P R E S E NTATION F E B R U A R Y 2 0 2 0 NYSE : CIO F ORWARD -L - - PowerPoint PPT Presentation

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

NYSE : CIO

F E B R U A R Y 2 0 2 0

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, 2019 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 December 31, 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 December 31, 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

Central Fairwinds, Orlando 7595 Tech, Denver 5090 N 40th St, Phoenix 2525 McKinnon, Dallas Park Tower, Tampa Circle Point, Denver The Quad, 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 Phoenix, AZ 22

1,213

$27.79 90.4% 3.2 Denver, CO 9

1,160

$25.78 87.1% 5.7 Tampa, FL 5

1,041

$25.19 94.9% 4.7 Orlando, FL 8

720

$25.96 94.6% 4.2 San Diego, CA 9

582

$34.49 91.0% 3.6 Dallas, TX 4

577

$29.19 93.1% 3.2 Portland, OR 5

329

$25.75 98.1% 4.2 Seattle, WA 3

207

$29.20 100.0% 9.1 Total 65 5,829 $27.54 91.9% 4.4 12%

Note: All information as of December 31, 2019 (1) Percentages based on management’s estimate of aggregate gross asset value in each market (2) Average historical annual total return on the Company’s common stock from April 14, 2014 (IPO) to December 31, 2019, including reinvestment of dividends

Dedicated

Class A & B Office Owner

Targeted

High Growth, 18-Hour Cities

Flexible

Balance Sheet Positioned For Growth

Experienced

Management Team

Strong

• Avg. Annual Returns
• f 11.1% (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 5% 18% 9% 17% 21% SAN DIEGO, CA 14%

CURRENT MARKETS (1) 4

SEATTLE, WA 4%

COMPANY OVERVIEW

+146k

+88k

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

+20k

• 5

10 15 20 25 30 35 40 45 50

2.0% 3.4% 6.7%

Gateway Markets National Avg CIO Markets

CIO TARGETS LEADING “18-HOUR CITIES”

NATION-LEADING OFFICE DEMAND DRIVERS (1)

Square Feet (in Millions)

5

NEW SUPPLY BELOW HISTORICAL AVERAGES (2) ATTRACTIVE 18-HOUR CITY CHARACTERISTICS DOMESTIC NET MIGRATION TO 18-HOUR CITIES

✓ 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 2020 - 2025 % PROJECTED EMPLOYMENT GROWTH 2020 - 2025 CONSTRUCTION DELIVERIES IN CIO CURRENT MARKETS 1978 - 2019 DEPICTS NET MIGRATION (PEOPLE PER YEAR) INTO CIO MARKETS (3) AVG (1) Source: SNL Financial, as of February 1, 2020. 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) Based on population change from July 2016 to July 2017 as measured by the US Census Bureau

2.6% 4.1% 7.5%

Gateway Markets National Avg CIO Markets

GROWTH AND VALUE CREATION STRATEGY

DISCIPLINED REAL ESTATE UNDERWRITING

6

❑

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

Generate strong investor returns by driving property cash flow growth, enhancing NAV and a focused acquisition strategy

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 December 31, 2019, excludes Circle Point land acquisition in Denver, CO (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

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

2014 2015 2016 2017 2018 2019 Avg.

ANNOUNCED POST-IPO PROJECTED ACQUISITION CAP RATES (2)

• 2

4 6 2014 2015 2016 2017 2018 2019 $0 $300 $600 $900 $1,200 $1,500 2014 2015 2016 2017 2018 2019 $0 $40 $80 $120 $160 2014 2015 2016 2017 2018 2019

SUCCESSFULLY EXECUTING GROWTH STRATEGY

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

7

$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

❑

San Diego: Mission Valley, Sorrento Mesa

❑

Orlando: Downtown Orlando, Florida Research Park, Lake Mary

❑

Dallas: Uptown, Lewisville, Richardson/Plano

❑

Portland: Sunset Corridor, Airport Way

❑

Seattle: Eastside / Bothell

$1.5B $156M 5.8M SF 2.3M SF $387M $37M

($M) (M SF) ($M) (1) Represents implied asset value at IPO plus acquisitions at cost and does not include impact of dispositions (2) Represents total “Rental and other revenues” NET RENTABLE AREA

8

RECENT ACQUISITIONS

❑

Focus on well-located real estate in leading submarkets with strong tenancy and cash flow growth potential

❑

Closed $144 million of acquisitions in Seattle, Portland and Denver during 2019

❑

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

(1) As of February 1, 2020 (2) 80% occupied at close; 95% leased represents the expansion of a tenant that had a signed lease agreement at the time of close and commenced occupancy in January 2020

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, anchored by an investment grade corporate tenant and large public company (2)

❑

Located directly adjacent to existing CIO property and has been integrated to create a 381,000 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

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) Levered 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

9

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 six dispositions have generated over $70 million of gains

ALL PRIOR ASSET SALES

❑

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

❑

The six dispositions have generated $72 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

❑

Logan Tower Denver, CO December 2019

Sorrento Mesa - 10455

RECENT COMPANY HIGHLIGHTS

10

FOURTH QUARTER 2019

❑

Core FFO per share of $0.25 and AFFO per share of $0.14

❑

Executed approximately 331,000 SF of new and renewal leases

❑

Occupancy of 91.9%, or 93.7% including signed leases that commence after quarter end

❑

Subsequent to quarter end, executed a 70,000 SF lease at the Denver Tech property

❑

Same store cash NOI growth of 3.9% for the quarter and 4.3% for the year ended December 31, 2019, compared to prior year

❑

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

❑

Gained inclusion into the MSCI US REIT Index (RMZ)

DELIVERING LEADING RETURNS TO INVESTORS (1)

FRP Collection, Orlando Mission City, San Diego New Fitness Center

42.6%

2019 Total Return

63.4%

Total Return Since IPO

vs 27.5% for Office REITs vs 27.6% for REITs $500M - $1B Market Cap vs 39.2% for Office REITs vs 32.5% for REITs $500M - $1B Market Cap

(1) Total return includes reinvestment of dividends. SNL US REIT Office Index and SNL US REITs $500M - $1B Implied Cap Index used as peer comparison indices

Low High Net Property Acquisitions (2) $340M $380M December 31, 2020 Occupancy 92.0% 94.0% Same Store Cash NOI Growth 1.0% 3.0% Core FFO per Diluted Share $1.13 $1.18 Low High Core FFO per Diluted Share $0.32 $0.34 Fully Deployed (Q4 2020) Full Year 2020

2020 OUTLOOK

(1) See the Company’s Q4 2019 earnings press release 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

2020 GUIDANCE (1)

❑

Approximately $200 million of common equity raised in second half of 2019 expected to be deployed in 2020

❑

Midpoint of Net Property Acquisitions guidance represents ~45% target leverage on these incremental acquisitions

❑

Midpoint of occupancy guidance is 93.0% vs 91.9% at 2019 year end

❑

Same Store Cash NOI expected to be strong in Q1 and Q4; flat in Q2 and Q3 due to impact of known tenant vacates and free rent periods

❑

Fully Deployed Core FFO guidance assumes completion of Net Property Acquisitions by start of Q4 2020

COMMENTARY

11

Mission City, San Diego

EMBEDDED PORTFOLIO OPPORTUNITIES

(1) Source: CoStar Property. Comparison of office and flex rental rates for Sorrento Mesa in Q3 2017 vs Q4 2019 (2) Certain conditions to closing remain and the Company cannot assure that the sale will occur on the terms expected, or at all

OTHER OPPORTUNITIES NOT INCLUDED IN GUIDANCE

❑

Future cash flow increases related to raising below-market rental rates and the successful completion of value-add programs

❑

Opportunity to monetize land holdings or participate in development

❑

49 acres of prime, developable land

❑

Located in Denver, Orlando, San Diego and Tampa

❑

8-acre portion of Circle Point Land under contract for sale (2)

❑

Capital recycling opportunities if accretive to portfolio cash flow 12

Circle Point Land, Denver

INCREASE CASH FLOW – THREE PROPERTIES WITH LOWEST OCCUPANCY AT YEAR END ARE WELL-POSITIONED

❑

Denver Tech, Denver – 62.7% year end occupancy

❑

128,000 SF of executed leases to take property to 93.7% occupancy in Q3 2020

❑

Camelback Square, Phoenix – 78.8% year end occupancy

❑

$3 million value-add capital improvement plan to be completed in 2020; post-renovation rents expected to be ~20% higher than in-place

❑

Sorrento Mesa, San Diego – 85.3% year end occupancy

❑

Vacancy concentrated in a single building; in-place rents significantly below market (12% increase in market rent since 2017 acquisition) (1)

Sorrento Mesa, San Diego

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 5.5% Seattle Genetics, Inc.

• 2019

207 3.6% United Healthcare Services, Inc. A+ 2008 198 3.4% Ally Financial Inc. BBB- 2008 163 2.8% HF Management Services LLC

• 2012

155 2.7%

• H. Lee Moffitt Cancer Center

A3 2008 155 2.7% 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 1.9% Total 1,685 29.1% Finance and Insurance 25% Professional and Technical Services 24% Technology and Information 14% Government 13% Health Care and Life Sciences 12% Real Estate 3% Educational Services 3% Accommodation and Food 2% Construction 1% Other 3%

DIVERSIFIED TENANT BASE (1)(2)

DIVERSE TENANT PROFILE

13

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 December 31, 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

6.3% 7.2% 14.1% 12.5% 12.9% 9.9% 6.8% 12.0% 6.0% 4.4% 6.1% 1.8% Contracted

0% 5% 10% 15% 20% 25% 30% Vacant & Contracted 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 & Thereafter

$0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

CONSERVATIVE STRUCTURE WITH LOCKED IN RATES

❑

37.7% leverage (1)(2)

❑

5.9x Net Debt / Annualized Adjusted EBITDA (2)

❑

4.0% weighted average interest rate

❑

100% 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) – DECEMBER 31, 2019

14

Debt Balance: $612.3 million (4)(5)

ATTRACTIVE TERMS LOCKED IN LONG-TERM SUMMARY AS OF DECEMBER 31, 2019

100% Fixed Rate (3)

(1) Calculated as net debt to enterprise value (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) $612.3 million represents the principal debt balance as of December 31, 2019 before deferred financing costs and unamortized fair value adjustments

$85,293 Interest Rate: 4.34% $44,942 Interest Rate: 3.10% $124,554 Interest Rate: 3.48% $96,250 Interest Rate: 4.36% $191,003 Interest Rate: 4.10% $70,250 Interest Rate: 4.36%

FOCUSED 18-HOUR CITY INVESTMENT STRATEGY

COMPANY HIGHLIGHTS

15

❑

Diversified portfolio of 5.8 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 December 31, 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 six dispositions have generated $72 million of gains and a combined IRR of approximately 17%

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 $2.5 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 Uptown Dallas, TX

EXECUTIVES AND BOARD OF DIRECTORS

16 John McLernon, Chairman Jamie Farrar, CEO & Director William Flatt, Director Sabah Mirza, Director Mark Murski, 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 $2.5 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 $3.0 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

❑

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

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 Pima Center 100.0% 272 87.0% $27.19 $27.19 $6,431 First American Title Insurance SanTan 100.0% 267 91.7% $28.05 $28.05 $6,855 Toyota Motor Credit 5090 N 40th St 100.0% 174 100.0% $29.28 $29.28 $5,108 Bar-S-Foods Co. Camelback Square 100.0% 174 78.8% $30.92 $30.92 $4,237 Digital Air Strike The Quad 100.0% 163 100.0% $28.85 $29.17 $4,703 Opendoor Labs, Inc. Papago Tech 100.0% 163 86.7% $21.88 $21.88 $3,087 Regional Acceptance Corp. Cherry Creek 100.0% 356 100.0% $18.59 $19.31 $6,612 State of Colorado Department of Health Circle Point 100.0% 272 94.3% $17.84 $31.72 $4,573 Epsilon Data Management, LLC Denver Tech4 100.0% 381 62.7% $22.98 $27.80 $5,264 Jackson National Life Insurance Company Superior Pointe 100.0% 151 96.5% $17.81 $30.29 $2,602 KeyBank National Association Park Tower 94.8% 471 92.4% $24.66 $24.66 $10,732 GSA US Attorneys Office City Center 95.0% 242 93.1% $25.66 $25.66 $5,774 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% $28.23 $28.23 $3,505 Paychex, Inc. Florida Research Park5 96.6% 397 92.9% $23.97 $27.51 $8,794 GSA - PEO STRI (US Dept of Defence) Central Fairwinds 97.0% 168 93.7% $25.50 $25.50 $4,019 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% $25.36 $33.36 $6,402 Genopis, Inc. Mission City 100.0% 286 96.9% $35.53 $35.53 $9,845 InnovaSystems International 190 Office Center 100.0% 303 89.5% $25.67 $25.67 $6,970 United Healthcare Services, Inc. Lake Vista Pointe 100.0% 163 100.0% $16.00 $25.00 $2,613 Ally Financial Inc. 2525 McKinnon 100.0% 111 92.5% $28.15 $45.15 $2,899 The Retail Connection AmberGlen 76.0% 201 96.9% $21.69 $24.28 $4,227 Planar Systems, Inc. Cascade Station 100.0% 128 100.0% $26.61 $27.98 $3,393 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 - December 31, 2019 ³ 5,829 91.9% $24.60 $27.54 $131,437 Portland, OR Phoenix, AZ Orlando, FL Denver, CO Tampa, FL Dallas, TX San Diego, CA

APPENDIX: PROPERTY OVERVIEW

17

(1) Annualized gross rent per square foot includes adjustment for estimated expense reimbursements of triple net leases for the year ended December 31, 2019 (2) Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended December 31, 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

Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 INCOME ITEMS Net income/(loss) 2,988 $ (947) $ 1,321 $ (920) $ (6,684) $ NOI 24,499 $ 24,562 $ 26,645 $ 23,276 $ 20,921 $ Same Store Cash NOI Growth 3.9% 5.8% 5.9% 1.8% 0.7% Net income/(loss) per share - diluted 0.02 $ (0.07) $ (0.02) $ (0.07) $ (0.22) $ Core FFO / Share 0.25 $ 0.29 $ 0.34 $ 0.29 $ 0.26 $ AFFO / Share 0.14 $ 0.22 $ 0.26 $ 0.21 $ 0.19 $ EBITDA (CIO share) 21,919 $ 21,830 $ 23,327 $ 21,027 $ 18,590 $ CAPITALIZATION Common shares 54,591 47,647 39,647 39,636 39,544 Unvested restricted shares 335 416 408 413 354 Total shares 54,926 48,063 40,055 40,049 39,898 Weighted average common shares outstanding - diluted 54,416 43,005 40,054 40,017 39,896 Share price at quarter end 13.52 $ 14.39 $ 11.99 $ 11.31 $ 10.25 $ Market value of common equity 742,606 $ 691,629 $ 480,262 $ 452,949 $ 408,959 $ 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 517,762 $ 617,518 $ 677,017 $ 657,080 $ 611,076 $ Total enterprise value (including net debt) 1,372,368 $ 1,421,147 $ 1,269,279 $ 1,222,029 $ 1,132,035 $ DEBT STATISTICS AND RATIOS Total principal debt (CIO share) 604,369 $ 649,114 $ 707,047 $ 693,248 $ 643,419 $ Weighted average maturity 5.6 years 5.6 years 5.4 years 5.7 years 5.8 years Weighted average interest rate 4.0% 4.0% 4.2% 4.2% 4.1% Fixed rate debt as a percentage of total debt1 100.0% 93.4% 79.0% 77.5% 77.4% LEASING STATISTICS In-Place occupancy 91.9% 91.2% 93.4% 92.6% 90.4% Weighted average remaining lease term 4.4 years 4.5 years 4.5 years 4.7 years 4.6 years

APPENDIX: FINANCIAL HIGHLIGHTS

18

(in thousands, except per share data)

(1) The fixed rate debt percentage for Q4 2019 and Q3 2019 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

• f the loan.

Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018

Net income/(loss) attributable to common stockholders 987 $ (2,966) $ (699) $ (2,944) $ (8,656) $ (+) Depreciation and amortization 15,102 15,035 14,604 14,417 15,308 (-) Net gain on sale of real estate property (2,934)

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

13,155 12,069 13,427 11,473 10,149 Non-controlling interests in properties: (+) Share of net income 146 164 165 169 117 (-) Share of FFO (305) (310) (312) (316) (263) Funds from Operations ("FFO") 12,996 $ 11,923 $ 13,280 $ 11,326 $ 10,003 $ (+) Stock based compensation 432 431 435 444 356 Core FFO 13,428 $ 12,354 $ 13,715 $ 11,770 $ 10,359 $ (+) Net recurring straight line rent/expense adjustment (52) (127) (850) (978) (553) (+) Net amortization of above and below market leases 40 24 (66) (29) (41) (+) Net amortization of deferred financing costs and debt fair value 330 318 331 334 320 (-) Net recurring tenant improvements and incentives (3,147) (1,723) (1,694) (1,298) (1,242) (-) Net recurring leasing commissions (1,521) (971) (592) (918) (447) (-) Net recurring capital expenditures (1,221) (526) (496) (542) (962) Adjusted Funds from Operations ("AFFO") 7,857 $ 9,349 $ 10,348 $ 8,339 $ 7,434 $ Core FFO per common share 0.25 $ 0.29 $ 0.34 $ 0.29 $ 0.26 $ AFFO per common share 0.14 $ 0.22 $ 0.26 $ 0.21 $ 0.19 $ Dividends per common share 0.235 $ 0.235 $ 0.235 $ 0.235 $ 0.235 $ Core FFO Payout Ratio 95% 82% 69% 80% 91% AFFO Payout Ratio 163% 108% 91% 113% 126% Weighted average common shares outstanding - diluted 54,416 43,005 40,054 40,017 39,896

APPENDIX: FFO, CORE FFO AND AFFO

19

(in thousands, except per share data)

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