P R E S E NTATION A U G U S T 2 0 1 9 NYSE : CIO F ORWARD -L - - PowerPoint PPT Presentation

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

NYSE : CIO

A U G U S T 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 operating 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 operations 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 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 June 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. 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 DTC Crossroads, 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 Phoenix, AZ 22

1,213

$27.21 95.6% 3.1 Denver, CO 9

1,040

$24.67 88.9% 5.8 Tampa, FL 5

1,040

$25.02 95.8% 4.8 Orlando, FL 8

720

$25.62 91.7% 4.5 San Diego, CA 9

582

$33.25 90.3% 3.3 Dallas, TX 4

577

$28.78 92.7% 3.5 Portland, OR 5

329

$27.26 98.1% 4.7 Seattle, WA 3

207

$29.20 100.0% 9.6 Total 65 5,708 $27.00 93.4% 4.5 13%

Note: All information as of June 30, 2019 (1) Percentage of portfolio NRA (2) Based on common share price of $11.99 as of June 30, 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

7.8% 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% 18% 10% 18% 21% SAN DIEGO, CA 10%

CURRENT MARKETS (1) 5

SEATTLE, WA 4%

COMPANY OVERVIEW

8.3% 7.5% 7.6% 7.2% 6.8% 7.4% 7.3%

2014 2015 2016 2017 2018 2019 YTD Avg.

2.8% 3.7% 6.9%

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 - 2024 % PROJECTED EMPLOYMENT GROWTH 2019 - 2024 CONSTRUCTION DELIVERIES IN CIO CURRENT MARKETS 1978 - 2018 ANNOUNCED POST-IPO PROJECTED ACQUISITION CAP RATES (3) AVG (1) Source: SNL Financial, as of August 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

3.4% 4.4% 7.7%

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 June 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

OVER $1B 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

$1.4B $129M 5.7M 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

$23.31 $23.61 $23.66 $23.90 $24.12 $24.03 $24.20 $24.27 $24.34 $24.45

(1) $78 million represents purchase price after release of escrowed $2 million to CIO when certain renewal leasing thresholds were not achieved in the first year of ownership (2) Annualized cash NOI for November 2016 as compared to annualized cash NOI for December 2018; November 2016 adjusted to remove revenue from tenant move-out expected at acquisition

ACHIEVING OCCUPANCY GAINS AND STABILIZATION

87% 81% 80% 83% 86% 85% 89% 90% 92% 94%

VALUE-ADD PROGRAM: PARK TOWER CASE STUDY

10

AFTER

BUSINESS PLAN EXECUTION

❑

Prominent downtown Tampa, FL skyline building

❑

Acquired November 2016 for $78 million / 471,000 SF (1)

❑

~$11 million transformative renovation completed, including building exterior, lobby, amenities, spec suite buildouts

❑

28 new leases signed (81,000 SF) since acquisition

❑

~$1 million in incremental annualized cash NOI (2)

14%

SIGNIFICANT INCREASES TO IN-PLACE RENT PER SF

14%

Known Vacate at Acquisition RECENT LEASES SIGNED AT $26.50 STARTING RATE Q1 ‘17 Q2 ’19 Q1 ‘17 Q2 ’19

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

11

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 four dispositions (3)

❑

The five dispositions have generated over $70 million in 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

12

RECENT ACQUISITIONS

❑

Closed $96 million of acquisitions in Seattle and Portland year to date 2019

❑

Robust acquisition pipeline with over $500 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 August 1, 2019

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

CANYON PARK – FEB 2019

❑

Three-building, class A office campus located in Eastside/ Bothell submarket of Seattle, WA

❑

$63.0 million / 206,770 SF

❑

7.1% cap rate on year 1 expected cash NOI

❑

100% leased to a leading biotechnology company

❑

Tenant investing significantly in the campus

❑

Excellent cash flow profile with lease expiration in 2028

13

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)

❑

81.1% 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

14

SECOND QUARTER 2019

❑

Core FFO of $0.34 per share and AFFO of $0.26 per share

❑

Benefitted from net impact of $1.5 million acquisition assignment fee

❑

Executed approximately 139,000 SF of new and renewal leases

❑

Occupancy of 93.4%

❑

Same store cash NOI growth of 5.9% for the quarter and 3.8% for the six months ended June 30, 2019, compared to prior year

SIGNIFICANT OCCUPANCY GAINS IN 2018 AND YTD 2019

❑

Increased portfolio occupancy from 87.7% on December 31, 2017 to 93.4% on June 30, 2019 (six straight quarterly increases)

❑

Backfilled 44,000 SF vacancy at FRP Collection, Orlando with three leases

❑

Executed 81,000 SF of new leases at Park Tower, Florida since November 2016 acquisition bringing occupancy above 90%

❑

Sale of Washington Group Plaza, Plaza 25, Sorrento Mesa – 10455; lower occupancy assets, generated combined gain of over $40 million

FRP Collection, Orlando Mission City, San Diego Spec Suite

Low High Low High Core FFO per Diluted Share $1.15 $1.20 $1.23 $1.26 Same Store Cash NOI Growth 2.0% 4.0% 4.0% 5.0% December 31, 2019 Occupancy 91.0% 94.0% 92.0% 93.5% Net Property Acquisitions (2) $78M $90M $78M $90M Previous Revised

2019 GUIDANCE & EMBEDDED OPPORTUNITIES

(1) See the Company’s Q4 2018, Q1 2019 and Q2 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 GUIDANCE ESTIMATES REVISED FULL YEAR 2019 GUIDANCE (1)

❑

$61 million of net acquisitions completed year to date

❑

Includes net impact of $1.5 million acquisition assignment fee in Q2 2019

❑

No incremental capital raising activities assumed

❑

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

MATERIAL ASSUMPTIONS UNDERLYING GUIDANCE

❑

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 15

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 5.6% Seattle Genetics, Inc.

• 2019

207 3.6% United Healthcare Services, Inc. A+ 2008 198 3.5% Ally Financial Inc. BB+ 2008 163 2.9% 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 2.2% GSA – US Attorneys Office (4) AA+ 1998 108 1.9% Paychex, Inc.

• 2009

102 1.8% Total 1,665 29.2% Finance and Insurance 23% Professional and Technical Services 20% Technology and Information 15% Government 14% Health Care and Life Sciences 13% Real Estate 4% Educational Services 3% Accommodation and Food 2% Construction 2% Other 4%

DIVERSIFIED TENANT BASE (1)(2)

DIVERSE TENANT PROFILE

16

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 June 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

5.5% 3.2% 10.2% 14.6% 12.6% 12.5% 9.9% 5.1% 12.3% 2.7% 10.3% 1.1% 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

❑

49.8% leverage (1)(2)

❑

7.5x Net Debt / Annualized Adjusted EBITDA (2)

❑

4.2% weighted average interest rate

❑

79% fixed rate debt

❑

5.4 year weighted average debt maturity

❑

$250 million unsecured credit facility with an additional $250 million accordion feature

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

17

Debt Balance: $715.0 million (3)(4)

PREDOMINANTLY FIXED RATE DEBT SUMMARY AS OF JUNE 30, 2019

21% Line of Credit

79% Fixed Rate

(1) Calculated as net debt as of June 30, 2019 divided by net debt plus liquidation value of preferred stock plus value of common equity, using consensus analyst estimate of NAV on June 30, 2019 (2) Net debt calculated as debt principal less cash, cash equivalents and restricted cash (3) $8.0 million of indebtedness attributable to non-controlling interests (4) $715.0 million represents the principal debt balance as of June 30, 2019 before deferred financing costs

$86,142 Interest Rate: 4.34% $45,442 Interest Rate: 3.73% $75,068 Interest Rate: 4.33% $96,804 Interest Rate: 4.70% $191,297 Interest Rate: 4.10% Credit Facility $150,000 Interest Rate: 4.09% $70,250 Interest Rate: 4.36%

FOCUSED 18-HOUR CITY INVESTMENT STRATEGY

COMPANY HIGHLIGHTS

18

❑

Diversified portfolio of 5.7 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 June 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 4.2%

❑

5.4 year weighted average debt maturity; no near-term maturities

❑

Consistent access to capital and flexibility to grow with $250 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

APPENDIX: PROPERTY OVERVIEW

19

(1) For FRP Ingenuity Drive, 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, $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. FRP Collection has net leases for five tenants which have been grossed up by $9 on a pro-rata basis. Circle Point has net leases for fourteen 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. (2) Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended June 30, 2019 by (ii) 12. (3) Averages weighted based on the property’s NRA, adjusted for occupancy

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 96.5% $27.15 $27.15 $7,122 First American Title Insurance SanTan 100.0% 267 98.6% $27.67 $27.67 $7,272 Toyota Motor Credit 5090 N 40th St 100.0% 175 95.8% $28.96 $28.96 $4,848 Bar-S-Foods Co. Camelback Square 100.0% 173 80.8% $29.24 $29.24 $4,092 Digital Air Strike The Quad 100.0% 163 100.0% $28.14 $28.39 $4,587 Opendoor Labs, Inc. Papago Tech 100.0% 163 100.0% $21.85 $21.85 $3,556 Regional Acceptance Corp. Cherry Creek 100.0% 356 100.0% $18.53 $18.53 $6,591 State of Colorado Department of Health Circle Point 100.0% 272 98.8% $17.46 $30.36 $4,692 Epsilon Data Management, LLC DTC Crossroads 100.0% 189 53.7% $26.24 $26.24 $2,665 ProBuild Holdings, Inc. Superior Pointe 100.0% 151 96.5% $17.66 $29.17 $2,579 KeyBank National Association Logan Tower 100.0% 72 73.3% $21.62 $21.62 $1,139 Colorado Water Resources Park Tower 94.8% 471 93.5% $24.45 $24.45 $10,761 GSA US Attorneys Office City Center 95.0% 241 94.7% $25.40 $25.40 $5,807 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% $28.06 $28.06 $3,485 Paychex, Inc. FRP Collection 95.0% 272 84.5% $24.29 $26.17 $5,575 GSA - PEO STRI (US Dept of Defence) Central Fairwinds 97.0% 168 89.5% $24.49 $24.49 $3,685 Fairwinds Credit Union Greenwood Blvd 100.0% 155 100.0% $22.75 $22.75 $3,527 HF Management Services LLC FRP Ingenuity Drive 100.0% 125 100.0% $21.50 $29.50 $2,677 Kaplan, Inc. Sorrento Mesa 100.0% 296 85.3% $25.19 $31.19 $6,360 Genopis, Inc. Mission City 100.0% 286 95.6% $35.14 $35.14 $9,603 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 90.4% $28.04 $45.04 $2,822 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% $26.37 $32.38 $3,363 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 - June 30, 2019 ³ 5,708 93.4% $24.36 $27.00 $129,797 Portland, OR Phoenix, AZ Orlando, FL Denver, CO Tampa, FL Dallas, TX San Diego, CA

Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 INCOME ITEMS Net income/(loss) 1,321 $ (920) $ (6,684) $ (1,161) $ (684) $ NOI 26,645 $ 23,276 $ 20,921 $ 20,294 $ 18,488 $ Same Store Cash NOI Growth 5.9% 1.8% 0.7% 0.8% (3.1%) Net (loss)/income per share - diluted (0.02) $ (0.07) $ (0.22) $ (0.08) $ (0.07) $ Core FFO / Share 0.34 $ 0.29 $ 0.26 $ 0.28 $ 0.26 $ AFFO / Share 0.26 $ 0.21 $ 0.19 $ 0.20 $ 0.19 $ EBITDA (CIO share) 23,327 $ 21,027 $ 18,590 $ 18,442 $ 16,503 $ CAPITALIZATION Common shares 39,647 39,636 39,544 39,544 36,133 Unvested restricted shares 408 413 354 347 341 Total shares 40,055 40,049 39,898 39,891 36,474 Weighted average common shares outstanding - diluted 40,054 40,017 39,896 37,839 36,473 Share price at quarter end 11.99 $ 11.31 $ 10.25 $ 12.62 $ 12.83 $ Market value of common equity 480,262 $ 452,949 $ 408,959 $ 503,428 $ 467,965 $ 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) 677,017 $ 657,080 $ 611,076 $ 511,173 $ 444,807 $ Total enterprise value (including net debt) 1,269,279 $ 1,222,029 $ 1,132,035 $ 1,126,601 $ 1,024,772 $ DEBT STATISTICS AND RATIOS Total principal debt (CIO share) 707,047 $ 693,248 $ 643,419 $ 544,171 $ 476,382 $ Weighted average maturity 5.4 years 5.7 years 5.8 years 6.5 years 6.2 years Weighted average interest rate 4.2% 4.2% 4.1% 4.2% 4.1% Fixed rate debt as percentage of total debt 79.0% 77.5% 77.4% 90.4% 88.0% LEASING STATISTICS In-Place occupancy 93.4% 92.6% 90.4% 90.1% 89.6% Weighted average remaining lease term 4.5 years 4.7 years 4.6 years 4.5 years 4.5 years

APPENDIX: FINANCIAL HIGHLIGHTS

20

(in thousands, except per share data)

Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018

Net (loss)/income attributable to common stockholders (699) $ (2,944) $ (8,656) $ (3,151) $ (2,653) $ (+) Depreciation and amortization 14,604 14,417 15,308 13,379 11,771 (-) Net gain on sale of real estate property (478)

• (+) Impairment of real estate
• 3,497
• 13,427

11,473 10,149 10,228 9,118 Non-controlling interests in properties: (+) Share of net income 165 169 117 135 114 (-) Share of FFO (312) (316) (263) (278) (283) Funds from Operations ("FFO") 13,280 $ 11,326 $ 10,003 $ 10,085 $ 8,949 $ (+) Stock based compensation 435 444 356 356 356 Core FFO 13,715 $ 11,770 $ 10,359 $ 10,441 $ 9,305 $ (+) Net recurring straight line rent/expense adjustment (850) (978) (553) (735) (738) (+) Net amortization of above and below market leases (66) (29) (41) (5) 58 (+) Net amortization of deferred financing costs and debt fair value 331 334 320 308 348 (-) Net recurring tenant improvements and incentives (1,694) (1,298) (1,242) (761) (807) (-) Net recurring leasing commissions (592) (918) (447) (1,313) (589) (-) Net recurring capital expenditures (496) (542) (962) (396) (514) Adjusted Funds from Operations ("AFFO") 10,348 $ 8,339 $ 7,434 $ 7,539 $ 7,063 $ Core FFO per common share 0.34 $ 0.29 $ 0.26 $ 0.28 $ 0.26 $ AFFO per common share 0.26 $ 0.21 $ 0.19 $ 0.20 $ 0.19 $ Dividends per common share 0.235 $ 0.235 $ 0.235 $ 0.235 $ 0.235 $ Core FFO Payout Ratio 69% 80% 91% 85% 92% AFFO Payout Ratio 91% 113% 126% 118% 121% Weighted average common shares outstanding - diluted 40,054 40,017 39,896 37,839 36,473

APPENDIX: FFO, CORE FFO AND AFFO

21

(in thousands, except per share data)

C I T Y OFFIC E 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 AkardStreet Dallas, TX 75201