City Office REIT Announces the Acquisition of $174.5 Million Portfolio in San Diego
VANCOUVER, Oct. 2, 2017 /PRNewswire/ -- City Office REIT, Inc. (NYSE: CIO) ("City Office" or the "Company") announced the closing of a portfolio in San Diego, CA for an aggregate purchase price of approximately $174.5 million.
On September 29, 2017, City Office closed the previously announced acquisition of a ten-building, 669,653 SF portfolio located in San Diego (the "San Diego Portfolio") for an aggregate purchase price of $174.5 million, exclusive of closing costs. The San Diego Portfolio is comprised of Mission City Corporate Center ("Mission City") and the Sorrento Mesa portfolio ("Sorrento Mesa"), which includes a five-acre land parcel. The acquisition is anticipated to generate a combined pro forma net operating income yield of approximately 7.4% inclusive of estimated closing costs, reserves for planned capital improvements and the cost of the land parcel.
Mission City is a four-building, 285,095 SF, Class A office campus located in the Mission Valley submarket. The complex is located immediately adjacent to Qualcomm Stadium, the former San Diego Chargers stadium that is slated for a major master-planned mixed-use redevelopment. Mission City benefits from its central location within the San Diego MSA, excellent freeway access, proximity to workforce and executive housing and strong corporate presence. The complex is 88% leased, multi-tenanted to a diversified rent roll of tenants primarily in the financial, tech, healthcare, legal and insurance industries.
Sorrento Mesa is a six-building, 384,558 SF, Class B office and flex complex located in the Sorrento Mesa submarket of San Diego. The complex is 88% net leased to tenants primarily within the life sciences, technology and defense industries. San Diego has the third largest concentration of life sciences and biotech companies in the United States and the Sorrento Mesa submarket represents one of the top, low-vacancy submarkets in San Diego for the life sciences industry.
Sorrento Mesa also contains a five-acre land parcel located at a main-and-main intersection within the Sorrento Mesa submarket, directly adjacent to Qualcomm's world headquarters. San Diego is one of the nation's most geographically constrained markets, and the parcel represents a prime development site.
"We are excited to announce our entry into San Diego with the addition of ten high quality assets to our portfolio," said James Farrar, Chief Executive Officer of City Office. "This acquisition gives us immediate scale and diversification in San Diego, a market that is characterized by high quality of life, strong demographics, positive employment and population growth trends and high barriers to entry for new supply." Mr. Farrar noted, "With this off market transaction, City Office has acquired over $1.0 billion in total real estate. We are also excited about the opportunities to unlock further value through strategic capital improvements, building remeasurement and re-tenanting space at market rents."
The Company has posted a summary presentation relating to this acquisition under the Investors Relations section of its website.
About City Office REIT, Inc.
City Office REIT is an internally-managed real estate company focused on acquiring, owning and operating high-quality office properties located in leading markets in the Southern and Western United States. City Office currently owns or has a controlling interest in 5.0 million square feet of office properties. Additional information about City Office is available on the Company's website at www.cityofficereit.com. The Company has elected to be taxed as a real estate investment trust for U.S. federal income tax purposes.
Forward-looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. These factors include, but are not limited to, the Company's ability to forecast accurately the barriers to entry and competition in the markets in which it operates; the Company's ability to assess risks associated with entering into new markets; the Company's expectations and forecasts of its cash flows and future leasing activity at its current and future properties, and the Company's ability to accurately model the income yield, capitalization rate, and other financial metrics used to evaluate its properties. These and other material risks are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 and any other documents filed by the Company from time to time, which are available from the Company and from the SEC, and you should read and understand these risks when evaluating any forward-looking statement. The Company does not have any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances.
Contact
City Office REIT, Inc.
Anthony Maretic, CFO
+1-604-806-3366
[email protected]
SOURCE City Office REIT, Inc.
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