I N V E S TO R P R E S E NTATION N O V E M B E R 2 0 1 9 N YS E : - - PowerPoint PPT Presentation

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

N YS E : CIO

N O V E M B E R 2 0 1 9

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 and operating 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

• perating performance of anticipated near-term or recent acquisitions and dispositions and descriptions relating to these expectations, including,

without limitation, anticipated net operating income yield, cap rates and the Company’s projections for its performance in future periods. 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

• perations and future prospects are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 and

subsequent filings with the SEC, including the sections entitled “Risk Factors” contained therein. The factors set forth in the Risk Factors section and

• therwise 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 September 30, 2019. 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. This presentation contains non-GAAP measures, some of which may constitute forward-looking statements. We encourage you to review our earnings release for the quarter ended September 30, 2019 and the accompanying supplemental financial information package, both of which include a reconciliation of non-GAAP measures that are discussed herein to their most directly comparable GAAP financial measures. 2

EXECUTIVES AND BOARD OF DIRECTORS

3 John McLernon, Chairman Jamie Farrar, CEO & Director William Flatt, Director Sabah Mirza, 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 $2.0 billion of real estate since 2011

❑

Prior experience with a family office focused on real estate and hospitality as well as 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 $2.5 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

❑

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

❑

Held financial management positions with Bentall Kennedy and a senior living real estate company

✓ ✓ ✓ ✓ ✓ ✓ Indicates Independent Director ✓

Central Fairwinds, Orlando 7595 Tech, Denver 5090 N 40th St, Phoenix 2525 McKinnon, Dallas Park Tower, Tampa Circle Point, Denver Pima Center, Phoenix City Center, Tampa Mission City, San Diego

Market

• No. of

Buildings NRA (000s SF) Annualized Gross Rent per SF In Place Occupancy Lease Term Remaining Denver, CO 10

1,231

$24.89 87.5% 5.9 Phoenix, AZ 22

1,213

$27.47 88.2% 3.2 Tampa, FL 5

1,040

$25.11 94.7% 4.7 Orlando, FL 8

720

$25.75 92.3% 4.4 San Diego, CA 9

582

$33.23 91.0% 3.7 Dallas, TX 4

577

$28.73 93.1% 3.2 Portland, OR 5

329

$27.29 98.1% 4.5 Seattle, WA 3

207

$29.20 100.0% 9.3 Total 66 5,899 $27.13 91.2% 4.5 12%

Note: All information as of September 30, 2019 (1) Percentage of portfolio NRA (2) Based on common share price of $13.54 as of October 31, 2019

Dedicated

Class A & B Office Owner

Targeted

High Growth, 18-Hour Cities

Flexible

Balance Sheet Positioned For Growth

Experienced

Management Team and Board of Directors

Attractive

6.9% Dividend Yield (2) City Office invests in high-quality office properties in 18-hour cities with strong economic fundamentals in the Southern and Western United States

DENVER, CO PORTLAND, OR DALLAS, TX ORLANDO, FL TAMPA, FL PHOENIX, AZ 6% 21% 10% 18% 20% SAN DIEGO, CA 10%

CURRENT MARKETS (1)

5

SEATTLE, WA 3%

COMPANY OVERVIEW

8.3% 7.5% 7.6% 7.2% 6.8% 7.3% 7.3%

2014 2015 2016 2017 2018 2019 YTD Avg.

0.0% 4.6% 8.3%

Gateway Markets National Avg CIO Markets

• 5

10 15 20 25 30 35 40 45 50

CIO TARGETS LEADING “18-HOUR CITIES”

NATION-LEADING OFFICE DEMAND DRIVERS (1)

Square Feet (in Millions)

6

NEW SUPPLY BELOW HISTORICAL AVERAGES (2) ATTRACTIVE 18-HOUR CITY CHARACTERISTICS OUTSIZED RETURN & GROWTH POTENTIAL

✓ High-quality urban living experience in amenitized setting ✓ Live, work, play environments; attractive to millennials ✓ Diverse employment bases with national and international employers ✓ Educated workforces ✓ Low-cost centers for businesses to operate ✓ Sound transportation infrastructure with lower congestion ✓ Strong and stable demand generators such as state capitals or university proximity

% PROJECTED POPULATION GROWTH 2019 - 2025 % PROJECTED EMPLOYMENT GROWTH 2019 - 2025 CONSTRUCTION DELIVERIES IN CIO CURRENT MARKETS 1978 - 2018 ANNOUNCED POST-IPO PROJECTED ACQUISITION CAP RATES (3) AVG (1) Source: SNL Financial, as of November 1, 2019. Gateway markets represent New York, NY, Boston, MA, Chicago, IL, Los Angeles, CA, San Francisco, CA and Washington, D.C. (2) Source: CoStar Property. Construction deliveries represent Class A&B office building deliveries over 50,000 SF in CIO current markets (3) 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

1.6% 6.0% 10.4%

Gateway Markets National Avg CIO Markets

TRENDS FAVORING CIO 18-HOUR CITIES

TOP 2019 “MARKETS TO WATCH” BY ULI AND PWC

7

DOMESTIC NET MIGRATION TO 18-HOUR CITIES

(1) Emerging Trends in Real Estate 2019 published by Urban Land Institute and PricewaterhouseCoopers (2) Based on population change from July 2016 to July 2017 as measured by the US Census Bureau

Scottsdale, AZ Uptown Dallas, TX

1. Dallas/Fort Worth, TX 2. Brooklyn, NY 3. Raleigh/Durham, NC 4. Orlando, FL 5. Nashville, TN 6. Austin, TX 7. Boston, MA 8. Denver, CO 9. Charlotte, NC 10. Tampa/St. Petersburg, FL

Top 10 markets for overall real estate prospects include nine 18-hour cities (1)

BLUE represents CIO market

+146k

+88k

+64k +55k +56k +36k +30k

+20k

Graphic depicts net migration (people per year) into CIO markets (2)

GROWTH AND VALUE CREATION STRATEGY

DISCIPLINED REAL ESTATE UNDERWRITING

8

❑

Focus on properties valued between $25 million and $100 million

❑

Average acquisition size of $48.3 million post IPO (1)

❑

Less competition from larger institutional investors

❑

Leverage existing infrastructure and deep relationships in our current markets to source acquisitions and operate efficiently

INVEST WHERE WE HAVE AN ADVANTAGE

❑

Target strong and diverse tenancy, below market in-place rents and acquisition prices below replacement cost

❑

Detailed underwriting process and due diligence; confront adverse findings during acquisition diligence

CIO’s strategy is to produce attractive returns through a focused acquisition strategy in high growth markets and an active approach to increasing property cash flows

Circle Point, Denver The Quad, Phoenix

ACTIVE APPROACH TO CREATING VALUE

❑

Active in-house asset management with local market presence

❑

Selectively implement value-add initiatives to increase cash flows

❑

Long-term hold mentality but will selectively harvest value when capital can be redeployed accretively

(1) As of September 30, 2019, excludes Circle Point land acquisition in Denver, CO

• 2

4 6 IPO (4/14) 2014 2015 2016 2017 2018 $0 $300 $600 $900 $1,200 $1,500 IPO (4/14) 2014 2015 2016 2017 2018 $0 $30 $60 $90 $120 IPO (4/14) 2014 2015 2016 2017 2018

SUCCESSFULLY EXECUTING GROWTH STRATEGY

GROWTH AND DIVERSIFICATION IN REVENUES (2) EXPANSION INTO LEADING SUBMARKETS

9

$1.5B IN TOTAL REAL ESTATE ACQUIRED (1) GAINING ECONOMIES OF SCALE IN ALL MARKETS

❑

Phoenix: Scottsdale, Tempe, Camelback Corridor, Chandler

❑

Denver: Cherry Creek / Glendale, Downtown Denver, Denver Technology Center, Northwest Corridor

❑

Tampa: Downtown Tampa, Downtown St. Petersburg, I-75 Corridor, Carillon Office Park

❑

Orlando: Downtown Orlando, Florida Research Park, Lake Mary

❑

San Diego: Mission Valley, Sorrento Mesa

❑

Dallas: Uptown, Lewisville, Richardson/Plano

❑

Portland: Sunset Corridor, Airport Way

❑

Seattle: Eastside/Bothell

$1.5B $129M 5.9M SF 1.9M SF $307M $33M

($M) (M SF) ($M) (1) Represents implied asset value at IPO plus acquisitions at cost and does not include impact of dispositions (2) IPO represents total revenue on a pro forma basis for the City Office Predecessor for the year ended December 31, 2013 NET RENTABLE AREA 2019 Acquisitions 2019 Acquisitions / Dispositions

SELECTIVELY HARVESTING VALUE

(1) IRR calculated using allocated equity value at IPO (2) Based on forward net operating income at the time the property was placed under contract for sale (3) IRR calculated using allocated equity value at IPO or acquisition equity investment, as applicable. AmberGlen and Sorrento Mesa – 10455 were acquired as components of portfolios, and certain values, income and expenses have been estimated in the IRR calculation based on portfolio pro rata share

10

WASHINGTON GROUP PLAZA – BOISE, ID

❑

Sold in Q1 2018 for $86.5 million

❑

22% IRR and $47.0 million gain (1)

❑

~5.8% disposition cap rate (2)

❑

Renovations to common areas and mechanical systems

❑

Implemented significant operating expense savings

❑

Increased NRA by 23,000 SF through re-measurement

❑

Completed significant leasing transactions, including 148,000 SF, 10-year lease to St. Luke’s Hospital

❑

Two largest tenants competed to acquire property

Prudent capital recycling: CIO’s five dispositions have generated over $70 million of gains

ALL PRIOR ASSET SALES

❑

Combined IRR of approximately 17% across five dispositions (3)

❑

The five dispositions have generated over $70 million of gains:

❑

Corporate Parkway Allentown, PA June 2016

❑

AmberGlen Portland, OR May 2017

❑

WGP Boise, ID March 2018

❑

Plaza 25 Denver, CO February 2019

❑

Sorrento – 10455 San Diego, CA May 2019

Sorrento Mesa - 10455

11

RECENT ACQUISITIONS

❑

Closed $144 million of acquisitions in Seattle, Portland and Denver year-to-date 2019

❑

Robust acquisition pipeline with over $750 million of potential investment opportunities (1)

❑

Focus on ~7.0% + cap rates; potential upside through below market rental rates and elevating the property’s market position

(1) As of November 1, 2019 (2) 80% occupied at close; 95% leased represents the expansion of a tenant that has signed a lease agreement and will occupy the expansion space once the buildout has been completed

7601 TECH – SEPTEMBER 2019

❑

Six-story, class A office building located in the Denver Tech Center submarket of Denver, CO

❑

$48.8 million / 191,368 SF

❑

7.1% cap rate on year 1 expected cash NOI

❑

95% leased at close (2), anchored by an investment grade corporate tenant and large public company

❑

Located directly adjacent to existing CIO property and has been integrated to create a 380,000 SF amenitized campus

CASCADE STATION – JUNE 2019

❑

Two-building, class A office complex located in the Airport Way submarket of Portland, OR

❑

$32.5 million / 127,508 SF

❑

8.1% cap rate on year 1 expected cash NOI

❑

100% leased to strong, diversified rent roll, anchored by a credit tenant

❑

Transit-oriented location, high-end finishes and large flexible floorplates attracting strong tenant base

12

VALUE-ADD ACQUISITION: CAMELBACK SQUARE

CAMELBACK MOUNTAIN PARADISE VALLEY ARCADIA

(1) Expected cap rate and yield. Metrics include renovation budget. 7%+ yield represents stabilized yield-to-cost after renovation and lease-up period

❑

Located in Oldtown Scottsdale, a dense, mixed-use pocket with a radius of approximately one mile that features world- class amenities in a walkable environment

❑

Directly across from Scottsdale Fashion Square

❑

1,000+ feet of frontage at a premier intersection

❑

One of the state’s top restaurants is located at the property

SCOTTSDALE, AZ – ACQUIRED DEC 2018

❑

$53.2 million / 173,206 SF / $307 per SF

❑

5.1% year 1 cash NOI cap rate / stabilizing to 7%+ yield (1)

❑

81% leased at December 31, 2018

❑

Estimated replacement cost of ~$400 per SF

CIO TO IMPLEMENT VALUE-ADD PROGRAM

❑

Planning over $3 million of up-front capital improvements

❑

In-place rents 20%+ below anticipated post-reno rental rates

❑

81% occupancy is below anticipated stabilized occupancy

❑

Opportunity to add amenities and activate common areas

❑

Convert traditional tenant spaces to creative suites

❑

Improve curb appeal and signage at high-traffic intersection

“AAA” LOCATION AT PRIME INTERSECTION

SCOTTSDALE FASHION SQUARE CAMELBACK SQUARE

RECENT COMPANY HIGHLIGHTS

13

THIRD QUARTER 2019

❑

Core FFO of $0.29 per share and AFFO of $0.22 per share

❑

Executed approximately 144,000 SF of new and renewal leases

❑

Occupancy of 91.2%, or 93.1% including signed leases that commence after quarter end

❑

Same store cash NOI growth of 5.8% for the quarter and 4.5% for the nine months ended September 30, 2019, compared to prior year

EFFICIENT AND OPPORTUNISTIC CAPITAL RAISING

❑

Issued 8,000,000 shares of common stock through CIO’s ATM program for aggregate gross proceeds of $106.5 million

❑

Issued 6,900,000 shares of common stock (after quarter end) in a follow-on offering for aggregate gross proceeds of $95.6 million

❑

ATM and follow-on equity issuances gross pricing averaged $13.56 per share, CIO’s highest average issuance price to date

❑

Modified four property loans, resulting in approximately $0.8 million of initial annualized interest savings

❑

Upsized the unsecured credit facility from $250 million to $300 million by issuing a new tranche of term loan commitments in the principal amount of $50 million

❑

Entered in a swap agreement, effectively fixing the $50 million term loan at 2.67% as of quarter end, based on current leverage levels

FRP Collection, Orlando Mission City, San Diego Spec Suite

ENHANCEMENT OF THE BALANCE SHEET

Low High Core FFO per Diluted Share $1.17 $1.19 Same Store Cash NOI Growth 4.0% 5.0% Occupancy (December 31, 2019) 92.0% 93.0% Net Property Acquisitions (2) $97M $110M $0.92 4.5% 91.2% $110M YTD through Q3 Revised 2019 Guidance Actual

2019 GUIDANCE & EMBEDDED OPPORTUNITIES

(1) See the Company’s Q4 2018, Q1 2019, Q2 2019 and Q3 2019 earnings press releases for further discussion of the material assumptions underlying the Company’s guidance. This outlook reflects management’s view of current and future acquisitions and market conditions which management cannot guarantee will occur as expected, or at all (2) Total property acquisitions less total property dispositions

POTENTIAL OPPORTUNITIES ACCRETIVE TO EARNINGS REVISED FULL YEAR 2019 GUIDANCE (1)

❑

Guidance impacted by share issuances in Q3 and Q4

❑

High end of Core FFO range achievable through further occupancy gains, recycling of assets or incremental acquisitions

❑

Continued positive momentum in Same Store Cash NOI growth

❑

Signed and committed leases expected to increase occupancy in Q4

❑

Range in Net Property Acquisitions reflects potential asset sale in Denver

COMMENTARY

❑

Lease-up of attractive, larger blocks of vacant space

❑

Opportunity to monetize land holdings or participate in development

❑

49 acres of prime, developable land

❑

Located in Denver, Orlando, San Diego and Tampa

❑

Future cash flow increases related to the successful completion of value-add programs, such as Camelback Square in Scottsdale, AZ

❑

Capital recycling opportunities if accretive to portfolio cash flow

14

Circle Point Land, Denver

Tenant / Parent Credit Rating (S&P / Moody's) Tenant Since NRA (000s) % of Net Rentable Area State of Colorado Dept. of Health AA+ 1993 319 5.4% Seattle Genetics, Inc.

• 2019

207 3.5% United Healthcare Services, Inc. A+ 2008 198 3.4% Ally Financial Inc. BB+ 2008 163 2.8% HF Management Services LLC

• 2012

155 2.6%

• H. Lee Moffitt Cancer Center

A3 2008 155 2.6% Toyota Motor Credit Corporation AA- 2011 133 2.3% Kaplan, Inc. (3) BB+ 2008 125 2.1% Jackson National Life Insurance Co. AA- 2007 122 2.1% GSA – US Attorneys Office (4) AA+ 1998 108 1.8% Total 1,685 28.6% Finance and Insurance 25% Professional and Technical Services 23% Technology and Information 14% Government 13% Health Care and Life Sciences 12% Real Estate 4% Educational Services 3% Accommodation and Food 2% Construction 1% Other 3%

DIVERSIFIED TENANT BASE (1)(2)

DIVERSE TENANT PROFILE

15

TOP TEN TENANTS OF OUR PROPERTIES (2) LEASE MATURITIES – STABLE, LONG-TERM TENANCY PROFILE WITH WELL-STAGGERED EXPIRATIONS (2)

(1) Percentage of portfolio NRA; derived from the North American Industry Classification System (NAICS) (2) As of September 30, 2019 (3) Lease is to Kaplan, Inc., which is a subsidiary of Graham Holdings Company (4) The credit rating indicated is for the United States Government

7.0% 1.1% 8.5% 14.0% 11.8% 12.6% 9.8% 5.3% 11.9% 5.6% 10.5% 1.9% Contracted

0% 5% 10% 15% 20% 25% 30% Vacant & Contracted 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 & Thereafter

$0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

CONSERVATIVE STRUCTURE WITH LOCKED IN RATES

❑

43.5% leverage (1)(2)

❑

6.6x Net Debt / Annualized Adjusted EBITDA (2)

❑

4.0% weighted average interest rate

❑

93% fixed rate debt (3)

❑

5.6 year weighted average debt maturity

❑

$300 million unsecured credit facility with an additional $200 million accordion feature

WELL STAGGERED DEBT MATURITIES ($000S) – SEPTEMBER 30, 2019

16

Debt Balance: $657.1 million (4)(5)

PREDOMINANTLY FIXED RATE DEBT SUMMARY AS OF SEPTEMBER 30, 2019

7% Line of Credit

93% Fixed Rate (3)

(1) Calculated as net debt as of September 30, 2019 divided by net debt plus liquidation value of preferred stock plus market value of common equity at September 30, 2019 (2) Net debt calculated as debt principal less cash, cash equivalents and restricted cash (3) Included in fixed rate debt is $50 million of term loan debt that has been effectively fixed with a swap agreement (4) $7.9 million of indebtedness attributable to non-controlling interests (5) $657.1 million represents the principal debt balance as of September 30, 2019 before deferred financing costs and unamortized fair value adjustments

$85,719 Interest Rate: 4.34% $45,210 Interest Rate: 3.10% $124,816 Interest Rate: 3.95% $96,534 Interest Rate: 4.36% $191,200 Interest Rate: 4.10% Credit Facility $43,325 Interest Rate: 3.69% $70,250 Interest Rate: 4.36%

FOCUSED 18-HOUR CITY INVESTMENT STRATEGY

COMPANY HIGHLIGHTS

17

❑

Diversified portfolio of 5.9 million SF across leading 18-hour cities in the Southern and Western US (1)

❑

Markets positioned to outperform, driven by outsized employment and population growth

❑

Focused on well-located office properties in vibrant, amenity-rich and transit-oriented submarkets

(1) As of September 30, 2019 (2) Corporate Parkway in June 2016, two buildings at AmberGlen in May 2017, Washington Group Plaza in March 2018, Plaza 25 in February 2019 and Sorrento Mesa – 10455 in May 2019

❑

Disciplined underwriting and active asset management to generate long-term value creation opportunities

❑

Built in rental rate growth enhanced through value-add programs, asset recycling and strategic land holdings

❑

CIO’s five dispositions have generated over $70 million of gains and combined IRR of approximately 17% (2)

PROVEN GROWTH AND VALUE CREATION APPROACH

❑

Primarily fixed rate debt with a weighted average interest rate of 4.0% (1)

❑

5.6 year weighted average debt maturity; no near-term maturities (1)

❑

Consistent access to capital and flexibility to grow with $300 million unsecured credit facility

WELL-POSITIONED, LONG-TERM BALANCE SHEET

❑

Average over 20 years of experience with over $2.0 billion of real estate acquisitions since 2010

❑

Deep relationships in CIO markets and strong reputation for execution

EXPERIENCED AND COMMITTED MANAGEMENT TEAM

Sorrento Mesa, San Diego Mission City, San Diego Central Fairwinds, Orlando Denver, CO

Metropolitan Area Property 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 Cherry Creek 100.0% 356 100.0% $18.59 $18.59 $6,612 State of Colorado Department of Health Circle Point 100.0% 272 94.3% $17.58 $30.47 $4,506 Epsilon Data Management, LLC Denver Tech4 100.0% 380 66.9% $22.86 $27.69 $5,646 Jackson National Life Insurance Company Superior Pointe 100.0% 151 96.5% $17.66 $29.17 $2,579 KeyBank National Association Pima Center 100.0% 272 87.0% $27.19 $27.19 $6,431 First American Title Insurance SanTan 100.0% 267 91.7% $27.85 $27.85 $6,807 Toyota Motor Credit 5090 N 40th St 100.0% 175 95.8% $29.03 $29.03 $4,861 Bar-S-Foods Co. Camelback Square 100.0% 173 67.1% $29.89 $29.89 $3,472 Digital Air Strike The Quad 100.0% 163 100.0% $28.66 $28.91 $4,672 Opendoor Labs, Inc. Papago Tech 100.0% 163 86.7% $21.78 $21.78 $3,072 Regional Acceptance Corp. Park Tower 94.8% 471 92.4% $24.58 $24.58 $10,696 GSA US Attorneys Office City Center 95.0% 241 91.8% $25.49 $25.49 $5,652 Kobie Marketing, Inc. Intellicenter 100.0% 204 100.0% $23.99 $23.99 $4,881

• H. Lee Moffitt Cancer Center

Carillon Point 100.0% 124 100.0% $28.16 $28.16 $3,498 Paychex, Inc. Florida Research Park5 96.6% 397 89.4% $23.44 $27.25 $8,262 GSA - PEO STRI (US Dept of Defence) Central Fairwinds 97.0% 168 92.1% $25.32 $25.32 $3,921 Fairwinds Credit Union Greenwood Blvd 100.0% 155 100.0% $22.75 $22.75 $3,527 HF Management Services LLC Sorrento Mesa 100.0% 296 85.3% $25.27 $31.27 $6,380 Genopis, Inc. Mission City 100.0% 286 96.9% $35.01 $35.01 $9,703 InnovaSystems International 190 Office Center 100.0% 303 89.5% $25.64 $25.64 $6,960 United Healthcare Services, Inc. Lake Vista Pointe 100.0% 163 100.0% $16.00 $24.00 $2,613 Ally Financial Inc. 2525 McKinnon 100.0% 111 92.5% $27.41 $44.41 $2,823 The Retail Connection AmberGlen 76.0% 201 96.9% $21.30 $23.89 $4,151 Planar Systems, Inc. Cascade Station 100.0% 128 100.0% $26.45 $32.45 $3,372 Wells Fargo Bank, N.A. Seattle, WA Canyon Park 100.0% 207 100.0% $21.20 $29.20 $4,384 Seattle Genetics Inc. Total / Weighted Average - Excluding Assets Held For Sale³ 5,827 91.4% $24.35 $27.18 $129,481 Denver, CO Logan Tower 100.0% 72 69.8% $21.60 $21.60 $1,084 GSA US Attorneys Office Total / Weighted Average - September 30, 2019 ³ 5,899 91.2% $24.32 $27.13 $130,565 Portland, OR Phoenix, AZ Orlando, FL Denver, CO Tampa, FL Dallas, TX San Diego, CA

APPENDIX: PROPERTY OVERVIEW

18

(1) Lake Vista Pointe, 2525 McKinnon, Sorrento Mesa, and Canyon Park the annualized base rent per square foot on a triple net basis was increased by $8, $17, $6, and $8 respectively, to estimate a gross equivalent base rent. AmberGlen has a net lease for one tenant which has been grossed up by $7 on a pro rata basis. Superior Pointe has net leases for eight tenants which have been grossed up by $12 on a pro-rata basis. Florida Research Park has net leases for six tenants which have been grossed up by $8 on a pro-rata basis. Circle Point has net leases for twelve tenants which have been grossed up by $13 on a pro-rata basis. The Quad has one tenant with a net lease, which has been grossed up by $8 on a pro-rata

• basis. Cascade Station has net leases for six tenants which have been grossed up by $7 on a pro-rata basis. Denver Tech has a net lease for one tenant which has been grossed up by $12 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 September 30, 2019 by (ii) 12. (3) Averages weighted based on the property’s NRA, adjusted for occupancy. (4) Denver Tech is comprised of 7601 Tech, which was acquired during the third quarter of 2019, and 7595 Tech (formerly “DTC Crossroads”). (5) Florida Research Park is comprised of FRP Collection and FRP Ingenuity Drive.

Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 INCOME ITEMS Net (loss)/income (947) $ 1,321 $ (920) $ (6,684) $ (1,161) $ NOI 24,562 $ 26,645 $ 23,276 $ 20,921 $ 20,294 $ Same Store Cash NOI Growth 5.8% 5.9% 1.8% 0.7% 0.8% Net (loss)/income per share - diluted (0.07) $ (0.02) $ (0.07) $ (0.22) $ (0.08) $ Core FFO / Share 0.29 $ 0.34 $ 0.29 $ 0.26 $ 0.28 $ AFFO / Share 0.22 $ 0.26 $ 0.21 $ 0.19 $ 0.20 $ EBITDA (CIO share) 21,830 $ 23,327 $ 21,027 $ 18,590 $ 18,442 $ CAPITALIZATION Common shares 47,647 39,647 39,636 39,544 39,544 Unvested restricted shares 416 408 413 354 347 Total shares 48,063 40,055 40,049 39,898 39,891 Weighted average common shares outstanding - diluted 43,005 40,054 40,017 39,896 37,839 Share price at quarter end 14.39 $ 11.99 $ 11.31 $ 10.25 $ 12.62 $ Market value of common equity 691,629 $ 480,262 $ 452,949 $ 408,959 $ 503,428 $ Total Series A preferred shares outstanding 4,480 4,480 4,480 4,480 4,480 Liquidation preference per preferred share 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ Aggregate liquidation preference of preferred shares 112,000 $ 112,000 $ 112,000 $ 112,000 $ 112,000 $ Net debt - CIO share (see page 15) 617,518 $ 677,017 $ 657,080 $ 611,076 $ 511,173 $ Total enterprise value (including net debt) 1,421,147 $ 1,269,279 $ 1,222,029 $ 1,132,035 $ 1,126,601 $ DEBT STATISTICS AND RATIOS Total principal debt (CIO share) 649,114 $ 707,047 $ 693,248 $ 643,419 $ 544,171 $ Weighted average maturity 5.6 years 5.4 years 5.7 years 5.8 years 6.5 years Weighted average interest rate 4.0% 4.2% 4.2% 4.1% 4.2% Fixed rate debt as percentage of total debt 93.4%

(1 )

79.0% 77.5% 77.4% 90.4% LEASING STATISTICS In-Place occupancy 91.2% 93.4% 92.6% 90.4% 90.1% Weighted average remaining lease term 4.5 years 4.5 years 4.7 years 4.6 years 4.5 years

APPENDIX: FINANCIAL HIGHLIGHTS

19

(in thousands, except per share data)

(1) At September 30, 2019 the fixed rate debt percentage factors in an interest rate swap applied against the $50 million term loan which effectively fixes the 30 day LIBOR rate component of the term loan at 1.27% throughout the duration of the loan.

Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018

Net loss attributable to common stockholders (2,966) $ (699) $ (2,944) $ (8,656) $ (3,151) $ (+) Depreciation and amortization 15,035 14,604 14,417 15,308 13,379 (-) Net gain on sale of real estate property

• (478)
• (+) Impairment of real estate
• 3,497
• 12,069

13,427 11,473 10,149 10,228 Non-controlling interests in properties: (+) Share of net income 164 165 169 117 135 (-) Share of FFO (310) (312) (316) (263) (278) Funds from Operations ("FFO") 11,923 $ 13,280 $ 11,326 $ 10,003 $ 10,085 $ (+) Stock based compensation 431 435 444 356 356 Core FFO 12,354 $ 13,715 $ 11,770 $ 10,359 $ 10,441 $ (+) Net recurring straight line rent/expense adjustment (127) (850) (978) (553) (735) (+) Net amortization of above and below market leases 24 (66) (29) (41) (5) (+) Net amortization of deferred financing costs and debt fair value 318 331 334 320 308 (-) Net recurring tenant improvements and incentives (1,723) (1,694) (1,298) (1,242) (761) (-) Net recurring leasing commissions (971) (592) (918) (447) (1,313) (-) Net recurring capital expenditures (526) (496) (542) (962) (396) Adjusted Funds from Operations ("AFFO") 9,349 $ 10,348 $ 8,339 $ 7,434 $ 7,539 $ Core FFO per common share 0.29 $ 0.34 $ 0.29 $ 0.26 $ 0.28 $ AFFO per common share 0.22 $ 0.26 $ 0.21 $ 0.19 $ 0.20 $ Dividends per common share 0.235 $ 0.235 $ 0.235 $ 0.235 $ 0.235 $ Core FFO Payout Ratio 82% 69% 80% 91% 85% AFFO Payout Ratio 108% 91% 113% 126% 118% Weighted average common shares outstanding - diluted 43,005 40,054 40,017 39,896 37,839

APPENDIX: FFO, CORE FFO AND AFFO

20

(in thousands, except per share data)

C I TY OF F ICE REIT, I N C . E: investorrelations@cityofficereit.com | T: 604 806 3366 Suite 3210 666 Burrard Street Vancouver, BC V6C 2X8 Suite 2990 500 North Akard Street Dallas, TX 75201