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 September 30, 2025

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	(IRS Employer
of incorporation or organization)	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 November 4, 2025 was 40,363,640.

City Office REIT, Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended September 30, 2025

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2025 and 2024	3
	Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended September 30, 2025 and 2024	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024	6
	Notes to the Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION	27
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
Signatures		31

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)

	September 30, 2025			December 31, 2024
Assets
Real estate properties
Land	$	146,309		$	190,372
Building and improvement		839,998			1,169,793
Tenant improvement		121,483			163,569
Furniture, fixtures and equipment		236			1,368
		1,108,026			1,525,102
Accumulated depreciation		(207,015	)		(251,956	)
		901,011			1,273,146
Cash and cash equivalents		21,347			18,886
Restricted cash		17,935			15,073
Rents receivable, net		40,904			52,311
Deferred leasing costs, net		22,154			25,291
Acquired lease intangible assets, net		23,873			34,631
Other assets		4,225			23,744
Assets held for sale		35,784			12,588
Total Assets	$	1,067,233		$	1,455,670
Liabilities and Equity
Liabilities:
Debt	$	398,359		$	646,972
Accounts payable and accrued liabilities		29,008			34,535
Deferred rent		6,896			7,010
Tenant rent deposits		5,143			7,257
Acquired lease intangible liabilities, net		3,844			6,301
Other liabilities		5,396			16,879
Liabilities related to assets held for sale		8,134			2,176
Total Liabilities		456,780			721,130
Commitments and Contingencies (Note 9)
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 September 30, 2025 and December 31, 2024		112,000			112,000
Common stock, $0.01 par value, 100,000,000 shares authorized, 40,363,640 and    40,154,055 shares issued and outstanding as of September 30, 2025 and December 31,    2024		403			401
Additional paid-in capital		444,355			442,329
Retained earnings		55,172			179,838
Accumulated other comprehensive loss		(1,880	)		(713	)
Total Stockholders’ Equity		610,050			733,855
Non-controlling interests in properties		403			685
Total Equity		610,453			734,540
Total Liabilities and Equity	$	1,067,233		$	1,455,670

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 September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Rental and other revenues	$	37,275		$	42,371		$	121,876		$	129,207
Operating expenses:
Property operating expenses		15,615			17,783			48,201			53,020
General and administrative		3,780			3,790			11,835			11,321
Depreciation and amortization		10,573			14,642			41,762			44,440
Impairment of real estate		—			—			102,229			—
Merger and transaction-related costs		3,093			—			3,093			—
Total operating expenses		33,061			36,215			207,120			108,781
Operating income/(loss)		4,214			6,156			(85,244	)		20,426
Interest expense:
Contractual interest expense		(6,836	)		(8,274	)		(23,452	)		(24,502	)
Amortization of deferred financing costs and debt fair value		(776	)		(369	)		(1,510	)		(1,030	)
		(7,612	)		(8,643	)		(24,962	)		(25,532	)
Net loss on disposition of real estate property		(378	)		—			(378	)		(1,462	)
Net loss		(3,776	)		(2,487	)		(110,584	)		(6,568	)
Less:
Net income attributable to non-controlling interests in properties		(38	)		(152	)		(266	)		(412	)
Net loss attributable to the Company		(3,814	)		(2,639	)		(110,850	)		(6,980	)
Preferred stock distributions		(1,855	)		(1,855	)		(5,565	)		(5,565	)
Net loss attributable to common stockholders	$	(5,669	)	$	(4,494	)	$	(116,415	)	$	(12,545	)
Net loss per common share:
Basic	$	(0.14	)	$	(0.11	)	$	(2.89	)	$	(0.31	)
Diluted	$	(0.14	)	$	(0.11	)	$	(2.89	)	$	(0.31	)
Weighted average common shares outstanding:
Basic		40,363			40,154			40,343			40,135
Diluted		40,363			40,154			40,343			40,135
Dividend distributions declared per common share	$	—		$	0.10		$	0.20		$	0.30

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

2

City Office REIT, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(In thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Net loss	$	(3,776	)	$	(2,487	)	$	(110,584	)	$	(6,568	)
Other comprehensive loss:
Unrealized cash flow hedge gain/(loss)		49			(3,087	)		(958	)		470
Amounts reclassified to interest expense		(81	)		(1,000	)		(239	)		(3,249	)
Other comprehensive loss		(32	)		(4,087	)		(1,197	)		(2,779	)
Comprehensive loss		(3,808	)		(6,574	)		(111,781	)		(9,347	)
Less:
Comprehensive income attributable to non-controlling interests in    properties		(39	)		(99	)		(236	)		(382	)
Comprehensive loss attributable to the Company	$	(3,847	)	$	(6,673	)	$	(112,017	)	$	(9,729	)

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 loss			Total stockholders’ equity			Non- controlling interests in properties			Total equity
Balance —December 31, 2024		4,480	$	112,000		40,154	$	401	$	442,329	$	179,838		$	(713	)	$	733,855		$	685		$	734,540
Restricted stock award grants and vesting		—		—		204		2		249		(59	)		—			192			—			192
Common stock dividend distribution declared		—		—		—		—		—		(4,036	)		—			(4,036	)		—			(4,036	)
Preferred stock dividend distribution declared		—		—		—		—		—		(1,855	)		—			(1,855	)		—			(1,855	)
Contributions		—		—		—		—		—		—			—			—			24			24
Distributions		—		—		—		—		—		—			—			—			(161	)		(161	)
Net (loss)/income		—		—		—		—		—		(1,670	)		—			(1,670	)		171			(1,499	)
Other comprehensive loss		—		—		—		—		—		—			(646	)		(646	)		(19	)		(665	)
Balance —March 31, 2025		4,480	$	112,000		40,358	$	403	$	442,578	$	172,218		$	(1,359	)	$	725,840		$	700		$	726,540
Restricted stock award grants and vesting		—		—		—		—		903		(60	)		—			843			—			843
Common stock dividend distribution declared		—		—		—		—		—		(4,036	)		—			(4,036	)		—			(4,036	)
Preferred stock dividend distribution declared		—		—		—		—		—		(1,855	)		—			(1,855	)		—			(1,855	)
Contributions		—		—		—		—		—		—			—			—			35			35
Distributions		—		—		—		—		—		—			—			—			(290	)		(290	)
Net (loss)/income		—		—		—		—		—		(105,366	)		—			(105,366	)		57			(105,309	)
Other comprehensive loss		—		—		—		—		—		—			(488	)		(488	)		(12	)		(500	)
Balance —June 30, 2025		4,480	$	112,000		40,358	$	403	$	443,481	$	60,901		$	(1,847	)	$	614,938		$	490		$	615,428
Restricted stock award grants and vesting		—		—		5		—		874		(60	)		—			814			—			814
Common stock dividend distribution declared		—		—		—		—		—		—			—			—			—			—
Preferred stock dividend distribution declared		—		—		—		—		—		(1,855	)		—			(1,855	)		—			(1,855	)
Contributions		—		—		—		—		—		—			—			—			14			14
Distributions		—		—		—		—		—		—			—			—			(140	)		(140	)
Net (loss)/income		—		—		—		—		—		(3,814	)		—			(3,814	)		38			(3,776	)
Other comprehensive loss		—		—		—		—		—		—			(33	)		(33	)		1			(32	)
Balance — September 30, 2025		4,480	$	112,000		40,363	$	403	$	444,355	$	55,172		$	(1,880	)	$	610,050		$	403		$	610,453

4

	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, 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
Restricted stock award grants and vesting		—		—		—		—		1,139		(56	)		—			1,083			—			1,083
Common stock dividend distribution declared		—		—		—		—		—		(4,015	)		—			(4,015	)		—			(4,015	)
Preferred stock dividend distribution declared		—		—		—		—		—		(1,855	)		—			(1,855	)		—			(1,855	)
Contributions		—		—		—		—		—		—			—			—			442			442
Distributions		—		—		—		—		—		—			—			—			(104	)		(104	)
Net (loss)/income		—		—		—		—		—		(3,752	)		—			(3,752	)		125			(3,627	)
Other comprehensive loss		—		—		—		—		—		—			(478	)		(478	)		(3	)		(481	)
Balance —June 30, 2024		4,480	$	112,000		40,154	$	401	$	440,048	$	205,031		$	1,037		$	758,517		$	579		$	759,096
Restricted stock award grants and vesting		—		—		—		—		1,140		(56	)		—			1,084			—			1,084
Common stock dividend distribution declared		—		—		—		—		—		(4,015	)		—			(4,015	)		—			(4,015	)
Preferred stock dividend distribution declared		—		—		—		—		—		(1,855	)		—			(1,855	)		—			(1,855	)
Contributions		—		—		—		—		—		—			—			—			80			80
Distributions		—		—		—		—		—		—			—			—			(247	)		(247	)
Net (loss)/income		—		—		—		—		—		(2,639	)		—			(2,639	)		152			(2,487	)
Other comprehensive loss		—		—		—		—		—		—			(4,034	)		(4,034	)		(53	)		(4,087	)
Balance — September 30, 2024		4,480	$	112,000		40,154	$	401	$	441,188	$	196,466		$	(2,997	)	$	747,058		$	511		$	747,569

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

5

City Office REIT, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Nine Months Ended September 30,
	2025			2024
Cash Flows from Operating Activities:
Net loss	$	(110,584	)	$	(6,568	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		41,762			44,440
Amortization of deferred financing costs and debt fair value		1,510			1,030
Amortization of above and below market leases		75			(97	)
Straight-line rent/expense		(513	)		(40	)
Non-cash stock compensation		2,601			3,238
Net loss on disposition of real estate property		378			1,462
Impairment of real estate		102,229			—
Changes in non-cash working capital:
Rents receivable, net		(601	)		471
Other assets		899			178
Accounts payable and accrued liabilities		2,535			5,966
Deferred rent		16			(449	)
Tenant rent deposits		(1,598	)		349
Net Cash Provided By Operating Activities		38,709			49,980
Cash Flows from/(to) Investing Activities:
Additions to real estate properties		(24,681	)		(21,300	)
Net proceeds from sale of real estate property		267,977			—
Reduction of cash on disposition of real estate property		—			(2,477	)
Deferred leasing costs		(7,537	)		(5,980	)
Net Cash Provided By/(Used In) Investing Activities		235,759			(29,757	)
Cash Flows to Financing Activities:
Debt issuance and extinguishment costs		(678	)		(576	)
Proceeds from borrowings		8,500			59,000
Repayment of borrowings		(258,044	)		(60,075	)
Dividend distributions paid to stockholders		(17,652	)		(17,590	)
Distributions to non-controlling interests in properties		(591	)		(795	)
Shares withheld for payment of taxes on restricted stock unit vesting		(753	)		(1,072	)
Contributions from non-controlling interests in properties		73			522
Net Cash Used In Financing Activities		(269,145	)		(20,586	)
Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash		5,323			(363	)
Cash, Cash Equivalents and Restricted Cash, Beginning of Period		33,959			43,392
Cash, Cash Equivalents and Restricted Cash, End of Period	$	39,282		$	43,029
Reconciliation of Cash, Cash Equivalents and Restricted Cash:
Cash and Cash Equivalents, End of Period		21,347			25,911
Restricted Cash, End of Period		17,935			17,118
Cash, Cash Equivalents and Restricted Cash, End of Period	$	39,282		$	43,029
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest	$	25,600		$	25,642
Purchase of additions in real estate properties included in accounts payable	$	4,074		$	11,237
Purchase of deferred leasing costs included in accounts payable	$	1,671		$	1,998

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

6

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 expects to 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.

On July 23, 2025, the Company entered into a definitive merger agreement (the “Merger Agreement”) with MCME Carell Holdings, LP and MCME Carell Merger Sub, LLC (collectively, “MCME Carell” or the “Buyer”) under which, subject to the satisfaction of the conditions set forth in the Merger Agreement, MCME Carell will acquire (other than shares owned by the Buyer, the Company or their respective affiliates) all of the issued and outstanding shares of the Company for $7.00 per share of common stock in cash (the “Merger”). The Merger is subject to the satisfaction of a number of customary closing conditions more thoroughly described in the Merger Agreement, including the approval of the Company's common stockholders. On October 16, 2025, the Company’s common stockholders approved the Merger.

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, 2024.

3. Real Estate Investments

Assets Held for Sale

On June 18, 2025, the Company entered into a purchase and sale agreement (the “Phoenix Sale Agreement”) to sell Block 23, Pima Center, 5090 N 40th St, SanTan, Papago Tech, The Quad, and Camelback Square (the “Phoenix Portfolio”) for $296.0 million, which excludes closing costs and credits. Upon classification as held for sale during the second quarter of 2025, the Company recognized an impairment of $102.2 million to lower the carrying amount of the Phoenix Portfolio to its estimated fair value less cost to sell. Refer to “Impairment of Real Estate” below. On August 15, 2025, the Company completed the sale of six of the seven office properties in the Phoenix Portfolio (the “First Phoenix Closing”). These six properties included Block 23; 5090 N 40th St; SanTan; Papago Tech; The Quad; and Camelback Square. The Company’s Pima Center property continues to be under contract at a $30.0 million gross sales price, and meets the criteria for classification as held for sale as of September 30, 2025. The sale of the Pima Center property is expected to close at a later date, subject to the Company (or its successor in interest) obtaining certain approvals related to the property’s ground lease.

7

The property was classified as held for sale as of September 30, 2025 (in thousands):

Pima Center	September 30, 2025
Real estate properties, net	$	27,572
Deferred leasing costs, net		1,038
Rents receivable, prepaid expenses and other assets		7,174
Assets held for sale	$	35,784
Accounts payable, accrued liabilities, deferred rent, tenant rent deposits, and other liabilities		8,134
Liabilities related to assets held for sale	$	8,134

On November 1, 2024, the Company entered into a purchase and sale agreement to sell the Superior Pointe property for
$12.0 million, which excludes closing costs and credits. The Company determined that the property met the criteria for classification
as held for sale as of December 31, 2024. Upon classification as held for sale, the Company recognized an impairment of $8.5 million
to lower the carrying amount of the property to its estimated fair value less cost to sell. Refer to “Impairment of Real Estate” below.
As of December 31, 2024, the Company had received a deposit of $0.3 million, which was recorded in restricted cash along with a
corresponding liability in other liabilities on the Company’s condensed consolidated balance sheets. On January 14, 2025, the Company completed the sale of the Superior Pointe property.

The property was classified as held for sale as of December 31, 2024 (in thousands):

Superior Pointe	December 31, 2024
Real estate properties, net	$	10,637
Deferred leasing costs, net		382
Rents receivable, prepaid expenses and other assets		1,569
Assets held for sale	$	12,588
Accounts payable, accrued liabilities, deferred rent, tenant rent deposits, and other liabilities		2,176
Liabilities related to assets held for sale	$	2,176

Disposition of Real Estate Property

First Phoenix Closing

As described above, on August 15, 2025, the Company closed on the sale of six of the Company’s office properties located in Phoenix, Arizona for an aggregate sales price of $266.0 million. Upon closing of the sale, the Company recognized an aggregate loss of $0.4 million net of disposal-related costs, which has been classified as net loss on disposition of real estate property in the condensed consolidated statement of operations.

Superior Pointe

On January 14, 2025, the Company sold the Superior Pointe property in Denver, Colorado for a gross sales price of $12.0 million. No gain or loss was recognized on the sale as the property was carried at fair value less cost to sell on the date of disposition.

Cascade Station

On June 27, 2024, the Company entered into an assignment in lieu of foreclosure agreement to transfer possession and control of the Cascade Station property to the lender as a result of an event of default as defined in the property’s non-recourse loan agreement. Given the terms of the assignment in lieu of foreclosure agreement, the Company assessed whether the entity holding the property should be reassessed for consolidation as a Variable Interest Entity (“VIE”) in accordance with ASC 810 – Consolidation.

Based on its analysis, the Company concluded that it was not the primary beneficiary of the VIE and therefore deconsolidated the property as of June 27, 2024. The Company deconsolidated the net carrying value of real estate assets of $17.9 million, the mortgage loan of $20.6 million, cash and restricted cash of $2.5 million and net current assets of $1.7 million. For the three months ended June 30, 2024, the Company recognized a loss on deconsolidation of $1.5 million, which has been included within net loss on disposition of real estate property on the Company’s condensed consolidated statement of operations and statement of cash flows.

8

Impairment of Real Estate

During the three and nine months ended September 30, 2025, the Company recognized an impairment of real estate of nil and $102.2 million, respectively, to lower the carrying amount of the Phoenix Portfolio to its estimated fair value less cost to sell.

There was no impairment of real estate during the nine months ended September 30, 2024.

4. Lease Intangibles

Lease intangibles and the value of assumed lease obligations as of September 30, 2025 and December 31, 2024 were comprised of the following (in thousands):

	Lease Intangible Assets												Lease Intangible Liabilities
September 30, 2025	Above Market Leases			In Place Leases			Leasing Commissions			Total			Below Market Leases			Below Market Ground Lease			Total
Cost	$	14,507		$	51,716		$	23,017		$	89,240		$	(9,924	)	$	(138	)	$	(10,062	)
Accumulated amortization		(9,929	)		(39,777	)		(15,661	)		(65,367	)		6,155			63			6,218
	$	4,578		$	11,939		$	7,356		$	23,873		$	(3,769	)	$	(75	)	$	(3,844	)
	Lease Intangible Assets												Lease Intangible Liabilities
December 31, 2024	Above Market Leases			In Place Leases			Leasing Commissions			Total			Below Market Leases			Below Market Ground Lease			Total
Cost	$	16,596		$	69,760		$	30,987		$	117,343		$	(14,294	)	$	(138	)	$	(14,432	)
Accumulated amortization		(10,584	)		(51,893	)		(20,235	)		(82,712	)		8,071			60			8,131
	$	6,012		$	17,867		$	10,752		$	34,631		$	(6,223	)	$	(78	)	$	(6,301	)

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

2025	$	1,324
2026		4,986
2027		4,018
2028		3,468
2029		2,624
Thereafter		3,609
	$	20,029

9

5. Debt

The following table summarizes the indebtedness as of September 30, 2025 and December 31, 2024 (dollars in thousands), including the impact of the effective interest rate swaps described in Note 6:

Property		September 30, 2025		December 31, 2024	Interest Rate as of September 30, 2025 (1)		Maturity
Credit Facility (2)	$	115,000	$	255,000	SOFR + 1.40%	(1)(2)(3)	January 2026	(2)
Mission City		44,399		45,095	3.78%		November 2027
Circle Point		37,638		38,109	4.49%		September 2028
Canyon Park (4)		37,558		38,159	4.30%		March 2027	(4)
Intellicenter (5)		29,540		30,042	4.65%		October 2025	(5)
2525 McKinnon		27,000		27,000	4.24%		April 2027
FRP Collection		25,416		25,736	7.05%	(6)	August 2028
AmberGlen		20,000		20,000	3.69%		May 2027
Greenwood Blvd (7)		19,982		20,299	6.34%	(7)	May 2028
Central Fairwinds		15,321		15,497	7.68%	(8)	June 2029
FRP Ingenuity Drive (9)		14,096		14,096	4.44%		December 2026
Carillon Point		14,020		14,196	7.05%	(6)	August 2028
Term Loan (10)		-		25,000	-		-
SanTan (11)		-		30,773	-		-
The Quad (11)		-		30,600	-		-
5090 N 40th St (11)		-		19,912	-		-
Total Principal		399,970		649,514
Deferred financing costs, net		(1,611)		(2,542)
Total	$	398,359	$	646,972

(1)As of September 30, 2025, the daily-simple Secured Overnight Financing Rate (“SOFR”) was 4.24%.

(2)Borrowings under our credit facility (the “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. As of September 30, 2025, the Credit Facility had $115.0 million drawn and a $2.5 million letter of credit to satisfy escrow requirements for a mortgage lender. On August 15, 2025, the Company entered into a third amendment to the Amended and Restated Credit Agreement, dated November 16, 2021, for the Credit Facility (the “Amended and Restated Credit Agreement”), to, among other things, decrease the total authorized borrowing from $325 million to $150 million, and provide for the pledge of certain of the Company's assets as security. Subsequent to quarter-end, on October 3, 2025, the Company entered into a fourth amendment to the Amended and Restated Credit Agreement to extend the maturity date from November 2025 to January 2026. There is an option for further extension to November 2026, provided the Company’s option is delivered no later than 30 days prior to the January 2026 maturity, there is no event of default, the Company affirms the representations and warranties set forth in the Amended and Restated Credit Agreement, and the Company pays the extension fee. The Credit Facility requires the Company to maintain a fixed charge coverage ratio of no less than 1.50x.

(3)On February 9, 2023, the Company entered into an interest rate swap for a notional amount of $140 million, effective March 8, 2023 through November 16, 2025, to effectively fix the SOFR component of the borrowing rate for $140 million of the Credit Facility at 4.19%. During the period ended September 30, 2025, the Company discontinued the hedging relationship of the interest rate swap as the hedged future cash flows were no longer highly probable to occur. Refer to Note 6 for further details.

(4)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.

(5)In April 2025, a ‘cash-sweep period’ began at the Intellicenter property following the DSCR covenant not being met. As of September 30, 2025, total restricted cash for the property was $1.8 million. On October 1, 2025, the non-recourse property loan at the Intellicenter property matured, and an event of default occurred under the terms of the Intellicenter loan, following non-payment of the principal amount outstanding at loan maturity. The Company is in discussions with the lender to extend the maturity of the loan.

(6)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%.

(7)On May 28, 2025, the Company entered into an amended and restated loan agreement for Greenwood Blvd, extending the term for an additional three years and amending the interest rate from fixed to floating. The loan bears interest at a rate equal to the daily-simple SOFR rate plus a margin of 250 basis points. The Company also entered into a three-year interest rate swap agreement, effectively fixing the SOFR component of the borrowing rate of the loan at 3.84%.

10

(8)The Central Fairwinds loan bears interest at a rate equal to the daily-simple SOFR rate plus a margin of 325 basis points. The SOFR component of the borrowing rate is effectively fixed for the remainder of the five-year term via an interest rate swap at 4.43%.

(9)Under the terms of the FRP Ingenuity Drive loan modification and extension agreement signed in the second quarter of 2024, the property will be in a ‘cash-sweep period’ which will continue through the maturity of the loan. As of September 30, 2025 and December 31, 2024, total restricted cash for the property was $2.0 million and $3.6 million, respectively.

(10)On August 15, 2025, the $25 million term loan was repaid with proceeds from the First Phoenix Closing. The $25 million interest rate swap entered into on January 5, 2023 was terminated concurrently with the repayment of the term loan. Refer to Note 6 for further details.

(11)On August 15, 2025, the mortgage loans associated with the 5090 N 40th St, SanTan and The Quad properties were repaid in full, following the First Phoenix Closing.

The scheduled principal repayments of indebtedness as of September 30, 2025, without consideration of extension options, are as follows (in thousands):

2025	$	145,422
2026		17,975
2027		128,950
2028		93,133
2029		14,490
Thereafter		—
	$	399,970

6. 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 January 2023, the Company entered into an interest rate swap for a notional amount of $25.0 million. The interest rate swap effectively fixed the SOFR component of the corresponding loan at approximately 3.90% for the three-year term. In August 2025, the $25.0 million interest rate swap was terminated, following the repayment of the corresponding $25.0 million loan. Upon termination, the Company reclassified a nominal amount from other comprehensive loss to interest expense within the condensed consolidated statement of operations.

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% until November 16, 2025. During the period ended September 30, 2025, the Company discontinued the hedging relationship of the interest rate swap for a notional amount of $140.0 million, as the hedged future cash flows were no longer highly probable to occur. Upon discontinuation, the Company reclassified a nominal amount from other comprehensive loss to interest expense within the condensed consolidated statement of operations. This derivative continues to be recognized on the condensed consolidated balance sheet at fair value, presented within other liabilities.

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.

In May 2024, the Company entered into an interest rate swap at Central Fairwinds for an initial notional amount of $15.6 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.43% 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.

11

In May 2025, the Company entered into an interest rate swap at Greenwood Blvd for an initial notional amount of $20.1 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 3.84% for the three-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 for FRP Collection, Carillon Point, Central Fairwinds and Greenwood Blvd 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 September 30, 2025 and December 31, 2024 (in thousands):

					Fair Value Assets/(Liabilities)
	Notional Value September 30, 2025		Effective Date	Maturity Date	September 30, 2025			December 31, 2024
Interest Rate Swap	$	140,000	March 2023	November 2025	$	(15	)	$	(75	)
Interest Rate Swap		25,416	August 2023	August 2028		(690	)		(275	)
Interest Rate Swap		14,020	August 2023	August 2028		(380	)		(152	)
Interest Rate Swap		15,321	May 2024	June 2029		(592	)		(284	)
Interest Rate Swap		19,982	May 2025	May 2028		(270	)		—
Interest Rate Swap		—	January 2023	August 2025		—			50
	$	214,739			$	(1,947	)	$	(736	)

For the nine months ended September 30, 2025, approximately $0.2 million of net realized gains were reclassified to interest expense due to payments made to or received from the swap counterparty. For the nine months ended September 30, 2024, approximately $3.2 million of net realized gains were reclassified to interest expense due to payments made to or received from the swap counterparty.

Cash and 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 loans 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 $206.6 million and $301.8 million (compared to a carrying value of $210.2 million and $314.1 million) as of September 30, 2025 and December 31, 2024, respectively. Accordingly, the fair value of mortgage loans payable have been classified as Level 3 fair value measurements.

7. Related Party Transactions

Administrative Services Agreements

During the nine months ended September 30, 2025 and 2024, the Company earned $0.2 million and $0.2 million, respectively, in administrative services performed for Second City Real Estate II Corporation, Clarity Real Estate Ventures GP, Limited Partnership and their affiliates.

12

8. Leases

Lessor Accounting

The Company is focused on acquiring, owning and operating 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 and nine months ended September 30, 2025 and 2024 as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Fixed payments	$	32,031	$	35,794	$	105,557	$	109,428
Variable payments		5,228		6,546		16,016		19,561
	$	37,259	$	42,340	$	121,573	$	128,989

The Company ceased recognizing rental lease income with respect to the Cascade Station property on the deconsolidation of the entity on June 27, 2024. Refer to Note 3 for further details.

Future minimum lease payments to be received by the Company as of September 30, 2025 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):

2025	$	24,754
2026		99,466
2027		86,767
2028		77,194
2029		59,749
Thereafter		142,304
	$	490,234

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.

Lessee Accounting

As a lessee, the Company has ground and office leases which are classified as operating and financing leases. The lessee lease at the property classified as held for sale as at September 30, 2025 has been excluded from the following disclosures. Refer to Note 3 for further details. As of September 30, 2025, the Company's leases had remaining terms of one to 11 years and a weighted average remaining lease term of 10 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):

	September 30, 2025		December 31, 2024
Right-of-use asset – operating leases	$	1,624	$	10,101
Lease liability – operating leases	$	1,594	$	8,286
Right-of-use asset – financing leases	$	—	$	9,593
Lease liability – financing leases	$	—	$	1,637

Lease liabilities are measured at the commencement date based on the present value of future lease payments. 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 5.0% 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.

13

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.

Future minimum lease payments to be paid by the Company as a lessee for operating leases as of September 30, 2025 for the next five years and thereafter are as follows (in thousands):

	Operating Leases
2025	$	74
2026		310
2027		173
2028		173
2029		173
Thereafter		1,098
Total future minimum lease payments		2,001
Discount		(407	)
Total	$	1,594

9. 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 September 30, 2025, 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.

10. 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 nine months ended September 30, 2025 and 2024.

14

Preferred Stock Distributions

On September 15, 2025, 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 September 30, 2025. The dividend was paid subsequent to quarter end on October 24, 2025 to the holders of record of Series A Preferred Stock as of the close of business on October 10, 2025.

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”). On May 1, 2025, the Company's stockholders approved an amendment to the Equity Incentive Plan increasing the maximum number of shares of common stock that may be issued under the Equity Incentive Plan from 3,763,580 shares to 5,763,580 shares. 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 May 2, 2024, each of the Board of Directors and the Compensation Committee approved a new form of performance-based restricted unit award agreement (the “Performance RSU 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. Shares of the Company’s common stock issuable pursuant to the Performance RSU Awards and dividend equivalents granted pursuant to the Performance RSU Award Agreement, taken together with the shares issuable pursuant to any other grants under the Equity Incentive Plan, shall not exceed the annual limitation set forth in Section 6 of the Equity Incentive Plan.

During the first quarter of 2025, the Performance RSU Awards granted in January 2022, with a January 1, 2022 through December 31, 2024 Measurement Period, were earned at 50% of the target number of shares granted based on achievement of a TSR that was at or above the 26th percentile of the 2022 Peer Group.

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 Peer Group.

15

The following table summarizes the activity of the awards under the Equity Incentive Plan for the three and nine months ended September 30, 2025:

	Number of RSUs			Number of Performance RSUs
Outstanding at December 31, 2024		588,089			629,840
Granted		292,261			275,701
Issuance of dividend equivalents		11,624			—
Vested		(290,979	)		(90,000	)
Outstanding at March 31, 2025		600,995			815,541
Issuance of dividend equivalents		12,075			—
Outstanding at June 30, 2025		613,070			815,541
Issuance of dividend equivalents		8,728			—
Vested		(10,800	)		—
Outstanding at September 30, 2025		610,998			815,541

The following table summarizes the activity of the awards under the Equity Incentive Plan for the three and nine months ended September 30, 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
Issuance of dividend equivalents		12,161			—
Outstanding at June 30, 2024		567,859			629,840
Issuance of dividend equivalents		10,039			—
Outstanding at September 30, 2024		577,898			629,840

During the nine months ended September 30, 2025 and September 30, 2024, the Company granted the following restricted stock unit awards (“RSU Awards”) and Performance RSU Awards to directors, executive officers and certain non-executive employees:

	Units Granted						Weighted Average Grant
	RSUs		Performance RSUs		Fair Value (in thousands)		Fair Value Per Share
2025		292,261		275,701	$	2,874	$	5.06
2024		324,414		324,952		3,539		5.45

The RSU Awards are contractually scheduled to vest in three equal, annual installments on each of the first three anniversaries of the date of grant. The Performance RSU Awards are contractually scheduled to vest on the last day of the Measurement Period.

During the three months ended September 30, 2025 and September 30, 2024, the Company recognized net compensation expense for the RSU Awards and Performance RSU Awards as follows (in thousands):

	RSUs		Performance RSUs		Total
2025	$	418	$	426	$	844
2024		643		441		1,084

16

During the nine months ended September 30, 2025 and September 30, 2024, the Company recognized net compensation expense for the RSU Awards and Performance RSU Awards as follows (in thousands):

	RSUs		Performance RSUs		Total
2025	$	1,317	$	1,284	$	2,601
2024		1,928		1,310		3,238

11. Segment Information

The Company is a REIT focused on real estate investments and currently operates in one operating segment: Office Properties. As a group, the Company’s Chief Executive Officer, Chief Operating Officer and Chief Financial Officer have collectively been identified as the chief operating decision makers (“CODM”), as defined by GAAP. The CODM review financial information presented on a consolidated basis when making decisions. Additionally, the Company does not group its operations on a geographical basis for the purpose of measuring performance.

The CODM use both consolidated net income and net operating income (“NOI”) as the profit or loss measures to evaluate the performance of our operating segment and allocate resources. Refer to the accompanying condensed consolidated statements of operations for the presentation of consolidated net loss for the three and nine months ended September 30, 2025 and 2024. NOI is a measure which includes the revenues and certain expenses directly attributable to our office properties. NOI is defined as rental and other revenues less property operating expenses. NOI is used by the CODM to make operating decisions as we believe it provides information useful in understanding the core operations and operating performance of our portfolio. Total assets are not utilized by the CODM to assess performance.

The following table presents segment NOI for the three and nine months ended September 30, 2025 and 2024 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Rental and other revenues	$	37,275	$	42,371	$	121,876	$	129,207
Property operating expenses		15,615		17,783		48,201		53,020
Segment net operating income	$	21,660	$	24,588	$	73,675	$	76,187

Presented below is a reconciliation of the reportable segment NOI to the consolidated net loss for the three and nine months ended September 30, 2025 and 2024 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Segment net operating income	$	21,660		$	24,588		$	73,675		$	76,187
General and administrative		(3,780	)		(3,790	)		(11,835	)		(11,321	)
Depreciation and amortization		(10,573	)		(14,642	)		(41,762	)		(44,440	)
Impairment of real estate		—			—			(102,229	)		—
Merger and transaction-related costs		(3,093	)		—			(3,093	)		—
Contractual interest expense		(6,836	)		(8,274	)		(23,452	)		(24,502	)
Amortization of deferred financing costs and debt fair value		(776	)		(369	)		(1,510	)		(1,030	)
Net loss on disposition of real estate property		(378	)		—			(378	)		(1,462	)
Consolidated net loss	$	(3,776	)	$	(2,487	)	$	(110,584	)	$	(6,568	)

17

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:

•the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

•the outcome of any legal proceedings that may be, or have been, instituted against the Company and others prior to the expected closing of the Merger;

•the inability to complete the Merger due to the failure to satisfy the closing conditions more fully described in the Merger Agreement;

•risks that the Merger disrupts current plans and operations of the Company;

•potential difficulties in employee retention as a result of the Merger;

•legislative, regulatory and economic developments;

•risks related to disruption of management's attention from the Company's ongoing business operations due to the Merger;

•the effect of the announcement of the proposed Merger and the pending Pima Center disposition on the Company's relationships with tenants, operating results and business generally;

•our inability to successfully realize all of the expected benefits of the Merger or that such benefits may take longer to realize than expected;

•our inability to successfully complete our pending disposition of the Pima property on the terms and timing we expect, or at all;

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

•increased interest rates, the failure of interest rates to decrease according to market expectations, any resulting increase in financing or operating costs, the impact of inflation or stagflation, disruptions to tenants’ business, financial condition and ability to pay rent related to tariffs and other trade or sanction issues or any 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 impact long-term office space demand;

•the extent to which artificial intelligence use impacts long-term office space demand;

•our inability to compete effectively;

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

18

•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;

•availability of qualified personnel;

•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, 2024 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, 2024 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.

On July 23, 2025, the Company entered into a Merger Agreement with MCME Carell under which, subject to the satisfaction of the conditions set forth in the Merger Agreement, MCME Carell will acquire (other than shares owned by the Buyer, the Company or their respective affiliates) all of the issued and outstanding shares of the Company for $7.00 per share of common stock in cash. The Merger is subject to the satisfaction of a number of customary closing conditions more thoroughly described in the Merger Agreement. On October 16, 2025, the Company’s common stockholders approved the Merger.

19

Revenue Base

As of September 30, 2025, we owned 16 properties comprised of 33 office buildings with a total of approximately 4.2 million square feet of net rentable area (“NRA”). As of September 30, 2025, our properties were approximately 84.5% leased.

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

Business and Strategy

We focus on owning 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 September 30, 2025, the operating properties in our portfolio were 84.5% leased, with 0.7% 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. Certain leases contain termination provisions which permit the tenant to terminate the arrangement generally upon payment of a termination fee, which we believe acts as a deterrent to cancelling the lease. These early termination provisions applied to approximately 20.1% of the NRA in our portfolio as of September 30, 2025. In 2025, no tenant has exercised an early termination provision. 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. General Services Administration (“GSA”) tenants represent approximately 5.1% of the base rental revenue from our properties as of September 30, 2025, with all federal or state governmental agencies representing 7.7%. 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.

20

Leasing Activity

The following table presents our leasing activity for the three months ended September 30, 2025.

Three Months Ended September 30, 2025 Leasing Activity	New Leasing		Renewal Leasing			Total Leasing
Square Feet (000's)		38		67			105
Average Effective Rents per Square Foot	$	45.50	$	40.25		$	42.13
Tenant Improvements per Square Foot	$	53.21	$	15.01		$	28.71
Leasing Commissions per Square Foot	$	23.48	$	6.97		$	12.89
% Change in Renewal Cash Rent vs. Expiring				3.7	%
Retention Rate %				68	%

Our Properties

As of September 30, 2025, we owned 16 properties comprised of 33 office buildings with a total of approximately 4.2 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 September 30, 2025.

Metropolitan Area	Property	Year of Construction	Economic Interest			NRA (000’s 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)  ($000’s)
Tampa, FL	Park Tower	1973		94.8	%		482		93.9	%	$	29.21	$	30.13	$	30.13	$	13,628
(25.3% of NRA)	City Center	1984		95.0	%		242		79.1	%	$	34.77	$	35.58	$	35.58	$	6,803
	Intellicenter	2008		100.0	%		204		76.1	%	$	24.31	$	26.46	$	26.46	$	4,100
	Carillon Point	2007		100.0	%		124		100.0	%	$	30.40	$	32.38	$	32.38	$	4,021
Orlando, FL	Florida Research Park	1999		96.6	%		398		93.8	%	$	26.43	$	27.20	$	28.69	$	10,133
(17.3%)	Central Fairwinds	1982		97.0	%		168		87.3	%	$	29.63	$	29.87	$	29.87	$	4,388
	Greenwood Blvd	1997		100.0	%		155		57.2	%	$	26.11	$	25.74	$	25.74	$	2,284
Denver, CO	Denver Tech	1997; 1999		100.0	%		381		78.4	%	$	23.08	$	24.16	$	32.97	$	7,217
(15.7%)	Circle Point	2001		100.0	%		272		92.9	%	$	20.22	$	21.34	$	37.00	$	5,400
Raleigh, NC	Bloc 83	2019; 2021		100.0	%		493		94.6	%	$	41.25	$	40.55	$	40.90	$	18,922
(11.8%)
Dallas, TX	The Terraces	2017		100.0	%		173		85.6	%	$	39.00	$	39.45	$	59.95	$	5,830
(6.8%)	2525 McKinnon	2003		100.0	%	111			45.9	%	$	29.83	$	31.86	$	50.86	$	1,629
San Diego, CA	Mission City	1990-2007		100.0	%		281		94.4	%	$	39.28	$	41.08	$	41.08	$	10,909
(6.8%)
Seattle, WA	Canyon Park	1993; 1999		100.0	%		207		100.0	%	$	22.31	$	25.32	$	31.32	$	5,235
(5.0%)
Portland, OR	AmberGlen	1984-1998		76.0	%		203		52.5	%	$	25.71	$	28.41	$	28.41	$	3,036
(4.8%)
Total / Weighted Average - Excluding Assets Held for Sale(4)							3,894		85.5	%	$	30.13	$	31.12	$	34.89	$	103,535
Phoenix, AZ	Pima Center	2006-2008		100.0	%		272		70.8	%	$	28.20	$	30.38	$	30.38	$	5,843
(6.5%)
Total / Weighted Average - September 30, 2025(4)							4,166		84.5	%	$	30.03	$	31.08	$	34.64	$	109,378

(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 September 30, 2025 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 September 30, 2025 by (ii) 12.

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

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 elevated interest rates as well as potential changes in tax policy, trade policy,

21

immigration policy, fiscal policy and monetary policy. It is uncertain and impossible to estimate the potential impact that the work-from-home trend or the effects of widespread use of artificial intelligence 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, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Results of Operations

Comparison of Three Months Ended September 30, 2025 to Three Months Ended September 30, 2024

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 $5.1 million, or 12%, to $37.3 million for the three months ended September 30, 2025 compared to $42.4 million for the three months ended September 30, 2024. Revenue decreased due to the disposition of six Phoenix properties in August 2025 and the Superior Pointe property in January 2025 which reduced revenue by $4.2 million and $0.8 million, respectively. Block 23, 5090 N 40th St, SanTan, Papago Tech, The Quad and Camelback Square comprised the six Phoenix properties which were sold in August 2025. Revenue also decreased at AmberGlen by $0.6 million due to lower occupancy at the property compared to the prior year. Offsetting these decreases, revenue increased at Bloc 83 by $0.4 million due to higher occupancy at the property compared to the prior year. The remaining properties’ rental and other revenues were relatively unchanged.

Operating Expenses

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 decreased $2.2 million, or 12%, to $15.6 million for the three months ended September 30, 2025, from $17.8 million for the three months ended September 30, 2024. The disposition of six Phoenix properties in August 2025 and the Superior Pointe property in January 2025 decreased property operating expenses by $1.8 million and $0.5 million, respectively. The remaining property operating expenses were relatively unchanged in comparison to the prior year period.

General and Administrative. General and administrative expenses are comprised of public company reporting costs and the compensation of our employees and Board of Directors, as well as non-cash stock-based compensation expenses. General and administrative expenses were unchanged at $3.8 million for the three months ended September 30, 2025 and 2024.

Depreciation and Amortization. Depreciation and amortization decreased $4.0 million, or 28%, to $10.6 million for the three months ended September 30, 2025, from $14.6 million reported in the prior year period. The disposition of six Phoenix properties in August 2025 and the Superior Pointe property in January 2025 decreased depreciation and amortization expense by $3.3 million and $0.2 million, respectively. The remaining properties’ depreciation expenses were $0.5 million lower in comparison to the prior year period.

Merger and Transaction-related costs. The Company incurred $3.1 million in merger and transaction-related costs during the third quarter of 2025.

Other Expense (Income)

Interest Expense. Interest expense decreased $1.0 million, or 12%, to $7.6 million for the three months ended September 30, 2025, from $8.6 million for the three months ended September 30, 2024. The proceeds from the disposition of the six Phoenix properties in August 2025 were used to repay property-level debt for the disposed properties and partially repay the credit facility which resulted in decreased interest expense of $0.9 million. The remaining properties’ interest expenses were relatively unchanged in comparison to the prior year period.

22

Net Loss on Disposition of Real Estate Property. The disposition of six Phoenix properties in August 2025 resulted in a net loss on disposition of real estate properties of $0.4 million for the three months ended September 30, 2025.

Comparison of Nine Months Ended September 30, 2025 to Nine Months Ended September 30, 2024

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 $7.3 million, or 6%, to $121.9 million for the nine months ended September 30, 2025 compared to $129.2 million for the nine months ended September 30, 2024. Revenue decreased year over year due to the dispositions of six Phoenix properties in August 2025, the Superior Pointe property in January 2025 and the Cascade Station property in June 2024 which reduced revenue by $4.7 million, $2.4 million and $1.0 million, respectively. Revenue also decreased at 2525 McKinnon and AmberGlen by $1.4 million and $0.9 million, respectively, due to lower occupancy at the properties compared to the prior year. Revenue also decreased at The Terraces by $0.7 million, largely due to the downsize of WeWork in the prior period resulting in lower income in the current period. Offsetting these decreases, revenue increased year over year at Bloc 83, Mission City and Florida Research Park’s Ingenuity Drive by $1.5 million, $1.0 million and $0.9 million, respectively, due to higher occupancy. The remaining properties’ rental and other revenues were marginally higher in comparison to the prior year period.

Operating Expenses

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 decreased $4.8 million, or 9%, to $48.2 million for the nine months ended September 30, 2025, from $53.0 million for the nine months ended September 30, 2024. The dispositions of six Phoenix properties in August 2025, the Superior Pointe property in January 2025 and the Cascade Station property in June 2024 decreased property operating expenses by $1.5 million, $1.6 million and $0.5 million, respectively. Property taxes decreased across the portfolio by $1.6 million, excluding the dispositions noted above, in comparison to the prior year as property tax accruals were lower in the first three quarters of 2025 as compared to the first three quarters of 2024. In 2024, the final property tax assessments received at year end were lower than accrued in the first three quarters of 2024. The remaining property operating expenses were marginally higher in comparison to the prior period.

General and Administrative. General and administrative expenses are comprised of public company reporting costs and the compensation of our employees and Board of Directors, as well as non-cash stock-based compensation expenses. General and administrative expenses increased $0.5 million, or 5%, to $11.8 million for the nine months ended September 30, 2025, from $11.3 million reported in the prior year period primarily due to higher legal expenses.

Depreciation and Amortization. Depreciation and amortization decreased $2.6 million, or 6%, to $41.8 million for the nine months ended September 30, 2025, from $44.4 million reported in the prior year period. The dispositions of six Phoenix properties in August 2025, the Superior Pointe property in January 2025 and the Cascade Station property in June 2024 decreased depreciation and amortization expense by $3.3 million, $0.9 million and $0.4 million, respectively. Offsetting these decreases, Greenwood Blvd and Florida Research Park's Ingenuity Drive increased by $0.9 million and $0.4 million, respectively, due to higher amortization of tenant-related assets. The increase at Greenwood Blvd was due to accelerated amortization of tenant-related assets recorded in the current year associated with an early lease termination at the property. The remaining properties’ depreciation expenses were $0.7 million higher in comparison to the prior year period.

Impairment of Real Estate. Impairment of real estate was $102.2 million for the nine months ended September 30, 2025 compared to nil in the prior year period. The impairment was related to the write down of the carrying amount of the Phoenix Portfolio, which was classified as held for sale in the second quarter of 2025, to estimated fair value less cost to sell.

Merger and Transaction-related costs. The Company incurred $3.1 million in merger and transaction-related costs during the third quarter of 2025.

Other Expense (Income)

Interest Expense. Interest expense decreased $0.5 million, or 2%, to $25.0 million for the nine months ended September 30, 2025, from $25.5 million for the nine months ended September 30, 2024. The proceeds from the disposition of the six Phoenix properties in August 2025 were used to repay property-level debt for the disposed properties and partially repay the credit facility

23

which resulted in decreased interest expense of $0.9 million. Further, the disposition of the Cascade Station property in June 2024 decreased interest expense by $0.4 million. Offsetting these decreases, higher interest rates on the refinance of the Greenwood Blvd property in May 2025 and the Central Fairwinds property in May 2024 resulted in higher interest expense of $0.2 million and $0.2 million, respectively. The remaining properties’ interest expenses were $0.4 million higher in comparison to the prior year period.

Net Loss on Disposition of Real Estate Property. The disposition of six Phoenix properties in August 2025 resulted in a net loss on disposition of real estate properties of $0.4 million for the nine months ended September 30, 2025. During the second quarter of 2024, the Company entered into an assignment in lieu of foreclosure agreement to transfer possession and control of the Cascade Station property to the lender as a result of an event of default as defined in the property’s loan agreement. Given the terms of the assignment in lieu of foreclosure agreement, the Company deconsolidated the entity holding the property and related assets and liabilities during the second quarter of 2024. For the nine months ended September 30, 2024, the Company recognized a loss on deconsolidation of $1.5 million.

Cash Flows

Comparison of Nine Months Ended September 30, 2025 to Nine Months Ended September 30, 2024

Cash, cash equivalents and restricted cash were $39.3 million and $43.0 million as of September 30, 2025 and September 30, 2024, respectively.

Cash flow from operating activities. Net cash provided by operating activities decreased by $11.3 million to $38.7 million for the nine months ended September 30, 2025 compared to $50.0 million for the nine months ended September 30, 2024. The decrease was primarily attributable to changes in working capital and a decrease in net income related to the First Phoenix Closing.

Cash flow from investing activities. Net cash provided by investing activities increased by $265.6 million to $235.8 million for the nine months ended September 30, 2025 compared to $29.8 million of net cash used in investing activities for the nine months ended September 30, 2024. The increase in net cash provided by investing activities was primarily attributable to the sale of Superior Pointe and the First Phoenix Closing in the current year for proceeds of $268.0 million. This increase was partially offset by an increase in additions to real estate properties for the nine months ended September 30, 2025.

Cash flow to financing activities. Net cash used in financing activities increased by $248.5 million to $269.1 million for the nine months ended September 30, 2025 compared to $20.6 million for the nine months ended September 30, 2024. The increase in net cash used in financing activities was primarily attributable to increased repayment of borrowings and decreased proceeds from borrowings for the nine months ended September 30, 2025.

Non-GAAP Supplemental Measures: NOI

NOI is a non-GAAP measure which includes the revenue and expense directly attributable to our office properties. NOI is calculated as rental and other revenues less property operating expenses.

We use NOI as a supplemental performance measure because, in excluding real estate depreciation and amortization expense, general and administrative expenses, interest expense, gains (or losses) on sale of real estate and other non-operating items, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that NOI will be useful to investors as a basis to compare our operating performance with that of other REITs. However, because NOI excludes depreciation and amortization expense and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties (all of which have real economic effect and could materially impact our results from operations), the utility of NOI as a measure of our performance is limited. Other equity REITs may not calculate NOI in a similar manner and, accordingly, our NOI may not be comparable to such other REITs’ NOI. Accordingly, NOI should be considered only as a supplement to net income as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. NOI should not be used as a substitute for cash flow from operating activities in accordance with GAAP.

24

Refer to Note 11 to our condensed consolidated financial statements for the revenue and expense items comprising NOI. Presented below is a reconciliation of the reportable segment NOI to the consolidated net loss (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Segment net operating income	$	21,660		$	24,588		$	73,675		$	76,187
General and administrative		(3,780	)		(3,790	)		(11,835	)		(11,321	)
Depreciation and amortization		(10,573	)		(14,642	)		(41,762	)		(44,440	)
Impairment of real estate		—			—			(102,229	)		—
Merger and transaction-related costs		(3,093	)		—			(3,093	)		—
Contractual interest expense		(6,836	)		(8,274	)		(23,452	)		(24,502	)
Amortization of deferred financing costs and debt fair value		(776	)		(369	)		(1,510	)		(1,030	)
Net loss on disposition of real estate property		(378	)		—			(378	)		(1,462	)
Consolidated net loss	$	(3,776	)	$	(2,487	)	$	(110,584	)	$	(6,568	)

Liquidity and Capital Resources

Analysis of Liquidity and Capital Resources

We had approximately $21.3 million of cash and cash equivalents and $17.9 million of restricted cash as of September 30, 2025.

On March 15, 2018, the Company entered into a credit agreement for the Credit Facility that provided for commitments of up to $250 million. On September 27, 2019, the Company entered into a five-year $50 million term loan, increasing its authorized borrowings under the Company’s 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 Credit Facility and entered into a three-year $25 million term loan, increasing its total authorized borrowings from $350 million to $375 million. On September 27, 2024, the $50 million term loan matured and was repaid with proceeds from the Credit Facility, reducing total authorized borrowings from $375 million to $325 million. On August 15, 2025, the Company repaid the $25 million term loan and entered into a third amendment to the Amended and Restated Credit Agreement to, among other things, decrease the total authorized borrowing from $325 million to $150 million and provide for the pledge of certain of the Company's assets as security. Subsequent to quarter-end, on October 3, 2025, the Company entered into a fourth amendment to the Amended and Restated Credit Agreement to extend the maturity date from November 2025 to January 2026, with a further option to extend to November 2026, provided the Company meets certain conditions. As of September 30, 2025, of the $150 million total authorized borrowings, we had approximately $115.0 million outstanding under our Credit Facility and a $2.5 million letter of credit to satisfy escrow requirements for a mortgage lender.

On May 28, 2025, the Company entered into an amended and restated loan agreement for Greenwood Blvd, extending the term for an additional three years and amending the interest rate from fixed to floating. The loan bears interest at a rate equal to the daily-simple SOFR rate plus a margin of 250 basis points. The Company also entered into a three-year interest rate swap agreement, effectively fixing the SOFR component of the borrowing rate of the loan at 3.84%.

On February 26, 2020, the Company and the Operating Partnership entered into equity distribution agreements (collectively, the “Agreements”) with certain investment banks acting as sales agents (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”). In the event that the Company elects to make sales under the ATM Program, the Company will file a prospectus supplement to the prospectus included in the Company's Registration Statement on Form S-3. The Company did not issue any shares of common stock or Series A Preferred Stock under the ATM Program during the nine months ended September 30, 2025.

Following changes in property-level occupancy rates, 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 September 30, 2025, the lender for our mortgage borrowings at the Intellicenter property have elected their right to direct property cash flows into lender-controlled restricted cash accounts to fund property operations until certain thresholds are met. On October 1, 2025, the non-recourse property loan at the Intellicenter property matured, and an event of default occurred under the terms of the Intellicenter loan, following

25

non-payment of the principal amount outstanding at loan maturity. The Company is in discussions with the lender to extend the maturity of the loan. Further, under the terms of the loan modification and extension agreement at the FRP Ingenuity Drive property, signed in the second quarter of 2024, property cash flows from this property will be directed into lender-controlled restricted cash accounts through the maturity of the loan. For these two properties, the total restricted cash as of September 30, 2025 was $3.8 million.

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 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 indebtedness and the issuance of equity and debt securities. We also may fund property acquisitions and non-recurring capital improvements using our 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 provide assurance 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.

In addition to the incurrence of debt and the offering of equity securities, dispositions of properties 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 September 30, 2025, 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		2025		2026-2027		2028-2029		More than 5 years
Principal payments on indebtedness	$	399,970	$	145,422	$	146,925	$	107,623	$	—
Interest payments (1)		37,794		4,930		27,635		5,229		—
Tenant-related commitments		11,113		9,531		1,582		—		—
Lease obligations		2,001		74		483		346		1,098
Total	$	450,878	$	159,957	$	176,625	$	113,198	$	1,098

(1)Contracted interest on the floating rate borrowings under our Credit Facility was calculated based on the balance and interest rate at September 30, 2025. Contracted interest on our loans which we have applied interest rate swaps was calculated based on the swap 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. We have entered, and we will only enter into, contracts with major financial institutions based on their credit rating and other factors. See Note 6 to our condensed consolidated financial statements in Item 1 of this Report for more information regarding our derivatives.

26

We currently consider our interest rate exposure to be moderate because as of September 30, 2025, approximately $285.0 million, or 71.2%, of our debt had fixed interest rates, or effectively fixed rates when factoring in interest rate swaps, and $115.0 million, or 28.8%, had variable interest rates. 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 $1.2 million increase to our annual interest costs on debt outstanding as of September 30, 2025 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 Credit Facility. A 1% decrease in SOFR would result in a $1.2 million decrease to our annual interest costs on debt outstanding as of September 30, 2025 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 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.

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 September 30, 2025.

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.

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 September 30, 2025, 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

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, except for the one below. Any of those risk factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the Securities and Exchange Commission.

The announcement and pendency of the Merger Agreement could have an adverse effect on our business, financial condition and results of operations.

The announcement and pendency of the Merger could cause disruption in our business, including the potential loss or disruption of commercial relationships prior to the completion of the Merger. For example, some of our tenants, prospective tenants or vendors may delay or defer decisions, which could negatively affect our revenues, earnings, cash flows and expenses, regardless of whether the Merger is completed. Similarly, our current and prospective employees may experience uncertainty about their future roles with the combined company following the Merger, which may adversely affect our ability to attract and retain key personnel during the pendency of the Merger.

The Merger Agreement generally requires us to use commercially reasonable efforts to operate our business in the ordinary course of business pending consummation of the Merger, but includes certain contractual restrictions on the conduct of our business prior to completion of the Merger. Due to these operating restrictions, during the pendency of the Merger Agreement we may be unable to pursue strategic transactions, undertake significant capital projects, undertake certain financing transactions and otherwise pursue other actions, even if such actions would prove beneficial.

27

The Merger Agreement also contains provisions that limit our ability to pursue alternatives to the Merger and that could discourage a potential competing acquirer of us from making a favorable alternative transaction proposal. In addition, matters relating to the Merger (including integration planning) will require substantial commitments of time and resources by our management, which could divert their time and attention. We have also incurred, and will continue to incur, significant non-recurring costs in connection with the Merger that we may be unable to recover.

Completion of the Merger is subject to the satisfaction or waiver of certain conditions.

Completion of the Merger remains subject to the satisfaction or waiver of certain conditions, including, among other things, (a) the absence of any law, injunction, judgment, order, decree or ruling restraining or prohibiting consummation of the Merger; (b) the receipt of certain third party consents; (c) the delivery of a written tax opinion to the effect that, as of December 31, 2014 until the Merger effective time, the Company has been organized and operated in accordance with the requirements for qualification and taxation as a REIT; and (d) no event of default that is incapable of being cured or capable of being cured but still continuing shall have occurred and be continuing under certain of the Company’s loan documents. Each party’s obligation to consummate the Merger is also subject to certain additional conditions, which include the accuracy of the other party’s representations and warranties (subject to materiality qualifiers) and the other party’s compliance with its covenants and obligations in all material respects (in each case, as contained and more fully described in the Merger Agreement).

We cannot provide assurance that these conditions to completing the Merger will be satisfied or waived, and accordingly, that our pending Merger will be completed on the timeline that we anticipate or at all. Failure to complete the Merger could negatively affect our stock price and our future business and financial results.

Failure to complete the Merger could negatively impact the stock price and the future business and financial results of the Company.

If the Merger is not completed, the ongoing business of City Office REIT, Inc. may be adversely affected and we will be subject to several risks without realizing any of the benefits of having the Merger completed, including the following:

•the market price of our Common Stock could decline;

•restrictions on the conduct of our business during the period between the day the Merger Agreement was executed and termination of the Merger Agreement may adversely affect our ability to execute certain business strategies;

•we may experience negative reactions from the financial markets or from our tenants or employees;

•we may be subject to litigation related to any failure to complete the Merger or to enforcement proceedings commenced against us to perform our obligations under the Merger Agreement;

•the focus of our management on the Merger instead of other opportunities could adversely affect our business;

•if the Merger Agreement is terminated and our board of directors seeks another business combination, our stockholders cannot be certain that we will be able to find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms that we have agreed to in the Merger Agreement; and

•if the Merger is not completed, we may be required under certain circumstances to pay a termination.

An adverse outcome in any litigation or other legal proceedings relating to the Merger Agreement could have a material adverse impact on our business and our ability to consummate the transactions contemplated by the Merger Agreement.

Transactions like the Merger are frequently the subject of litigation or other legal proceedings, including actions alleging that either our board of directors breached their respective duties to their shareholders by entering into the Merger Agreement, by failing to obtain a greater value in the transaction for their shareholders or otherwise. Since entering into the Merger Agreement, the Company has received, to its knowledge, thirteen demand letters from purported stockholders of the Company (the “Demand Letters”). Further, two complaints have been filed by purported stockholders of the Company in the New York Supreme Court (the “Complaints”). The Complaints are captioned as Eric Johnson vs. City Office REIT, Inc., et. al (Case No. 655681/2025) and Andrew Thompson v. City Office REIT, Inc., et. al (Case No. 655671/2025). The Complaints each name the Company and the members of its board of directors as defendants. We believe that such litigation or proceedings are, and any future litigation or proceedings would be, without merit. If any additional litigation or other legal proceedings are brought against us or against our board in connection with the Merger Agreement, we will defend against it, but we might not be successful in doing so. It is possible that additional or similar demand letters may be received by the Company, or that complaints making similar allegations may be filed naming the Company, the members of its board of directors and/or any other parties to the Merger as defendants. An adverse outcome in such matters, as well as

28

the costs and efforts of a defense even if successful, could have a material adverse effect on our business, results of operation or financial position, including through the possible diversion of either company’s resources or distraction of key personnel.

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

During the three months ended September 30, 2025, no director or officer of the Company adopted, terminated or modified a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

29

Item 6. Exhibits

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated July 23, 2025, by and among MCME Carell Holdings, LP, MCME Carell Merger Sub, LLC, and City Office REIT, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Commission on July 24, 2025).
3.1	Articles of Amendment and Restatement of the Company, as amended and supplemented (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed with the Commission on March 1, 2018).
3.2	Third Amended and Restated Bylaws of the Company, effective as of August 2, 2023 (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 3, 2023).
4.1	Certificate of Common Stock of City Office REIT, Inc. (incorporated by reference to Exhibit 4.1 to 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).
10.1	First Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of July 23, 2025, by and among SWVP Acquisitions LLC, a Delaware limited liability company, as buyer, and CIO 5090, Limited Partnership, a Delaware limited partnership; CIO Block 23, LLC, a Delaware limited liability company; CIO PAPAGO Tech Holdings, LLC, a Delaware limited liability company; CIO SAN TAN I, Limited Partnership, a Delaware limited partnership; CIO SAN TAN II, Limited Partnership, a Delaware limited partnership; CIO PIMA, Limited Partnership, a Delaware limited partnership; CIO QUAD, Limited Partnership, a Delaware limited partnership; and CIO CAMELBACK, Limited Partnership, a Delaware limited partnership, each as a seller (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on July 24, 2025).
10.2	Amendment No. 3 to Executive Employment Agreement, dated as of July 23, 2025, by and among City Office Management ULC, City Office REIT Operating Partnership, and James Farrar (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Commission on July 24, 2025).
10.3	Third Amendment, dated as of July 21, 2025 and effective as of August 15, 2025, to Amended and Restated Credit Agreement, by and among City Office REIT Operating Partnership, L.P., as borrower, City Office REIT, Inc. and certain of its subsidiaries, as guarantors, KeyBank National Association, as lender, agent and swing loan lender, the other lending institutions parties named therein, as lenders, and Keybanc Capital Markets, as sole lead arranger and sole book manager (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on August 15, 2025).
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 - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104	Cover page formatted as Inline XBRL and contained in Exhibit 101

† Filed herewith.

30

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: November 7, 2025	By:	/s/ James Farrar
		James Farrar
		Chief Executive Officer and Director
		(Principal Executive Officer)
Date: November 7, 2025	By:	/s/ Anthony Maretic
		Anthony Maretic
		Chief Financial Officer, Secretary and Treasurer
		(Principal Financial Officer and Principal Accounting Officer)

31