 

 

 

Equity:

        

6.625% Series A Preferred stock, $0.01 par value per share, 5,600,000 shares authorized, 4,480,000 shares issued and outstanding

     112,000       —         —         112,000  

Common stock, $0.01 par value per share, 100,000,000 shares authorized, 43,554,375 shares issued and outstanding

     435       —         —         435  

Additional paid-in capital

     481,345       —         —         481,345  

Retained earnings (accumulated deficit)

     (146,930     —         432,183       285,253  

Accumulated other comprehensive loss

     (1,063     —         —         (1,063
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Stockholders’ Equity

     445,787       —         432,183       877,970  

Non-controlling interests in properties

     761       —         —         761  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Equity

     446,548       —         432,183       878,731  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Liabilities and Equity

   $ 1,152,383     $ 3,477     $ 429,310     $ 1,585,170  
  

 

 

   

 

 

   

 

 

   

 

 

 


City Office REIT, Inc.

Pro Forma Consolidated Statement of Operations

For the Nine Months Ended September 30, 2021

(Unaudited)

(In thousands, except per share data)

 

     City Office REIT,
Inc. Historical
    Acquisition of
Bloc 83
(AA)
     Disposition of
Sorrento Mesa
(BB)
    City Office REIT,
Inc. Pro Forma
 

Rental and other revenues

   $ 124,369     $ 8,700      $ (9,375   $ 123,694  

Operating expenses:

         

Property operating expenses

     43,477       2,362        (1,981     43,858  

General and administrative

     13,768       —          —         13,768  

Depreciation and amortization

     44,017       5,334        (3,423     45,928  
  

 

 

   

 

 

    

 

 

   

 

 

 

Total operating expenses

     101,262       7,696        (5,404     103,554  
  

 

 

   

 

 

    

 

 

   

 

 

 

Operating income

     23,107       1,004        (3,971     20,140  

Interest expense:

         

Contractual interest expense

     (17,533     —          —         (17,533

Amortization of deferred financing costs and debt fair value

     (869     —          —         (869
  

 

 

   

 

 

    

 

 

   

 

 

 
     (18,402     —          —         (18,402

Net gain on sale of real estate property

     47,400       —          —         47,400  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

     52,105       1,004        (3,971     49,138  

Less:

         

Net income attributable to non-controlling interests in properties

     (760     —          —         (760
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income attributable to the Company

     51,345       1,004        (3,971     48,378  

Preferred stock distributions

     (5,565     —          —         (5,565
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income attributable to common stockholders

   $ 45,780     $ 1,004      $ (3,971   $ 42,813  
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income per common share:

         

Basic

   $ 1.05          $ 0.98  
  

 

 

        

 

 

 

Diluted

   $ 1.04          $ 0.97  
  

 

 

        

 

 

 

Weighted average common shares outstanding:

         

Basic

     43,478            43,478  
  

 

 

        

 

 

 

Diluted

     44,091            44,091  
  

 

 

        

 

 

 

Dividend distributions declared per common share

   $ 0.45          $ 0.45  
  

 

 

        

 

 

 


City Office REIT, Inc.

Pro Forma Consolidated Statement of Comprehensive Income

For the Nine Months Ended September 30, 2021

(Unaudited)

(In thousands)

 

     City Office REIT,
Inc. Historical
    Acquisition of
Bloc 83
(AA)
     Disposition of
Sorrento Mesa
(BB)
    City Office REIT,
Inc. Pro Forma
 

Net income

   $ 52,105     $ 1,004      $ (3,971   $ 49,138  

Other comprehensive income:

         

Unrealized cash flow hedge gain

     458       —          —         458  

Amounts reclassified to interest expense

     439       —          —         439  
  

 

 

   

 

 

    

 

 

   

 

 

 

Other comprehensive income

     897       —          —         897  
  

 

 

   

 

 

    

 

 

   

 

 

 

Comprehensive income

     53,002       1,004        (3,971     50,035  

Less:

         

Comprehensive income attributable to non-controlling interests in properties

     (760     —          —         (760
  

 

 

   

 

 

    

 

 

   

 

 

 

Comprehensive income attributable to the Company

   $ 52,242     $ 1,004      $ (3,971   $ 49,275  
  

 

 

   

 

 

    

 

 

   

 

 

 


City Office REIT, Inc.

Pro Forma Consolidated Statement of Operations

For the Year Ended December 31, 2020

(Unaudited)

(In thousands, except per share data)

 

     City Office REIT,
Inc. Historical
    Acquisition of
Bloc 83
(AA)
    Disposition of
Sorrento Mesa (BB)
    City Office REIT,
Inc. Pro Forma
 

Rental and other revenues

   $ 160,840     $ 9,177     $ (9,921   $ 160,096  

Operating expenses:

        

Property operating expenses

     58,312       2,402       (1,892     58,822  

General and administrative

     10,690       —         —         10,690  

Depreciation and amortization

     60,367       7,271       (3,747     63,891  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     129,369       9,673       (5,639     133,403  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     31,471       (496     (4,282     26,693  

Interest expense:

        

Contractual interest expense

     (26,363     —         —         (26,363

Amortization of deferred financing costs and debt fair value

     (1,326     —         —         (1,326
  

 

 

   

 

 

   

 

 

   

 

 

 
     (27,689     —         —         (27,689

Net gain on sale of real estate property

     1,347       —         —         1,347  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     5,129       (496     (4,282     351  

Less:

        

Net income attributable to non-controlling interests in properties

     (602     —         —         (602
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income/(loss) attributable to the Company

     4,527       (496     (4,282     (251

Preferred stock distributions

     (7,420     —         —         (7,420
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (2,893   $ (496   $ (4,282   $ (7,671
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss per common share:

        

Basic

   $ (0.06       $ (0.16
  

 

 

       

 

 

 

Diluted

   $ (0.06       $ (0.16
  

 

 

       

 

 

 

Weighted average common shares outstanding:

        

Basic

     47,223           47,223  
  

 

 

       

 

 

 

Diluted

     47,223           47,223  
  

 

 

       

 

 

 

Dividend distributions declared per common share

   $ 0.60         $ 0.60  
  

 

 

       

 

 

 


City Office REIT, Inc.

Pro Forma Consolidated Statement of Comprehensive Income

For the Year Ended December 31, 2020

(Unaudited)

(In thousands)

 

     City Office REIT,
Inc. Historical
    Acquisition of
Bloc 83
(AA)
    Disposition of
Sorrento Mesa
(BB)
    City Office REIT,
Inc. Pro Forma
 

Net income

   $ 5,129     $ (496   $ (4,282   $ 351  

Other comprehensive income/(loss):

        

Unrealized cash flow hedge loss

     (3,003     —         —         (3,003

Amounts reclassified to interest expense

     328       —         —         328  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive loss

     (2,675     —         —         (2,675
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income/(loss)

     2,454       (496     (4,282     (2,324

Less:

        

Comprehensive income attributable to non-controlling interests in properties

     (602     —         —         (602
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income/(loss) attributable to the Company

   $ 1,852     $ (496   $ (4,282   $ (2,926
  

 

 

   

 

 

   

 

 

   

 

 

 


City Office REIT, Inc.

Notes to Unaudited Pro Forma Consolidated Financial Statements

1. Adjustments to Unaudited Pro Forma Consolidated Balance Sheet

(A) The acquisition of Bloc 83 was accounted for using preliminary estimates of the fair value of tangible and intangible assets to be acquired and liabilities to be assumed in connection with the acquisition. The pro forma adjustments include the estimated cash paid from escrow upon the acquisition of Bloc 83 and was recorded as an asset acquisition.

(B) The pro forma adjustments for the disposition of the Sorrento Mesa property include the net sales proceeds received and remove the carrying value of the disposed Sorrento Mesa property.

2. Adjustments to Unaudited Pro Forma Consolidated Statement of Operations and Unaudited Pro Forma Consolidated Statement of Comprehensive Income

(AA) These pro forma adjustments are based on the historical revenue and expenses of Bloc 83 for the nine months ended September 30, 2021 and year ended December 31, 2020 under the previous owners’ ownership. The pro forma adjustments include estimated depreciation expense based on the fair value of the tangible and intangible assets acquired and liabilities assumed.

(BB) These pro forma adjustments remove the actual historical revenue and expenses for the nine months ended September 30, 2021 and year ended December 31, 2020 from the operations of the Sorrento Mesa property under the Company’s ownership.

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Document and Entity Information
Dec. 31, 2021
Document And Entity Information [Line Items]  
Amendment Flag true
Entity Central Index Key 0001593222
Document Type 8-K/A
Document Period End Date Dec. 31, 2021
Entity Registrant Name City Office REIT, Inc.
Entity Incorporation State Country Code MD
Entity File Number 001-36409
Entity Tax Identification Number 98-1141883
Entity Address, Address Line One 666 Burrard Street
Entity Address, Address Line Two Suite 3210
Entity Address, City or Town Vancouver
Entity Address, State or Province BC
Entity Address, Postal Zip Code V6C 2X8
City Area Code (604)
Local Phone Number 806-3366
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Amendment Description This Form 8-K/A amends and supplements the Form 8-K filed by City Office REIT, Inc. (the “Company”) on January 3, 2022 (the “Original Filing”) reporting the acquisition of the property known as Bloc 83, an approximately 495,000 square foot office complex in Raleigh, North Carolina, to include the historical financial statements and pro forma information required by Item 9.01(a) and (b) of Form 8-K. This Form 8-K/A should be read in conjunction with the Original Filing.
Common Stock [Member]  
Document And Entity Information [Line Items]  
Security 12b Title Common Stock, $0.01 par value
Trading Symbol CIO
Security Exchange Name NYSE
Series A Preferred Stock [Member]  
Document And Entity Information [Line Items]  
Security 12b Title 6.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share
Trading Symbol CIO.PrA
Security Exchange Name NYSE
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