What is City Office REIT Probability of Financial Distress (%)?
Probability of Financial Distress (%) measures the probability that a company will go bankrupt in the upcoming year given its current financial position. A higher ratio indicates a larger probability of bankruptcy for the company, while a lower ratio indicates a healthier fundamental. As of today, City Office REIT's Probability of Financial Distress (%) is 0.15%.
Like the Altman Z-Score, the PFD measures a company's bankruptcy risk. However, the main drawback of the Z-score is it does not apply to banks and insurance companies. According to Investopedia, the concept of "working capital" does not apply to banks and insurance companies, as financial institutions do not have typical current assets or current liabilities like inventories or accounts payable.
Competitive Comparison of City Office REIT's Probability of Financial Distress (%)
For the REIT - Office subindustry, City Office REIT's Probability of Financial Distress (%), along with its competitors' market caps and Probability of Financial Distress (%) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
City Office REIT's Probability of Financial Distress (%) Distribution in the REITs Industry
For the REITs industry and Real Estate sector, City Office REIT's Probability of Financial Distress (%) distribution charts can be found below:
* The bar in red indicates where City Office REIT's Probability of Financial Distress (%) falls into.
City Office REIT Probability of Financial Distress (%) Calculation
Probability of Financial Distress (%) (PFD) was developed by John Campbell, Jens Hilscher and Jan Szilagyi in their Search of Distress Risk. It measures the probability that a company will go bankrupt within the next 12 months given its current financial position.
The Probability of Financial Distress (%) was obtained by a logit probability model based on eight explanatory variables. The logit formula to compute the probability of financial distress (LPFD) is given below:
| LPFD | = | -20.12 * NIMTAAVG | + | 1.60 * TLMTA | - | 7.88 * EXRETAVG | + | 1.55 * SIGMA | - | 0.005 * RSIZE | - | 2.27 * CASHMTA | + | 0.070 * MB | - | 0.09 * PRICE | - | 8.87 |
| = | -6.47 |
The Probability of Financial Distress (%) (PFD) was then obtianed by:
| PFD | = | 1 | / | (1 + e^(-LPFD)) | * | 100% |
| = | 0.15% |
The eight explanatory variables are:
1. NIMTAAVG = Net Income to Market Total Assets
*Note that for companies reported quarterly, geometrically declining weighted quarterly Net Income data in latest four quarters are used.
2. TLMTA = Total liabilities to Market Total Assets
3. CASHMTA = Cash to Market Total Assets
For non-financial companies, CASHMTA is measured as:
4. EXRETAVG = Excess Return compared to the S&P 500
EXRETAVG is the weighted excess return compared to the S&P 500 in past 12 month. Geometrically declining weights are imposed on the monthly excess return to reflect lagged information. The weight is halved each quarter.
5. SIGMA = Standard Deviation of Daily Returns
For sigma, we use the annualized standard deviation of a company's returns over the past 92 days (or 63 trading days).
6. RSIZE = Relative Size
| RSIZE | = | log (Market Cap | / | Total Market Cap of S&P 500 companies) |
7. MB = Market to Adjusted Book Equity Ratio
8. PRICE
PRICE is measured as the log of the stock price, capped at log(15).
City Office REIT (City Office REIT) Business Description
Traded in Other Exchanges
Address
666 Burrard Street, Suite 3210, Vancouver, BC, CAN, V6C 2X8
City Office REIT Inc is a real estate investment trust. It is focused on acquiring, owning, and operating high-quality office properties located predominantly in Sun Belt markets. The company owns office buildings in the metropolitan areas of Dallas, Denver, Orlando, Phoenix, Portland, Raleigh, San Diego, Seattle, and Tampa.
Executives
| Michael Mazan |
director |
3210-666 BURRARD STREET, VANCOUVER A1 V6C2X8 |
| William R Flatt |
director |
188 E. CAPITOL STREET, SUITE 1000, JACKSON MS 39201 |
| Anthony Maretic |
officer: Chief Financial Officer |
1075 WEST GEORGIA STREET, SUITE 2600, VANCOUVER A1 V6E 3C9 |
| James Thomas Farrar |
director, officer: Chief Executive Officer |
1075 WEST GEORGIA STREET, SUITE 2600, VANCOUVER A1 V6E 3C9 |
| Stephen B Shraiberg |
director |
1331 SEVENTEENTH STREET, STE. 300, DENVER CO 80202 |
| Gregory Tylee |
officer: See Remarks |
1075 WEST GEORGIA STREET, SUITE 2600, VANCOUVER A1 V6E 3C9 |
| John Sweet |
director |
SUITE 2990, 500 NORTH AKARD STREET, DALLAS TX 75201 |
| Sabah Mirza |
director |
27 FASKEN DRIVE, TORONTO A6 M9W1K6 |
| Mark Wilhelm Murski |
director |
1312 CLEAVER DRIVE, OAKVILLE A6 L6J IW4 |
| John R. Mclernon |
director |
200 GRANVILLE STREET, 19TH FLOOR, VANCOUVER A1 V6C 2R6 |
| Jeffrey David Kohn |
director |
1029 17 AVE SW, SUITE 200, CALGARY A0 T2T 0A9 |
| Samuel Belzberg |
10 percent owner |
|
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