10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from       to      

Commission File Number: 001-36409

CITY OFFICE REIT, INC.

(Exact name of registrant as specified in its charter)

Maryland	98-1141883
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

666 Burrard Street

Suite 3210

Vancouver, BC V6C 2X8

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (604) 806-3366

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of each Exchange on Which Registered
Common Stock, $0.01 par value 6.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share	“CIO” “CIO.PrA”	New York Stock Exchange New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ ☒ No

The number of shares of Common Stock, $0.01 par value, of the registrant outstanding at April 30, 2024 was 40,154,055.

City Office REIT, Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended March 31, 2024

Table of Contents

PART I. FINANCIAL INFORMATION			1
	Item 1.	Financial Statements	1
		Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	1
		Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023	2
		Condensed Consolidated Statements of Comprehensive Income/(Loss) for the Three Months Ended March 31, 2024 and 2023	3
		Condensed Consolidated Statements of Changes in Equity for the Three Months Ended March 31, 2024 and 2023	4
		Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	5
		Notes to the Condensed Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	24
	Item 4.	Controls and Procedures	25
PART II. OTHER INFORMATION			26
	Item 1.	Legal Proceedings	26
	Item 1A.	Risk Factors	26
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
	Item 3.	Defaults Upon Senior Securities	26
	Item 4.	Mine Safety Disclosures	26
	Item 5.	Other Information	26
	Item 6.	Exhibits	26
	Signatures		28

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

City Office REIT, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except par value and share data)

	March 31, 2024			December 31, 2023
Assets
Real estate properties
Land	$	193,524		$	193,524
Building and improvement		1,196,003			1,194,819
Tenant improvement		156,625			152,540
Furniture, fixtures and equipment		944			820
		1,547,096			1,541,703
Accumulated depreciation		(229,680	)		(218,628	)
		1,317,416			1,323,075
Cash and cash equivalents		29,533			30,082
Restricted cash		13,831			13,310
Rents receivable, net		53,114			53,454
Deferred leasing costs, net		23,220			21,046
Acquired lease intangible assets, net		40,459			42,434
Other assets		27,954			27,975
Total Assets	$	1,505,527		$	1,511,376
Liabilities and Equity
Liabilities:
Debt	$	668,249		$	669,510
Accounts payable and accrued liabilities		29,908			29,070
Deferred rent		8,040			7,672
Tenant rent deposits		7,853			7,198
Acquired lease intangible liabilities, net		7,393			7,736
Other liabilities		16,431			17,557
Total Liabilities		737,874			738,743
Commitments and Contingencies (Note 8)
Equity:
6.625% Series A Preferred stock, $0.01 par value per share, 5,600,000 shares authorized, 4,480,000 issued and outstanding as of March 31, 2024 and December 31, 2023		112,000			112,000
Common stock, $0.01 par value, 100,000,000 shares authorized, 40,154,055 and 39,938,451 shares issued and outstanding as of March 31, 2024 and December 31, 2023		401			399
Additional paid-in capital		438,909			438,867
Retained earnings		214,709			221,213
Accumulated other comprehensive income/(loss)		1,515			(248	)
Total Stockholders’ Equity		767,534			772,231
Non-controlling interests in properties		119			402
Total Equity		767,653			772,633
Total Liabilities and Equity	$	1,505,527		$	1,511,376
Subsequent Events (Note 10)

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

City Office REIT, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)

	Three Months Ended March 31,
	2024			2023
Rental and other revenues	$	44,493		$	45,957
Operating expenses:
Property operating expenses		17,744			17,720
General and administrative		3,711			3,765
Depreciation and amortization		15,075			15,304
Total operating expenses		36,530			36,789
Operating income		7,963			9,168
Interest expense:
Contractual interest expense		(8,098	)		(7,972	)
Amortization of deferred financing costs and debt fair value		(319	)		(323	)
		(8,417	)		(8,295	)
Net (loss)/income		(454	)		873
Less:
Net income attributable to non-controlling interests in properties		(135	)		(169	)
Net (loss)/income attributable to the Company		(589	)		704
Preferred stock distributions		(1,855	)		(1,855	)
Net loss attributable to common stockholders	$	(2,444	)	$	(1,151	)
Net loss per common share:
Basic	$	(0.06	)	$	(0.03	)
Diluted	$	(0.06	)	$	(0.03	)
Weighted average common shares outstanding:
Basic		40,097			39,873
Diluted		40,097			39,873
Dividend distributions declared per common share	$	0.10		$	0.20

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

City Office REIT, Inc.

Condensed Consolidated Statements of Comprehensive Income/(Loss)

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	2024			2023
Net (loss)/income	$	(454	)	$	873
Other comprehensive income/(loss):
Unrealized cash flow hedge gain/(loss)		2,906			(1,465	)
Amounts reclassified to interest expense		(1,117	)		(477	)
Other comprehensive income/(loss)		1,789			(1,942	)
Comprehensive income/(loss)		1,335			(1,069	)
Less:
Comprehensive income attributable to non-controlling interests in properties		(161	)		(169	)
Comprehensive income/(loss) attributable to the Company	$	1,174		$	(1,238	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

City Office REIT, Inc.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

(In thousands)

	Number of shares of preferred stock		Preferred stock		Number of shares of common stock		Common stock		Additional paid-in capital		Retained earnings			Accumulated other comprehensive income			Total stockholders’ equity			Non- controlling interests in properties			Total equity
Balance—December 31, 2023		4,480	$	112,000		39,938	$	399	$	438,867	$	221,213		$	(248	)	$	772,231		$	402		$	772,633
Restricted stock award grants and vesting		—		—		216		2		42		(45	)		—			(1	)		—			(1	)
Common stock dividend distribution declared		—		—		—		—		—		(4,015	)		—			(4,015	)		—			(4,015	)
Preferred stock dividend distribution declared		—		—		—		—		—		(1,855	)		—			(1,855	)		—			(1,855	)
Distributions		—		—		—		—		—		—			—			—			(444	)		(444	)
Net (loss)/income		—		—		—		—		—		(589	)		—			(589	)		135			(454	)
Other comprehensive income		—		—		—		—		—		—			1,763			1,763			26			1,789
Balance—March 31, 2024		4,480	$	112,000		40,154	$	401	$	438,909	$	214,709		$	1,515		$	767,534		$	119		$	767,653

	Number of shares of preferred stock		Preferred stock		Number of shares of common stock		Common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive (loss)/income			Total stockholders’ equity			Non- controlling interests in properties			Total equity
Balance—December 31, 2022		4,480	$	112,000		39,718	$	397	$	436,161		$	251,542		$	2,731		$	802,831		$	343		$	803,174
Restricted stock award grants and vesting		—		—		220		2		(535	)		(85	)		—			(618	)		—			(618	)
Common stock dividend distribution declared		—		—		—		—		—			(7,988	)		—			(7,988	)		—			(7,988	)
Preferred stock dividend distribution declared		—		—		—		—		—			(1,855	)		—			(1,855	)		—			(1,855	)
Contributions		—		—		—		—		—			—			—			—			110			110
Distributions		—		—		—		—		—			—			—			—			(235	)		(235	)
Net income		—		—		—		—		—			704			—			704			169			873
Other comprehensive loss		—		—		—		—		—			—			(1,942	)		(1,942	)		—			(1,942	)
Balance—March 31, 2023		4,480	$	112,000		39,938	$	399	$	435,626		$	242,318		$	789		$	791,132		$	387		$	791,519

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

City Office REIT, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	2024			2023
Cash Flows from Operating Activities:
Net (loss)/income	$	(454	)	$	873
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization		15,075			15,304
Amortization of deferred financing costs and debt fair value		319			323
Amortization of above and below market leases		(27	)		9
Straight-line rent/expense		(454	)		(2,801	)
Non-cash stock compensation		1,070			1,024
Changes in non-cash working capital:
Rents receivable, net		865			539
Other assets		505			(282	)
Accounts payable and accrued liabilities		(1,536	)		(965	)
Deferred rent		368			(278	)
Tenant rent deposits		655			137
Net Cash Provided By Operating Activities		16,386			13,883
Cash Flows to Investing Activities:
Additions to real estate properties		(5,989	)		(11,383	)
Deferred leasing costs		(1,505	)		(1,037	)
Net Cash Used In Investing Activities		(7,494	)		(12,420	)
Cash Flows (to)/from Financing Activities:
Debt issuance and extinguishment costs		(26	)		(236	)
Proceeds from borrowings		4,000			25,000
Repayment of borrowings		(5,529	)		(6,683	)
Dividend distributions paid to stockholders		(5,849	)		(9,799	)
Distributions to non-controlling interests in properties		(444	)		(235	)
Shares withheld for payment of taxes on restricted stock unit vesting		(1,072	)		(1,643	)
Contributions from non-controlling interests in properties		—			110
Net Cash (Used In)/Provided By Financing Activities		(8,920	)		6,514
Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash		(28	)		7,977
Cash, Cash Equivalents and Restricted Cash, Beginning of Period		43,392			44,262
Cash, Cash Equivalents and Restricted Cash, End of Period	$	43,364		$	52,239
Reconciliation of Cash, Cash Equivalents and Restricted Cash:
Cash and Cash Equivalents, End of Period		29,533			35,854
Restricted Cash, End of Period		13,831			16,385
Cash, Cash Equivalents and Restricted Cash, End of Period	$	43,364		$	52,239
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	8,029		$	7,256
Purchase of additions in real estate properties included in accounts payable	$	7,526		$	7,811
Purchase of deferred leasing costs included in accounts payable	$	3,026		$	1,207

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

City Office REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

1. Organization and Description of Business

City Office REIT, Inc. (the “Company”) was organized in the state of Maryland on November 26, 2013. On April 21, 2014, the Company completed its initial public offering (“IPO”) of shares of the Company’s common stock. The Company contributed the net proceeds of the IPO to City Office REIT Operating Partnership, L.P., a Maryland limited partnership (the “Operating Partnership”), in exchange for common units of limited partnership interest in the Operating Partnership (“common units”).

The Company’s interest in the Operating Partnership entitles the Company to share in distributions from, and allocations of profits and losses of, the Operating Partnership in proportion to the Company’s percentage ownership of common units. As the sole general partner of the Operating Partnership, the Company has the exclusive power under the Operating Partnership’s partnership agreement to manage and conduct the Operating Partnership’s business, subject to limited approval and voting rights of the limited partners.

The Company has elected to be taxed and will continue to operate in a manner that will allow it to continue to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to qualification as a REIT, the Company will be permitted to deduct dividend distributions paid to its stockholders, eliminating the U.S. federal taxation of income represented by such distributions at the Company level. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and, for years prior to 2018, any applicable alternative minimum tax.

2. Summary of Significant Accounting Policies

Basis of Preparation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with Securities and Exchange Commission (“SEC”) rules and regulations and generally accepted accounting principles in the United States of America (“US GAAP”) and in the opinion of management contain all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07 (“ASU 2023-07”) Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which will enhance segment disclosures. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024, with early adoption permitted. This standard must be applied retrospectively to all periods presented in the financial statements. The Company has not yet adopted the standard and is currently evaluating the impact of ASU 2023-07 on the Company’s consolidated financial statements and disclosures.

6

3. Lease Intangibles

Lease intangibles and the value of assumed lease obligations as of March 31, 2024 and December 31, 2023 were comprised of the following (in thousands):

	Lease Intangible Assets												Lease Intangible Liabilities
March 31, 2024	Above Market Leases			In Place Leases			Leasing Commissions			Total			Below Market Leases			Below Market Ground Lease			Total
Cost	$	17,463		$	73,127		$	32,537		$	123,127		$	(14,968	)	$	(138	)	$	(15,106	)
Accumulated amortization		(10,537	)		(52,290	)		(19,841	)		(82,668	)		7,656			57			7,713
	$	6,926		$	20,837		$	12,696		$	40,459		$	(7,312	)	$	(81	)	$	(7,393	)
	Lease Intangible Assets												Lease Intangible Liabilities
December 31, 2023	Above Market Leases			In Place Leases			Leasing Commissions			Total			Below Market Leases			Below Market Ground Lease			Total
Cost	$	17,463		$	73,128		$	32,541		$	123,132		$	(14,968	)	$	(138	)	$	(15,106	)
Accumulated amortization		(10,222	)		(51,290	)		(19,186	)		(80,698	)		7,314			56			7,370
	$	7,241		$	21,838		$	13,355		$	42,434		$	(7,654	)	$	(82	)	$	(7,736	)

The estimated aggregate amortization expense for lease intangibles for the next five years and in the aggregate are as follows (in thousands):

2024	$	4,748
2025		6,194
2026		5,887
2027		4,900
2028		4,206
Thereafter		7,131
	$	33,066

4. Debt

The following table summarizes the indebtedness as of March 31, 2024 and December 31, 2023 (dollars in thousands), including the impact of the effective interest rate swaps described in Note 5:

Property	March 31, 2024		December 31, 2023		Interest Rate as of March 31, 2024			Maturity
Unsecured Credit Facility (2)(4)	$	200,000	$	200,000		SOFR +1.50	%(1)(2)	November 2025
Term Loan (3)		50,000		50,000		SOFR +1.35	%(1)(3)	September 2024
Term Loan (4)		25,000		25,000		6.00	%(4)	January 2026
Mission City		45,772		45,994		3.78	%	November 2027
Canyon Park (5)		38,742		38,932		4.30	%	March 2027
Circle Point		38,678		38,789		4.49	%	September 2028
SanTan (6)		31,322		31,501		4.56	%	March 2027
Intellicenter		30,523		30,682		4.65	%	October 2025
The Quad		30,600		30,600		4.20	%	September 2028
2525 McKinnon		27,000		27,000		4.24	%	April 2027
FRP Collection		26,041		26,139		7.05	%(7)	August 2028
Greenwood Blvd		20,719		20,856		3.15	%	December 2025
Cascade Station (8)		20,680		20,752		4.55	%	May 2024
5090 N. 40th St		20,257		20,370		3.92	%	January 2027
AmberGlen (9)		20,000		20,000		3.69	%	May 2027

7

Property	March 31, 2024			December 31, 2023			Interest Rate as of March 31, 2024			Maturity
FRP Ingenuity Drive (10)		15,782			15,860			4.44	%		December 2024
Central Fairwinds		15,711			15,826			3.15	%		June 2024
Carillon Point		14,364			14,419			7.05	%(7)		August 2028
Total Principal		671,191			672,720
Deferred financing costs, net		(2,954	)		(3,258	)
Unamortized fair value adjustments		12			48
Total	$	668,249		$	669,510

(1) As of March 31, 2024, the daily-simple Secured Overnight Financing Rate (“SOFR”) was 5.34%.

(2) Borrowings under our unsecured credit facility (the “Unsecured Credit Facility”) bear interest at a rate equal to the daily-simple SOFR rate plus a margin of between 135 to 235 basis points depending upon the Company’s consolidated leverage ratio. On February 9, 2023, the Company entered into a three-year interest rate swap for a notional amount of $140 million, effective March 8, 2023, effectively fixing the SOFR component of the borrowing rate for $140 million of the Unsecured Credit Facility at 4.19%. As of March 31, 2024, the Unsecured Credit Facility had $200.0 million drawn and a $2.5 million letter of credit to satisfy escrow requirements for a mortgage lender. The Unsecured Credit Facility matures in November 2025 and may be extended 12 months at the Company’s option upon meeting certain conditions. The Unsecured Credit Facility requires the Company to maintain a fixed charge coverage ratio of no less than 1.50x.

(3) Borrowings under the $50 million term loan bear interest at a rate equal to the daily-simple SOFR rate plus a margin of between 135 to 225 basis points depending upon the Company’s consolidated leverage ratio. The SOFR component of the borrowing rate is effectively fixed for the remainder of the five-year term by a $50 million interest rate swap at 1.17%.

(4) On January 5, 2023, the Company entered into a second amendment to its amended and restated credit agreement, dated November 16, 2021 for the Unsecured Credit Facility and entered into a three-year $25 million term loan, increasing its total authorized borrowings from $350 million to $375 million. Borrowings under the $25 million term loan bear interest at a rate equal to the daily-simple SOFR rate plus a margin of 210 basis points. In conjunction with the term loan, the Company also entered into a three-year interest rate swap for a notional amount of $25 million, effectively fixing the SOFR component of the borrowing rate of the term loan at 3.90%.

(5) The mortgage loan anticipated repayment date (“ARD”) is March 1, 2027. The final scheduled maturity date can be extended up to 5 years beyond the ARD. If the loan is not paid off at ARD, the loan’s interest rate shall be adjusted to the greater of (i) the initial interest rate plus 200 basis points or (ii) the yield on the five year “on the run” treasury reported by Bloomberg market data service plus 450 basis points.

(6) In the second quarter of 2023, the Debt Service Coverage Ratio (“DSCR”) and debt yield covenants for SanTan were not met, which triggered a ‘cash-sweep period’ that began in the second quarter of 2023. As of March 31, 2024, the DSCR and debt yield covenants were still not met. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $3.6 million and $4.1 million, respectively.

(7) The FRP Collection and Carillon Point loans bear interest at a rate equal to the daily-simple SOFR rate plus a margin of 275 basis points. The SOFR component of the borrowing rate is effectively fixed for the remainder of the five-year term via interest rate swaps at 4.30%.

(8) In the first quarter of 2023, a ‘cash-sweep period’ began for the Cascade Station loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $2.3 million and $2.0 million, respectively. On May 1, 2024, the non-recourse property loan at our Cascade Station property in Portland matured, and an event of default was triggered under the terms of the Cascade Station loan, following non-payment of the principal amount outstanding at loan maturity.

(9) In the first quarter of 2024, a ‘cash-sweep period’ began for the AmberGlen loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2024, total restricted cash for the property was $0.2 million.

(10) In the third quarter of 2022, the DSCR covenant for FRP Ingenuity Drive was not met, which triggered a ‘cash-sweep period’ that began in the fourth quarter of 2022. As of March 31, 2024, the DSCR was still not met. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $3.5 million and $3.2 million, respectively.

The scheduled principal repayments of debt as of March 31, 2024 are as follows (in thousands):

2024	$	106,146
2025		254,697
2026		29,563
2027		176,477
2028		104,308
Thereafter		—
	$	671,191

8

5. Fair Value of Financial Instruments

Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy for inputs used in measuring fair value is as follows:

Level 1 Inputs – quoted prices in active markets for identical assets or liabilities

Level 2 Inputs – observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3 Inputs – unobservable inputs

In September 2019, the Company entered into a London Interbank Offered Rate (“LIBOR”) interest rate swap for a notional amount of $50.0 million. In January 2023, the Company amended the $50.0 million interest rate swap to transition from LIBOR to daily-simple SOFR. The Company applied the practical expedients available for hedging relationships under the reference rate reform guidance, which preserves the presentation of the derivative consistent with past presentation and does not result in dedesignation of the hedging relationship. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 1.17% for the remainder of the five-year term.

In January 2023, the Company entered into an interest rate swap for a notional amount of $25.0 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 3.90% for the three-year term.

In February 2023, the Company entered into an interest rate swap for a notional amount of $140.0 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.19% for the three-year term.

In August 2023, the Company entered into an interest rate swap at FRP Collection for an initial notional amount of $26.3 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.30% for the five-year term. The notional amount of the interest rate swap amortizes over the term consistent with the balance of the corresponding loan.

In August 2023, the Company entered into an interest rate swap at Carillon Point for an initial notional amount of $14.5 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.30% for the five-year term. The notional amount of the interest rate swap amortizes over the term consistent with the balance of the corresponding loan.

The fair value of the interest rate swaps have been classified as Level 2 fair value measurements.

The interest rate swaps have been designated and qualify as cash flow hedges and have been recognized on the condensed consolidated balance sheets at fair value, presented within other assets and other liabilities. Gains and losses resulting from changes in the fair value of derivatives that have been designated and qualify as cash flow hedges are reported as a component of other comprehensive income/(loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings.

The following table summarizes the Company’s derivative financial instruments as of March 31, 2024 and December 31, 2023 (in thousands):

	Notional Value March 31, 2024		Effective Date		Maturity Date		Fair Value Assets/(Liabilities)
							March 31, 2024			December 31, 2023
Interest Rate Swap	$	50,000		September 2019		September 2024	$	855		$	1,268
Interest Rate Swap		25,000		January 2023		January 2026		273			49
Interest Rate Swap		140,000		March 2023		November 2025		875			(295	)
Interest Rate Swap		26,041		August 2023		August 2028		(325	)		(846	)
Interest Rate Swap		14,364		August 2023		August 2028		(179	)		(466	)
	$	255,405					$	1,499		$	(290	)

9

For the three months ended March 31, 2024, approximately $1.1 million of realized gains were reclassified to interest expense due to payments made to or received from the swap counterparty. For the three months ended March 31, 2023, approximately $0.5 million of realized gains were reclassified to interest expense due to payments made to or received from the swap counterparty.

Cash, Cash Equivalents, Restricted Cash, Rents Receivable, Accounts Payable and Accrued Liabilities

The Company estimates that the fair value approximates carrying value due to the relatively short-term nature of these instruments.

Fair Value of Financial Instruments Not Carried at Fair Value

With the exception of fixed rate mortgage loans payable, the carrying amounts of the Company’s financial instruments approximate their fair value. The Company determines the fair value of its fixed rate mortgage loan payable based on a discounted cash flow analysis using a discount rate that approximates the current borrowing rates for instruments of similar maturities. Based on this, the Company has determined that the fair value of these instruments was $339.6 million and $343.1 million (compared to a carrying value of $355.8 million and $357.2 million) as of March 31, 2024, and December 31, 2023, respectively. Accordingly, the fair value of mortgage loans payable have been classified as Level 3 fair value measurements.

6. Related Party Transactions

Administrative Services Agreement

During the three months ended March 31, 2024, the amounts earned by the Company for the administrative services performed for Second City Real Estate II Corporation, Clarity Real Estate Ventures GP, Limited Partnership and their affiliates were nominal. For the three months ended March 31, 2023, the Company earned $0.1 million in administrative services performed for Second City Real Estate II Corporation, Clarity Real Estate Ventures GP, Limited Partnership and their affiliates.

7. Leases

Lessor Accounting

The Company is focused on acquiring, owning and operating high-quality office properties for lease to a stable and diverse tenant base. The Company’s properties have both full-service gross and net leases which are generally classified as operating leases. Rental income related to such leases is recognized on a straight-line basis over the remaining lease term. The Company’s total revenue includes fixed base rental payments provided under the lease and variable payments, which principally consist of tenant expense reimbursements for certain property operating expenses as provided under the lease.

The Company recognized fixed and variable lease payments for operating leases for the three months ended March 31, 2024 and 2023 as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Fixed payments	$	37,592	$	38,914
Variable payments		6,778		6,743
	$	44,370	$	45,657

10

Future minimum lease payments to be received by the Company as of March 31, 2024 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):

2024	$	96,163
2025		119,416
2026		109,150
2027		92,233
2028		77,533
Thereafter		165,595
	$	660,090

The Company’s leases may include various provisions such as scheduled rent increases, renewal options and termination options. The majority of the Company’s leases include defined rent increases rather than variable payments based on an index or unknown rate.

At the beginning of the period the Company, through wholly owned subsidiaries, was the landlord under leases totaling approximately 177,000 square feet with subsidiaries of WeWork Inc. (“WeWork”) at three of the Company’s properties. WeWork announced on November 6, 2023 that it filed for Chapter 11 bankruptcy protection and subsequently rejected the lease at one of our properties effective February 7, 2024 totaling 46,000 square feet. The Company recorded a termination fee of $0.9 million during the period ended March 31, 2024. As of March 31, 2024, WeWork was operating at the remaining two locations totaling 131,000 square feet and the leases had not been rejected as part of the WeWork bankruptcy proceedings. As of March 31, 2024, the balance sheet exposure to WeWork was $1.5 million in straight-line rent receivables, $2.4 million in tenant improvements, and $8.2 million in acquired lease intangible assets. The Company continues to monitor rental payments and potential lease rejection related to WeWork, and the Company will continue to assess what it believes will be the likelihood of each of the two WeWork leases being rejected in the bankruptcy proceedings as of each reporting period.

Lessee Accounting

As a lessee, the Company has ground and office leases which are classified as operating and financing leases. As of March 31, 2024, these leases had remaining terms of three to 64 years and a weighted average remaining lease term of 50 years. Right-of-use assets and lease liabilities have been included within other assets and other liabilities on the Company’s condensed consolidated balance sheets as follows (in thousands):

	March 31, 2024		December 31, 2023
Right-of-use asset – operating leases	$	12,483	$	12,564
Lease liability – operating leases	$	8,484	$	8,550
Right-of-use asset – financing leases	$	9,763	$	9,820
Lease liability – financing leases	$	1,573	$	1,551

Lease liabilities are measured at the commencement date based on the present value of future lease payments. One of the Company’s operating ground leases includes rental payment increases over the lease term based on increases in the Consumer Price Index (“CPI”). Changes in the CPI were not estimated as part of the measurement of the operating lease liability. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The Company used a weighted average discount rate of 6.2% in determining its lease liabilities. The discount rates were derived from the Company’s assessment of the credit quality of the Company and adjusted to reflect secured borrowing, estimated yield curves and long-term spread adjustments.

Right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.

11

Operating lease expense for the three months ended March 31, 2024 and March 31, 2023 was $0.2 million and $0.2 million, respectively. Financing lease expense for the three months ended March 31, 2024 and March 31, 2023 was $0.1 million and $0.1 million, respectively.

Future minimum lease payments to be paid by the Company as a lessee for operating and financing leases as of March 31, 2024 for the next five years and thereafter are as follows (in thousands):

	Operating Leases			Financing Leases
2024	$	459		$	6
2025		770			8
2026		724			8
2027		587			8
2028		587			8
Thereafter		25,976			6,930
Total future minimum lease payments		29,103			6,968
Discount		(20,619	)		(5,395	)
Total	$	8,484		$	1,573

8. Commitments and Contingencies

The Company is obligated under certain tenant leases to fund tenant improvements and the expansion of the underlying leased properties.

Under various federal, state and local laws, ordinances and regulations relating to the protection of the environment, a current or previous owner or operator of real estate may be liable for the cost of removal or remediation of certain hazardous or toxic substances disposed, stored, generated, released, manufactured or discharged from, on, at, under, or in a property. As such, the Company may be potentially liable for costs associated with any potential environmental remediation at any of its formerly or currently owned properties.

The Company believes that it is in compliance in all material respects with all federal, state and local ordinances and regulations regarding hazardous or toxic substances. Management is not aware of any environmental liability that it believes would have a material adverse impact on the Company’s financial position or results of operations. Management is unaware of any instances in which the Company would incur significant environmental costs if any or all properties were sold, disposed of or abandoned. However, there can be no assurance that any such non-compliance, liability, claim or expenditure will not arise in the future.

The Company is involved from time to time in lawsuits and other disputes which arise in the ordinary course of business. As of March 31, 2024, management believes that these matters will not have a material adverse effect, individually or in the aggregate, on the Company’s financial position or results of operations.

9. Stockholders’ Equity

Share Repurchase Plan

On May 4, 2023, the Company’s Board of Directors (the “Board of Directors”) approved a share repurchase plan (“Repurchase Program”) authorizing the Company to repurchase up to $50 million of its outstanding shares of common stock or Series A Preferred Stock. Under the share repurchase program, the shares may be repurchased from time to time using a variety of methods, which may include open market transactions, privately negotiated transactions or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements.

12

Repurchased shares of common stock will be classified as authorized and unissued shares. The Company recognizes the cost of shares of common stock it repurchases, including direct costs incurred, as a reduction in stockholders’ equity. Such reductions of stockholders equity due to the repurchases of shares of common stock will be applied first, to reduce common stock in the amount of the par value associated with the shares of common stock repurchased and second, to reduce additional paid-in capital by the amount that the purchase price for the shares of common stock repurchased exceed the par value.

There were no shares repurchased during the three months ended March 31, 2024 and 2023.

Common Stock and Common Unit Distributions

On March 15, 2024, the Board of Directors approved and the Company declared a cash dividend distribution of $0.10 per common share for the quarterly period ended March 31, 2024. The dividend was paid subsequent to quarter end on April 24, 2024 to common stockholders and common unitholders of record as of the close of business on April 10, 2024, resulting in an aggregate payment of $4.0 million.

Preferred Stock Distributions

On March 15, 2024, the Board of Directors approved and the Company declared a cash dividend distribution of $0.4140625 per share of the Company’s 6.625% Series A Preferred Stock (“Series A Preferred Stock”) for an aggregate amount of $1.9 million for the quarterly period ended March 31, 2024. The dividend was paid subsequent to quarter end on April 24, 2024 to the holders of record of Series A Preferred Stock as of the close of business on April 10, 2024.

Equity Incentive Plan

The Company has an equity incentive plan (“Equity Incentive Plan”) for executive officers, directors and certain non-executive employees, and with approval of the Board of Directors, for subsidiaries and their respective affiliates. The Equity Incentive Plan provides for grants of restricted common stock, restricted stock units, phantom shares, stock options, dividend equivalent rights and other equity-based awards (including the grant of Operating Partnership long-term incentive plan units), subject to the total number of shares available for issuance under the plan. The Equity Incentive Plan is administered by the compensation committee of the Board of Directors (the “Compensation Committee”). The Equity Incentive Plan provides for the issuance of up to 3,763,580 shares of common stock. To the extent an award granted under the Equity Incentive Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards.

On January 27, 2020, each of the Board of Directors and the Compensation Committee approved a new form of performance-based restricted unit award agreement that will be used to grant performance-based restricted stock unit awards (“Performance RSU Awards”) pursuant to the Equity Incentive Plan. The Performance RSU Awards are based upon the total stockholder return (“TSR”) of the Company’s common stock over a three-year measurement period beginning January 1 of the year of grant (the “Measurement Period”) relative to the TSR of a defined peer group list of other US Office REIT companies (the “Peer Group”) as of the first trading date in the year of grant. The payouts under the Performance RSU Awards are evaluated on a sliding scale as follows: TSR below the 30th percentile of the Peer Group would result in a 50% payout; TSR at the 50th percentile of the Peer Group would result in a 100% payout; and TSR at or above the 75th percentile of the Peer Group would result in a 150% payout. Payouts are mathematically interpolated between these stated percentile targets, subject to a 150% maximum. To the extent earned, the payouts of the Performance RSU Awards are intended to be settled in the form of shares of the Company’s common stock, pursuant to the Equity Incentive Plan. Upon satisfaction of the vesting conditions, dividend equivalents in an amount equal to all regular and special dividends declared with respect to the Company’s common stock during each annual measurement period during the Measurement Period are determined and paid on a cumulative, reinvested basis over the term of the applicable Performance RSU Award, at the time such award vests and based on the number of shares of the Company’s common stock that are earned.

During the first quarter of 2024, the Performance RSU Awards granted in January 2021, with a January 1, 2021 through December 31, 2023 Measurement Period, were earned at 120% of the target number of shares granted based on achievement of a TSR that was at or above the 60th percentile of the 2021 RSU Peer Group.

13

The following table summarizes the activity of the awards under the Equity Incentive Plan for the three months ended March 31, 2024:

	Number of RSUs			Number of Performance RSUs
Outstanding at December 31, 2023		451,741			424,888
Granted		324,414			324,952
Issuance of dividend equivalents		8,290			—
Vested		(228,747	)		(120,000	)
Outstanding at March 31, 2024		555,698			629,840

The following table summarizes the activity of the awards under the Equity Incentive Plan for the three months ended March 31, 2023:

	Number of RSUs			Number of Performance RSUs
Outstanding at December 31, 2022		428,320			307,500
Granted		198,022			214,888
Issuance of dividend equivalents		9,485			—
Vested		(216,520	)		(97,500	)
Outstanding at March 31, 2023		419,307			424,888

During the three months ended March 31, 2024 and March 31, 2023, the Company granted the following restricted stock units (“RSUs”) and Performance RSU Awards to directors, executive officers and certain non-executive employees:

	Units Granted				Fair Value (in thousands)		Weighted Average Grant Fair Value Per Share
	RSUs		Performance RSUs
2024		324,414		324,952	$	3,539	$	5.45
2023		198,022		214,888		3,729		9.03

The RSU Awards will vest in three equal, annual installments on each of the first three anniversaries of the grant date. The Performance RSU Awards will vest on the last day of the three-year measurement period.

During the three months ended March 31, 2024 and March 31, 2023, the Company recognized net compensation expense for the RSUs and Performance RSU Awards as follows (in thousands):

	RSUs		Performance RSUs		Total
2024	$	641	$	429	$	1,070
2023		643		381		1,024

14

10. Subsequent Events

On May 1, 2024, the non-recourse property loan at our Cascade Station property in Portland matured, and an event of default was triggered under the terms of the Cascade Station loan, following non-payment of the principal amount outstanding at loan maturity. The loan, in the original principal amount of $22.5 million, is secured by the Cascade Station property. As such, the process to transfer the property to the lender has been initiated. In the first quarter of 2023, a “cash-sweep period” began for the Cascade Station loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $2.3 million and $2.0 million, respectively. As previously disclosed, in December 2022, we recorded a $6.5 million impairment to write down the asset’s carrying amount to fair value. As a result, the Company does not expect to recognize a material gain or loss as a result of the events described.

15

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is based on, and should be read in conjunction with, the condensed consolidated financial statements and the related notes thereto of the City Office REIT, Inc. contained in this Quarterly Report on Form 10-Q (this “Report”).

As used in this section, unless the context otherwise requires, references to “we,” “our,” “us,” and “our company” refer to City Office REIT, Inc., a Maryland corporation, together with our consolidated subsidiaries, including City Office REIT Operating Partnership L.P., a Maryland limited partnership, of which we are the sole general partner and which we refer to in this section as our Operating Partnership, except where it is clear from the context that the term only means City Office REIT, Inc.

Cautionary Statement Regarding Forward-Looking Statements 

This Report, including “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains both historical and forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have used the words “approximately,” “anticipate,” “assume,” “believe,” “budget,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “hypothetical,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” and similar terms and phrases to identify forward-looking statements in this Report. All of our forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we are expecting, including:

• adverse economic or real estate developments in the office sector or the markets in which we operate;

• increased interest rates, any resulting increase in financing or operating costs, the impact of inflation and a stall in economic growth or an economic recession;

• changes in local, regional, national and international economic conditions, including as a result of recent pandemics or any future epidemics or pandemics;

• the extent to which “work-from-home” and hybrid work policies continue;

• our inability to compete effectively;

• our inability to collect rent from tenants or renew tenants’ leases on attractive terms if at all;

• our dependence upon significant tenants, bankruptcy or insolvency of a major tenant or a significant number of small tenants or borrowers, or defaults on or non-renewal of leases by tenants;

• demand for and market acceptance of our properties for rental purposes, including as a result of near-term market fluctuations or long-term trends that result in an overall decrease in the demand for office space;

• decreased rental rates or increased vacancy rates;

• our failure to obtain necessary financing or access the capital markets on favorable terms or at all;

• changes in the availability of acquisition opportunities;

• availability of qualified personnel;

• our inability to successfully complete real estate acquisitions or dispositions on the terms and timing we expect, or at all;

• our failure to successfully operate acquired properties and operations;

16

• changes in our business, financing or investment strategy or the markets in which we operate;

• our failure to generate sufficient cash flows to service our outstanding indebtedness;

• environmental uncertainties and risks related to adverse weather conditions and natural disasters;

• our failure to maintain our qualification as a REIT for U.S. federal income tax purposes;

• government approvals, actions and initiatives, including the need for compliance with environmental requirements;

• outcome of claims and litigation involving or affecting us;

• financial market fluctuations;

• changes in real estate, taxation and zoning laws and other legislation and government activity and changes to real property tax rates and the taxation of REITs in general; and

• other factors described in our news releases and filings with the SEC, including but not limited to those described in our Annual Report on Form 10-K for the year ended December 31, 2023 under the sections captioned “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” and in our subsequent reports filed with the SEC.

The forward-looking statements contained in this Report are based on historical performance and management’s current plans, estimates and expectations in light of information currently available to us and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to the factors, risks and uncertainties described above, changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors described in our news releases and filings with the SEC, including but not limited to those described in our Annual Report on Form 10-K for the year ended December 31, 2023 under the heading “Risk Factors” and elsewhere in this Form 10-Q and any updates to those factors set forth in our subsequent Quarterly Reports on Form 10-Q or other public filings with the SEC, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement made by us in this Report speaks only as of the date of this Report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.

Overview

Company

We were formed as a Maryland corporation on November 26, 2013. On April 21, 2014, we completed our IPO of shares of common stock. We contributed the net proceeds of the IPO to our Operating Partnership in exchange for common units in our Operating Partnership. Both we and our Operating Partnership commenced operations upon completion of the IPO and certain related formation transactions.

Revenue Base

As of March 31, 2024, we owned 24 properties comprised of 58 office buildings with a total of approximately 5.7 million square feet of net rentable area (“NRA”). As of March 31, 2024, our properties were approximately 83.0% leased.

17

Office Leases

Historically, most leases for our properties have been on a full-service gross or net lease basis, and we expect to continue to use such leases in the future. A full-service gross lease generally has a base year expense “stop,” whereby we pay a stated amount of expenses as part of the rent payment while future increases (above the base year stop) in property operating expenses are billed to the tenant based on such tenant’s proportionate square footage in the property. The property operating expenses are reflected in operating expenses; however, only the increased property operating expenses above the base year stop recovered from tenants are reflected as tenant recoveries within rental and other revenues on our condensed consolidated statements of operations. In a triple net lease, the tenant is typically responsible for all property taxes and operating expenses. As such, the base rent payment does not include any operating expenses, but rather all such expenses are billed to or paid by the tenant. The full amount of the expenses for this lease type is reflected in operating expenses, and the reimbursement is reflected as tenant recoveries. We are also a lessor for a fee simple ground lease at the AmberGlen property.

Factors That May Influence Our Operating Results and Financial Condition

Economic Environment and Inflation

Recently, the broader economy in the U.S. began experiencing increased levels of inflation, higher interest rates and tightening monetary and fiscal policies. The banking and lending sector in particular has been impacted by the interest rate environment. While it remains difficult to predict the full impact of recent events and any future changes in interest rates or inflation, this evolving economic environment impacts our operating activities as:

• business leaders may generally become more reticent to make large capital allocation decisions, such as entry into a new lease, given the uncertain economic environment;

• our cost of capital has increased due to higher interest rates and credit spreads, and private market debt financing is significantly more challenging to arrange; and

• retaining and attracting new tenants has become increasingly challenging due to potential business layoffs, downsizing and industry slowdowns.

Despite the challenging economic environment, there is increasing evidence that many businesses have or will tighten up in-person work policies particularly if economic conditions worsen. Many of these companies increased their workforce beginning in 2020 without increasing their available space. We expect these factors will help offset, at least partially, the headwinds to office space demand.

Work-From-Home Trends

Our business has been and will likely continue to be impacted by tenant uncertainty regarding office space needs given the evolving remote and hybrid working trends. Usage of our assets in the near future depends on corporate and individual decisions regarding return to usage of office space, which is impossible to estimate. As of March 31, 2024, 14.0% of net rentable area under our portfolio was vacant, as compared to 12.5% as of March 31, 2023.

Leasing activity has been and is expected to be impacted by the evolving work-from-home trend until and unless tenants increase the utilization of their spaces. We have experienced and we expect that we will continue to experience slower new leasing, and there remains uncertainty over existing tenants’ long-term space requirements. Overall, this could reduce our anticipated rental revenues. In addition, certain tenants in our markets have and may explore opportunities to sublease all or a portion of their leased square footage to other tenants or third parties. While subleasing generally does not impact the ability to collect payment from the original lessee and will not result in any decrease in the rental revenues expected to be received from the primary tenant, this trend could reduce our ability to lease incremental square footage to new tenants, could increase the square footage of our properties that “goes dark,” could reduce anticipated rental revenue should tenants determine their long-term needs for square footage are lower than originally anticipated and could impact the pricing and competitiveness for leasing office space in our markets.

18

We will continue to actively evaluate business operations and strategies to optimally position ourselves given current economic and industry conditions.

Business and Strategy

We focus on owning and acquiring office properties in our footprint of growth markets predominantly in the Sun Belt. Our markets generally possess growing populations with above-average employment growth forecasts, a large number of government offices, large international, national and regional employers across diversified industries, generally lower-cost centers for business operations and a high quality of life. We believe these characteristics have made our markets desirable, as evidenced by domestic net migration generally towards our geographic footprint. A majority of our properties are well located, have good access and functionality to our markets, are new or in new condition, attract high-quality tenants and are professionally managed. We utilize our management’s market-specific knowledge and relationships as well as the expertise of local real estate property and leasing managers to identify acquisition opportunities that we believe will offer cash flow stability and long-term value appreciation.

Rental Revenue and Tenant Recoveries

The amount of net rental revenue generated by our properties will depend principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space and space that becomes available from lease terminations. As of March 31, 2024, the operating properties in our portfolio were 83.0% leased, with 6.9% of our leases scheduled to expire over the remainder of the calendar year, without regard to renewal options. The amount of rental revenue generated also depends on our ability to maintain or increase rental rates at our properties. Our leases typically include rent escalation provisions designed to provide annual growth in our rental income as well as an ability to pass through cost escalations to our tenants, and in the normal course of business we do not typically waive these rent escalation provisions. Negative trends in one or more of these factors could adversely affect our rental revenue in future periods. We continually monitor our tenants’ ability to meet their lease obligations to pay us rent to determine if any adjustments should be reflected currently. Future economic downturns or regional downturns affecting our markets or submarkets or downturns in our tenants’ industries, including as a result of high interest rates and the fluctuating likelihood of a U.S. recession, that impair our ability to renew or re-let space and the ability of our tenants to fulfill their lease commitments, as in the case of tenant bankruptcies, could adversely affect our ability to maintain or increase rental rates at our properties. In addition, growth in rental revenue will also partially depend on our ability to acquire additional properties that meet our investment criteria.

At the beginning of the period the Company, through wholly owned subsidiaries, was the landlord under leases totaling approximately 177,000 square feet with subsidiaries of WeWork at three of the Company’s properties. WeWork announced on November 6, 2023 that it filed for Chapter 11 bankruptcy protection and subsequently rejected the lease at one of our properties effective February 7, 2024 totaling 46,000 square feet. The Company recorded a termination fee of $0.9 million during the period ended March 31, 2024. As of March 31, 2024, WeWork was operating at the remaining two locations totaling 131,000 square feet and the leases had not been rejected as part of the WeWork bankruptcy proceedings. It is reasonably likely that the Company will take back at least some portions of these leased spaces in the future based on the Company’s latest assessment of these proceedings. The Company continues to monitor rental payments and potential lease rejection related to WeWork, and the Company will continue to assess what it believes will be the likelihood of each of the two WeWork leases being rejected in the bankruptcy proceedings as of each reporting period. For more information regarding the risks associated with a tenant in bankruptcy, see “Item 1A. Risk Factors” in our Annual Report on Form 10-K.

19

Leasing Activity

The following table presents our leasing activity for the three months ended March 31, 2024.

Three Months Ended March 31, 2024 Leasing Activity	New Leasing		Renewal Leasing			Total Leasing
Square Feet (000’s)		110		81			191
Average Effective Rents	$	33.33	$	32.50		$	32.98
Tenant Improvements	$	68.80	$	5.49		$	41.82
Leasing Commissions	$	20.66	$	8.15		$	15.33
% Change in Renewal Cash Rent vs. Expiring				2.7	%
Retention Rate %				41	%

Our Properties

As of March 31, 2024, we owned 24 properties comprised of 58 office buildings with a total of approximately 5.7 million square feet of NRA in the metropolitan areas of Dallas, Denver, Orlando, Phoenix, Portland, Raleigh, San Diego, Seattle and Tampa. The following table presents an overview of our portfolio as of March 31, 2024.

Metropolitan Area	Property	Economic Interest			NRA (000s Square Feet)		In Place Occupancy			Annualized Average Effective Rent per Square Foot(1)		Annualized Base Rent per Square Foot		Annualized Gross Rent per Square Foot(2)		Annualized Base Rent(3) ($000s)
Phoenix, AZ (26.7% of NRA)	Block 23		100.0	%		307		79.6	%	$	27.76	$	28.79	$	32.41	$	7,033
	Pima Center		100.0	%		272		52.1	%	$	28.70	$	29.74	$	29.74	$	4,211
	SanTan		100.0	%		267		50.4	%	$	31.87	$	33.18	$	33.18	$	4,459
	5090 N. 40th St		100.0	%		175		66.3	%	$	32.06	$	34.85	$	34.85	$	4,049
	Camelback Square		100.0	%		173		85.7	%	$	32.86	$	35.12	$	35.12	$	5,196
	The Quad		100.0	%		163		100.0	%	$	32.93	$	34.21	$	34.55	$	5,576
	Papago Tech		100.0	%		163		67.8	%	$	24.30	$	25.92	$	25.92	$	2,862
Tampa, FL (18.5%)	Park Tower		94.8	%		481		91.8	%	$	27.53	$	28.45	$	28.45	$	12,551
	City Center		95.0	%		244		87.4	%	$	31.06	$	31.15	$	31.15	$	6,646
	Intellicenter		100.0	%		204		99.1	%	$	24.79	$	26.45	$	26.45	$	5,333
	Carillon Point		100.0	%		124		100.0	%	$	30.42	$	31.01	$	31.01	$	3,851
Denver, CO (14.1%)	Denver Tech		100.0	%		381		85.6	%	$	23.58	$	24.15	$	29.34	$	7,882
	Circle Point		100.0	%		272		84.0	%	$	18.07	$	20.33	$	36.19	$	4,646
	Superior Pointe		100.0	%		152		71.7	%	$	17.19	$	19.02	$	33.02	$	2,077
Orlando, FL (12.7%)	Florida Research Park		96.6	%		397		87.2	%	$	25.25	$	26.44	$	28.60	$	9,131
	Central Fairwinds		97.0	%		168		89.7	%	$	27.84	$	28.66	$	28.66	$	4,324
	Greenwood Blvd		100.0	%		155		100.0	%	$	24.84	$	25.25	$	25.25	$	3,915
Raleigh, NC (8.7%)	Bloc 83		100.0	%		495		83.6	%	$	41.13	$	38.41	$	38.81	$	15,897
Portland, OR (5.8%)	AmberGlen		76.0	%		203		90.1	%	$	22.38	$	24.00	$	27.55	$	4,401
	Cascade Station		100.0	%		128		61.4	%	$	26.72	$	28.07	$	31.64	$	2,208
Dallas, TX (5.0%)	The Terraces		100.0	%		173		100.0	%	$	41.38	$	39.58	$	60.58	$	6,833
	2525 McKinnon		100.0	%		111		80.0	%	$	28.98	$	31.03	$	51.03	$	2,765
San Diego, CA (4.9%)	Mission City		100.0	%		281		80.9	%	$	38.87	$	40.06	$	40.06	$	9,114
Seattle, WA (3.6%)	Canyon Park		100.0	%		207		100.0	%	$	22.31	$	24.58	$	30.58	$	5,082
Total / Weighted Average – March 31, 2024(4)						5,696		83.0	%	$	28.82	$	29.64	$	33.08	$	140,042

(1) Annualized Average Effective Rent accounts for the impact of straight-line rent adjustments, including the amortization of rent escalations and base rent concessions (e.g., free rent abatements) contained in the lease. The square foot result per property is calculated by multiplying (i) Average Effective Rent for the month ended March 31, 2024 by (ii) 12, divided by the occupied square footage in that period.

(2) Annualized gross rent per square foot includes adjustment for estimated expense reimbursements of triple net leases.

(3) Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended March 31, 2024 by (ii) 12.

(4) Averages weighted based on the property’s NRA, adjusted for occupancy.

20

Operating Expenses

Our operating expenses generally consist of utilities, property and ad valorem taxes, insurance and site maintenance costs. Increases in these expenses over tenants’ base years (until the base year is reset at expiration) are generally passed along to tenants in our full-service gross leased properties and are generally paid in full by tenants in our net leased properties.

Conditions in Our Markets

Positive or negative changes in economic or other conditions in the markets we operate in, including state budgetary shortfalls, employment rates, natural hazards and other factors, may impact our overall performance. While we generally expect the trend of positive population and economic growth in our Sun Belt cities to continue, there is no way for us to predict whether these trends will continue, especially in light of inflation and rising interest rates as well as potential changes in tax policy, fiscal policy and monetary policy. In addition, it is uncertain and impossible to estimate the potential impact that the work-from-home trend will have on the short- and long-term demand for office space in our markets.

Critical Accounting Policies and Estimates

The interim condensed consolidated financial statements follow the same policies and procedures as outlined in the audited consolidated financial statements for the year ended December 31, 2023 included in our Annual Report on Form 10-K for the year ended December 31, 2023.

Results of Operations

Comparison of Three Months Ended March 31, 2024 to Three Months Ended March 31, 2023

Rental and Other Revenues. Rental and other revenues include net rental income, including parking, signage and other income, as well as the recovery of operating costs and property taxes from tenants. Rental and other revenues decreased $1.5 million, or 3%, to $44.5 million for the three months ended March 31, 2024 compared to $46.0 million for the three months ended March 31, 2023. The disposition of 190 Office Center in May 2023 reduced revenue by $1.7 million. Revenue also decreased at Cascade Station by $0.4 million, due to lower occupancy at the property compared to the prior year. Offsetting these decreases, Block 23 revenue increased by $0.6 million primarily due to a termination fee recorded as a result of the WeWork lease termination. The remaining properties’ rental and other revenues were relatively unchanged in comparison to the prior period.

Operating Expenses

Total Operating Expenses. Total operating expenses consist of property operating expenses, general and administrative expenses and depreciation and amortization. Total operating expenses decreased $0.3 million, or 1%, to $36.5 million for the three months ended March 31, 2024, from $36.8 million for the three months ended March 31, 2023. The disposition of 190 Office Center in May 2023 decreased total operating expenses by $1.1 million. Offsetting the decrease, Bloc 83 increased total operating expenses by $0.4 million primarily due to higher electricity and property taxes. The remaining properties’ total operating expenses were $0.4 million higher in comparison to the prior period.

Property Operating Expenses. Property operating expenses are comprised mainly of building common area and maintenance expenses, insurance, property taxes, property management fees, as well as certain expenses that are not recoverable from tenants, the majority of which are related to costs necessary to maintain the appearance and marketability of vacant space. In the normal course of business, property expenses fluctuate and are impacted by various factors including, but not limited to, occupancy levels, weather, utility costs, repairs, maintenance and re-leasing costs. Property operating expenses for the three months ended March 31, 2024, were relatively unchanged from the $17.7 million reported for the three months ended March 31, 2023. The disposition of 190 Office Center in May 2023 decreased property operating expenses by $0.8 million. Offsetting this decrease, property operating expenses at Bloc 83 increased by $0.4 million primarily due to higher electricity and property taxes. The remaining properties’ property operating expenses were $0.4 million higher in comparison to the prior period, primarily due to inflation.

21

General and Administrative. General and administrative expenses are comprised of public company reporting costs and the compensation of our management team and Board of Directors, as well as non-cash stock-based compensation expenses. General and administrative expenses were relatively unchanged at $3.7 million for the three months ended March 31, 2024, a decrease of $0.1 million, or 1%, from $3.8 million reported in the prior period.

Depreciation and Amortization. Depreciation and amortization decreased $0.2 million, or 1%, to $15.1 million for the three months ended March 31, 2024, from $15.3 million reported for the same period in 2023. Of this decrease, the disposition of 190 Office Center in May 2023 decreased depreciation and amortization expense by $0.4 million. The remaining properties’ depreciation expenses were marginally higher in comparison to the prior period.

Other Expense (Income)

Interest Expense. Interest expense increased $0.1 million, or 1%, to $8.4 million for the three months ended March 31, 2024, from $8.3 million for the three months ended March 31, 2023. Interest expense at FRP Collection and Carillon Point increased by $0.3 million and $0.1 million, respectively, as a result of amended and restated property mortgages entered into in 2023 at higher interest rates. Interest expense also increased by $0.2 million due to higher interest rates on our floating rate debt. Offsetting these increases, interest expense decreased by $0.5 million due to the disposition of 190 Office Center in May 2023.

Cash Flows

Comparison of Three Months Ended March 31, 2024 to Three Months Ended March 31, 2023

Cash, cash equivalents and restricted cash were $43.4 million and $52.2 million as of March 31, 2024 and March 31, 2023, respectively.

Cash flow from operating activities. Net cash provided by operating activities increased by $2.5 million to $16.4 million for the three months ended March 31, 2024, compared to $13.9 million for the same period in 2023. The increase was primarily attributable to changes in working capital.

Cash flow to investing activities. Net cash used in investing activities decreased by $4.9 million to $7.5 million for the three months ended March 31, 2024, compared to $12.4 million for the same period in 2023. The decrease in cash used in investing activities was primarily attributable to lower additions to real estate properties for the three months ended March 31, 2024.

Cash flow to financing activities. Net cash used in financing activities increased by $15.4 million to $8.9 million for the three months ended March 31, 2024, compared to $6.5 million provided by financing activities for the same period in 2023. The increase in cash used in financing activities was primarily attributable to lower proceeds from borrowings partially offset by lower dividend distributions paid to stockholders for the three months ended March 31, 2024.

Liquidity and Capital Resources

Analysis of Liquidity and Capital Resources

We had approximately $29.5 million of cash and cash equivalents and $13.8 million of restricted cash as of March 31, 2024.

On March 15, 2018, the Company entered into a credit agreement for the Unsecured Credit Facility that provided for commitments of up to $250 million, which included an accordion feature that allowed the Company to borrow up to $500 million, subject to customary terms and conditions. On September 27, 2019, the Company entered into a five-year $50 million term loan, increasing its authorized borrowings under the Company’s Unsecured

22

Credit Facility from $250 million to $300 million. On November 16, 2021, the Company entered into an Amended and Restated Credit Agreement that increased the total authorized borrowings from $300 million to $350 million. On January 5, 2023, the Company entered into a second amendment to the Amended and Restated Credit Agreement for the Unsecured Credit Facility and entered into a three-year $25 million term loan, increasing its total authorized borrowings from $350 million to $375 million. The Unsecured Credit Facility matures in November 2025 and may be extended 12 months at the Company’s option upon meeting certain conditions. As of March 31, 2024, we had approximately $200.0 million outstanding under our Unsecured Credit Facility and a $2.5 million letter of credit to satisfy escrow requirements for a mortgage lender.

On February 26, 2020, the Company and the Operating Partnership entered into equity distribution agreements (collectively, the “Agreements”) with each of KeyBanc Capital Markets Inc., Raymond James & Associates, Inc., BMO Capital Markets Corp., RBC Capital Markets, LLC, B. Riley FBR, Inc., D.A. Davidson & Co. and Janney Montgomery Scott LLC (the “Sales Agents”) pursuant to which the Company may issue and sell from time to time up to 15,000,000 shares of common stock and up to 1,000,000 shares of Series A Preferred Stock through the Sales Agents, acting as agents or principals (the “ATM Program”). On May 7, 2021, the Company delivered to D.A. Davidson & Co. a notice of termination of the Agreement, effective May 7, 2021. The Company did not issue any shares of common stock or Series A Preferred Stock under the ATM Program during the three months ended March 31, 2024.

After considering the effect of the work-from-home trend on our consolidated operations, it is possible that we could fail certain financial covenants within certain property-level mortgage borrowings. For mortgages with financial covenants, the lenders’ remedy of a covenant failure would be a requirement to escrow funds for the purpose of meeting our future debt payment obligations.

As of March 31, 2024, the lenders for four of our mortgage borrowings have elected their right to direct property cash flows into lender-controlled restricted cash accounts to fund property operations until certain thresholds are met. For these four properties, the total restricted cash as of March 31, 2024 was $9.6 million.

On May 1, 2024, the non-recourse property loan at our Cascade Station property in Portland matured, and an event of default was triggered under the terms of the Cascade Station loan, following non-payment of the principal amount outstanding at loan maturity. The loan, in the original principal amount of $22.5 million, is secured by the Cascade Station property. As such, the process to transfer the property to the lender has been initiated. In the first quarter of 2023, a “cash-sweep period” began for the Cascade Station loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $2.3 million and $2.0 million, respectively. As previously disclosed, in December 2022, we recorded a $6.5 million impairment to write down the asset’s carrying amount to fair value. As a result, the Company does not expect to recognize a material gain or loss as a result of the events described.

Our short-term liquidity requirements primarily consist of operating expenses and other expenditures associated with our properties, distributions to our limited partners and distributions to our stockholders required to qualify for REIT status, capital expenditures and, potentially, acquisitions. We expect to meet our short-term liquidity requirements through net cash provided by operations and reserves established from existing cash. We have further sources such as proceeds from our public offerings, including under our ATM Program, and borrowings under our mortgage loans and our Unsecured Credit Facility.

Our long-term liquidity needs consist primarily of funds necessary for the repayment of debt at maturity, property acquisitions and non-recurring capital improvements. We expect to meet our long-term liquidity requirements with net cash from operations, long-term secured and unsecured indebtedness and the issuance of equity and debt securities. We also may fund property acquisitions and non-recurring capital improvements using our Unsecured Credit Facility pending longer term financing.

We believe we have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional debt and the issuance of additional equity securities. However, we cannot assure you that this is or will continue to be the case. Our ability to incur additional debt is dependent on a number of factors, including our degree of leverage, interest rates, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. Our ability to access the equity capital markets is dependent on a number of factors as well, including general market conditions for REITs and market perceptions about us.

23

In addition to the incurrence of debt and the offering of equity securities, dispositions of property may serve as additional capital resources and sources of liquidity. We may recycle capital from stabilized assets or from sales of properties. Capital from these types of transactions is intended to be redeployed into property acquisitions, capital improvements, or to pay down existing debt.

Contractual Obligations and Other Long-Term Liabilities

The following table provides information with respect to our commitments as of March 31, 2024, including any guaranteed or minimum commitments under contractual obligations. The table does not reflect available debt extension options.

	Payments Due by Period (in thousands)
Contractual Obligations	Total		2024		2025-2026		2027-2028		More than 5 years
Principal payments on mortgage loans	$	671,191	$	106,146	$	284,260	$	280,785	$	—
Interest payments (1)		75,759		23,165		40,082		12,512		—
Tenant-related commitments		14,998		14,998		—		—		—
Lease obligations		36,071		465		1,510		1,190		32,906
Total	$	798,019	$	144,774	$	325,852	$	294,487	$	32,906

(1) Contracted interest on the floating rate borrowings under our Unsecured Credit Facility was calculated based on the balance and interest rate at March 31, 2024. Contracted interest on our loans which we have applied interest rate swaps was calculated based on the swap rate fixing the SOFR component of the borrowing rates.

Inflation

Substantially all of our office leases include expense reimbursement provisions that provide for property operating expense escalations. In addition, most of the leases provide for fixed rent increases. We believe that expense increases due to inflation may be at least partially offset by these contractual rent increases and expense escalations. However, a longer period of inflation could affect our cash flows or earnings, or impact our borrowings, as discussed elsewhere in this Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We use derivative financial instruments to manage or hedge interest rate risks related to borrowings. We do not use derivatives for trading or speculative purposes and only enter into contracts with major financial institutions based upon their credit rating and other factors. We have entered, and we will only enter into, contracts with major financial institutions based on their credit rating and other factors. See Note 5 to our condensed consolidated financial statements in Item 1 of this Report for more information regarding our derivatives.

We currently consider our interest rate exposure to be moderate because as of March 31, 2024, approximately $611.2 million, or 91.1%, of our debt had fixed interest rates, or effectively fixed rates when factoring in interest rate swaps, and $60.0 million, or 8.9%, had variable interest rates. The $611.2 million fixed rate debt includes our loans against which we have applied interest rate swaps. The interest rate swaps effectively fix the SOFR component of the borrowing rates until maturity of the debt. A 1% increase in SOFR would result in a $0.6 million increase to our annual interest costs on debt outstanding as of March 31, 2024 and would decrease the fair value of our outstanding debt, as well as increase interest costs associated with future debt issuances or borrowings under our Unsecured Credit Facility. A 1% decrease in SOFR would result in a $0.6 million decrease to our annual interest costs on debt outstanding as of March 31, 2024 and would increase the fair value of our outstanding debt, as well as decrease interest costs associated with future debt issuances or borrowings under our Unsecured Credit Facility.

Interest rate risk amounts are our management’s estimates based on our Company’s capital structure and were determined by considering the effect of hypothetical interest rates on our financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur in that environment. We may take actions to further mitigate our exposure to changes in interest rates. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our Company’s financial structure.

24

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on the most recent evaluation, the Company’s Chief Executive Officer and Chief Financial Officer determined that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) were effective as of March 31, 2024.

Management’s Report on Internal Control Over Financial Reporting

There have been no changes to our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

25

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We and our subsidiaries are, from time to time, parties to litigation arising from the ordinary course of business. As of March 31, 2024, management does not believe that any such litigation will have a material adverse effect, individually or in the aggregate, on our financial position or results of operations.

Item 1A. Risk Factors

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On May 1, 2024, the non-recourse property loan at our Cascade Station property in Portland matured, and an event of default was triggered under the terms of the Cascade Station loan, following non-payment of the principal amount outstanding at loan maturity. The loan, in the original principal amount of $22.5 million, is secured by the Cascade Station property. As such, the process to transfer the property to the lender has been initiated. In the first quarter of 2023, a “cash-sweep period” began for the Cascade Station loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $2.3 million and $2.0 million, respectively. As previously disclosed, in December 2022, we recorded a $6.5 million impairment to write down the asset’s carrying amount to fair value. As a result, the Company does not expect to recognize a material gain or loss as a result of the events described.

Item 6. Exhibits

Exhibit Number	Description
3.1	Articles of Amendment and Restatement of City Office REIT, Inc., as amended and supplemented (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on March 1, 2018).
3.2	Third Amended and Restated Bylaws of City Office REIT, Inc., effective as of August 2, 2023 (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed on August 3, 2023).
4.1	Certificate of Common Stock of City Office REIT, Inc. (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-11/A filed with the Commission on February 18, 2014).
4.2	Form of certificate representing the 6.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A filed with the Commission on September 30, 2016).

26

10.1	Amended and Restated Loan Agreement, dated as of August 16, 2023, by and among CIO Research Commons, LLC, CIO Technology Point I & II, LLC and CIO University Tech, LLC, each and collectively as borrower, and BankUnited, N.A. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on August 18, 2023).
10.2	Amended and Restated Renewal Promissory Note, dated as of August 16, 2023, by and among CIO Research Commons, LLC, CIO Technology Point I & II, LLC and CIO University Tech, LLC, each and collectively as borrower, and BankUnited, N.A. (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on August 18, 2023).
31.1	Certification by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002. †
31.2	Certification by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002. †
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. †
101.INS	INLINE XBRL INSTANCE DOCUMENT†
101.SCH	INLINE XBRL SCHEMA DOCUMENT†
101.CAL	INLINE XBRL CALCULATION LINKBASE DOCUMENT†
101.LAB	INLINE XBRL LABELS LINKBASE DOCUMENT†
101.PRE	INLINE XBRL PRESENTATION LINKBASE DOCUMENT†
101.DEF	INLINE XBRL DEFINITION LINKBASE DOCUMENT†
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) †

† Filed herewith.

27

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CITY OFFICE REIT, INC.

Date: May 3, 2024

By:	/s/ James Farrar
	James Farrar
	Chief Executive Officer and Director
	(Principal Executive Officer)

Date: May 3, 2024

By:	/s/ Anthony Maretic
	Anthony Maretic
	Chief Financial Officer, Secretary and Treasurer
	(Principal Financial Officer and Principal Accounting Officer)

28

EX-31.1

Exhibit 31.1

Certification

I, James Farrar, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2024 of City Office REIT, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 3, 2024	/s/ James Farrar
Date	James Farrar Chief Executive Officer and Director (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification

I, Anthony Maretic, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2024 of City Office REIT, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 3, 2024	/s/ Anthony Maretic
Date	Anthony Maretic Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q for the period ended March 31, 2024 of City Office REIT, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James Farrar, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 3, 2024	/s/ James Farrar
Date	James Farrar Chief Executive Officer and Director (Principal Executive Officer)

This written report is being furnished to the Securities and Exchange Commission as an exhibit to the Report. A signed original of this written statement required by Section 906 has been provided to City Office REIT, Inc. and will be retained by City Office REIT, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report on Form 10-Q for the period ended March 31, 2024 of City Office REIT, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Anthony Maretic, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

May 3, 2024	/s/ Anthony Maretic
Date	Anthony Maretic Chief Financial Officer, Secretary and Treasurer (Principal Financial Officer and Principal Accounting Officer)

This written report is being furnished to the Securities and Exchange Commission as an exhibit to the Report. A signed original of this written statement required by Section 906 has been provided to City Office REIT, Inc. and will be retained by City Office REIT, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2024	Apr. 30, 2024
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Entity Interactive Data Current	Yes
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Registrant Name	CITY OFFICE REIT, INC.
Entity Central Index Key	0001593222
Entity Filer Category	Accelerated Filer
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		40,154,055
Entity Address, State or Province	BC
Document Transition Report	false
Document Quarterly Report	true
Entity File Number	001-36409
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	98-1141883
Entity Address, City or Town	Vancouver
Entity Address, Address Line One	666 Burrard Street
Entity Address, Address Line Two	Suite 3210
Entity Address, Postal Zip Code	V6C 2X8
City Area Code	604
Local Phone Number	806-3366
Common Stock [Member]
Document Information [Line Items]
Trading Symbol	CIO
Security Exchange Name	NYSE
Title of 12(b) Security	Common Stock
6.625% Series A Cumulative Redeemable Preferred Stock [Member]
Document Information [Line Items]
Trading Symbol	CIO.PrA
Security Exchange Name	NYSE
Title of 12(b) Security	6.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Real estate properties
Land	$ 193,524	$ 193,524
Building and improvement	1,196,003	1,194,819
Tenant improvement	156,625	152,540
Furniture, fixtures and equipment	944	820
Real estate properties, gross	1,547,096	1,541,703
Accumulated depreciation	(229,680)	(218,628)
Real estate properties, net	1,317,416	1,323,075
Cash and cash equivalents	29,533	30,082
Restricted cash	13,831	13,310
Rents receivable, net	53,114	53,454
Deferred leasing costs, net	23,220	21,046
Acquired lease intangible assets, net	40,459	42,434
Other assets	27,954	27,975
Total Assets	1,505,527	1,511,376
Liabilities:
Debt	668,249	669,510
Accounts payable and accrued liabilities	29,908	29,070
Deferred rent	8,040	7,672
Tenant rent deposits	7,853	7,198
Acquired lease intangible liabilities, net	7,393	7,736
Other Liabilities	16,431	17,557
Total Liabilities	737,874	738,743
Commitments and Contingencies (Note 8)
Equity:
6.625% Series A Preferred stock, $0.01 par value per share, 5,600,000 shares authorized, 4,480,000 issued and outstanding as of March 31, 2024 and December 31, 2023	112,000	112,000
Common stock, $0.01 par value, 100,000,000 shares authorized, 40,154,055 and 39,938,451 shares issued and outstanding as of March 31, 2024 and December 31, 2023	401	399
Additional paid-in capital	438,909	438,867
Retained earnings	214,709	221,213
Accumulated other comprehensive income/(loss)	1,515	(248)
Total Stockholders' Equity	767,534	772,231
Non-controlling interests in properties	119	402
Total Equity	767,653	772,633
Total Liabilities and Equity	$ 1,505,527	$ 1,511,376

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, Dividend rate percentage	6.625%	6.625%
Preferred stock, par value per share	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,600,000	5,600,000
Preferred stock, shares issued	4,480,000	4,480,000
Preferred stock, shares outstanding	4,480,000	4,480,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	40,154,055	39,938,451
Common stock, shares outstanding	40,154,055	39,938,451

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Statement [Abstract]
Rental and other revenues	$ 44,493	$ 45,957
Operating expenses:
Property operating expenses	17,744	17,720
General and administrative	3,711	3,765
Depreciation and amortization	15,075	15,304
Total operating expenses	36,530	36,789
Operating income	7,963	9,168
Interest expense:
Contractual interest expense	(8,098)	(7,972)
Amortization of deferred financing costs and debt fair value	(319)	(323)
Interest expense, net	(8,417)	(8,295)
Net (loss)/income	(454)	873
Net income attributable to non-controlling interests in properties	(135)	(169)
Net (loss)/income attributable to the Company	(589)	704
Preferred stock distributions	(1,855)	(1,855)
Net loss attributable to common stockholders	$ (2,444)	$ (1,151)
Net loss per common share:
Basic	$ (0.06)	$ (0.03)
Diluted	$ (0.06)	$ (0.03)
Weighted average common shares outstanding:
Basic	40,097	39,873
Diluted	40,097	39,873
Dividend distributions declared per common share	$ 0.1	$ 0.2

XML

Condensed Consolidated Statements of Comprehensive Income/(Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Comprehensive Income [Abstract]
Net (loss)/income	$ (454)	$ 873
Other comprehensive income/(loss):
Unrealized cash flow hedge gain/(loss)	2,906	(1,465)
Amounts reclassified to interest expense	(1,117)	(477)
Other comprehensive income/(loss)	1,789	(1,942)
Comprehensive income/(loss)	1,335	(1,069)
Comprehensive income attributable to non-controlling interests in properties	(161)	(169)
Comprehensive income/(loss) attributable to the Company	$ 1,174	$ (1,238)

XML

Condensed Consolidated Statements of Changes in Equity - USD ($) $ in Thousands	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained earnings [Member]	Accumulated other comprehensive (loss)/income [Member]	Total stockholders' equity [Member]	Non-controlling Interests in Properties [Member]
Beginning balance at Dec. 31, 2022	$ 803,174	$ 112,000	$ 397	$ 436,161	$ 251,542	$ 2,731	$ 802,831	$ 343
Beginning balance, shares at Dec. 31, 2022		4,480,000	39,718,000
Restricted stock award grants and vesting, values	(618)		$ 2	(535)	(85)		(618)
Restricted stock award grants and vesting, shares			220,000
Common stock dividend distribution declared	(7,988)				(7,988)		(7,988)
Preferred stock dividend distribution declared	(1,855)				(1,855)		(1,855)
Contributions	110							110
Distributions	(235)							(235)
Net (loss)/income	873				704		704	169
Other comprehensive income (loss)	(1,942)					(1,942)	(1,942)
Ending balance at Mar. 31, 2023	791,519	$ 112,000	$ 399	435,626	242,318	789	791,132	387
Ending balance, shares at Mar. 31, 2023		4,480,000	39,938,000
Beginning balance at Dec. 31, 2023	772,633	$ 112,000	$ 399	438,867	221,213	(248)	772,231	402
Beginning balance, shares at Dec. 31, 2023		4,480,000	39,938,000
Restricted stock award grants and vesting, values	(1)		$ 2	42	(45)		(1)
Restricted stock award grants and vesting, shares			216,000
Common stock dividend distribution declared	(4,015)				(4,015)		(4,015)
Preferred stock dividend distribution declared	(1,855)				(1,855)		(1,855)
Distributions	(444)							(444)
Net (loss)/income	(454)				(589)		(589)	135
Other comprehensive income (loss)	1,789					1,763	1,763	26
Ending balance at Mar. 31, 2024	$ 767,653	$ 112,000	$ 401	$ 438,909	$ 214,709	$ 1,515	$ 767,534	$ 119
Ending balance, shares at Mar. 31, 2024		4,480,000	40,154,000

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash Flows from Operating Activities:
Net (loss)/income	$ (454)	$ 873
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization	15,075	15,304
Amortization of deferred financing costs and debt fair value	319	323
Amortization of above and below market leases	(27)	9
Straight-line rent/expense	(454)	(2,801)
Non-cash stock compensation	1,070	1,024
Changes in non-cash working capital:
Rents receivable, net	865	539
Other assets	505	(282)
Accounts payable and accrued liabilities	(1,536)	(965)
Deferred rent	368	(278)
Tenant rent deposits	655	137
Net Cash Provided By Operating Activities	16,386	13,883
Cash Flows to Investing Activities:
Additions to real estate properties	(5,989)	(11,383)
Deferred leasing costs	(1,505)	(1,037)
Net Cash Used In Investing Activities	(7,494)	(12,420)
Cash Flows (to)/from Financing Activities:
Debt issuance and extinguishment costs	(26)	(236)
Proceeds from borrowings	4,000	25,000
Repayment of borrowings	(5,529)	(6,683)
Dividend distributions paid to stockholders	(5,849)	(9,799)
Distributions to non-controlling interests in properties	(444)	(235)
Shares withheld for payment of taxes on restricted stock unit vesting	(1,072)	(1,643)
Contributions from non-controlling interests in properties	0	110
Net Cash (Used In)/Provided By Financing Activities	(8,920)	6,514
Net (Decrease)/Increase in Cash, Cash Equivalents and Restricted Cash	(28)	7,977
Cash, Cash Equivalents and Restricted Cash, Beginning of Period	43,392	44,262
Cash, Cash Equivalents and Restricted Cash, End of Period	43,364	52,239
Reconciliation of Cash, Cash Equivalents and Restricted Cash:
Cash and Cash Equivalents, End of Period	29,533	35,854
Restricted Cash, End of Period	13,831	16,385
Cash, Cash Equivalents and Restricted Cash, End of Period	43,364	52,239
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	8,029	7,256
Purchase of additions in real estate properties included in accounts payable	7,526	7,811
Purchase of deferred leasing costs included in accounts payable	$ 3,026	$ 1,207

XML

Organization and Description of Business

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

1. Organization and Description of Business

City Office REIT, Inc. (the “Company”) was organized in the state of Maryland on November 26, 2013. On April 21, 2014, the Company completed its initial public offering (“IPO”) of shares of the Company’s common stock. The Company contributed the net proceeds of the IPO to City Office REIT Operating Partnership, L.P., a Maryland limited partnership (the “Operating Partnership”), in exchange for common units of limited partnership interest in the Operating Partnership (“common units”).

The Company’s interest in the Operating Partnership entitles the Company to share in distributions from, and allocations of profits and losses of, the Operating Partnership in proportion to the Company’s percentage ownership of common units. As the sole general partner of the Operating Partnership, the Company has the exclusive power under the Operating Partnership’s partnership agreement to manage and conduct the Operating Partnership’s business, subject to limited approval and voting rights of the limited partners.

The Company has elected to be taxed and will continue to operate in a manner that will allow it to continue to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to qualification as a REIT, the Company will be permitted to deduct dividend distributions paid to its stockholders, eliminating the U.S. federal taxation of income represented by such distributions at the Company level. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S. federal and state income tax on its taxable income at regular corporate tax rates and, for years prior to 2018, any applicable alternative minimum tax.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Preparation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with Securities and Exchange Commission (“SEC”) rules and regulations and generally accepted accounting principles in the United States of America (“US GAAP”) and in the opinion of management contain all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07 (“ASU 2023-07”) Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which will enhance segment disclosures. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024, with early adoption permitted. This standard must be applied retrospectively to all periods presented in the financial statements. The Company has not yet adopted the standard and is currently evaluating the impact of ASU 2023-07 on the Company’s consolidated financial statements and disclosures.

XML

Lease Intangibles

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Lease Intangibles

3. Lease Intangibles

Lease intangibles and the value of assumed lease obligations as of March 31, 2024 and December 31, 2023 were comprised of the following (in thousands):

	Lease Intangible Assets												Lease Intangible Liabilities
March 31, 2024	Above Market Leases			In Place Leases			Leasing Commissions			Total			Below Market Leases			Below Market Ground Lease			Total
Cost	$	17,463		$	73,127		$	32,537		$	123,127		$	(14,968	)	$	(138	)	$	(15,106	)
Accumulated amortization		(10,537	)		(52,290	)		(19,841	)		(82,668	)		7,656			57			7,713
	$	6,926		$	20,837		$	12,696		$	40,459		$	(7,312	)	$	(81	)	$	(7,393	)
	Lease Intangible Assets												Lease Intangible Liabilities
December 31, 2023	Above Market Leases			In Place Leases			Leasing Commissions			Total			Below Market Leases			Below Market Ground Lease			Total
Cost	$	17,463		$	73,128		$	32,541		$	123,132		$	(14,968	)	$	(138	)	$	(15,106	)
Accumulated amortization		(10,222	)		(51,290	)		(19,186	)		(80,698	)		7,314			56			7,370
	$	7,241		$	21,838		$	13,355		$	42,434		$	(7,654	)	$	(82	)	$	(7,736	)

The estimated aggregate amortization expense for lease intangibles for the next five years and in the aggregate are as follows (in thousands):

2024	$	4,748
2025		6,194
2026		5,887
2027		4,900
2028		4,206
Thereafter		7,131
	$	33,066

XML

Debt

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Debt

4. Debt

The following table summarizes the indebtedness as of March 31, 2024 and December 31, 2023 (dollars in thousands), including the impact of the effective interest rate swaps described in Note 5:

Property	March 31, 2024		December 31, 2023		Interest Rate as of March 31, 2024			Maturity
Unsecured Credit Facility (2)(4)	$	200,000	$	200,000		SOFR +1.50	%(1)(2)	November 2025
Term Loan (3)		50,000		50,000		SOFR +1.35	%(1)(3)	September 2024
Term Loan (4)		25,000		25,000		6.00	%(4)	January 2026
Mission City		45,772		45,994		3.78	%	November 2027
Canyon Park (5)		38,742		38,932		4.30	%	March 2027
Circle Point		38,678		38,789		4.49	%	September 2028
SanTan (6)		31,322		31,501		4.56	%	March 2027
Intellicenter		30,523		30,682		4.65	%	October 2025
The Quad		30,600		30,600		4.20	%	September 2028
2525 McKinnon		27,000		27,000		4.24	%	April 2027
FRP Collection		26,041		26,139		7.05	%(7)	August 2028
Greenwood Blvd		20,719		20,856		3.15	%	December 2025
Cascade Station (8)		20,680		20,752		4.55	%	May 2024
5090 N. 40th St		20,257		20,370		3.92	%	January 2027
AmberGlen (9)		20,000		20,000		3.69	%	May 2027

Property	March 31, 2024			December 31, 2023			Interest Rate as of March 31, 2024			Maturity
FRP Ingenuity Drive (10)		15,782			15,860			4.44	%		December 2024
Central Fairwinds		15,711			15,826			3.15	%		June 2024
Carillon Point		14,364			14,419			7.05	%(7)		August 2028
Total Principal		671,191			672,720
Deferred financing costs, net		(2,954	)		(3,258	)
Unamortized fair value adjustments		12			48
Total	$	668,249		$	669,510

(1) As of March 31, 2024, the daily-simple Secured Overnight Financing Rate (“SOFR”) was 5.34%.

(2) Borrowings under our unsecured credit facility (the “Unsecured Credit Facility”) bear interest at a rate equal to the daily-simple SOFR rate plus a margin of between 135 to 235 basis points depending upon the Company’s consolidated leverage ratio. On February 9, 2023, the Company entered into a three-year interest rate swap for a notional amount of $140 million, effective March 8, 2023, effectively fixing the SOFR component of the borrowing rate for $140 million of the Unsecured Credit Facility at 4.19%. As of March 31, 2024, the Unsecured Credit Facility had $200.0 million drawn and a $2.5 million letter of credit to satisfy escrow requirements for a mortgage lender. The Unsecured Credit Facility matures in November 2025 and may be extended 12 months at the Company’s option upon meeting certain conditions. The Unsecured Credit Facility requires the Company to maintain a fixed charge coverage ratio of no less than 1.50x.

(3) Borrowings under the $50 million term loan bear interest at a rate equal to the daily-simple SOFR rate plus a margin of between 135 to 225 basis points depending upon the Company’s consolidated leverage ratio. The SOFR component of the borrowing rate is effectively fixed for the remainder of the five-year term by a $50 million interest rate swap at 1.17%.

(4) On January 5, 2023, the Company entered into a second amendment to its amended and restated credit agreement, dated November 16, 2021 for the Unsecured Credit Facility and entered into a three-year $25 million term loan, increasing its total authorized borrowings from $350 million to $375 million. Borrowings under the $25 million term loan bear interest at a rate equal to the daily-simple SOFR rate plus a margin of 210 basis points. In conjunction with the term loan, the Company also entered into a three-year interest rate swap for a notional amount of $25 million, effectively fixing the SOFR component of the borrowing rate of the term loan at 3.90%.

(5) The mortgage loan anticipated repayment date (“ARD”) is March 1, 2027. The final scheduled maturity date can be extended up to 5 years beyond the ARD. If the loan is not paid off at ARD, the loan’s interest rate shall be adjusted to the greater of (i) the initial interest rate plus 200 basis points or (ii) the yield on the five year “on the run” treasury reported by Bloomberg market data service plus 450 basis points.

(6) In the second quarter of 2023, the Debt Service Coverage Ratio (“DSCR”) and debt yield covenants for SanTan were not met, which triggered a ‘cash-sweep period’ that began in the second quarter of 2023. As of March 31, 2024, the DSCR and debt yield covenants were still not met. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $3.6 million and $4.1 million, respectively.

(7) The FRP Collection and Carillon Point loans bear interest at a rate equal to the daily-simple SOFR rate plus a margin of 275 basis points. The SOFR component of the borrowing rate is effectively fixed for the remainder of the five-year term via interest rate swaps at 4.30%.

(8) In the first quarter of 2023, a ‘cash-sweep period’ began for the Cascade Station loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $2.3 million and $2.0 million, respectively. On May 1, 2024, the non-recourse property loan at our Cascade Station property in Portland matured, and an event of default was triggered under the terms of the Cascade Station loan, following non-payment of the principal amount outstanding at loan maturity.

(9) In the first quarter of 2024, a ‘cash-sweep period’ began for the AmberGlen loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2024, total restricted cash for the property was $0.2 million.

(10) In the third quarter of 2022, the DSCR covenant for FRP Ingenuity Drive was not met, which triggered a ‘cash-sweep period’ that began in the fourth quarter of 2022. As of March 31, 2024, the DSCR was still not met. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $3.5 million and $3.2 million, respectively.

The scheduled principal repayments of debt as of March 31, 2024 are as follows (in thousands):

2024	$	106,146
2025		254,697
2026		29,563
2027		176,477
2028		104,308
Thereafter		—
	$	671,191

XML

Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

Fair value measurements are based on assumptions that market participants would use in pricing an asset or a liability. The hierarchy for inputs used in measuring fair value is as follows:

Level 1 Inputs – quoted prices in active markets for identical assets or liabilities

Level 2 Inputs – observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3 Inputs – unobservable inputs

In September 2019, the Company entered into a London Interbank Offered Rate (“LIBOR”) interest rate swap for a notional amount of $50.0 million. In January 2023, the Company amended the $50.0 million interest rate swap to transition from LIBOR to daily-simple SOFR. The Company applied the practical expedients available for hedging relationships under the reference rate reform guidance, which preserves the presentation of the derivative consistent with past presentation and does not result in dedesignation of the hedging relationship. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 1.17% for the remainder of the five-year term.

In January 2023, the Company entered into an interest rate swap for a notional amount of $25.0 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 3.90% for the three-year term.

In February 2023, the Company entered into an interest rate swap for a notional amount of $140.0 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.19% for the three-year term.

In August 2023, the Company entered into an interest rate swap at FRP Collection for an initial notional amount of $26.3 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.30% for the five-year term. The notional amount of the interest rate swap amortizes over the term consistent with the balance of the corresponding loan.

In August 2023, the Company entered into an interest rate swap at Carillon Point for an initial notional amount of $14.5 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.30% for the five-year term. The notional amount of the interest rate swap amortizes over the term consistent with the balance of the corresponding loan.

The fair value of the interest rate swaps have been classified as Level 2 fair value measurements.

The interest rate swaps have been designated and qualify as cash flow hedges and have been recognized on the condensed consolidated balance sheets at fair value, presented within other assets and other liabilities. Gains and losses resulting from changes in the fair value of derivatives that have been designated and qualify as cash flow hedges are reported as a component of other comprehensive income/(loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings.

The following table summarizes the Company’s derivative financial instruments as of March 31, 2024 and December 31, 2023 (in thousands):

	Notional Value March 31, 2024		Effective Date		Maturity Date		Fair Value Assets/(Liabilities)
							March 31, 2024			December 31, 2023
Interest Rate Swap	$	50,000		September 2019		September 2024	$	855		$	1,268
Interest Rate Swap		25,000		January 2023		January 2026		273			49
Interest Rate Swap		140,000		March 2023		November 2025		875			(295	)
Interest Rate Swap		26,041		August 2023		August 2028		(325	)		(846	)
Interest Rate Swap		14,364		August 2023		August 2028		(179	)		(466	)
	$	255,405					$	1,499		$	(290	)

For the three months ended March 31, 2024, approximately $1.1 million of realized gains were reclassified to interest expense due to payments made to or received from the swap counterparty. For the three months ended March 31, 2023, approximately $0.5 million of realized gains were reclassified to interest expense due to payments made to or received from the swap counterparty.

Cash, Cash Equivalents, Restricted Cash, Rents Receivable, Accounts Payable and Accrued Liabilities

The Company estimates that the fair value approximates carrying value due to the relatively short-term nature of these instruments.

Fair Value of Financial Instruments Not Carried at Fair Value

With the exception of fixed rate mortgage loans payable, the carrying amounts of the Company’s financial instruments approximate their fair value. The Company determines the fair value of its fixed rate mortgage loan payable based on a discounted cash flow analysis using a discount rate that approximates the current borrowing rates for instruments of similar maturities. Based on this, the Company has determined that the fair value of these instruments was $339.6 million and $343.1 million (compared to a carrying value of $355.8 million and $357.2 million) as of March 31, 2024, and December 31, 2023, respectively. Accordingly, the fair value of mortgage loans payable have been classified as Level 3 fair value measurements.

XML

Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions [Abstract]

Related Party Transactions

6. Related Party Transactions

Administrative Services Agreement

During the three months ended March 31, 2024, the amounts earned by the Company for the administrative services performed for Second City Real Estate II Corporation, Clarity Real Estate Ventures GP, Limited Partnership and their affiliates were nominal. For the three months ended March 31, 2023, the Company earned $0.1 million in administrative services performed for Second City Real Estate II Corporation, Clarity Real Estate Ventures GP, Limited Partnership and their affiliates.

XML

Leases

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Leases

7. Leases

Lessor Accounting

The Company is focused on acquiring, owning and operating high-quality office properties for lease to a stable and diverse tenant base. The Company’s properties have both full-service gross and net leases which are generally classified as operating leases. Rental income related to such leases is recognized on a straight-line basis over the remaining lease term. The Company’s total revenue includes fixed base rental payments provided under the lease and variable payments, which principally consist of tenant expense reimbursements for certain property operating expenses as provided under the lease.

The Company recognized fixed and variable lease payments for operating leases for the three months ended March 31, 2024 and 2023 as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Fixed payments	$	37,592	$	38,914
Variable payments		6,778		6,743
	$	44,370	$	45,657

Future minimum lease payments to be received by the Company as of March 31, 2024 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):

2024	$	96,163
2025		119,416
2026		109,150
2027		92,233
2028		77,533
Thereafter		165,595
	$	660,090

The Company’s leases may include various provisions such as scheduled rent increases, renewal options and termination options. The majority of the Company’s leases include defined rent increases rather than variable payments based on an index or unknown rate.

At the beginning of the period the Company, through wholly owned subsidiaries, was the landlord under leases totaling approximately 177,000 square feet with subsidiaries of WeWork Inc. (“WeWork”) at three of the Company’s properties. WeWork announced on November 6, 2023 that it filed for Chapter 11 bankruptcy protection and subsequently rejected the lease at one of our properties effective February 7, 2024 totaling 46,000 square feet. The Company recorded a termination fee of $0.9 million during the period ended March 31, 2024. As of March 31, 2024, WeWork was operating at the remaining two locations totaling 131,000 square feet and the leases had not been rejected as part of the WeWork bankruptcy proceedings. As of March 31, 2024, the balance sheet exposure to WeWork was $1.5 million in straight-line rent receivables, $2.4 million in tenant improvements, and $8.2 million in acquired lease intangible assets. The Company continues to monitor rental payments and potential lease rejection related to WeWork, and the Company will continue to assess what it believes will be the likelihood of each of the two WeWork leases being rejected in the bankruptcy proceedings as of each reporting period.

Lessee Accounting

As a lessee, the Company has ground and office leases which are classified as operating and financing leases. As of March 31, 2024, these leases had remaining terms of three to 64 years and a weighted average remaining lease term of 50 years. Right-of-use assets and lease liabilities have been included within other assets and other liabilities on the Company’s condensed consolidated balance sheets as follows (in thousands):

	March 31, 2024		December 31, 2023
Right-of-use asset – operating leases	$	12,483	$	12,564
Lease liability – operating leases	$	8,484	$	8,550
Right-of-use asset – financing leases	$	9,763	$	9,820
Lease liability – financing leases	$	1,573	$	1,551

Lease liabilities are measured at the commencement date based on the present value of future lease payments. One of the Company’s operating ground leases includes rental payment increases over the lease term based on increases in the Consumer Price Index (“CPI”). Changes in the CPI were not estimated as part of the measurement of the operating lease liability. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The Company used a weighted average discount rate of 6.2% in determining its lease liabilities. The discount rates were derived from the Company’s assessment of the credit quality of the Company and adjusted to reflect secured borrowing, estimated yield curves and long-term spread adjustments.

Right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.

Operating lease expense for the three months ended March 31, 2024 and March 31, 2023 was $0.2 million and $0.2 million, respectively. Financing lease expense for the three months ended March 31, 2024 and March 31, 2023 was $0.1 million and $0.1 million, respectively.

Future minimum lease payments to be paid by the Company as a lessee for operating and financing leases as of March 31, 2024 for the next five years and thereafter are as follows (in thousands):

	Operating Leases			Financing Leases
2024	$	459		$	6
2025		770			8
2026		724			8
2027		587			8
2028		587			8
Thereafter		25,976			6,930
Total future minimum lease payments		29,103			6,968
Discount		(20,619	)		(5,395	)
Total	$	8,484		$	1,573

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

The Company is obligated under certain tenant leases to fund tenant improvements and the expansion of the underlying leased properties.

Under various federal, state and local laws, ordinances and regulations relating to the protection of the environment, a current or previous owner or operator of real estate may be liable for the cost of removal or remediation of certain hazardous or toxic substances disposed, stored, generated, released, manufactured or discharged from, on, at, under, or in a property. As such, the Company may be potentially liable for costs associated with any potential environmental remediation at any of its formerly or currently owned properties.

The Company believes that it is in compliance in all material respects with all federal, state and local ordinances and regulations regarding hazardous or toxic substances. Management is not aware of any environmental liability that it believes would have a material adverse impact on the Company’s financial position or results of operations. Management is unaware of any instances in which the Company would incur significant environmental costs if any or all properties were sold, disposed of or abandoned. However, there can be no assurance that any such non-compliance, liability, claim or expenditure will not arise in the future.

The Company is involved from time to time in lawsuits and other disputes which arise in the ordinary course of business. As of March 31, 2024, management believes that these matters will not have a material adverse effect, individually or in the aggregate, on the Company’s financial position or results of operations.

XML

Stockholder's Equity

3 Months Ended

Mar. 31, 2024

Federal Home Loan Banks [Abstract]

Stockholder's Equity

9. Stockholders’ Equity

Share Repurchase Plan

On May 4, 2023, the Company’s Board of Directors (the “Board of Directors”) approved a share repurchase plan (“Repurchase Program”) authorizing the Company to repurchase up to $50 million of its outstanding shares of common stock or Series A Preferred Stock. Under the share repurchase program, the shares may be repurchased from time to time using a variety of methods, which may include open market transactions, privately negotiated transactions or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements.

Repurchased shares of common stock will be classified as authorized and unissued shares. The Company recognizes the cost of shares of common stock it repurchases, including direct costs incurred, as a reduction in stockholders’ equity. Such reductions of stockholders equity due to the repurchases of shares of common stock will be applied first, to reduce common stock in the amount of the par value associated with the shares of common stock repurchased and second, to reduce additional paid-in capital by the amount that the purchase price for the shares of common stock repurchased exceed the par value.

There were no shares repurchased during the three months ended March 31, 2024 and 2023.

Common Stock and Common Unit Distributions

On March 15, 2024, the Board of Directors approved and the Company declared a cash dividend distribution of $0.10 per common share for the quarterly period ended March 31, 2024. The dividend was paid subsequent to quarter end on April 24, 2024 to common stockholders and common unitholders of record as of the close of business on April 10, 2024, resulting in an aggregate payment of $4.0 million.

Preferred Stock Distributions

On March 15, 2024, the Board of Directors approved and the Company declared a cash dividend distribution of $0.4140625 per share of the Company’s 6.625% Series A Preferred Stock (“Series A Preferred Stock”) for an aggregate amount of $1.9 million for the quarterly period ended March 31, 2024. The dividend was paid subsequent to quarter end on April 24, 2024 to the holders of record of Series A Preferred Stock as of the close of business on April 10, 2024.

Equity Incentive Plan

The Company has an equity incentive plan (“Equity Incentive Plan”) for executive officers, directors and certain non-executive employees, and with approval of the Board of Directors, for subsidiaries and their respective affiliates. The Equity Incentive Plan provides for grants of restricted common stock, restricted stock units, phantom shares, stock options, dividend equivalent rights and other equity-based awards (including the grant of Operating Partnership long-term incentive plan units), subject to the total number of shares available for issuance under the plan. The Equity Incentive Plan is administered by the compensation committee of the Board of Directors (the “Compensation Committee”). The Equity Incentive Plan provides for the issuance of up to 3,763,580 shares of common stock. To the extent an award granted under the Equity Incentive Plan expires or terminates, the shares subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards.

On January 27, 2020, each of the Board of Directors and the Compensation Committee approved a new form of performance-based restricted unit award agreement that will be used to grant performance-based restricted stock unit awards (“Performance RSU Awards”) pursuant to the Equity Incentive Plan. The Performance RSU Awards are based upon the total stockholder return (“TSR”) of the Company’s common stock over a three-year measurement period beginning January 1 of the year of grant (the “Measurement Period”) relative to the TSR of a defined peer group list of other US Office REIT companies (the “Peer Group”) as of the first trading date in the year of grant. The payouts under the Performance RSU Awards are evaluated on a sliding scale as follows: TSR below the 30th percentile of the Peer Group would result in a 50% payout; TSR at the 50th percentile of the Peer Group would result in a 100% payout; and TSR at or above the 75th percentile of the Peer Group would result in a 150% payout. Payouts are mathematically interpolated between these stated percentile targets, subject to a 150% maximum. To the extent earned, the payouts of the Performance RSU Awards are intended to be settled in the form of shares of the Company’s common stock, pursuant to the Equity Incentive Plan. Upon satisfaction of the vesting conditions, dividend equivalents in an amount equal to all regular and special dividends declared with respect to the Company’s common stock during each annual measurement period during the Measurement Period are determined and paid on a cumulative, reinvested basis over the term of the applicable Performance RSU Award, at the time such award vests and based on the number of shares of the Company’s common stock that are earned.

During the first quarter of 2024, the Performance RSU Awards granted in January 2021, with a January 1, 2021 through December 31, 2023 Measurement Period, were earned at 120% of the target number of shares granted based on achievement of a TSR that was at or above the 60th percentile of the 2021 RSU Peer Group.

The following table summarizes the activity of the awards under the Equity Incentive Plan for the three months ended March 31, 2024:

	Number of RSUs			Number of Performance RSUs
Outstanding at December 31, 2023		451,741			424,888
Granted		324,414			324,952
Issuance of dividend equivalents		8,290			—
Vested		(228,747	)		(120,000	)
Outstanding at March 31, 2024		555,698			629,840

The following table summarizes the activity of the awards under the Equity Incentive Plan for the three months ended March 31, 2023:

	Number of RSUs			Number of Performance RSUs
Outstanding at December 31, 2022		428,320			307,500
Granted		198,022			214,888
Issuance of dividend equivalents		9,485			—
Vested		(216,520	)		(97,500	)
Outstanding at March 31, 2023		419,307			424,888

During the three months ended March 31, 2024 and March 31, 2023, the Company granted the following restricted stock units (“RSUs”) and Performance RSU Awards to directors, executive officers and certain non-executive employees:

	Units Granted				Fair Value (in thousands)		Weighted Average Grant Fair Value Per Share
	RSUs		Performance RSUs
2024		324,414		324,952	$	3,539	$	5.45
2023		198,022		214,888		3,729		9.03

The RSU Awards will vest in three equal, annual installments on each of the first three anniversaries of the grant date. The Performance RSU Awards will vest on the last day of the three-year measurement period.

During the three months ended March 31, 2024 and March 31, 2023, the Company recognized net compensation expense for the RSUs and Performance RSU Awards as follows (in thousands):

	RSUs		Performance RSUs		Total
2024	$	641	$	429	$	1,070
2023		643		381		1,024

XML

Subsequent Events

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

Subsequent Events

10. Subsequent Events

On May 1, 2024, the non-recourse property loan at our Cascade Station property in Portland matured, and an event of default was triggered under the terms of the Cascade Station loan, following non-payment of the principal amount outstanding at loan maturity. The loan, in the original principal amount of $22.5 million, is secured by the Cascade Station property. As such, the process to transfer the property to the lender has been initiated. In the first quarter of 2023, a “cash-sweep period” began for the Cascade Station loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $2.3 million and $2.0 million, respectively. As previously disclosed, in December 2022, we recorded a $6.5 million impairment to write down the asset’s carrying amount to fair value. As a result, the Company does not expect to recognize a material gain or loss as a result of the events described.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Basis of Preparation and Summary of Significant Accounting Policies

Basis of Preparation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with Securities and Exchange Commission (“SEC”) rules and regulations and generally accepted accounting principles in the United States of America (“US GAAP”) and in the opinion of management contain all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07 (“ASU 2023-07”) Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which will enhance segment disclosures. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024, with early adoption permitted. This standard must be applied retrospectively to all periods presented in the financial statements. The Company has not yet adopted the standard and is currently evaluating the impact of ASU 2023-07 on the Company’s consolidated financial statements and disclosures.

XML

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of company's derivative financial instruments

The following table summarizes the Company’s derivative financial instruments as of March 31, 2024 and December 31, 2023 (in thousands):

	Notional Value March 31, 2024		Effective Date		Maturity Date		Fair Value Assets/(Liabilities)
							March 31, 2024			December 31, 2023
Interest Rate Swap	$	50,000		September 2019		September 2024	$	855		$	1,268
Interest Rate Swap		25,000		January 2023		January 2026		273			49
Interest Rate Swap		140,000		March 2023		November 2025		875			(295	)
Interest Rate Swap		26,041		August 2023		August 2028		(325	)		(846	)
Interest Rate Swap		14,364		August 2023		August 2028		(179	)		(466	)
	$	255,405					$	1,499		$	(290	)

XML

Lease Intangibles (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Lease Intangibles and Value of Assumed Lease Obligations

Lease intangibles and the value of assumed lease obligations as of March 31, 2024 and December 31, 2023 were comprised of the following (in thousands):

	Lease Intangible Assets												Lease Intangible Liabilities
March 31, 2024	Above Market Leases			In Place Leases			Leasing Commissions			Total			Below Market Leases			Below Market Ground Lease			Total
Cost	$	17,463		$	73,127		$	32,537		$	123,127		$	(14,968	)	$	(138	)	$	(15,106	)
Accumulated amortization		(10,537	)		(52,290	)		(19,841	)		(82,668	)		7,656			57			7,713
	$	6,926		$	20,837		$	12,696		$	40,459		$	(7,312	)	$	(81	)	$	(7,393	)
	Lease Intangible Assets												Lease Intangible Liabilities
December 31, 2023	Above Market Leases			In Place Leases			Leasing Commissions			Total			Below Market Leases			Below Market Ground Lease			Total
Cost	$	17,463		$	73,128		$	32,541		$	123,132		$	(14,968	)	$	(138	)	$	(15,106	)
Accumulated amortization		(10,222	)		(51,290	)		(19,186	)		(80,698	)		7,314			56			7,370
	$	7,241		$	21,838		$	13,355		$	42,434		$	(7,654	)	$	(82	)	$	(7,736	)

Estimated Aggregate Amortization Expense for Lease Intangibles

The estimated aggregate amortization expense for lease intangibles for the next five years and in the aggregate are as follows (in thousands):

2024	$	4,748
2025		6,194
2026		5,887
2027		4,900
2028		4,206
Thereafter		7,131
	$	33,066

XML

Debt (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Summary of Outstanding Indebtness

The following table summarizes the indebtedness as of March 31, 2024 and December 31, 2023 (dollars in thousands), including the impact of the effective interest rate swaps described in Note 5:

Property	March 31, 2024		December 31, 2023		Interest Rate as of March 31, 2024			Maturity
Unsecured Credit Facility (2)(4)	$	200,000	$	200,000		SOFR +1.50	%(1)(2)	November 2025
Term Loan (3)		50,000		50,000		SOFR +1.35	%(1)(3)	September 2024
Term Loan (4)		25,000		25,000		6.00	%(4)	January 2026
Mission City		45,772		45,994		3.78	%	November 2027
Canyon Park (5)		38,742		38,932		4.30	%	March 2027
Circle Point		38,678		38,789		4.49	%	September 2028
SanTan (6)		31,322		31,501		4.56	%	March 2027
Intellicenter		30,523		30,682		4.65	%	October 2025
The Quad		30,600		30,600		4.20	%	September 2028
2525 McKinnon		27,000		27,000		4.24	%	April 2027
FRP Collection		26,041		26,139		7.05	%(7)	August 2028
Greenwood Blvd		20,719		20,856		3.15	%	December 2025
Cascade Station (8)		20,680		20,752		4.55	%	May 2024
5090 N. 40th St		20,257		20,370		3.92	%	January 2027
AmberGlen (9)		20,000		20,000		3.69	%	May 2027

Property	March 31, 2024			December 31, 2023			Interest Rate as of March 31, 2024			Maturity
FRP Ingenuity Drive (10)		15,782			15,860			4.44	%		December 2024
Central Fairwinds		15,711			15,826			3.15	%		June 2024
Carillon Point		14,364			14,419			7.05	%(7)		August 2028
Total Principal		671,191			672,720
Deferred financing costs, net		(2,954	)		(3,258	)
Unamortized fair value adjustments		12			48
Total	$	668,249		$	669,510

(1) As of March 31, 2024, the daily-simple Secured Overnight Financing Rate (“SOFR”) was 5.34%.

(2) Borrowings under our unsecured credit facility (the “Unsecured Credit Facility”) bear interest at a rate equal to the daily-simple SOFR rate plus a margin of between 135 to 235 basis points depending upon the Company’s consolidated leverage ratio. On February 9, 2023, the Company entered into a three-year interest rate swap for a notional amount of $140 million, effective March 8, 2023, effectively fixing the SOFR component of the borrowing rate for $140 million of the Unsecured Credit Facility at 4.19%. As of March 31, 2024, the Unsecured Credit Facility had $200.0 million drawn and a $2.5 million letter of credit to satisfy escrow requirements for a mortgage lender. The Unsecured Credit Facility matures in November 2025 and may be extended 12 months at the Company’s option upon meeting certain conditions. The Unsecured Credit Facility requires the Company to maintain a fixed charge coverage ratio of no less than 1.50x.

(3) Borrowings under the $50 million term loan bear interest at a rate equal to the daily-simple SOFR rate plus a margin of between 135 to 225 basis points depending upon the Company’s consolidated leverage ratio. The SOFR component of the borrowing rate is effectively fixed for the remainder of the five-year term by a $50 million interest rate swap at 1.17%.

(4) On January 5, 2023, the Company entered into a second amendment to its amended and restated credit agreement, dated November 16, 2021 for the Unsecured Credit Facility and entered into a three-year $25 million term loan, increasing its total authorized borrowings from $350 million to $375 million. Borrowings under the $25 million term loan bear interest at a rate equal to the daily-simple SOFR rate plus a margin of 210 basis points. In conjunction with the term loan, the Company also entered into a three-year interest rate swap for a notional amount of $25 million, effectively fixing the SOFR component of the borrowing rate of the term loan at 3.90%.

(5) The mortgage loan anticipated repayment date (“ARD”) is March 1, 2027. The final scheduled maturity date can be extended up to 5 years beyond the ARD. If the loan is not paid off at ARD, the loan’s interest rate shall be adjusted to the greater of (i) the initial interest rate plus 200 basis points or (ii) the yield on the five year “on the run” treasury reported by Bloomberg market data service plus 450 basis points.

(6) In the second quarter of 2023, the Debt Service Coverage Ratio (“DSCR”) and debt yield covenants for SanTan were not met, which triggered a ‘cash-sweep period’ that began in the second quarter of 2023. As of March 31, 2024, the DSCR and debt yield covenants were still not met. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $3.6 million and $4.1 million, respectively.

(7) The FRP Collection and Carillon Point loans bear interest at a rate equal to the daily-simple SOFR rate plus a margin of 275 basis points. The SOFR component of the borrowing rate is effectively fixed for the remainder of the five-year term via interest rate swaps at 4.30%.

(8) In the first quarter of 2023, a ‘cash-sweep period’ began for the Cascade Station loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $2.3 million and $2.0 million, respectively. On May 1, 2024, the non-recourse property loan at our Cascade Station property in Portland matured, and an event of default was triggered under the terms of the Cascade Station loan, following non-payment of the principal amount outstanding at loan maturity.

(9) In the first quarter of 2024, a ‘cash-sweep period’ began for the AmberGlen loan due to the non-renewal of a major tenant’s leased space in the building. As of March 31, 2024, total restricted cash for the property was $0.2 million.

(10) In the third quarter of 2022, the DSCR covenant for FRP Ingenuity Drive was not met, which triggered a ‘cash-sweep period’ that began in the fourth quarter of 2022. As of March 31, 2024, the DSCR was still not met. As of March 31, 2024, and December 31, 2023, total restricted cash for the property was $3.5 million and $3.2 million, respectively.

Schedule of Principal Repayments of Mortgage Payable

The scheduled principal repayments of debt as of March 31, 2024 are as follows (in thousands):

2024	$	106,146
2025		254,697
2026		29,563
2027		176,477
2028		104,308
Thereafter		—
	$	671,191

XML

Leases (Tables)

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

Operating Lease Lease Income

The Company recognized fixed and variable lease payments for operating leases for the three months ended March 31, 2024 and 2023 as follows (in thousands):

	Three Months Ended March 31,
	2024		2023
Fixed payments	$	37,592	$	38,914
Variable payments		6,778		6,743
	$	44,370	$	45,657

Schedule of Future Minimum Rental Payments for Operating Leases

Future minimum lease payments to be received by the Company as of March 31, 2024 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):

2024	$	96,163
2025		119,416
2026		109,150
2027		92,233
2028		77,533
Thereafter		165,595
	$	660,090

Schedule Of Supplemental Balance Sheet Information Related To Leases

Right-of-use assets and lease liabilities have been included within other assets and other liabilities on the Company’s condensed consolidated balance sheets as follows (in thousands):

	March 31, 2024		December 31, 2023
Right-of-use asset – operating leases	$	12,483	$	12,564
Lease liability – operating leases	$	8,484	$	8,550
Right-of-use asset – financing leases	$	9,763	$	9,820
Lease liability – financing leases	$	1,573	$	1,551

Schedule future minimum lease payments to be paid

Future minimum lease payments to be paid by the Company as a lessee for operating and financing leases as of March 31, 2024 for the next five years and thereafter are as follows (in thousands):

	Operating Leases			Financing Leases
2024	$	459		$	6
2025		770			8
2026		724			8
2027		587			8
2028		587			8
Thereafter		25,976			6,930
Total future minimum lease payments		29,103			6,968
Discount		(20,619	)		(5,395	)
Total	$	8,484		$	1,573

XML

Stockholder's Equity (Tables)

3 Months Ended

Mar. 31, 2024

Federal Home Loan Banks [Abstract]

Summary of Activity of Awards under Equity Incentive Plan

The following table summarizes the activity of the awards under the Equity Incentive Plan for the three months ended March 31, 2024:

	Number of RSUs			Number of Performance RSUs
Outstanding at December 31, 2023		451,741			424,888
Granted		324,414			324,952
Issuance of dividend equivalents		8,290			—
Vested		(228,747	)		(120,000	)
Outstanding at March 31, 2024		555,698			629,840

The following table summarizes the activity of the awards under the Equity Incentive Plan for the three months ended March 31, 2023:

	Number of RSUs			Number of Performance RSUs
Outstanding at December 31, 2022		428,320			307,500
Granted		198,022			214,888
Issuance of dividend equivalents		9,485			—
Vested		(216,520	)		(97,500	)
Outstanding at March 31, 2023		419,307			424,888

Summary of Restricted Stock Units ("RSUs") and Performance RSU

During the three months ended March 31, 2024 and March 31, 2023, the Company granted the following restricted stock units (“RSUs”) and Performance RSU Awards to directors, executive officers and certain non-executive employees:

	Units Granted				Fair Value (in thousands)		Weighted Average Grant Fair Value Per Share
	RSUs		Performance RSUs
2024		324,414		324,952	$	3,539	$	5.45
2023		198,022		214,888		3,729		9.03

Summary of Recognized Compensation Expense for RSUs and Performance RSU

During the three months ended March 31, 2024 and March 31, 2023, the Company recognized net compensation expense for the RSUs and Performance RSU Awards as follows (in thousands):

	RSUs		Performance RSUs		Total
2024	$	641	$	429	$	1,070
2023		643		381		1,024

XML

Organization and Description of Business - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Company formation date	Nov. 26, 2013
Operation commencement date	Apr. 21, 2014

XML

Lease Intangibles - Schedule of Lease Intangibles and Value of Assumed Lease Obligations (Detail) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Cost, Lease Intangible Assets	$ 123,127	$ 123,132
Accumulated amortization, Lease Intangible Assets	(82,668)	(80,698)
Total, Lease Intangible Assets	40,459	42,434
Cost, Lease Intangible Liabilities	(15,106)	(15,106)
Accumulated amortization, Lease Intangible Liabilities	7,713	7,370
Total, Lease Intangible Liabilities	(7,393)	(7,736)
Above Market Leases [Member]
Finite-Lived Intangible Assets [Line Items]
Cost, Lease Intangible Assets	17,463	17,463
Accumulated amortization, Lease Intangible Assets	(10,537)	(10,222)
Total, Lease Intangible Assets	6,926	7,241
In Place Leases [Member]
Finite-Lived Intangible Assets [Line Items]
Cost, Lease Intangible Assets	73,127	73,128
Accumulated amortization, Lease Intangible Assets	(52,290)	(51,290)
Total, Lease Intangible Assets	20,837	21,838
Leasing Commissions [Member]
Finite-Lived Intangible Assets [Line Items]
Cost, Lease Intangible Assets	32,537	32,541
Accumulated amortization, Lease Intangible Assets	(19,841)	(19,186)
Total, Lease Intangible Assets	12,696	13,355
Below Market Tenant Lease [Member]
Finite-Lived Intangible Assets [Line Items]
Cost, Lease Intangible Liabilities	(14,968)	(14,968)
Accumulated amortization, Lease Intangible Liabilities	7,656	7,314
Total, Lease Intangible Liabilities	(7,312)	(7,654)
Below Market Ground Lease [Member]
Finite-Lived Intangible Assets [Line Items]
Cost, Lease Intangible Liabilities	(138)	(138)
Accumulated amortization, Lease Intangible Liabilities	57	56
Total, Lease Intangible Liabilities	$ (81)	$ (82)

XML

Lease Intangibles - Estimated Aggregate Amortization Expense for Lease Intangibles (Detail) $ in Thousands	Mar. 31, 2024 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2024	$ 4,748
2025	6,194
2026	5,887
2027	4,900
2028	4,206
Thereafter	7,131
Total	$ 33,066

XML

Debt - Summary of Outstanding Indebtedness (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Indebtedness	$ 671,191	$ 672,720
Deferred financing costs, net	(2,954)	(3,258)
Unamortized fair value adjustments	12	48
Total	668,249	669,510
Unsecured Debt [Member] | Term loan [Member]
Debt Instrument [Line Items]
Indebtedness	$ 50,000	50,000
Interest Rate, terms	1.35
Interest Rate, spread	1.35%
Maturity	2024-09
Unsecured Debt [Member] | Term Loan Two [Member]
Debt Instrument [Line Items]
Indebtedness	$ 25,000	25,000
Interest Rate	6.00%
Maturity	2026-01
Credit Facility [Member] | Unsecured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 200,000	200,000
Interest Rate, terms	1.50
Interest Rate, spread	1.50%
Maturity	2025-11
Mission City [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 45,772	45,994
Interest Rate	3.78%
Maturity	2027-11
Canyon Park [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 38,742	38,932
Interest Rate	4.30%
Maturity	2027-03
Circle Point [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 38,678	38,789
Interest Rate	4.49%
Maturity	2028-09
SanTan [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 31,322	31,501
Interest Rate	4.56%
Maturity	2027-03
Intellicenter [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 30,523	30,682
Interest Rate	4.65%
Maturity	2025-10
The Quad [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 30,600	30,600
Interest Rate	4.20%
Maturity	2028-09
2525 McKinnon [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 27,000	27,000
Interest Rate	4.24%
Maturity	2027-04
FRP Collection [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 26,041	26,139
Interest Rate	7.05%
Maturity	2028-08
Greenwood Blvd [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 20,719	20,856
Interest Rate	3.15%
Maturity	2025-12
Cascade Station [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 20,680	20,752
Interest Rate	4.55%
Maturity	2024-05
5090 N 40th St [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 20,257	20,370
Interest Rate	3.92%
Maturity	2027-01
AmberGlen Property [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 20,000	20,000
Interest Rate	3.69%
Maturity	2027-05
Central Fairwinds [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 15,711	15,826
Interest Rate	3.15%
Maturity	2024-06
FRP Ingenuity Drive [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 15,782	15,860
Interest Rate	4.44%
Maturity	2024-12
Carillon Point [Member] | Secured Debt [Member]
Debt Instrument [Line Items]
Indebtedness	$ 14,364	$ 14,419
Interest Rate	7.05%
Maturity	2028-08

XML

Debt - Summary of Outstanding Indebtedness (Parenthetical) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023	Aug. 16, 2023	Mar. 08, 2023	Feb. 09, 2023	Jan. 06, 2023	Jan. 05, 2023
Debt Instrument [Line Items]
Derivative, Notional Amount	$ 255,405
Interest Rate Swap [Member]
Debt Instrument [Line Items]
Derivative, Notional Amount			$ 26,300		$ 140,000	$ 50,000	$ 25,000
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Interest Rate Swap [Member] | Term Loan Two [Member]
Debt Instrument [Line Items]
Derivative, Fixed Interest Rate							3.90%
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Interest Rate Swap [Member] | Term loan [Member]
Debt Instrument [Line Items]
Derivative, Fixed Interest Rate						1.17%
Unsecured Debt [Member] | Term Loan Two [Member]
Debt Instrument [Line Items]
Term loan							$ 25,000
Unsecured Debt [Member] | Term loan [Member]
Debt Instrument [Line Items]
Interest Rate, Description	1.35%
Term loan							50,000
Unsecured Debt [Member] | Margin [Member] | Term Loan Two [Member]
Debt Instrument [Line Items]
Interest Rate, Description	210.00%
Unsecured Debt [Member] | Minimum [Member] | Term loan [Member]
Debt Instrument [Line Items]
Interest Rate, Description	135.00%
Unsecured Debt [Member] | Maximum [Member] | Term loan [Member]
Debt Instrument [Line Items]
Interest Rate, Description	225.00%
SanTan [Member] | Debt Service Coverage Ratio [Member] | Debt Yield [Member]
Debt Instrument [Line Items]
Restricted Cash	$ 3,600	$ 4,100
FRP Collection [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Derivative, Fixed Interest Rate			4.30%
FRP Collection [Member] | Secured Debt [Member] | Margin [Member]
Debt Instrument [Line Items]
Interest Rate, Description	275.00%
AmberGlen Property [Member]
Debt Instrument [Line Items]
Restricted Cash	$ 200
Carillon Point [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Derivative, Notional Amount			$ 14,500
Carillon Point [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Derivative, Fixed Interest Rate			4.30%
Carillon Point [Member] | Secured Debt [Member] | Margin [Member]
Debt Instrument [Line Items]
Interest Rate, Description	275.00%
Canyon Park [Member] | Secured Debt [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest Rate, Description	200.00%
Canyon Park [Member] | Secured Debt [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest Rate, Description	450.00%
Cascade Station [Member]
Debt Instrument [Line Items]
Restricted Cash	$ 2,300	2,000
FRP Ingenuity Drive [Member] | Debt Service Coverage Ratio [Member]
Debt Instrument [Line Items]
Restricted Cash	3,500	$ 3,200
Credit Facility [Member]
Debt Instrument [Line Items]
Revolving Credit Facility, outstanding					$ 140,000
Credit Facility [Member] | Letter of Credit [Member]
Debt Instrument [Line Items]
Revolving Credit Facility, outstanding	2,500
Credit Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Derivative, Fixed Interest Rate				4.19%
Credit Facility [Member] | Unsecured Debt [Member]
Debt Instrument [Line Items]
Revolving Credit Facility, outstanding	$ 200,000
Interest Rate, Description	1.50%
Credit Facility [Member] | Unsecured Debt [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Term loan [Member]
Debt Instrument [Line Items]
One month SOFR rate	5.34%
Credit Facility [Member] | Unsecured Debt [Member] | Minimum [Member]
Debt Instrument [Line Items]
Revolving Credit Facility, authorized amount							350,000
Interest Rate, Description	135.00%
Fixed charge coverage ratio	1.50%
Credit Facility [Member] | Unsecured Debt [Member] | Maximum [Member]
Debt Instrument [Line Items]
Revolving Credit Facility, authorized amount							$ 375,000
Interest Rate, Description	235.00%

XML

Debt - Schedule of Principal Repayments of Mortgage Payable (Detail) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Debt Disclosure [Abstract]
2024	$ 106,146
2025	254,697
2026	29,563
2027	176,477
2028	104,308
Thereafter	0
Total	$ 671,191	$ 672,720

XML

Fair Value of Financial Instruments - Summary of Company's Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023	Aug. 16, 2023	Feb. 09, 2023	Jan. 06, 2023	Jan. 05, 2023
Derivatives, Fair Value [Line Items]
Notional Value	$ 255,405
Fair Value	1,499	$ (290)
Interest Rate Swap [Member]
Derivatives, Fair Value [Line Items]
Notional Value			$ 26,300	$ 140,000	$ 50,000	$ 25,000
September 2024 [Member] | Interest Rate Swap [Member]
Derivatives, Fair Value [Line Items]
Notional Value	50,000
Fair Value, Assets	855	1,268
January 2026 [Member] | Interest Rate Swap [Member]
Derivatives, Fair Value [Line Items]
Notional Value	25,000
Fair Value, Assets	273	49
November 2025 [Member] | Interest Rate Swap [Member]
Derivatives, Fair Value [Line Items]
Notional Value	140,000
Fair Value, Assets	875
Fair Value, Liability		(295)
August 2028 [Member] | Interest Rate Swap [Member] | Derivative Instruments Maturity One [Member]
Derivatives, Fair Value [Line Items]
Notional Value	26,041
Fair Value, Liability	(325)	(846)
August 2028 [Member] | Interest Rate Swap [Member] | Derivative Instruments Maturity Two [Member]
Derivatives, Fair Value [Line Items]
Notional Value	14,364
Fair Value, Liability	$ (179)	$ (466)

XML

Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Aug. 16, 2023	Mar. 08, 2023	Feb. 09, 2023	Jan. 06, 2023	Jan. 05, 2023	Sep. 30, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notional amount	$ 255,405
Interest rate swap gain (loss) reclassified to interest expense	1,117	$ 477
Debt instrument carrying amount	671,191		$ 672,720
Interest Rate Swap [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notional amount				$ 26,300		$ 140,000	$ 50,000	$ 25,000
Interest rate swap gain (loss) reclassified to interest expense	1,100	$ 500
Interest Rate Swap [Member] | FRP Collection [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed interest rate				4.30%
Interest Rate Swap [Member] | Carillon Point [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notional amount				$ 14,500
Interest Rate Swap [Member] | Carillon Point [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed interest rate				4.30%
Interest Rate Swap [Member] | Credit Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed interest rate					4.19%
Interest Rate Swap [Member] | Term loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed interest rate							1.17%
Interest Rate Swap [Member] | Term Loan Two [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed interest rate								3.90%
LIBOR interest rate swap [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notional amount									$ 50,000
Fair Value, Inputs, Level 3 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Mortgage loans payable, fair value	339,600		343,100
Debt instrument carrying amount	$ 355,800		$ 357,200

XML

Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Related Party Transaction [Line Items]
Annual payment receivable for services	$ 44,493	$ 45,957
Administrative Services Agreement [Member] | SCRE II [Member] | Clarity Real Estate Ventures GP Limited [Member]
Related Party Transaction [Line Items]
Annual payment receivable for services		$ 100

XML

Leases - Additional Information (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($) ft²	Mar. 31, 2023 USD ($)	Feb. 07, 2024 ft²	Jan. 01, 2024 ft²	Dec. 31, 2023 USD ($)
Operating Lease cost	$ 200	$ 200
Weighted-average remaining lease term - operating leases	50 years
Weighted-average discount rate - operating leases	6.20%
Revenues	$ 44,493	45,957
Finance Lease, Weighted Average Remaining Lease Term	50 years
Finance Lease, Weighted Average Discount Rate, Percent	6.20%
Financing Lease Cost	$ 100	$ 100
Off balance sheet exposure asset	156,625				$ 152,540
Acquired lease intangible assets, net	$ 40,459				$ 42,434
Block 23 [Member]
Area of real estate property | ft²			46,000
Block 23 Terraces and Bloc 83 [Member]
Area of real estate property | ft²				177,000
Terraces and Bloc 83 [Member]
Area of real estate property | ft²	131,000
Off balance sheet exposure asset	$ 2,400
Acquired lease intangible assets, net	8,200
Straight-line rent receivables	1,500
Termination Fees [Member]
Revenues	$ 900
Maximum [Member]
Remaining lease terms	64 years
Remaining lease terms, Financing leases	64 years
Minimum [Member]
Remaining lease terms	3 years
Remaining lease terms, Financing leases	3 years

XML

Leases - Schedule of Operating Leases (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Fixed payments	$ 37,592	$ 38,914
Variable payments	6,778	6,743
Operating Lease, Lease Income	$ 44,370	$ 45,657
Operating Lease, Lease Income, Statement of Income or Comprehensive Income [Extensible Enumeration]	Operating Income (Loss)	Operating Income (Loss)

XML

Leases - Schedule of Future Minimum Lease Payments under Non-cancellable Operating Leases (Detail) $ in Thousands	Mar. 31, 2024 USD ($)
Leases [Abstract]
2024	$ 96,163
2025	119,416
2026	109,150
2027	92,233
2028	77,533
Thereafter	165,595
Total future minimum lease payments to be received	$ 660,090

XML

Leases - Schedule of Operating Right-of-Use Assets and Lease Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Right-of-use asset - operating leases	$ 12,483	$ 12,564
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other Assets	Other Assets
Lease liability – operating leases	$ 8,484	$ 8,550
Operating Lease, Liability, Statement of Financial Position [Extensible List]	Other Liabilities	Other Liabilities
Right-of-use asset – financing leases	$ 9,763	$ 9,820
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other Assets	Other Assets
Lease liability – financing leases	$ 1,573	$ 1,551
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Other Liabilities	Other Liabilities

XML

Leases - Schedule Future Minimum Lease Payments To Be Paid (Detail) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
2024	$ 459
2025	770
2026	724
2027	587
2028	587
Thereafter	25,976
Total future minimum lease payments	29,103
Discount	(20,619)
Total	8,484	$ 8,550
2024	6
2025	8
2026	8
2027	8
2028	8
Thereafter	6,930
Total future minimum lease payments	6,968
Discount	(5,395)
Total	$ 1,573	$ 1,551

XML

Stockholder's Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended		12 Months Ended
	Apr. 24, 2024	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	May 04, 2023	May 04, 2022
Class of Stock [Line Items]
Preferred stock, Dividend rate percentage		6.625%		6.625%
Maximum number of shares issued under Equity Incentive Plan						3,763,580
Stock Repurchase Program, Authorized Amount					$ 50.0
Stock Repurchased During Period, Shares		0	0
Schedule of Share Based Compensation Arrangement by Share Based Payment Award For Defined Performance		The payouts under the Performance RSU Awards are evaluated on a sliding scale as follows: TSR below the 30th percentile of the Peer Group would result in a 50% payout; TSR at the 50th percentile of the Peer Group would result in a 100% payout; and TSR at or above the 75th percentile of the Peer Group would result in a 150% payout. Payouts are mathematically interpolated between these stated percentile targets, subject to a 150% maximum.
Share-based Payment Award, Award Vesting Period		3 years
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock, Dividend rate percentage		6.625%
Common Stock [Member]
Class of Stock [Line Items]
Declared cash dividend distribution per share		$ 0.1
Dividends paid, declared date		Mar. 15, 2024
Dividends paid date		Apr. 24, 2024
Dividends paid, date of record		Apr. 10, 2024
Common Stock [Member] | Dividend Paid [Member]
Class of Stock [Line Items]
Cash distributions	$ 4.0
Preferred Stock [Member]
Class of Stock [Line Items]
Declared cash dividend distribution per share		$ 0.4140625
Dividends paid, declared date		Mar. 15, 2024
Dividends paid date		Apr. 24, 2024
Dividends paid, date of record		Apr. 10, 2024
Preferred Stock [Member] | Dividend Paid [Member]
Class of Stock [Line Items]
Cash distributions	$ 1.9
Executive Officer [Member]
Class of Stock [Line Items]
Share-based Payment Award, Award Vesting Period		3 years

XML

Stockholder's Equity - Summary of Activity of Awards under Equity Incentive Plan (Detail) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Restricted Stock Units (RSUs) [Member]
Schedule Of Share Based Compensation Restricted Stock Units Award Activity [Line Items]
Beginning balance	451,741	428,320
Granted	324,414	198,022
Issuance of dividend equivalents	8,290	9,485
Vested	(228,747)	(216,520)
Ending balance	555,698	419,307
Performance Restricted Stock Unit [Member]
Schedule Of Share Based Compensation Restricted Stock Units Award Activity [Line Items]
Beginning balance	424,888	307,500
Granted	324,952	214,888
Issuance of dividend equivalents	0	0
Vested	(120,000)	(97,500)
Ending balance	629,840	424,888

XML

Stockholder's Equity - Summary of Restricted Stock Units ("RSUs") and Performance RSU (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Schedule Of Share Based Compensation Restricted Stock Units Award Activity Granted [Line Items]
Fair Value	$ 3,539	$ 3,729
Weighted Average Grant Fair Value Per Share	$ 5.45	$ 9.03
Restricted Stock Units (RSUs) [Member]
Schedule Of Share Based Compensation Restricted Stock Units Award Activity Granted [Line Items]
Units Granted	324,414	198,022
Performance Restricted Stock Unit [Member]
Schedule Of Share Based Compensation Restricted Stock Units Award Activity Granted [Line Items]
Units Granted	324,952	214,888

XML

Stockholder's Equity - Summary of Recognized Compensation Expense for RSUs and Performance RSU (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Schedule Of Recognized Net Compensation Expense [Line Items]
Share-based Payment Arrangement, Amount Capitalized	$ 1,070	$ 1,024
Restricted Stock Units (RSUs) [Member]
Schedule Of Recognized Net Compensation Expense [Line Items]
Share-based Payment Arrangement, Amount Capitalized	641	643
Performance Restricted Stock Unit [Member]
Schedule Of Recognized Net Compensation Expense [Line Items]
Share-based Payment Arrangement, Amount Capitalized	$ 429	$ 381

XML

Subsequent Events - Additional Information (Detail) - USD ($) $ in Millions		12 Months Ended
	Jun. 13, 2019	Dec. 31, 2022	Mar. 31, 2024	Dec. 31, 2023
Cascade Station [Member]
Subsequent Event [Line Items]
Impairment of real estate		$ 6.5
Cascade Station [Member]
Subsequent Event [Line Items]
Restricted cash			$ 2.3	$ 2.0
Cascade Station [Member] | Secured Debt [Member]
Subsequent Event [Line Items]
Debt instrument, issued, principal	$ 22.5