I N V E S TO R P R E S E NTATION M A Y 2 0 1 7 N YS E : CIO F - - PowerPoint PPT Presentation

I N V E S TO R P R E S E NTATION

N YS E : CIO

M A Y 2 0 1 7

FORWARD-LOOKING STATEMENTS

This presentation contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A

• f the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements contained in this

presentation, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward- looking statements within the meaning of the federal securities laws and as such are based upon City Office REIT, Inc. (“CIO” or the “Company”) and its current beliefs as to the outcome and timing of future events. There can be no assurance that actual forward-looking statements, including projected capital resources, projected profitability and portfolio performance, estimates or developments affecting the Company will be those anticipated by the Company. Examples of forward-looking statements include those pertaining to expectations regarding our financial performance, including under metrics such as market rental rates, national or local economic growth, estimated replacement costs of our properties, projected capital improvements, expected sources of financing, expectations as to the timing of closing of acquisitions, dispositions, or other transactions, the expected operating performance of anticipated near-term acquisitions and dispositions and descriptions relating to these expectations, including, without limitation, the anticipated net operating income yield and cap rates. Forward-looking statements presented in this presentation are based on management’s beliefs and assumptions made by, and information currently available to, management. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “believe,” “could,” “project,” “predict,” “hypothetical,” “continue,” “future” or other similar words or expressions. All forward-looking statements included in this presentation are based upon information available to the Company on the date hereof and the Company is under no duty to update any of the forward-looking statements after the date of this presentation to conform these statements to actual

• results. The forward-looking statements involve a number of significant risks and uncertainties. Factors that could have a material adverse effect on

the Company’s operations and future prospects are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, including the sections entitled “Risk Factors” contained therein. The factors set forth in the Risk Factors section and otherwise described in the Company’s filings with SEC could cause the Company’s actual results to differ significantly from those contained in any forward-looking statement contained in this presentation. The Company does not guarantee that the assumptions underlying such forward-looking statements are free from

• errors. Unless otherwise stated, historical financial information and per share and other data is as of March 31, 2017.

Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s business, financial condition, liquidity, cash flows and results could differ materially from those expressed in any forward-looking statement. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. We disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Use caution in relying on past forward-looking statements, which were based on results and trends at the time they were made, to anticipate future results or trends. 2

EXECUTIVES AND BOARD OF DIRECTORS

3 John McLernon, Chairman Jamie Farrar, CEO & Director William Flatt, Director Jeffrey Kohn, Director Mark Murski, Director Stephen Shraiberg, Director John Sweet, Director

BOARD OF DIRECTORS

JAMIE FARRAR, CHIEF EXECUTIVE OFFICER



Over 20 years of real estate, private equity and corporate finance industry experience



Completed the acquisition of over $1.7 billion of real estate since 2011



Prior experience with a family office focused on real estate and hospitality and the private equity group of the TD Bank

GREG TYLEE, CHIEF OPERATING OFFICER & PRESIDENT



Over 20 years of diverse real estate experience that includes acquisitions of income-producing properties as well as high-rise development



Involved in real estate transactions, incl. development and management, with a combined enterprise value of over $2.0 billion



Former President of Bosa Properties Inc., a prominent real estate development company with over 400 employees

TONY MARETIC, CHIEF FINANCIAL OFFICER, SECRETARY & TREASURER



Over 20 years of experience, including over 15 years of experience in senior financial and operational roles, of which 12 years were spent within the real estate industry



Former Chief Operating Officer and Chief Financial Officer of Earls Restaurants Ltd., a multi-national hospitality company



Held financial management positions with a U.S. based senior living real estate company and Bentall Kennedy

       Indicates Independent Director

COMPANY OVERVIEW

(1) Current markets map and information in the table below are as of March 31, 2017 (2) Washington Group Plaza in Boise is under contract for disposition; this property is CIO’s only property in Boise (3) Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended March 31, 2017 by (ii) 12

19

Properties

6

States

38

Buildings

5.2 yrs

Avg Lease Term

4.5mm SF

Total NRA

$88.0mm

ABR (3)

90.2%

Occupancy

$22.98

Annualized Gross Rent /SF 4

% OF PORTFOLIO ABR(3) DENVER, CO PORTLAND, OR DALLAS, TX ORLANDO, FL TAMPA, FL BOISE, ID (2) PHOENIX, AZ 7% 10% 19% 13% 14% 26%

CURRENT MARKETS (1)

City Office invests in high-quality office properties in mid-sized metropolitan areas with strong economic fundamentals, primarily in the Southern and Western United States

12%

ATTRACTIVE MARKET CHARACTERISTICS



Strong economic fundamentals and demographics



Diverse employment base with national and international employers



Educated workforce



Low-cost center for businesses to operate



Strong and stable demand generators such as state capitals or university proximity



Demonstrated recovery in local real estate conditions

% PROJECTED JOB GROWTH FROM 2017 TO 2022 % PROJECTED POPULATION GROWTH FROM 2017 TO 2022

Source: SNL Financial as of May 1, 2017

(1) (1)

(1) Gateway markets represent New York, NY, Boston, MA, Chicago, IL, Los Angeles, CA, San Francisco, CA and Washington, D.C.

5

4.0% 4.7% 7.2% 7.3% 8.1% 9.0% 9.2% 9.4% 9.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Gateway Markets National Average Tampa, FL Portland, OR Phoenix, AZ Denver, CO Boise, ID Orlando, FL Dallas, TX 3.4% 4.0% 6.4% 6.5% 7.1% 7.6% 8.1% 8.1% 8.3% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Gateway Markets National Average Portland, OR Tampa, FL Phoenix, AZ Boise, ID Denver, CO Dallas, TX Orlando, FL

MIGRATION TRENDS FAVORING CIO MARKETS

Source: United States Census Bureau, data release from 3/23/2017

6

Maricopa County (Phoenix) added over 222 people per day in 2016, more than any

• ther county in the US

Dallas MSA experienced largest total gain, increasing by 100,000+

Represents CIO current or pipeline market

NET DOMESTIC MIGRATION 2015-2016

OUR STRATEGY

INVEST WHERE WE HAVE AN ADVANTAGE

(1) As of March 31, 2017 for the trailing 12 months. For REITs under coverage by Deutsche Bank Equity Research – North America. Ranking based on weighted average year over year non-seasonally adjusted job growth rate for each REIT under coverage (2) Includes all acquisitions since IPO; represents the weighted average cap rate for each year of announced, projected year one cap rates at the time of acquisition

7



Focus on properties valued between $25-100 million



Supply-constrained market dynamics



High credit tenancy, below market in-place rents and acquisition prices below replacement cost



Leverage local property manager relationships to source acquisition opportunities and efficiently operate

OUTPERFORMANCE OF NON-GATEWAY OFFICE MARKETS



Less competition from larger institutional investors



Local real estate operators lack the capital to compete



Outsized population and employment growth catalysts



CIO ranked #1 in market exposure to job-related demand in Deutsche Bank’s REIT Job Tracker (1)

CIO’s strategy is to produce attractive returns through a focused acquisition strategy and increasing property cash flows

Announced Post – IPO Acquisition Cap Rates (2)

8.3% 7.5% 7.6% 7.7% 2014 2015 2016 Avg.

PROVEN GROWTH STRATEGY

8

April 2014 IPO Q4 2014 Q4 2015 Q4 2016

(1) As of March 31, 2017 (2) Represents total revenue on a pro forma basis for the City Office Predecessor for the year ended December 31, 2013 and for the trailing 12 months ended March 31, 2017 (3) Financings subsequent to IPO, as of March 31, 2017 adjusted for the property-level debt financing at AmberGlen subsequent to quarter end (4) Represents implied asset value at IPO plus acquisitions at cost

MORE THAN $550 MILLION INVESTED SINCE IPO

$307 Million $863 Million



Multiple properties in nearly all current markets; creating significant economies of scale



Increased net rentable square footage to 4.5 million from 1.9 million at IPO (1)



Operating revenue increased to $81.6 million from $32.6 million at IPO (2)



Increased average annualized base rent/SF to $21.57 from $17.95 at IPO (1)

EFFICIENT ACCESS TO CAPITAL

TOTAL REAL ESTATE (4) $387 Million $559 Million



$216 million in common stock follow-on offerings



$112 million Series A preferred stock offering



$279 million in property-level debt financings (3)

Q1 2017

$816 Million

PROVEN VALUE CREATION

(1) Represents the two properties described above and the sale of two buildings at the AmberGlen property, which were sold for a net gain of approximately $9 million for CIO’s 76% ownership (2) The potential buyer has completed its due diligence review, waived certain conditions precedent for closing and made a $5 million non-refundable deposit. Customary conditions to closing remain

• utstanding, and there can be no assurance that the terms and timing of the disposition, if any, will meet our expectations

(3) Estimated accounting gain on sale based on an approximately $38 million net book value as of March 31, 2017

9

CORPORATE PARKWAY – ALLENTOWN, PA



$15.9 million gain on sale



~6.6% disposition cap rate



Completed an early 10 year lease extension and secured the investment grade parent as the tenant



Sale of this non-strategic asset enabled us to align our portfolio entirely within our target markets



Disposition closed on June 15, 2016

WASHINGTON GROUP PLAZA – BOISE, ID



Under contract for $86.5 million (2)



Greater than $40 million potential gain on sale (3)



~5.8% anticipated disposition cap rate



Completed numerous leasing transactions and implemented extensive operational improvements and cost savings



Opportunistic sale to largest tenant in the complex CIO’s three dispositions, including one under contract, are expected to generate in excess of $65 million of gains (1)

RECENT COMPANY HIGHLIGHTS

10

HIGHLIGHTS SUBSEQUENT TO QUARTER END FIRST QUARTER 2017



Executed approximately 262,000 square feet of new and renewal leases during the quarter



Property NOI increased to $15.8 million, a 24% increase over the prior quarter



Raised total gross proceeds of $71.3 million in a public follow-on offering of 5,750,000 shares of common stock



Completed the acquisition of 2525 McKinnon, a 111,334 square foot Class A property in Dallas, Texas for $46.8 million



Completed three ten-year secured property financings for aggregate borrowing proceeds of $84.1 million



Appointed John W. Sweet to the Board of Directors, effective March 1, 2017



Completed the sale of two of the five buildings at the AmberGlen property in Portland, Oregon for a combined sales price of $18.9 million, representing a net gain on sale of approximately $9 million for the Company’s 76% ownership



Refinanced the remaining three buildings at AmberGlen with a $20 million ten-year secured property loan with a fixed interest rate of 3.7%



Phoenix, Arizona



$42.6 million / 175,835 SF



Recently renovated and institutionally maintained property in the Camelback Corridor submarket

11

EXECUTION AND PIPELINE



Dallas, Texas



$46.8 million / 111,334 SF



Premier location in Uptown submarket, high-end finishes and rents approximately 30%+ below market



Advanced acquisition pipeline with over $400 million of potential investment opportunities (1)



Concentrated in high growth markets, including Dallas, Denver, Orlando, Phoenix and Salt Lake City



Focus on cap rates ranging from 7% to 8%; potential upside through below market rental rates



Phoenix, Arizona



$58.5 million / 266,531 SF



Prominently located complex in the Chandler submarket, 55% leased to investment grade tenants

RECENT ACQUISITION HIGHLIGHTS SANTAN CORPORATE CENTER 2525 MCKINNON

December 2016 January 2017

(1) As of May 1, 2017

5090 N 40TH ST

November 2016

Tenant / Parent Credit Rating (S&P / Moody's) Property Tenant since NRA (000s) % of Net Rentable Area State of Colorado Aa1 Cherry Creek 1993 319 7.1% United Healthcare Services, Inc. A+ 190 Office Center 2008 198 4.4%

• St. Luke's Regional Medical Center

A3 Washington Group Plaza 2015 175 3.9% Ally Financial Inc. BB+ Lake Vista Pointe 2008 163 3.6%

• H. Lee Moffitt Cancer Center

A3 Intellicenter 2008 155 3.4% GSA – US Attorneys Office (2) AA+ Multiple 1998 144 3.2% Toyota Motor Credit Corporation AA- SanTan Corporate Center 2011 133 2.9% Kaplan, Inc. (3) BB+ FRP Ingenuity Drive 2008 125 2.8% Idaho State Tax Commission Aa1 Washington Group Plaza 1992 111 2.5% Planar Systems, Inc.

• Amberglen

2002 110 2.4% Total 36.2%



Approximately 52.4% of CIO’s base rental revenue is derived from tenants that are government agencies, investment grade companies or their subsidiaries (1)



Portfolio in-place occupancy of 90.2% (1)



Benefit from low in-place rental rates with weighted average gross rental rate per square foot of $22.98 (1)

TOP TEN TENANTS OF OUR PROPERTIES

TENANT PROFILE

(1) As of March 31, 2017 (2) The credit rating indicated is for the United States Government (3) Lease is to Kaplan, Inc. which is a subsidiary of Graham Holdings Company

12

LEASE EXPIRATIONS



Stable, long-term tenancy profile with well-staggered expirations



5.2 year weighted average remaining lease term (1)

LEASE MATURITY SCHEDULE (2) – MARCH 31, 2017

(1) As of March 31, 2017 (2) Percentage represents the square footage of the leases divided by the total square footage of the portfolio, as of March 31, 2017

13 9.8% 6.0% 11.5% 7.7% 5.3% 15.2% 8.6% 5.6% 5.9% 2.5% 16.2% 5.7% 0% 5% 10% 15% 20% 25% 30% Vacant & Contracted 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Thereafter

$32,817 (3) Interest Rate: 3.85% $24,165 (4) Interest Rate: 4.38% $89,745 Interest Rate: 4.34% $47,518 Interest Rate: 3.73% $35,460 Interest Rate: 4.36% $91,813 Interest Rate: 4.61% $84,100 Interest Rate: 4.29% $- $100,000 $200,000 $300,000 $400,000 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027

GROWTH-ORIENTED BALANCE SHEET

 Conservative debt structure at favorable interest rates as of March 31, 2017

• 41.8% leverage
• 4.3% weighted average interest rate
• 100% fixed rate debt
• 6.5 year average debt maturity

 $100 million authorized under Secured Credit Facility with an additional $50 million accordion feature

DEBT MATURITY SCHEDULE ($000S) – MARCH 31, 2017

14

(1) $8.5 million of indebtedness attributable to non-controlling interests (2) $405.6 million represents the debt balance as of March 31, 2017 before deferred financing costs (3) Debt relates to the Washington Group Plaza property, which is under contract for sale (4) Debt relates to the AmberGlen property and was repaid on May 2, 2017 in conjunction with the sale of two of the five buildings at the property. A new loan maturing in 2027 in the amount of $20 million with a fixed interest rate of 3.7% closed on May 2, 2017.

Debt Balance: $405.6 million (1)(2)

STRONG AND STABLE PERFORMANCE

NET DEBT TO ENTERPRISE VALUE (1)

(1) Net Debt to Enterprise Value calculated as CIO share of debt less CIO share of unrestricted cash divided by market value as of quarter end

QUARTERLY COMMON DIVIDENDS PAID

15

64% 46% 48% 45% 42%

0% 10% 20% 30% 40% 50% 60% 70% Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

$0.235 $0.235 $0.235 $0.235 $0.235

$0.00 $0.05 $0.10 $0.15 $0.20 $0.25 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

NET OPERATING INCOME CORE FFO / SHARE

$10.1 $9.9 $11.4 $12.8 $15.8

$6 $9 $12 $15 $18 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

$0.32 $0.22 $0.27 $0.23 $0.26

$0.00 $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 $0.35 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

($M)

High Quality Properties with Strong Tenants

COMPANY HIGHLIGHTS

16



Well-located office properties in amenity-rich and transit-oriented locations



Approximately 52.4% of CIO’s base rental revenue is derived from tenants that are government agencies, investment grade companies or their subsidiaries (1)



Staggered lease maturities with a 5.2 year weighted average remaining lease term (1)



Core markets are located in high growth areas within the Southern and Western US



National leaders in employment growth and population growth



CIO’s three dispositions are expected to generate in excess of $65 million of gains (2)



CIO ranked #1 in Deutsche Bank’s REIT Job Tracker (1)



Conservative leverage profile with Net Debt / Enterprise Value of 41.8% (1)



Primarily fixed rate debt with a weighted average interest rate of 4.3% (1)



6.5 year average debt maturity (1)



Predictable earnings model with built-in rental rate growth



Management has an average of over 20 years of experience with over $1.7 billion of real estate acquisitions since 2011



Internalized management team in February 2016

Proven Value Creation and Markets Positioned for Growth Strong Balance Sheet with Consistent Cash Flow Generation Experienced and Committed Management

(1) As of March 31, 2017 (2) Corporate Parkway was sold on June 15, 2016, two buildings at AmberGlen were sold on May 2, 2017 and Washington Group Plaza is currently under contract for sale

APPENDIX: PROPERTY OVERVIEW

17

(1) Net leases have been grossed up by $10 for Superior Pointe, $8 for Lake Vista Pointe and $8 for FRP Ingenuity Drive. Amberglen has a net lease for one tenant which has been grossed up by $7 on a pro-rata

• basis. FRP Collection has net leases for three tenants which have been grossed up by $8 on a pro-rata basis. 2525 McKinnon has net leases for seven tenants which have been grossed up by $14 on a pro-

rata basis (2) Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended March 31, 2017 by (ii) 12 (3) Averages weighted based on the property’s NRA, adjusted for occupancy

Metropolitan Area Property Date Acquired Economic Interest NRA (000s SF) In Place Occupancy Annualized Base Rent per SF Annualized Gross Rent per SF1 Annualized Base Rent2 (000s) Largest Tenant by NRA Park Tower Nov-16 94.8% 473 86.7% $23.31 $23.31 $9,549 GSA - US Attorneys Office City Center Apr-14 95.0% 241 95.7% $24.28 $24.28 $5,600 Kobie Marketing, Inc. Intellicenter Sep-15 100.0% 204 100.0% $22.37 $22.37 $4,552

• H. Lee Moffitt Cancer

Center Carillon Point Jun-16 100.0% 124 100.0% $26.29 $26.29 $3,265 Paychex, Inc. Cherry Creek Apr-14 100.0% 356 100.0% $17.61 $17.61 $6,262 State of Colorado Department of Health Plaza 25 Jun-14 100.0% 196 55.0% $21.12 $21.12 $2,271 NTT America Inc. DTC Crossroads Jun-15 100.0% 191 92.4% $23.36 $23.36 $4,120 ProBuild Holdings, Inc. Superior Pointe Jun-15 100.0% 149 95.8% $17.08 $27.08 $2,439 KeyBank National Association Logan Tower Feb-15 100.0% 70 95.5% $19.73 $19.73 $1,321 State of Colorado Governor's Energy Boise, ID Washington Group Plaza Apr-14 100.0% 581 83.0% $17.35 $17.35 $8,362

• St. Luke's Regional

Medical Center 190 Office Center Sep-15 100.0% 303 88.6% $23.87 $23.87 $6,416 United Healthcare Services, Inc. Lake Vista Pointe Jul-14 100.0% 163 100.0% $14.50 $22.50 $2,368 Ally Financial Inc. 2525 McKinnon Jan-17 100.0% 111 97.8% $24.93 $34.68 $2,716 The Retail Connection, Inc. FRP Collection Jul-16 95.0% 272 81.1% $24.56 $26.94 $5,408 GSA - PEO STRI (US Dept of Defence) Central Fairwinds Apr-14 90.0% 170 89.8% $26.11 $26.11 $3,975 Fairwinds Credit Union FRP Ingenuity Drive Nov-14 100.0% 125 100.0% $20.50 $28.50 $2,552 Kaplan, Inc. SanTan Dec-16 100.0% 267 100.0% $25.08 $25.08 $6,683 Toyota Motor Credit 5090 N 40th St Nov-16 100.0% 176 89.0% $27.49 $27.49 $4,304 Bar-S-Foods Co. Portland, OR AmberGlen Apr-14 76.0% 353 90.8% $18.23 $19.66 $5,851 Planar Systems, Inc. Total / Weighted Average - March 31, 2017 3 4,525 90.2% $21.57 $22.98 $88,014 Phoenix, AZ Denver, CO Orlando, FL Tampa, FL Dallas, TX

APPENDIX: FINANCIAL HIGHLIGHTS

18

(in thousands, except share and per share data) Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 INCOME ITEMS NOI 15,787 $ 12,778 $ 11,406 $ 9,856 $ 10,117 $ Same Store Cash NOI Growth 0.7% 5.1% N/A N/A N/A Portfolio adjusted cash NOI 14,971 $ 13,053 $ 10,456 $ 8,156 $ 9,006 $ Adjusted Cash NOI (CIO share) 14,497 $ 12,641 $ 10,155 $ 7,862 $ 8,752 $ Net (loss)/income per share- fully diluted (0.11) $ (0.21) $ (0.08) $ 0.48 $ (0.56) $ Core FFO / Share 0.26 $ 0.23 $ 0.27 $ 0.22 $ 0.32 $ AFFO / Share 0.20 $ 0.17 $ 0.19 $ 0.13 $ 0.22 $ Portfolio EBITDA 14,421 $ 11,537 $ 10,284 $ 8,927 $ 9,309 $ EBITDA (CIO share) 13,947 $ 11,125 $ 9,983 $ 8,633 $ 9,055 $ Annualized dividend 0.94 $ 0.94 $ 0.94 $ 0.94 $ 0.94 $ Dividend yield 7.7% 7.1% 7.4% 7.1% 8.2% CAPITALIZATION Common shares 30,257,448 24,382,226 24,382,226 21,209,472 12,982,290 Unvested restricted shares 303,241 268,308 264,105 271,045 413,052 Common units 1 40,001 40,001 3,201,085 3,226,085 Total shares and units 30,560,690 24,690,535 24,686,332 24,681,602 16,621,427 Weighted average shares and units outstanding 29,803,715 24,689,228 24,685,252 24,234,851 16,238,684 Share price at quarter end 12.15 $ 13.17 $ 12.73 $ 12.98 $ 11.40 $ Market value of common equity 371,312 $ 325,174 $ 314,257 $ 320,367 $ 189,484 $ Total Series A preferred shares 4,480,000 4,480,000

• Liquidation preference per preferred share

25.00 $ 25.00 $

• $
• $
• $

Aggregate liquidation preference 112,000 $ 112,000 $

• $
• $
• $

Net debt - CIO share 347,019 $ 353,121 $ 285,951 $ 278,842 $ 333,574 $ Total enterprise value (including net debt ) 830,331 $ 790,295 $ 600,208 $ 599,209 $ 523,058 $ DEBT STATISTICS AND RATIOS Total debt (CIO share) 397,079 $ 366,332 $ 297,591 $ 285,881 $ 341,259 $ Weighted average maturity 6.5 years 5.3 years 6.1 years 6.0 years 5.6 years Average interest rate 4.3% 4.1% 4.3% 4.3% 4.3% Fixed rate debt as percentage of total debt 100.0% 86.0% 100.0% 94.2% 80.5% Adjusted interest coverage (CIO share) 3.2x 3.7x 2.9x 2.8x 2.5x Fixed charge coverage (CIO share) 2.0x 2.1x 2.7x 2.6x 2.3x Net debt/annualized adjusted EBITDA 6.1x 6.9x 7.1x 8.1x 9.2x LEASING STATISTICS In-Place occupancy 90.2% 91.0% 91.5% 88.2% 87.3% Weighted average lease term 5.2 years 5.2 years 4.9 years 5.0 years 5.5 years

APPENDIX: FFO, CORE FFO AND AFFO

19

(in thousands, except share and per share data) Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016 Net (loss)/income attributable to common stockholders (3,313) $ (5,080) $ (1,944) $ 11,527 $ (7,119) $ (+) Depreciation and amortization 10,498 9,345 7,763 6,520 6,551 (-) Operating Partnership unitholders' noncontrolling interest

• (5)

(3) 2,613 (1,739) 7,185 4,260 5,816 20,660 (2,307) Non-controlling interests in properties: (-) Share of net income 168 111 65 110 69 (-) Share of FFO (373) (303) (206) (211) (171) (-) Net gain on sale of real estate property

• (15,934)
• Funds from Operations ("FFO")

6,980 $ 4,068 $ 5,675 $ 4,625 $ (2,409) $ (+) Acquisition costs

• 353

252 87

• (+) Stock based compensation

827 649 630 615 542 (+) Change in fair value of earn-out

• 500
• (+) External advisor acquisition
• 7,044

Core FFO 7,807 $ 5,570 $ 6,557 $ 5,327 $ 5,177 $ (+) Net recurring straight line rent adjustment (129) 328 (967) (1,755) (1,168) (+) Net amortization of above and below market leases (3) 159 17 55 57 (+) Net amortization of deferred financing costs 315 277 195 245 216 (-) Net recurring tenant improvements and incentives (253) (565) (674) (413) (383) (-) Net recurring leasing commissions (1,281) (998) (217) (247) (139) (-) Net recurring capital expenditures (431) (568) (279) (163) (189) Adjusted Funds from Operations ("AFFO") 6,025 $ 4,203 $ 4,632 $ 3,049 $ 3,571 $ Core FFO per common share and unit 0.26 $ 0.23 $ 0.27 $ 0.22 $ 0.32 $ AFFO per common share and unit 0.20 $ 0.17 $ 0.19 $ 0.13 $ 0.22 $ Dividends per common share and unit 0.235 $ 0.235 $ 0.235 $ 0.235 $ 0.235 $ Core FFO Payout Ratio 90% 104% 88% 107% 74% AFFO Payout Ratio 116% 138% 125% 187% 107% Weighted average common stock and common units outstanding 29,803,715 24,689,228 24,685,252 24,234,851 16,238,684

APPENDIX: NET OPERATING INCOME RECONCILIATION

20

(in thousands)

Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016

Net (loss)/income (1,299) $ (3,193) $ (1,882) $ 14,250 $ (8,789) $ Adjustments to net income/loss: General and administrative 2,193 1,890 1,752 1,544 1,241 Contractual interest expense 4,072 3,598 3,321 3,139 3,740 Amortization of deferred financing costs 323 285 200 250 221 Depreciation and amortization 10,498 9,345 7,763 6,520 6,551 Acquisition costs

• 353

252 87

• Change in fair value of earn-out
• 500
• Net gain on sale of real estate property
• (15,934)
• Base management fee
• 109

External advisor acquisition

• 7,044

Net Operating Income ("NOI") 15,787 $ 12,778 $ 11,406 $ 9,856 $ 10,117 $ Net straight line rent adjustment (814) 116 (967) (1,755) (1,168) Net amortization of above and below market leases (3) 159 17 55 57 Portfolio Adjusted Cash NOI 14,970 $ 13,053 $ 10,456 $ 8,156 $ 9,006 $ Non-controlling interests in properties - share in cash NOI (474) (412) (301) (294) (254) Adjusted Cash NOI (CIO share) 14,496 $ 12,641 $ 10,155 $ 7,862 $ 8,752 $

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