Q3 2024 City Office REIT Inc Earnings Call Transcript
Key Points
- City Office REIT Inc (CIO) achieved healthy leasing activity during the quarter with 141,000 square feet of total leasing, including 78,000 square feet of new leases.
- The company completed a full floor lease extension at Block 83 in Raleigh, resulting in the office component being 98% leased.
- Renovations at Pima Center in Phoenix are complete, leading to increased occupancy and positive leasing traction.
- City Office REIT Inc (CIO) reported an increase in expected year-end occupancy and same-store cash NOI change due to strong leasing results.
- The company has no debt maturities until October 2025, providing financial stability and time to explore financing options for valuable properties like Block 83.
- Net operating income in the third quarter was $24.6 million, which is $300,000 lower than the second quarter due to the disposition of Cascade Station.
- Core FFO decreased by $400,000 from the second quarter, primarily due to lower net operating income and higher interest expenses.
- A $700,000 tenant improvement deduction related to a new lease impacted the third quarter's AFFO.
- Four significant property renovations resulted in a $1 million reduction to AFFO this quarter.
- Office capital markets activity remains suppressed, largely driven by limited debt availability for the sector.
Good morning and welcome to the City Office REIT Inc Third Quarter, 2024 Earnings Conference Call. (Operator Instructions) This conference call is being recorded. (Operator Instructions) It is now my pleasure to introduce you to Tony Maretic, the company's Chief Financial Officer, Treasurer and Corporate secretary. Thank you, Mr. Maretic. You may begin.
Before we begin. I would like to direct you to our website where you can view our third quarter earnings press release and supplemental information package. The earnings release and supplemental package. Both include a reconciliation of non-GAAP measures that will be discussed today to their most directly comparable GAAP. Financial measures. Certain statements made today that discuss the company's beliefs or expectations or that are not based on historical fact, may constitute forward-looking statements within the meaning of the federal securities laws. While the company believes that these expectations reflected in such forward
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