Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 04, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CIO | |
Entity Registrant Name | City Office REIT, Inc. | |
Entity Central Index Key | 1,593,222 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 12,417,230 |
Condensed Consolidated and Comb
Condensed Consolidated and Combined Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Real estate properties, cost | ||
Land | $ 77,708 | $ 66,204 |
Buildings and improvements | 183,310 | 132,964 |
Tenant improvement | 30,565 | 27,773 |
Furniture, fixtures and equipment | 198 | 198 |
Real estate properties, gross | 291,781 | 227,139 |
Accumulated depreciation | (20,092) | (15,311) |
Real estate properties, net | 271,689 | 211,828 |
Cash and cash equivalents | 11,293 | 34,862 |
Restricted cash | 10,114 | 11,093 |
Rents receivable, net | 11,635 | 7,981 |
Deferred financing costs, net of accumulated amortization | 2,801 | 2,901 |
Deferred leasing costs, net of accumulated amortization | 4,711 | 2,618 |
Acquired lease intangibles assets, net | 33,583 | 29,391 |
Prepaid expenses and other assets | 1,251 | 832 |
Total Assets | 347,077 | 301,506 |
Liabilities: | ||
Debt | 241,095 | 189,940 |
Accounts payable and accrued liabilities | 7,423 | 4,080 |
Deferred rent | 1,197 | 2,212 |
Tenant rent deposits | 2,078 | 1,862 |
Acquired lease intangibles liability, net | 1,193 | 606 |
Dividend distributions payable | 3,601 | 3,571 |
Earn-out liability | 8,600 | 8,000 |
Total Liabilities | $ 265,187 | $ 210,271 |
Commitments and Contingencies (Note 9) | ||
Equity: | ||
Common stock, $0.01 par value, 100,000,000 shares authorized, 12,417,230 shares issued and outstanding | $ 124 | $ 123 |
Additional paid-in capital | 92,270 | 91,308 |
Accumulated deficit | (19,664) | (11,320) |
Total Stockholders' Equity | 72,730 | 80,111 |
Operating Partnership unitholders' non-controlling interests | 9,866 | 11,878 |
Non-controlling interests in properties | (706) | (754) |
Total Equity | 81,890 | 91,235 |
Total Liabilities and Equity | $ 347,077 | $ 301,506 |
Condensed Consolidated and Com3
Condensed Consolidated and Combined Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 12,417,230 | 12,417,230 |
Common stock, shares outstanding | 12,417,230 | 12,417,230 |
Condensed Consolidated and Com4
Condensed Consolidated and Combined Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenues: | ||||
Rental income | $ 10,196 | $ 20,237 | ||
Expense reimbursement | 1,145 | 2,036 | ||
Other | 293 | 621 | ||
Total Revenues | 11,634 | 22,894 | ||
Operating Expenses: | ||||
Property operating expenses | 4,127 | 8,243 | ||
Acquisition costs | 882 | 1,091 | ||
Stock based compensation | 507 | 916 | ||
General and administrative | 495 | 902 | ||
Base management fee | 327 | 659 | ||
Depreciation and amortization | 4,494 | 8,900 | ||
Total Operating Expenses | 10,832 | 20,711 | ||
Operating income | 802 | 2,183 | ||
Interest Expense: | ||||
Contractual interest expense | (2,103) | (4,112) | ||
Amortization of deferred financing costs | (185) | (354) | ||
Interest expense, net | (2,288) | (4,466) | ||
Change in fair value of earn-out | (600) | (600) | ||
Net loss | (2,086) | (2,883) | ||
Less: Net (income)/loss attributable to noncontrolling interests in properties | (134) | (255) | ||
Less: Net loss attributable to Operating Partnership unitholders' noncontrolling interests | 422 | 598 | ||
Net loss attributable to stockholders | $ (1,798) | $ (2,540) | ||
Net loss per share: | ||||
Basic and diluted | $ (0.15) | $ (0.21) | ||
Weighted average common shares outstanding: | ||||
Basic and diluted | 12,365 | 12,328 | ||
Dividends/distributions declared per common share and unit | $ 0.235 | $ 0.235 | ||
Predecessor [Member] | ||||
Revenues: | ||||
Rental income | $ 7,714 | $ 14,951 | ||
Expense reimbursement | 503 | 953 | ||
Other | 176 | 472 | ||
Total Revenues | 8,393 | 16,376 | ||
Operating Expenses: | ||||
Property operating expenses | 3,184 | 6,261 | ||
Acquisition costs | 344 | 1,150 | ||
Stock based compensation | 285 | 285 | ||
General and administrative | 364 | 414 | ||
Base management fee | 185 | 185 | ||
Depreciation and amortization | 3,416 | 6,576 | ||
Total Operating Expenses | 7,778 | 14,871 | ||
Operating income | 615 | 1,505 | ||
Interest Expense: | ||||
Contractual interest expense | (1,785) | (3,955) | ||
Amortization of deferred financing costs | (137) | (1,129) | ||
Loss on early extinguishment of Predecessor debt | (1,655) | (1,655) | ||
Interest expense, net | (3,577) | (6,739) | ||
Change in fair value of earn-out | (105) | (105) | ||
Gain on equity investment | 4,475 | |||
Net loss | (3,067) | (864) | ||
Less: Net (income)/loss attributable to noncontrolling interests in properties | 69 | 79 | ||
Less: Net loss/(income) attributable to Predecessor | 240 | (1,973) | ||
Less: Net loss attributable to Operating Partnership unitholders' noncontrolling interests | 814 | 814 | ||
Net loss attributable to stockholders | $ (1,944) | $ (1,944) | ||
Net loss per share: | ||||
Basic and diluted | $ (0.24) | $ (0.24) | ||
Weighted average common shares outstanding: | ||||
Basic and diluted | 8,058 | 8,058 | ||
Dividends/distributions declared per common share and unit | $ 0.183 | $ 0.183 |
Condensed Consolidated and Com5
Condensed Consolidated and Combined Statement of Changes in Equity - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total Stockholders' Equity [Member] | Operating Partnership Unitholders' Non-controlling Interests [Member] | Non-controlling Interests in Properties [Member] |
Beginning balance at Dec. 31, 2014 | $ 91,235 | $ 123 | $ 91,308 | $ (11,320) | $ 80,111 | $ 11,878 | $ (754) |
Beginning balance, shares at Dec. 31, 2014 | 12,417,230 | 12,279,000 | |||||
Conversion of OP units to shares, values | 47 | 47 | (47) | ||||
Conversion of OP units to shares, shares | 12,000 | ||||||
Restricted stock award grants, values | $ 916 | $ 1 | 915 | 916 | |||
Restricted stock award grants, shares | 126,000 | ||||||
Dividend distributions declared | (7,171) | (5,804) | (5,804) | (1,367) | |||
Contributions | 0 | $ 0 | 0 | 0 | 0 | 0 | 0 |
Distributions | (207) | (207) | |||||
Net loss | (2,883) | (2,540) | (2,540) | (598) | 255 | ||
Ending balance at Jun. 30, 2015 | $ 81,890 | $ 124 | $ 92,270 | $ (19,664) | $ 72,730 | $ 9,866 | $ (706) |
Ending balance, shares at Jun. 30, 2015 | 12,417,230 | 12,417,000 |
Condensed Consolidated and Com6
Condensed Consolidated and Combined Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (2,883) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 8,900 | |
Amortization of deferred financing costs | 354 | |
Amortization of above/below market leases | 280 | |
Increase in straight-line rent | (71) | |
Non-cash stock compensation | 916 | |
Change in fair value of earn-out | 600 | |
Changes in non-cash working capital: | ||
Rents receivable, net | (3,583) | |
Prepaid expenses and other assets | (394) | |
Accounts payable and accrued liabilities | 2,610 | |
Deferred rent | (1,152) | |
Tenant rent deposits | 8 | |
Net Cash Provided By Operating Activities | 5,585 | |
Cash Flows to Investing Activities: | ||
Additions to real estate properties | (1,756) | |
Acquisition of real estate, net of cash assumed | (69,445) | |
Deferred leasing cost | (2,454) | |
Net Cash Used In Investing Activities | (73,655) | |
Cash Flows from Financing Activities: | ||
Debt issuance and extinguishment costs | (255) | |
Proceeds from mortgage loans payable | 17,000 | |
Proceeds from revolving credit facility | 34,692 | |
Repayment of mortgage loans payable | (537) | |
Distributions to non-controlling interests in properties | (207) | |
Dividend distributions paid to stockholders and Operating Partnership unitholders | (7,171) | |
Change in restricted cash | 979 | |
Net Cash Provided By Financing Activities | 44,501 | |
Net (Decrease)/Increase in Cash and Cash Equivalents | (23,569) | |
Cash and Cash Equivalents, Beginning of Period | 34,862 | |
Cash and Cash Equivalents, End of Period | 11,293 | |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for interest | 4,055 | |
Accrued dividend distributions payable | $ 3,601 | |
Predecessor [Member] | ||
Cash Flows from Operating Activities: | ||
Net loss | $ (864) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 6,576 | |
Amortization of deferred financing costs | 1,971 | |
Amortization of above/below market leases | 243 | |
Increase in straight-line rent | (834) | |
Non-cash stock compensation | 285 | |
Change in fair value of earn-out | 105 | |
Gain on equity investment | (4,475) | |
Changes in non-cash working capital: | ||
Rents receivable, net | (773) | |
Prepaid expenses and other assets | (2,090) | |
Accounts payable and accrued liabilities | 3,290 | |
Deferred rent | (1,050) | |
Tenant rent deposits | 500 | |
Net Cash Provided By Operating Activities | 2,884 | |
Cash Flows to Investing Activities: | ||
Additions to real estate properties | (1,967) | |
Acquisition of real estate, net of cash assumed | (37,172) | |
Deferred leasing cost | (435) | |
Net Cash Used In Investing Activities | (39,574) | |
Cash Flows from Financing Activities: | ||
Net proceeds from issuance of common shares | 72,471 | |
Formation transactions | (35,244) | |
Debt issuance and extinguishment costs | (3,538) | |
Proceeds from mortgage loans payable | 170,400 | |
Repayment of mortgage loans payable | (161,314) | |
Contributions from partners and members | 3,843 | |
Contributions from non-controlling interests in properties | 62 | |
Distributions to partners and members | (1,347) | |
Distributions to non-controlling interests in properties | (153) | |
Change in restricted cash | (5,442) | |
Net Cash Provided By Financing Activities | 39,738 | |
Net (Decrease)/Increase in Cash and Cash Equivalents | 3,048 | |
Cash and Cash Equivalents, Beginning of Period | 7,128 | |
Cash and Cash Equivalents, End of Period | 10,176 | |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for interest | 4,605 | |
Accrued dividend distributions payable | $ 2,094 |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business City Office REIT, Inc. (the “Company”) was organized in the state of Maryland on November 26, 2013. On April 21, 2014, the Company completed its initial public offering (“IPO”) of shares of the Company’s common stock. The Company contributed the net proceeds of the IPO to City Office REIT Operating Partnership, L.P., a Maryland limited partnership (the “Operating Partnership”), in exchange for common units in the Operating Partnership. Both the Company and the Operating Partnership commenced operations upon completion of the IPO and certain related formation transactions (the “Formation Transactions”). 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 partnership agreement to manage and conduct the Operating Partnership’s business, subject to limited approval and voting rights of the limited partners. City Office REIT, Inc. Predecessor (the “Predecessor”) represents the combination of the six properties outlined below (the “Properties”). The Predecessor does not represent a legal entity. The Predecessor and its related assets and liabilities are under common control and were contributed to a newly formed Operating Partnership in connection with the IPO of the Company on April 21, 2014. Unless the context suggests otherwise, references in this Quarterly Report on Form10-Q to “the Advisor” refers to the Company’s external advisor, City Office Real Estate Management Inc. “Second City” refers to Second City Capital Partners II, Limited Partnership. “Second City GP” refers to Second City General Partner II, Limited Partnership. “Gibralt” refers to Gibralt US, Inc. “GCC Amberglen” refers to GCC Amberglen Investments Limited Partnership. “CIO OP” refers to CIO OP Limited Partnership. “CIO REIT” refers to CIO REIT Stock Limited Partnership and CIO REIT Stock GP Limited Partnership. The “Second City Group” refers to Second City, any future real estate funds created by the principals of Second City, Second City GP, Gibralt, GCC Amberglen, CIO OP, CIO REIT and Daniel Rapaport. The historical financial results in these financial statements and the accompanying notes thereto for periods prior to April 21, 2014 relate to the Predecessor. The Predecessor is comprised of the following properties: • City Center • Central Fairwinds • AmberGlen • Washington Group Plaza • Corporate Parkway • Cherry Creek The Company intends to elect to be taxed and to continue to operate in a manner that will allow it to qualify as a real estate investment trust (“REIT”) commencing with its initial taxable year ended December 31, 2014. 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 any applicable alternative minimum tax. Initial Public Offering and Formation Transactions The Company’s operations are carried on primarily through the Operating Partnership and wholly owned subsidiaries of the Operating Partnership. Both the Company and the Operating Partnership commenced operations upon completion of the IPO and certain related Formation Transactions. On April 21, 2014, the Company closed the IPO, pursuant to which it sold 5,800,000 shares of common stock to the public at a public offering price of $12.50 per share. The Company raised $72.5 million in gross proceeds, resulting in net proceeds to of approximately $63.4 million after deducting approximately $5.1 million in underwriting discounts and approximately $4.0 million in other expenses relating to the IPO. On May 9, 2014, the underwriters of the IPO exercised their overallotment option to purchase an additional 782,150 shares of the Company’s common stock at the IPO price of $12.50 a share resulting in additional gross proceeds of approximately $9.8 million. The net proceeds to the Company were $9.1 million after deducting approximately $0.7 million in underwriting discounts. The Company’s common stock began trading on the New York Stock Exchange under the symbol “CIO” on April 15, 2014. The Company contributed the net proceeds of the IPO to the Operating Partnership in exchange for common units in the Operating Partnership. The Operating Partnership utilized a portion of the net proceeds of the IPO to pay fees in connection with the assumption of the indebtedness, pay expenses incurred in connection with the IPO and Formation Transactions and repay loans that were made to several of the contributing entities by certain investors in such entities. The remaining funds were used for general working capital purposes and to fund acquisitions. Pursuant to the Formation Transactions, the Operating Partnership acquired a 100% interest in each of the Washington Group Plaza, Cherry Creek and Corporate Parkway properties and acquired an approximate 76% economic interest in the AmberGlen property, 90% interest in the Central Fairwinds property and 95% interest in the City Center property. These initial property interests were contributed in exchange for 3,731,209 common units, 1,858,860 shares of common stock and $19.4 million of cash. On May 9, 2014, the Company used the $9.1 million of net proceeds from the exercise of the underwriters’ overallotment option to redeem, 479,305 common units and 248,095 common stock from the Second City Group. In connection with the IPO and Formation Transactions, the Company, through its Operating Partnership, extinguished the loan on the Central Fairwinds property and completed a refinancing of three properties (Cherry Creek, City Center and Corporate Parkway) with a new $95 million non-recourse mortgage loan and proceeds from the IPO. The loan bears a fixed interest rate of 4.34% and matures on May 6, 2021. Balances for the three and six months ended June 30, 2014 include those of the Predecessor for the period from April 1, 2014 through April 20, 2014 and January 1, 2014 through April 20, 2014, respectively. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Preparation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated and combined financial statements have been prepared by the Company in accordance with Securities and Exchange Commission 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 interim 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, 2014. The Predecessor represents a combination of certain entities holding interests in real estate that were commonly controlled prior to the Formation Transactions. Due to their common control, the financial statements of the separate entities which own the properties are presented on a combined basis in the Predecessor financial statements. New Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which creates a new Topic Accounting Standards Codification (Topic 606). The standard is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. This standard is effective for interim or annual periods beginning after December 15, 2017, and allows for either full retrospective or modified retrospective adoption. We are not permitted to adopt the standard earlier than January 1, 2017. We are currently evaluating the impact the adoption of Topic 606 will have on our financial statements. In January 2015, the FASB issued ASU No. 2015-01, “Income Statement—Extraordinary and Unusual Items.” ASU 2015-01 eliminates the concept of extraordinary items. However, the presentation and disclosure requirements for items that are either unusual or in nature or infrequent in occurrence remain and will be expanded to include items that are both unusual in nature and infrequent in occurrence. ASU 2015-01 is effective for periods beginning after December 15, 2015. We are currently evaluating the impact of adopting this new accounting standard on our financial statements. In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-02, Consolidation (Topic 810)—Amendments to the Consolidation Analysis, which amends the criteria for determining which entities are considered variable interest entities (“VIE”), amends the criteria for determining if a service provider possesses a variable interest in a VIE and ends the deferral granted to investment companies for application of the VIE consolidation model. ASU 2015-02 is effective for annual periods, and interim periods therein, beginning after December 15, 2015. We are currently evaluating the impact the adoption of Topic 810 will have on our financial statements. |
Real Estate Investments
Real Estate Investments | 6 Months Ended |
Jun. 30, 2015 | |
Real Estate [Abstract] | |
Real Estate Investments | 3. Real Estate Investments Acquisitions During the six months ended June 30, 2015 and 2014, the Company, through the Operating Parntership, acquired the following properties: Property Date Acquired Percentage Owned DTC Crossroads June 2015 100 % Superior Pointe June 2015 100 % Logan Tower February 2015 100 % Plaza 25 June 2014 100 % Cherry Creek January 2014 100 % The above acquisitions have been accounted for as business combinations. On January 2, 2014, the Predecessor acquired the remaining 57.7% interest it did not already own in ROC-SCCP Cherry Creek I, LP (“Cherry Creek”) for approximately $12.0 million. The acquisition was financed through a new $50 million mortgage loan, the proceeds of which were used to repay $36 million of existing debt of Cherry Creek, fund the payment of $12.0 million to the seller, pay $1.2 million of deferred financing costs and $0.8 million in transactions costs. The following table summarizes the Company’s allocation of the purchase price of assets acquired and liabilities assumed during the six months ended June 30, 2014 (in thousands): Cherry Creek Land $ 25,745 Buildings and improvements 15,771 Tenant improvements 4,372 Acquired intangible assets 12,009 Accounts payable and other liabilities (815 ) Lease intangible liabilities (249 ) Fair value of assets and liabilities at acquisition $ 56,833 The Company recognized expenses relating to the Cherry Creek acquisition of $806,344 for the six months ended June 30, 2014. A gain of $4.5 million was recognized from the fair value adjustment associated with the Predecessor’s original ownership due to a change in control, calculated as follows (in thousands): Fair value of assets and liabilities acquired $ 56,833 Less existing mortgage in Cherry Creek (36,000 ) 20,833 Less cash paid to seller (12,021 ) Fair value of 42.3% equity interest 8,812 Carrying value of investment in Cherry Creek (4,337 ) Gain on existing 42.3% equity interest $ 4,475 On June 4, 2014, the Company, through its Operating Partnership acquired 100% of Plaza 25, a property in Denver, Colorado for $24.3 million. The following table summarizes the Company’s allocation of the purchase price of assets acquired and liabilities assumed (in thousands): Plaza 25 Land $ 1,764 Buildings and improvements 18,487 Tenant improvements 2,076 Acquired intangible assets 2,924 Prepaid expenses and other assets 2 Accounts payable and other liabilities (641 ) Lease intangible liabilities (328 ) Total consideration $ 24,284 On February 4, 2015, the Company, through the Operating Partnership, acquired 100% of Logan Tower, a property in Denver, Colorado, for $10.4 million. The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands): Logan Tower Land $ 1,306 Buildings and improvements 7,844 Tenant improvements 353 Acquired intangible assets 1,274 Accounts payable and other liabilities (48 ) Lease intangible liabilities (306 ) Total consideration $ 10,423 On June 17, 2015, the Company, through the Operating Partnership, acquired 100% of Superior Pointe, a property in Denver, Colorado, for $25.5 million. The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands): Superior Pointe Land $ 3,153 Buildings and improvements 19,250 Tenant improvements 584 Acquired intangible assets 2,866 Prepaid expenses and other assets 24 Accounts payable and other liabilities (316 ) Lease intangible liabilities (53 ) Total consideration $ 25,508 On June 30, 2015, the Company, through the Operating Partnership, acquired 100% of DTC Crossroads, a property in Denver, Colorado, for $33.5 million. The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands): DTC Crossroads Land $ 7,046 Buildings and improvements 22,832 Tenant improvements 630 Acquired intangible assets 4,099 Accounts payable and other liabilities (742 ) Lease intangible liabilities (351 ) Total consideration $ 33,514 The operating results of the Logan Tower, Superior Pointe and DTC Crossroads properties since the date of acquisition have been included in the Company’s Condensed consolidated and combined financial statements for the three and six months ended June 30, 2015. The following table represents the results of the property’s operations since the date of acquisition on a stand-alone basis (in thousands): Three months ended June 30, 2015 Six months ended June 30, 2015 Operating revenues $ 535 $ 779 Operating expenses (779 ) (1,196 ) Interest (59 ) (59 ) Net loss before gain on equity investment $ (303 ) $ (476 ) The following table presents the unaudited revenues and income from continuing operations for Logan Tower, Superior Pointe and DTC Crossroads, on a pro forma basis as if the Company had completed the acquisition of the properties as of January 1, 2014 (in thousands): Six Months Ended Six Months Ended Total revenues as reported by City Office REIT, Inc. and Predecessor $ 22,894 $ 16,376 Plus: Logan Tower 143 765 Plus: Superior Pointe 1,666 1,589 Plus: DTC Crossroads 1,904 1,777 Pro forma total revenues $ 26,607 $ 20,507 Total operating income as reported by the City Office REIT, Inc. and Predecessor $ 2,183 $ 1,505 Property acquisition costs 320 (320 ) Plus: Logan Tower (13 ) (68 ) Plus: Superior Pointe (86 ) (135 ) Plus: DTC Crossroads (59 ) (51 ) Pro forma operating income $ 2,345 $ 931 |
Lease Intangibles
Lease Intangibles | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Lease Intangibles | 4. Lease Intangibles Lease intangibles and the value of assumed lease obligations as of June 30, 2015 and December 31, 2014 were comprised as follows (in thousands): June 30, 2015 Above In Place Leasing Total Below Below Total Cost $ 4,868 35,418 14,025 54,311 (1,456 ) (138 ) (1,594 ) Accumulated amortization (2,388 ) (13,630 ) (4,710 ) (20,728 ) 379 22 401 $ 2,480 21,788 9,315 33,583 (1,077 ) (116 ) (1,193 ) December 31, 2014 Above In Place Leasing Total Below Below Total Cost $ 4,762 28,505 12,926 46,193 (746 ) (138 ) (884 ) Accumulated amortization (1,985 ) (11,159 ) (3,658 ) (16,802 ) 258 20 278 $ 2,777 17,346 9,268 29,391 (488 ) (118 ) (606 ) The estimated aggregate amortization expense for lease intangibles for the five succeeding years and in the aggregate are as follows (in thousands): 2015 $ 4,678 2016 8,855 2017 6,217 2018 3,742 2019 3,377 Thereafter 5,521 $ 32,390 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt The following table summarizes the debt as of June 30, 2015 and December 31, 2014 (in thousands): Property June 30, December 31, Interest Rate as Maturity Revolving Credit Facility (1) $ 34,692 $ — LIBOR +2.25 % (2) June 2018 AmberGlen Mortgage Loan (3) 24,946 25,158 4.38 May 2019 Midland Life Insurance (4) 95,000 95,000 4.34 May 2021 Lake Vista Pointe (5) 18,460 18,460 4.28 August 2024 Florida Research Park (5)(6) 17,000 17,000 4.44 December 2024 Washington Group Plaza (5) 33,997 34,322 3.85 July 2018 Plaza 25 (5)(7) 17,000 — 4.10 July 2025 Total $ 241,095 $ 189,940 All interest rates are fixed interest rates with the exception of the revolving credit facility (“Revolving Credit Facility”) as explained in footnotes 1 and 2 below. (1) At June 30, 2015 the Revolving Credit Facility had $35 million authorized and drawn. In addition, the Revolving Credit Facility has an accordion feature that will permit the Company to borrow up to $150 million, subject to additional collateral availability and lender approval. The Credit Agreement has a maturity date of June 26, 2018, which may be extended to June 26, 2019 at the Company’s option subject to compliance with certain extension conditions set forth in the Revolving Credit Facility. The Revolving Credit Facility currently bears an interest rate of one month LIBOR plus 2.25% and requires the Company to maintain a minimum Fixed Charge Coverage Ratio of no less than 1.60x. At June 30, 2015, the Revolving Credit Facility is cross-collateralized by Central Fairwinds, Logan Tower and Superior Pointe. On July 14, 2015, the Company entered into a first Amendment and Joinder to its Amended and Restated Credit Agreement which increased the authorized borrowing capacity under the Credit Agreement from $35 million to $75 million. (2) As of June 30, 2015, the one month LIBOR rate was 0.19%. (3) The Company is required to maintain a minimum net worth of $25 million and a minimum liquidity of $2 million. (4) The mortgage loan is cross-collateralized by Corporate Parkway, Cherry Creek and City Center. Interest only until June 2016 then interest payable monthly plus principal based on 360 months of amortization. The loan bears a fixed interest rate of 4.34% and matures on May 6, 2021. (5) Interest on mortgage loan is payable monthly plus principal based on 360 months of amortization. (6) The Company is required to maintain a minimum net worth of $17 million, minimum liquidity of $1.7 million and a debt service coverage ratio of no less than 1.15x. (7) The Company is required to maintain a debt service coverage ratio of no less than 1.45x. The scheduled principal repayments of debt as of June 30, 2015 are as follows (in thousands): 2015 $ 545 2016 2,034 2017 3,036 2018 69,772 2019 25,723 Thereafter 139,985 Total $ 241,095 Mortgage Loan On June 25, 2015, the Company closed on a $17 million loan secured by a first mortgage lien on the Plaza 25 property in Denver. The loan matures in June 2025 and provides for monthly payments of principal and interest. Interest is payable at a fixed rate of 4.1% per annum. Monthly payments are initially interest only. Secured Credit Facility On July 14, 2015, the Company entered into an Amendment and Joinder to its Amended and Restated Credit Agreement which increased the authorized borrowing capacity under the Credit Agreement from $35 million to $75 million. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 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 Earn-Out Liability The fair value of the Central Fairwinds earn-out (note 9) was derived by making assumptions on the timing of the lease up of vacant space and the gross effective rents of those new leases and then applying an 8% discount rate to the resulting cash-flows to obtain a present value. The earn-out valuation assumes that approximately 4,000 square feet of additional leasing is completed between the date of the valuation and the end of the calculation period which would take the earn-out occupancy from 71% signed and committed at June 30, 2015 to 85% by July 2016 and stabilized at that level thereafter. The average gross effective rent and incremental operating costs per square foot is assumed to be $22 and $3, respectively. As of June 30, 2015, the 70% earn-out occupancy and net operating income threshholds had been met. This triggers a payment of approximately $3.2 million to be made in August 2015. The estimated fair value of the earn-out liability was $8.6 million as of June 30, 2015 and $8.0 million as of December 31, 2014. The fair value increased by $0.6 million for the three and six months ended June 30, 2015. Level 3 sensitivity analysis: The Company applies judgment in determining unobservable inputs used to calculate the fair value of Level 3 instruments. Level 3 instruments held by the Company include the earn-out. The unobservable inputs used in the valuation of the earn-out primarily include the net effective rent assumptions. A sensitivity analysis has been performed to determine the potential gain or loss by varying the significant unobservable inputs by increasing or decreasing them by 10%. The impact of applying these other reasonably possible inputs is a potential loss of $0.1 million and a potential gain of $0.1 million. This potential gain or loss would be recorded through profit and loss. Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts Payable and Accrued Liabilities The Company estimates that the fair value approximates carrying value due to the relatively short-term nature of these instruments. Fair Value of Financial Instruments Not Carried at Fair Value With the exception of fixed rate mortgage loans payable, the carrying amounts of the Company’s financial instruments approximate their fair value. The Company determines the fair value of its fixed rate mortgage loan payable based on a discounted cash flow analysis using a discount rate that approximates the current borrowing rates for instruments of similar maturities. Based on this, the Company has determined that the fair value of these instruments was $208,000,000 and $192,500,000 as of June 30, 2015 and December 31, 2014, respectively. Although the Company has determined the majority of the inputs used to value its fixed rate debt fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its fixed rate debt utilize Level 3 inputs, such as estimates of current credit spreads. Accordingly, mortgage loans payable have been classified as Level 3 fair value measurements. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. Related Party Transactions Formation and Equity Transactions The Formation Transactions were completed on April 21, 2014 through the contribution of the initial properties by Second City Capital Partners II, Limited Partnership, Second City General Partner II, Limited Partnership, Gibralt US, Inc., GCC Amberglen Investments Limited Partnership and Daniel Rapaport (collectively, the “Second City Group”). The Second City Group received as consideration for its contribution approximately $19.4 million in cash in accordance with the terms of its contribution agreement to acquire various non-controlling interests and eliminate economic incentives in the initial properties. Additional payments to the Second City Group included $4.9 million for reimbursement of IPO costs and $1.8 million for working capital. On May 9, 2014, subsequent to the underwriters’ exercise of the overallotment option, the Company used the $9.1 million of net proceeds from the underwriters’ exercise of the overallotment option to redeem 479,305 common units and 248,095 shares of common stock from the Second City Group. On December 23, 2014, the underwriters of the secondary public offering exercised their overallotment option to purchase an additional 512,664 shares of the Company`s common stock at the offering price of $12.50 a share resulting in additional net proceeds to the Company of $6.1 million after deducting underwriting discounts. The Company used the $6.1 million of net proceeds from exercise of the overallotment option to redeem 336,195 common units and 176,469 shares of common stock from the Second City Group. Property Management Fees Three of the Company`s properties (City Center, Central Fairwinds and AmberGlen) engaged related parties to perform asset and property management services for a fee ranging from 3.0% to 3.5% of gross revenue. Advisory and Transaction Fees During the three and six month period ended June 30, 2015, the Company incurred $0.9 million and $1.4 million, respectively, in advisory and transaction fees payable to the Advisor. |
Future Minimum Rent Schedule
Future Minimum Rent Schedule | 6 Months Ended |
Jun. 30, 2015 | |
Leases [Abstract] | |
Future Minimum Rent Schedule | 8. Future Minimum Rent Schedule Future minimum lease payments to be received as of June 30, 2015 under noncancellable operating leases for the next five years and thereafter are as follows (in thousands): 2015 $ 22,649 2016 38,703 2017 34,487 2018 28,091 2019 22,477 Thereafter 86,223 $ 232,630 The above minimum lease payments to be received do not include reimbursements from tenants for certain operating expenses and real estate taxes and do not include early termination payments provided for in certain leases. Two state government tenants currently have the exercisable right to terminate their lease if the state does not appropriate rent in its annual budgets. The Company has determined that the occurrence of the government tenant not appropriating the rent in its annual budget is a remote contingency and accordingly recognizes lease revenue on a straight-line basis over the respective lease term. These tenants represent approximately 28.50% of the Company’s total future minimum lease payments as of June 30, 2015. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Earn-Out As part of the Formation Transactions and contribution agreement with respect to the Central Fairwinds property, the Company is obligated to make additional payments to Second City (each, an “Earn-Out Payment”). Earn-Out Payments are contingent on the property reaching certain specified occupancy levels through new leases to qualified tenants and exceeding a net operating income threshold, which grows annually. Second City will be entitled to receive an Earn-Out Payment (net of the associated leasing costs and inclusive of leasing commissions and tenant improvements/allowances and free rent) as and when the occupancy of Central Fairwinds reaches each of 70%, 80% and 90% (each, an “Earn-Out Threshold”) based on the incremental cash flow generated by new leases and a 7.75% stabilized capitalization rate. The Company will make any additional Earn-Out Payment within 30 days of the end of the Earn-Out Term based on new qualified leases entered into since the achievement of the last Earn-Out Threshold. Earn-Out Payments will be subject to a claw-back if a qualified tenant defaults in the payment of rent and is not replaced with another qualified tenant (see note 6). As of June 30, 2015, the 70% earn-out occupancy and net operating income threshholds had been met. This triggers a payment of approximately $3.2 million to be made in August 2015. The estimated fair value of the earn-out liability was $8.6 million as of June 30, 2015 and $8.0 million as of December 31, 2014. The fair value increased by $0.6 million for the three and six months ended June 30, 2015. Other 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 June 30, 2015 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. |
Stockholder's Equity
Stockholder's Equity | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Stockholder's Equity | 10. Stockholder’s Equity The Company issued 5,800,000 shares in the IPO resulting in net proceeds of $63.4 million after deducting the underwriters’ discount and offering expenses. The underwriters of the IPO exercised their overallotment option to purchase an additional 782,150 shares of the Company’s common stock resulting in additional net proceeds of $9.1 million after deducting underwriting discounts. On December 10, 2014, the Company completed a follow-on public offering pursuant to which the Company sold 3,750,000 shares of our common stock at a price of $12.50 per share. The Company raised $46.9 million in gross proceeds, resulting in net proceeds to the Company of approximately $43.7 million after deducting approximately $2.6 million in underwriting discounts and approximately $0.6 million in other expenses relating to the offering. On December 23, 2014, the underwriters of the offering exercised their overallotment option to purchase an additional 512,664 shares of our common stock at the offering price of $12.50 a share for additional gross proceeds to the Company of approximately $6.4 million resulting in net proceeds to the Company of $6.1 million after deducting approximately $0.3 million in underwriting discounts. All net proceeds from the underwriters’ exercise of the overallotment option were used to redeem 336,195 common units and 176,469 common stock held by the Second City Group. Non-controlling Interests Non-controlling interests in the Company represent common units of the Operating Partnership held by the Predecessor’s prior investors. Non-controlling interests consisted of 2,903,209 Operating Partnership common units and represented an approximately 18.9% interest in the Operating Partnership as of June 30, 2015. Operating Partnership units and shares of common stock have essentially the same economic characteristics, as they share equally in the total net income or loss distributions of the Operating Partnership. Beginning on or after the date which is 12 months after the later of the completion of the initial public offering or the date on which a person first became a holder of common units, each limited partner and assignees of limited partners will have the right, subject to the terms and conditions set forth in the partnership agreement, to require the Operating Partnership to redeem all or a portion of the common units held by such limited partner or assignee in exchange for a cash amount per common unit equal to the value of one share of common stock, determined in accordance with and subject to adjustment under the partnership agreement. The Company has the sole option at its discretion to redeem the common units by issuing common stock on a one-for-one basis. The Operating Partnership unitholders are entitled to share in cash distributions from the Operating Partnership in proportion to its percentage ownership of common units. During the three months ended June 30, 2015, 12,500 Operating Partnership units were converted to common stock. Common Stock and Common Unit Distributions On June 15, 2015, the Company’s board of directors declared a cash dividend distribution of $0.235 per share for the quarterly period ended June 30, 2015. The dividend was payable on July 17, 2015 to stockholders and common unitholders of record on July 3, 2015. Subsequent to June 30, 2015, $2.9 million in dividends was paid to stockholders and $0.7 million to common unitholders, totaling $3.6 million. Restricted Stock Units The Company has an equity incentive plan (“Equity Incentive Plan”) for certain officers, directors, advisors and personnel, and, with approval of the board of directors, for subsidiaries, the Advisor 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 LTIP 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 “plan administrator”). The maximum number of shares of common stock that may be issued under the Equity Incentive Plan is 1,263,580 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. During the three months ended June 30, 2015, 7,966 restricted stock units (“RSUs”) were granted to directors and non-executive employees of the Advisor with a fair value of $0.1 million. The awards will vest in three equal, annual installments on each of the first three anniversaries of the date of grant. For the three months ended June 30, 2015, 125,620 RSUs vested and the Company recognized net compensation expense of $0.5 million related to the RSUs. A RSU award represents the right to receive shares of the Company’s common stock in the future, after the applicable vesting criteria, determined by the plan administrator, has been satisfied. The holder of an award of RSU has no rights as a stockholder until shares of common stock are issued in settlement of vested RSUs. The plan administrator may provide for a grant of dividend equivalent rights in connection with the grant of RSU; provided, however, that if the RSUs do not vest solely upon satisfaction of continued employment or service, any payment in respect to the related dividend equivalent rights will be held by the Company and paid when, and only to the extent that, the related RSU vest. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events On July 29, 2015, the Company, through the Operating Partnership, entered into an Agreement of Purchase and Sale to acquire a property in Dallas, Texas for $54.4 million. On July 14, 2015, the Company entered into an Amendment and Joinder to its Amended and Restated Credit Agreement which increased the authorized borrowing capacity under the Credit Agreement from $35 million to $75 million. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Preparation and Summary of Significant Accounting Policies | Basis of Preparation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated and combined financial statements have been prepared by the Company in accordance with Securities and Exchange Commission 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 interim 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, 2014. The Predecessor represents a combination of certain entities holding interests in real estate that were commonly controlled prior to the Formation Transactions. Due to their common control, the financial statements of the separate entities which own the properties are presented on a combined basis in the Predecessor financial statements. |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which creates a new Topic Accounting Standards Codification (Topic 606). The standard is principle-based and provides a five-step model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. This standard is effective for interim or annual periods beginning after December 15, 2017, and allows for either full retrospective or modified retrospective adoption. We are not permitted to adopt the standard earlier than January 1, 2017. We are currently evaluating the impact the adoption of Topic 606 will have on our financial statements. In January 2015, the FASB issued ASU No. 2015-01, “Income Statement—Extraordinary and Unusual Items.” ASU 2015-01 eliminates the concept of extraordinary items. However, the presentation and disclosure requirements for items that are either unusual or in nature or infrequent in occurrence remain and will be expanded to include items that are both unusual in nature and infrequent in occurrence. ASU 2015-01 is effective for periods beginning after December 15, 2015. We are currently evaluating the impact of adopting this new accounting standard on our financial statements. In February 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2015-02, Consolidation (Topic 810)—Amendments to the Consolidation Analysis, which amends the criteria for determining which entities are considered variable interest entities (“VIE”), amends the criteria for determining if a service provider possesses a variable interest in a VIE and ends the deferral granted to investment companies for application of the VIE consolidation model. ASU 2015-02 is effective for annual periods, and interim periods therein, beginning after December 15, 2015. We are currently evaluating the impact the adoption of Topic 810 will have on our financial statements. |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Schedule of Acquired Properties through Operating Partnership | During the six months ended June 30, 2015 and 2014, the Company, through the Operating Parntership, acquired the following properties: Property Date Acquired Percentage Owned DTC Crossroads June 2015 100 % Superior Pointe June 2015 100 % Logan Tower February 2015 100 % Plaza 25 June 2014 100 % Cherry Creek January 2014 100 % |
Cherry Creek [Member] | |
Schedule of Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | The following table summarizes the Company’s allocation of the purchase price of assets acquired and liabilities assumed during the six months ended June 30, 2014 (in thousands): Cherry Creek Land $ 25,745 Buildings and improvements 15,771 Tenant improvements 4,372 Acquired intangible assets 12,009 Accounts payable and other liabilities (815 ) Lease intangible liabilities (249 ) Fair value of assets and liabilities at acquisition $ 56,833 |
Schedule of Realized Gain Loss on Investments | The Company recognized expenses relating to the Cherry Creek acquisition of $806,344 for the six months ended June 30, 2014. A gain of $4.5 million was recognized from the fair value adjustment associated with the Predecessor’s original ownership due to a change in control, calculated as follows (in thousands): Fair value of assets and liabilities acquired $ 56,833 Less existing mortgage in Cherry Creek (36,000 ) 20,833 Less cash paid to seller (12,021 ) Fair value of 42.3% equity interest 8,812 Carrying value of investment in Cherry Creek (4,337 ) Gain on existing 42.3% equity interest $ 4,475 |
Logan Tower [Member] | |
Schedule of Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands): Logan Tower Land $ 1,306 Buildings and improvements 7,844 Tenant improvements 353 Acquired intangible assets 1,274 Accounts payable and other liabilities (48 ) Lease intangible liabilities (306 ) Total consideration $ 10,423 |
Logan Tower Superior Pointe And DTC Crossroads Properties [Member] | |
Schedule of Operating Results Relating to Acquired Entities | The following table represents the results of the property’s operations since the date of acquisition on a stand-alone basis (in thousands): Three months ended June 30, 2015 Six months ended June 30, 2015 Operating revenues $ 535 $ 779 Operating expenses (779 ) (1,196 ) Interest (59 ) (59 ) Net loss before gain on equity investment $ (303 ) $ (476 ) |
Schedule of Business Acquisition Pro Forma Results of Operations | The following table presents the unaudited revenues and income from continuing operations for Logan Tower, Superior Pointe and DTC Crossroads, on a pro forma basis as if the Company had completed the acquisition of the properties as of January 1, 2014 (in thousands): Six Months Ended Six Months Ended Total revenues as reported by City Office REIT, Inc. and Predecessor $ 22,894 $ 16,376 Plus: Logan Tower 143 765 Plus: Superior Pointe 1,666 1,589 Plus: DTC Crossroads 1,904 1,777 Pro forma total revenues $ 26,607 $ 20,507 Total operating income as reported by the City Office REIT, Inc. and Predecessor $ 2,183 $ 1,505 Property acquisition costs 320 (320 ) Plus: Logan Tower (13 ) (68 ) Plus: Superior Pointe (86 ) (135 ) Plus: DTC Crossroads (59 ) (51 ) Pro forma operating income $ 2,345 $ 931 |
Plaza 25 [Member] | |
Schedule of Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | The following table summarizes the Company’s allocation of the purchase price of assets acquired and liabilities assumed (in thousands): Plaza 25 Land $ 1,764 Buildings and improvements 18,487 Tenant improvements 2,076 Acquired intangible assets 2,924 Prepaid expenses and other assets 2 Accounts payable and other liabilities (641 ) Lease intangible liabilities (328 ) Total consideration $ 24,284 |
Superior Pointe [Member] | |
Schedule of Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands): Superior Pointe Land $ 3,153 Buildings and improvements 19,250 Tenant improvements 584 Acquired intangible assets 2,866 Prepaid expenses and other assets 24 Accounts payable and other liabilities (316 ) Lease intangible liabilities (53 ) Total consideration $ 25,508 |
DTC Crossroads [Member] | |
Schedule of Allocation of Purchase Price of Assets Acquired and Liabilities Assumed | The following table summarizes the Company’s preliminary allocation of the purchase price of assets acquired and liabilities assumed (in thousands): DTC Crossroads Land $ 7,046 Buildings and improvements 22,832 Tenant improvements 630 Acquired intangible assets 4,099 Accounts payable and other liabilities (742 ) Lease intangible liabilities (351 ) Total consideration $ 33,514 |
Lease Intangibles (Tables)
Lease Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Lease Intangibles and Value of Assumed Lease Obligations | Lease intangibles and the value of assumed lease obligations as of June 30, 2015 and December 31, 2014 were comprised as follows (in thousands): June 30, 2015 Above In Place Leasing Total Below Below Total Cost $ 4,868 35,418 14,025 54,311 (1,456 ) (138 ) (1,594 ) Accumulated amortization (2,388 ) (13,630 ) (4,710 ) (20,728 ) 379 22 401 $ 2,480 21,788 9,315 33,583 (1,077 ) (116 ) (1,193 ) December 31, 2014 Above In Place Leasing Total Below Below Total Cost $ 4,762 28,505 12,926 46,193 (746 ) (138 ) (884 ) Accumulated amortization (1,985 ) (11,159 ) (3,658 ) (16,802 ) 258 20 278 $ 2,777 17,346 9,268 29,391 (488 ) (118 ) (606 ) |
Estimated Aggregate Amortization Expense for Lease Intangibles | The estimated aggregate amortization expense for lease intangibles for the five succeeding years and in the aggregate are as follows (in thousands): 2015 $ 4,678 2016 8,855 2017 6,217 2018 3,742 2019 3,377 Thereafter 5,521 $ 32,390 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Debt | The following table summarizes the debt as of June 30, 2015 and December 31, 2014 (in thousands): Property June 30, December 31, Interest Rate as Maturity Revolving Credit Facility (1) $ 34,692 $ — LIBOR +2.25 % (2) June 2018 AmberGlen Mortgage Loan (3) 24,946 25,158 4.38 May 2019 Midland Life Insurance (4) 95,000 95,000 4.34 May 2021 Lake Vista Pointe (5) 18,460 18,460 4.28 August 2024 Florida Research Park (5)(6) 17,000 17,000 4.44 December 2024 Washington Group Plaza (5) 33,997 34,322 3.85 July 2018 Plaza 25 (5)(7) 17,000 — 4.10 July 2025 Total $ 241,095 $ 189,940 All interest rates are fixed interest rates with the exception of the revolving credit facility (“Revolving Credit Facility”) as explained in footnotes 1 and 2 below. (1) At June 30, 2015 the Revolving Credit Facility had $35 million authorized and drawn. In addition, the Revolving Credit Facility has an accordion feature that will permit the Company to borrow up to $150 million, subject to additional collateral availability and lender approval. The Credit Agreement has a maturity date of June 26, 2018, which may be extended to June 26, 2019 at the Company’s option subject to compliance with certain extension conditions set forth in the Revolving Credit Facility. The Revolving Credit Facility currently bears an interest rate of one month LIBOR plus 2.25% and requires the Company to maintain a minimum Fixed Charge Coverage Ratio of no less than 1.60x. At June 30, 2015, the Revolving Credit Facility is cross-collateralized by Central Fairwinds, Logan Tower and Superior Pointe. On July 14, 2015, the Company entered into a first Amendment and Joinder to its Amended and Restated Credit Agreement which increased the authorized borrowing capacity under the Credit Agreement from $35 million to $75 million. (2) As of June 30, 2015, the one month LIBOR rate was 0.19%. (3) The Company is required to maintain a minimum net worth of $25 million and a minimum liquidity of $2 million. (4) The mortgage loan is cross-collateralized by Corporate Parkway, Cherry Creek and City Center. Interest only until June 2016 then interest payable monthly plus principal based on 360 months of amortization. The loan bears a fixed interest rate of 4.34% and matures on May 6, 2021. (5) Interest on mortgage loan is payable monthly plus principal based on 360 months of amortization. (6) The Company is required to maintain a minimum net worth of $17 million, minimum liquidity of $1.7 million and a debt service coverage ratio of no less than 1.15x. (7) The Company is required to maintain a debt service coverage ratio of no less than 1.45x. |
Schedule of Principal Repayments of Debt | The scheduled principal repayments of debt as of June 30, 2015 are as follows (in thousands): 2015 $ 545 2016 2,034 2017 3,036 2018 69,772 2019 25,723 Thereafter 139,985 Total $ 241,095 |
Future Minimum Rent Schedule (T
Future Minimum Rent Schedule (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Leases [Abstract] | |
Schedule of Future Minimum Lease Payments under Noncancellable Operating Leases | Future minimum lease payments to be received as of June 30, 2015 under noncancellable operating leases for the next five years and thereafter are as follows (in thousands): 2015 $ 22,649 2016 38,703 2017 34,487 2018 28,091 2019 22,477 Thereafter 86,223 $ 232,630 |
Organization and Description 23
Organization and Description of Business - Additional Information (Detail) $ / shares in Units, $ in Thousands | May. 09, 2014USD ($)shares | Apr. 21, 2014USD ($)Property$ / sharesshares | Jan. 02, 2014USD ($) | Jun. 30, 2015USD ($)shares | Jun. 30, 2014USD ($) | Apr. 20, 2014Property |
Business Description And Basis Of Presentation [Line Items] | ||||||
Company formation date | Nov. 26, 2013 | |||||
Operation commencement date | Apr. 21, 2014 | |||||
Common stock issued in IPO, shares | shares | 5,800,000 | 5,800,000 | ||||
Common stock issued in IPO, price per share | $ / shares | $ 12.50 | |||||
IPO Closed date | Apr. 21, 2014 | |||||
Gross proceeds from issuance of public offering | $ 72,500 | |||||
Net proceeds from issuance of public offering | 63,400 | $ 63,400 | ||||
Underwriting discounts | 5,100 | |||||
Other expenses relating to IPO | 4,000 | |||||
Purchase consideration, cash paid | $ 19,400 | |||||
Number of properties in which loan refinanced | Property | 3 | |||||
Overallotment Option [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Common stock issued in IPO, shares | shares | 782,150 | |||||
Gross proceeds from issuance of public offering | $ 9,800 | |||||
Net proceeds from issuance of public offering | 9,100 | |||||
Underwriting discounts | 700 | |||||
Overallotment Option [Member] | Second City Group [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Common units and common stock redemption value, in cash | $ 9,100 | |||||
City Office REIT Operating Partnership, L.P. [Member] | Washington Group Plaza [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Percent of ownership interest acquired in properties | 100.00% | |||||
City Office REIT Operating Partnership, L.P. [Member] | Cherry Creek [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Percent of ownership interest acquired in properties | 100.00% | |||||
City Office REIT Operating Partnership, L.P. [Member] | Corporate Parkway [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Percent of ownership interest acquired in properties | 100.00% | |||||
City Office REIT Operating Partnership, L.P. [Member] | AmberGlen [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Percent of ownership interest acquired in properties | 76.00% | |||||
City Office REIT Operating Partnership, L.P. [Member] | Central Fairwinds [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Percent of ownership interest acquired in properties | 90.00% | |||||
City Office REIT Operating Partnership, L.P. [Member] | City Center Property [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Percent of ownership interest acquired in properties | 95.00% | |||||
Non-Recourse Mortgage Loan [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Non-recourse mortgage loan, amount | $ 95,000 | |||||
Non-recourse mortgage loan, interest rate | 4.34% | |||||
Non-recourse mortgage loan, maturity date | May 6, 2021 | |||||
Predecessor [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Number of properties acquired | Property | 6 | |||||
Predecessor [Member] | Cherry Creek [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Purchase consideration, cash paid | $ 12,000 | $ 12,021 | ||||
Percent of ownership interest acquired in properties | 57.70% | 100.00% | ||||
Common Units [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Purchase consideration, units issued | shares | 3,731,209 | |||||
Common Units [Member] | Overallotment Option [Member] | Second City Group [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Previously issued number of redeemable shares | shares | 479,305 | |||||
Common Stock [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Purchase consideration, units issued | shares | 1,858,860 | |||||
Common Stock [Member] | Overallotment Option [Member] | Second City Group [Member] | ||||||
Business Description And Basis Of Presentation [Line Items] | ||||||
Previously issued number of redeemable shares | shares | 248,095 |
Real Estate Investments - Sched
Real Estate Investments - Schedule of Acquired Properties through Operating Partnership (Detail) | 6 Months Ended | |||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 17, 2015 | Feb. 04, 2015 | Jun. 04, 2014 | Jan. 02, 2014 | |
DTC Crossroads [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Real estate property, date acquired | 2015-06 | |||||
Real estate property, percentage owned | 100.00% | |||||
Superior Pointe [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Real estate property, date acquired | 2015-06 | |||||
Real estate property, percentage owned | 100.00% | 100.00% | ||||
Logan Tower [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Real estate property, date acquired | 2015-02 | |||||
Real estate property, percentage owned | 100.00% | 100.00% | ||||
Plaza 25 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Real estate property, date acquired | 2014-06 | |||||
Real estate property, percentage owned | 100.00% | 100.00% | ||||
Predecessor [Member] | Cherry Creek [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Real estate property, date acquired | 2014-01 | |||||
Real estate property, percentage owned | 100.00% | 57.70% |
Real Estate Investments - Addit
Real Estate Investments - Additional Information (Detail) - USD ($) | Jun. 17, 2015 | Feb. 04, 2015 | Jun. 04, 2014 | Apr. 21, 2014 | Jan. 02, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||||||
Business acquisition, purchase consideration | $ 19,400,000 | |||||||
Business acquisition, deferred financing costs | $ 2,801,000 | $ 2,901,000 | ||||||
Logan Tower [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, ownership percentage | 100.00% | 100.00% | ||||||
Business acquisition, purchase consideration | $ 10,400,000 | |||||||
Plaza 25 [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, ownership percentage | 100.00% | 100.00% | ||||||
Business acquisition, purchase consideration | $ 24,300,000 | |||||||
Superior Pointe [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, ownership percentage | 100.00% | 100.00% | ||||||
Business acquisition, purchase consideration | $ 25,500,000 | |||||||
DTC Crossroads [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, ownership percentage | 100.00% | |||||||
Business acquisition, purchase consideration | $ 33,500,000 | |||||||
Predecessor [Member] | Cherry Creek [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition, ownership percentage | 57.70% | 100.00% | ||||||
Business acquisition, purchase consideration | $ 12,000,000 | $ 12,021,000 | ||||||
Business acquisition, liabilities assumed | 50,000,000 | |||||||
Repayment of debt | 36,000,000 | 36,000,000 | ||||||
Business acquisition, deferred financing costs | 1,200,000 | |||||||
Business acquisition, transaction costs | $ 800,000 | |||||||
Expenses related to acquisition | 806,344 | |||||||
Gain on equity investment | $ 4,475,000 |
Real Estate Investments - Sch26
Real Estate Investments - Schedule of Allocation of Purchase Price of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Jun. 17, 2015 | Feb. 04, 2015 | Jun. 30, 2014 | Jun. 04, 2014 |
Logan Tower [Member] | |||||
Business Acquisition [Line Items] | |||||
Land | $ 1,306 | ||||
Buildings and improvements | 7,844 | ||||
Tenant improvements | 353 | ||||
Acquired intangible assets | 1,274 | ||||
Accounts payable and other liabilities | (48) | ||||
Lease intangible liabilities | (306) | ||||
Fair value of assets and liabilities at acquisition | $ 10,423 | ||||
Plaza 25 [Member] | |||||
Business Acquisition [Line Items] | |||||
Land | $ 1,764 | ||||
Buildings and improvements | 18,487 | ||||
Tenant improvements | 2,076 | ||||
Acquired intangible assets | 2,924 | ||||
Prepaid expenses and other assets | 2 | ||||
Accounts payable and other liabilities | (641) | ||||
Lease intangible liabilities | (328) | ||||
Fair value of assets and liabilities at acquisition | $ 24,284 | ||||
Superior Pointe [Member] | |||||
Business Acquisition [Line Items] | |||||
Land | $ 3,153 | ||||
Buildings and improvements | 19,250 | ||||
Tenant improvements | 584 | ||||
Acquired intangible assets | 2,866 | ||||
Prepaid expenses and other assets | 24 | ||||
Accounts payable and other liabilities | (316) | ||||
Lease intangible liabilities | (53) | ||||
Fair value of assets and liabilities at acquisition | $ 25,508 | ||||
DTC Crossroads [Member] | |||||
Business Acquisition [Line Items] | |||||
Land | $ 7,046 | ||||
Buildings and improvements | 22,832 | ||||
Tenant improvements | 630 | ||||
Acquired intangible assets | 4,099 | ||||
Accounts payable and other liabilities | (742) | ||||
Lease intangible liabilities | (351) | ||||
Fair value of assets and liabilities at acquisition | $ 33,514 | ||||
Predecessor [Member] | Cherry Creek [Member] | |||||
Business Acquisition [Line Items] | |||||
Land | $ 25,745 | ||||
Buildings and improvements | 15,771 | ||||
Tenant improvements | 4,372 | ||||
Acquired intangible assets | 12,009 | ||||
Accounts payable and other liabilities | (815) | ||||
Lease intangible liabilities | (249) | ||||
Fair value of assets and liabilities at acquisition | $ 56,833 |
Real Estate Investments - Sch27
Real Estate Investments - Schedule of Realized Gain Loss on Investments (Detail) - USD ($) $ in Thousands | Apr. 21, 2014 | Jan. 02, 2014 | Jun. 30, 2014 |
Business Acquisition [Line Items] | |||
Less cash paid to seller | $ (19,400) | ||
Predecessor [Member] | Cherry Creek [Member] | |||
Business Acquisition [Line Items] | |||
Fair value of assets and liabilities acquired | $ 56,833 | ||
Less existing mortgage in Cherry Creek | $ (36,000) | (36,000) | |
Fair value of assets and liabilities acquired, after mortgage | 20,833 | ||
Less cash paid to seller | $ (12,000) | (12,021) | |
Fair value of 42.3% equity interest | 8,812 | ||
Carrying value of investment in Cherry Creek | (4,337) | ||
Gain on existing 42.3% equity interest | $ 4,475 |
Real Estate Investments - Sch28
Real Estate Investments - Schedule of Realized Gain Loss on Investments (Parenthetical) (Detail) | Jun. 30, 2014 |
Predecessor [Member] | Cherry Creek [Member] | |
Business Acquisition [Line Items] | |
Percentage of equity interest | 42.30% |
Real Estate Investments - Sch29
Real Estate Investments - Schedule of Operating Results Relating to Acquired Entities (Detail) - Jun. 30, 2015 - USD ($) $ in Thousands | Total | Total |
Business Acquisition [Line Items] | ||
Operating revenues | $ 10,196 | $ 20,237 |
Operating expenses | (4,127) | (8,243) |
Logan Tower Superior Pointe And DTC Crossroads Properties [Member] | ||
Business Acquisition [Line Items] | ||
Operating revenues | 535 | 779 |
Operating expenses | (779) | (1,196) |
Interest | (59) | (59) |
Net loss before gain on equity investment | $ (303) | $ (476) |
Real Estate Investments - Sch30
Real Estate Investments - Schedule of Business Acquisition Pro Forma Results of Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Business Acquisition [Line Items] | ||||
Total revenues as reported by City Office REIT, Inc. and Predecessor | $ 11,634 | $ 22,894 | ||
Pro forma total revenues | 26,607 | |||
Total operating income as reported by the City Office REIT, Inc. and Predecessor | $ 802 | 2,183 | ||
Property acquisition costs | 320 | |||
Pro forma operating income | 2,345 | |||
Logan Tower [Member] | ||||
Business Acquisition [Line Items] | ||||
Pro forma total revenues | 143 | |||
Pro forma operating income | (13) | |||
Superior Pointe [Member] | ||||
Business Acquisition [Line Items] | ||||
Pro forma total revenues | 1,666 | |||
Pro forma operating income | (86) | |||
DTC Crossroads [Member] | ||||
Business Acquisition [Line Items] | ||||
Pro forma total revenues | 1,904 | |||
Pro forma operating income | $ (59) | |||
Predecessor [Member] | ||||
Business Acquisition [Line Items] | ||||
Total revenues as reported by City Office REIT, Inc. and Predecessor | $ 8,393 | $ 16,376 | ||
Pro forma total revenues | 20,507 | |||
Total operating income as reported by the City Office REIT, Inc. and Predecessor | $ 615 | 1,505 | ||
Property acquisition costs | (320) | |||
Pro forma operating income | 931 | |||
Predecessor [Member] | Logan Tower [Member] | ||||
Business Acquisition [Line Items] | ||||
Pro forma total revenues | 765 | |||
Pro forma operating income | (68) | |||
Predecessor [Member] | Superior Pointe [Member] | ||||
Business Acquisition [Line Items] | ||||
Pro forma total revenues | 1,589 | |||
Pro forma operating income | (135) | |||
Predecessor [Member] | DTC Crossroads [Member] | ||||
Business Acquisition [Line Items] | ||||
Pro forma total revenues | 1,777 | |||
Pro forma operating income | $ (51) |
Lease Intangibles - Schedule of
Lease Intangibles - Schedule of Lease Intangibles and Value of Assumed Lease Obligations (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Total | $ 33,583 | $ 29,391 |
Above Market Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 4,868 | 4,762 |
Accumulated amortization | (2,388) | (1,985) |
Total | 2,480 | 2,777 |
In Place Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 35,418 | 28,505 |
Accumulated amortization | (13,630) | (11,159) |
Total | 21,788 | 17,346 |
Leasing Commissions [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 14,025 | 12,926 |
Accumulated amortization | (4,710) | (3,658) |
Total | 9,315 | 9,268 |
Above Market and In Place Leases and Leasing Commissions [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 54,311 | 46,193 |
Accumulated amortization | (20,728) | (16,802) |
Total | 33,583 | 29,391 |
Below Market Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | (1,456) | (746) |
Accumulated amortization | 379 | 258 |
Total | (1,077) | (488) |
Below Market Ground Lease [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | (138) | (138) |
Accumulated amortization | 22 | 20 |
Total | (116) | (118) |
Total of Below Market and Below Market Ground Leases [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | (1,594) | (884) |
Accumulated amortization | 401 | 278 |
Total | $ (1,193) | $ (606) |
Lease Intangibles - Estimated A
Lease Intangibles - Estimated Aggregate Amortization Expense for Lease Intangibles (Detail) $ in Thousands | Jun. 30, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,015 | $ 4,678 |
2,016 | 8,855 |
2,017 | 6,217 |
2,018 | 3,742 |
2,019 | 3,377 |
Thereafter | 5,521 |
Total | $ 32,390 |
Debt - Summary of Debt (Detail)
Debt - Summary of Debt (Detail) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Debt Instrument [Line Items] | ||
Debt | $ 241,095 | $ 189,940 |
AmberGlen Mortgage Loan [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 24,946 | 25,158 |
Interest Rate | 4.38% | |
Maturity | 2019-05 | |
Midland Life Insurance [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 95,000 | 95,000 |
Interest Rate | 4.34% | |
Maturity | 2021-05 | |
Lake Vista Pointe [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 18,460 | 18,460 |
Interest Rate | 4.28% | |
Maturity | 2024-08 | |
Florida Research Park [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 17,000 | 17,000 |
Interest Rate | 4.44% | |
Maturity | 2024-12 | |
Washington Group Plaza [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 33,997 | $ 34,322 |
Interest Rate | 3.85% | |
Maturity | 2018-07 | |
Plaza 25 [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 17,000 | |
Interest Rate | 4.10% | |
Maturity | 2025-07 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt | $ 34,692 | |
Maturity | 2018-06 | |
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Interest Rate, Description | 2.25% |
Debt - Summary of Debt (Parenth
Debt - Summary of Debt (Parenthetical) (Detail) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jul. 14, 2015 | |
AmberGlen Mortgage Loan [Member] | ||
Debt Instrument [Line Items] | ||
Minimum net worth required | $ 25,000,000 | |
Minimum liquidity requirements | $ 2,000,000 | |
Effective interest rate of loan | 4.38% | |
Midland Life Insurance [Member] | ||
Debt Instrument [Line Items] | ||
Loan maturity date | May 6, 2021 | |
Amortization period | 360 months | |
Effective interest rate of loan | 4.34% | |
Lake Vista Pointe [Member] | ||
Debt Instrument [Line Items] | ||
Amortization period | 360 months | |
Effective interest rate of loan | 4.28% | |
Florida Research Park [Member] | ||
Debt Instrument [Line Items] | ||
Minimum net worth required | $ 17,000,000 | |
Minimum liquidity requirements | $ 1,700,000 | |
Amortization period | 360 months | |
Effective interest rate of loan | 4.44% | |
Washington Group Plaza [Member] | ||
Debt Instrument [Line Items] | ||
Amortization period | 360 months | |
Effective interest rate of loan | 3.85% | |
Plaza 25 [Member] | ||
Debt Instrument [Line Items] | ||
Amortization period | 360 months | |
Effective interest rate of loan | 4.10% | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Revolving Credit Facility, authorized amount | $ 35,000,000 | |
Revolving Credit Facility, outstanding amount | 35,000,000 | |
Revolving Credit Facility, accordion feature | $ 150,000,000 | |
Revolving Credit Facility, interest rate description | one month LIBOR plus 2.25% | |
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Revolving Credit Facility, variable interest rate | 2.25% | |
One month LIBOR rate | 0.19% | |
Scenario, Previously Reported [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Loan maturity date | Jun. 26, 2018 | |
Amended and Restated Credit Agreement [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Loan maturity date | Jun. 26, 2019 | |
Subsequent Event [Member] | Scenario, Previously Reported [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Revolving Credit Facility, authorized amount | $ 35,000,000 | |
Subsequent Event [Member] | Amended and Restated Credit Agreement [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Revolving Credit Facility, authorized amount | $ 75,000,000 | |
Minimum [Member] | Florida Research Park [Member] | ||
Debt Instrument [Line Items] | ||
Fixed Charge Coverage Ratio | 115.00% | |
Minimum [Member] | Plaza 25 [Member] | ||
Debt Instrument [Line Items] | ||
Fixed Charge Coverage Ratio | 145.00% | |
Minimum [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Fixed Charge Coverage Ratio | 160.00% |
Debt - Schedule of Principal Re
Debt - Schedule of Principal Repayments of Debt (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Debt Disclosure [Abstract] | ||
2,015 | $ 545 | |
2,016 | 2,034 | |
2,017 | 3,036 | |
2,018 | 69,772 | |
2,019 | 25,723 | |
Thereafter | 139,985 | |
Debt | $ 241,095 | $ 189,940 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Jun. 25, 2015 | Jun. 30, 2015 | Jul. 14, 2015 |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Secured loan, maturity date | 2018-06 | ||
Revolving Credit Facility, authorized amount | $ 35,000,000 | ||
Scenario, Previously Reported [Member] | Subsequent Event [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving Credit Facility, authorized amount | $ 35,000,000 | ||
Amended and Restated Credit Agreement [Member] | Subsequent Event [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Revolving Credit Facility, authorized amount | $ 75,000,000 | ||
Plaza 25 [Member] | |||
Debt Instrument [Line Items] | |||
Secured loan, maturity date | 2025-07 | ||
Plaza 25 [Member] | First Mortgage Lien [Member] | |||
Debt Instrument [Line Items] | |||
Secured loan | $ 17,000,000 | ||
Secured loan, maturity date | 2025-06 | ||
Secured loan, fixed interest rate | 4.10% |
Fair Value of Financial Instr37
Fair Value of Financial Instruments - Additional Information (Detail) $ in Thousands | Jun. 30, 2015USD ($)ft² | Jul. 31, 2016 | Aug. 31, 2015USD ($) | Jun. 30, 2015USD ($)ft² | Jun. 30, 2015USD ($)ft²$ / ft² | Dec. 31, 2014USD ($) |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Fair value, discount rate | 8.00% | |||||
Approximate square feet of additional lease space | ft² | 4,000 | 4,000 | 4,000 | |||
Percentage of lease space occupancy | 71.00% | |||||
Average gross effective rent per square foot | $ / ft² | 22 | |||||
Incremental operating costs per square foot | $ / ft² | 3 | |||||
Percentage of Earn-Out Threshold | 70.00% | |||||
Estimated fair value of earn-out liability | $ 8,600 | $ 8,600 | $ 8,600 | $ 8,000 | ||
Change in fair value of earn-out | 600 | $ 600 | ||||
Percentage of increase or decrease in potential gain or loss by varying the significant unobservable inputs | 10.00% | |||||
Potential loss by varying the significant unobservable inputs | $ 100 | |||||
Potential gain by varying the significant unobservable inputs | 100 | |||||
Mortgage loans payable, fair value | $ 208,000 | $ 208,000 | $ 208,000 | $ 192,500 | ||
Scenario, Forecast [Member] | ||||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||||
Percentage of lease space occupancy | 85.00% | |||||
Earn-out payment | $ 3,200 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) $ / shares in Units, $ in Millions | Dec. 23, 2014USD ($)$ / sharesshares | May. 09, 2014USD ($)shares | Apr. 21, 2014USD ($)shares | Jun. 30, 2015USD ($)Property$ / shares | Jun. 30, 2015USD ($)Property$ / sharesshares | Dec. 31, 2014$ / shares |
Related Party Transaction [Line Items] | ||||||
Shares issued to underwriters under overallotment option | shares | 5,800,000 | 5,800,000 | ||||
Common stock price per share | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Net proceeds from issuance of public offering | $ 63.4 | $ 63.4 | ||||
Overallotment Option [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Shares issued to underwriters under overallotment option | shares | 782,150 | |||||
Net proceeds from issuance of public offering | $ 9.1 | |||||
Secondary Public Offering, Over Allotment Option [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Shares issued to underwriters under overallotment option | shares | 512,664 | |||||
Common stock price per share | $ / shares | $ 12.50 | |||||
Net proceeds from issuance of public offering | $ 6.1 | |||||
Property Management Firm [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fee, Description | Fee ranging from 3.0% to 3.5% of gross revenue | |||||
Number of real estate properties | Property | 3 | 3 | ||||
Property Management Firm [Member] | Minimum [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fee, percentage | 3.00% | |||||
Property Management Firm [Member] | Maximum [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Property management fee, percentage | 3.50% | |||||
Advisor [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Advisory and transaction fees payable | $ 0.9 | $ 1.4 | ||||
Second City Group [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Formation transactions completed date | Apr. 21, 2014 | |||||
Consideration for formation transactions | $ 19.4 | |||||
Additional payments to Second City reimbursement of IPO | 4.9 | |||||
Additional payments to the Second City Group for working capital | $ 1.8 | |||||
Second City Group [Member] | Overallotment Option [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock redemption value, in cash | $ 9.1 | |||||
Second City Group [Member] | Overallotment Option [Member] | Common Units [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Previously issued number of redeemable shares | shares | 479,305 | |||||
Second City Group [Member] | Overallotment Option [Member] | Common Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Previously issued number of redeemable shares | shares | 248,095 | |||||
Second City Group [Member] | Secondary Public Offering, Over Allotment Option [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Common stock redemption value, in cash | $ 6.1 | |||||
Shares issued to underwriters under overallotment option | shares | 512,664 | |||||
Net proceeds from issuance of public offering | $ 6.1 | |||||
Second City Group [Member] | Secondary Public Offering, Over Allotment Option [Member] | Common Units [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Previously issued number of redeemable shares | shares | 336,195 | |||||
Second City Group [Member] | Secondary Public Offering, Over Allotment Option [Member] | Common Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Previously issued number of redeemable shares | shares | 176,469 |
Future Minimum Rent Schedule -
Future Minimum Rent Schedule - Schedule of Future Minimum Lease Payments under Noncancellable Operating Leases (Detail) $ in Thousands | Jun. 30, 2015USD ($) |
Leases [Abstract] | |
2,015 | $ 22,649 |
2,016 | 38,703 |
2,017 | 34,487 |
2,018 | 28,091 |
2,019 | 22,477 |
Thereafter | 86,223 |
Total future minimum lease payments to be received | $ 232,630 |
Future Minimum Rent Schedule 40
Future Minimum Rent Schedule - Additional Information (Detail) | Jun. 30, 2015 |
Sales Revenue, Services, Net [Member] | Government Contracts Concentration Risk [Member] | |
Schedule Of Operating Leases Future Minimum Payments Receivable [Line Items] | |
Percentage of total future minimum lease payments | 28.50% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Aug. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Other Commitments [Line Items] | |||||
Percentage of Earn-Out Threshold | 70.00% | ||||
Estimated fair value of earn-out liability | $ 8,600 | $ 8,600 | $ 8,600 | $ 8,000 | |
Change in fair value of earn-out | $ 600 | $ 600 | |||
Scenario, Forecast [Member] | |||||
Other Commitments [Line Items] | |||||
Earn-out payment | $ 3,200 | ||||
Central Fairwinds [Member] | |||||
Other Commitments [Line Items] | |||||
Stabilized capitalization rate | 7.75% | ||||
Earn-Out Payment, Description | The Company will make any additional Earn-Out Payment within 30 days of the end of the Earn-Out Term based on new qualified leases entered into since the achievement of the last Earn-Out Threshold. | ||||
Central Fairwinds [Member] | Range 1 [Member] | |||||
Other Commitments [Line Items] | |||||
Percentage of Earn-Out Threshold | 70.00% | ||||
Central Fairwinds [Member] | Range 2 [Member] | |||||
Other Commitments [Line Items] | |||||
Percentage of Earn-Out Threshold | 80.00% | ||||
Central Fairwinds [Member] | Range 3 [Member] | |||||
Other Commitments [Line Items] | |||||
Percentage of Earn-Out Threshold | 90.00% |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Detail) $ / shares in Units, $ in Thousands | Jun. 15, 2015$ / shares | Dec. 23, 2014USD ($)$ / sharesshares | Dec. 10, 2014USD ($)$ / sharesshares | May. 09, 2014USD ($)shares | Apr. 21, 2014USD ($)shares | Jun. 30, 2015USD ($)Installment$ / sharesshares | Jun. 30, 2015USD ($)$ / sharesshares | Dec. 31, 2014$ / sharesshares |
Class of Stock [Line Items] | ||||||||
Common stock issued in IPO, shares | shares | 5,800,000 | 5,800,000 | ||||||
Net proceeds from IPO | $ 63,400 | $ 63,400 | ||||||
Common stock issued | shares | 12,417,230 | 12,417,230 | 12,417,230 | |||||
Common stock price per share | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Gross proceeds from issuance of public offering | 72,500 | |||||||
Underwriting discounts | 5,100 | |||||||
Other expenses relating to secondary public offering | $ 4,000 | |||||||
Operating Partnership common units | shares | 2,903,209 | |||||||
Percentage of interest in Operating Partnership | 18.90% | 18.90% | ||||||
Partnership unit, description | Beginning on or after the date which is 12 months after the later of the completion of the initial public offering or the date on which a person first became a holder of common units, each limited partner and assignees of limited partners will have the right, subject to the terms and conditions set forth in the partnership agreement, to require the Operating Partnership to redeem all or a portion of the common units held by such limited partner or assignee in exchange for a cash amount per common unit equal to the value of one share of common stock, determined in accordance with and subject to adjustment under the partnership agreement. The Company has the sole option at its discretion to redeem the common units by issuing common stock on a one-for-one basis. | |||||||
Operating Partnership units Converted to common stock | shares | 12,500 | |||||||
Declared cash dividend distribution per share | $ / shares | $ 0.235 | $ 0.235 | $ 0.235 | |||||
Dividends payable, declared date | Jun. 15, 2015 | |||||||
Dividends payable date | Jul. 17, 2015 | |||||||
Dividends payable, date of record | Jul. 3, 2015 | |||||||
Dividends | $ 7,171 | |||||||
Maximum number of shares issued under Equity Incentive Plan | shares | 1,263,580 | |||||||
Restricted Stock Units (RSUs) [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Net compensation expense | $ 100 | |||||||
Number of annual installments for award vesting | Installment | 3 | |||||||
Restricted stock units, vested in period | shares | 125,620 | |||||||
Restricted Stock Units (RSUs) [Member] | Directors and Non-Executive Employees [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Restricted stock units granted to directors and non-executive employees of the Advisor | shares | 7,966 | |||||||
Restricted stock units grant date fair value | $ 100 | |||||||
Subsequent Event [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Dividends | $ 3,600 | |||||||
Subsequent Event [Member] | Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Dividends | 2,900 | |||||||
Subsequent Event [Member] | Common Units [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Dividends | $ 700 | |||||||
Overallotment Option [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock issued in IPO, shares | shares | 782,150 | |||||||
Net proceeds from IPO | $ 9,100 | |||||||
Gross proceeds from issuance of public offering | 9,800 | |||||||
Underwriting discounts | $ 700 | |||||||
Overallotment Option [Member] | Second City Group [Member] | Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Previously issued number of redeemable shares | shares | 248,095 | |||||||
Overallotment Option [Member] | Second City Group [Member] | Common Units [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Previously issued number of redeemable shares | shares | 479,305 | |||||||
Follow-on Public Offering [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Net proceeds from IPO | $ 43,700 | |||||||
Common stock issued | shares | 3,750,000 | |||||||
Common stock price per share | $ / shares | $ 12.50 | |||||||
Gross proceeds from issuance of public offering | $ 46,900 | |||||||
Underwriting discounts | 2,600 | |||||||
Other expenses relating to secondary public offering | $ 600 | |||||||
Secondary Public Offering, Over Allotment Option [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock issued in IPO, shares | shares | 512,664 | |||||||
Net proceeds from IPO | $ 6,100 | |||||||
Common stock price per share | $ / shares | $ 12.50 | |||||||
Gross proceeds from issuance of public offering | $ 6,400 | |||||||
Underwriting discounts | $ 300 | |||||||
Secondary Public Offering, Over Allotment Option [Member] | Second City Group [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Common stock issued in IPO, shares | shares | 512,664 | |||||||
Net proceeds from IPO | $ 6,100 | |||||||
Secondary Public Offering, Over Allotment Option [Member] | Second City Group [Member] | Common Stock [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Previously issued number of redeemable shares | shares | 176,469 | |||||||
Secondary Public Offering, Over Allotment Option [Member] | Second City Group [Member] | Common Units [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Previously issued number of redeemable shares | shares | 336,195 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) | Jul. 29, 2015 | Jul. 14, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Subsequent Event [Line Items] | ||||
Acquired property under agreement of purchase and sale | $ 271,689,000 | $ 211,828,000 | ||
Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Revolving Credit Facility, authorized amount | $ 35,000,000 | |||
Dallas, Texas [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Acquired property under agreement of purchase and sale | $ 54,400,000 | |||
Scenario, Previously Reported [Member] | Subsequent Event [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Revolving Credit Facility, authorized amount | $ 35,000,000 | |||
Amended and Restated Credit Agreement [Member] | Subsequent Event [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Revolving Credit Facility, authorized amount | $ 75,000,000 |
Uncategorized Items - cio-20150
Label | Element | Value |
Predecessor [Member] | ||
Depreciation, Depletion and Amortization, Nonproduction | us-gaap_DepreciationAndAmortization | $ 3,416 |
Share-based Compensation | us-gaap_ShareBasedCompensation | 285 |
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | us-gaap_ProfitLoss | $ (3,067) |