City Office REIT Maintains Dividends Amid Challenging Office REIT Sector

City Office REIT (CIO) has announced its dividends for the fourth quarter of 2024, maintaining a quarterly dividend of $0.10 per share of common stock and common unit of partnership interest, and a regular quarterly dividend of $0.4140625 per share of the Company's 6.625% Series A Cumulative Redeemable Preferred Stock. The dividends will be payable on January 23, 2025, to all stockholders, preferred stockholders, and operating partnership unitholders, as applicable, of record as of the close of business on January 9, 2025.

City Office REIT's decision to maintain dividends reflects its stable financial performance and occupancy rates, despite the challenging office REIT sector. The company's occupancy rate of 83.4% (87.0% including signed leases not yet occupied) demonstrates resilience, while its Core FFO of $11.1 million and AFFO of $4.8 million in the third quarter of 2024 indicate a solid financial foundation. The maintenance of dividend levels provides stability for income-focused investors.

The company's rental and other revenues for the quarter were $42.4 million, a decrease from the previous quarter's $45.2 million. Additionally, the Company's GAAP net loss attributable to common stockholders was approximately $4.5 million, or ($0.11) per fully diluted share, compared to the previous quarter's net income of $2.3 million, or $0.06 per fully diluted share. Furthermore, the Company's Core FFO was approximately $11.1 million, or $0.27 per fully diluted share, a decrease from the previous quarter's $12.5 million, or $0.31 per fully diluted share. These factors contributed to the change in dividend payout compared to previous quarters.

City Office REIT's current dividend yield is approximately 5.7% based on current share prices, which is relatively modest compared to its historical average and the industry peers. As of December 11, 2024, CIO's TTM dividend payout is $0.40, with a yield of 6.87%. In contrast, the average dividend yield for the Finance REIT - Other Equity Trusts sector is around 7.5%. While CIO's dividend yield is lower than its historical average and industry peers, the company maintains a stable dividend policy, providing income-focused investors with a reliable source of returns.

In conclusion, City Office REIT's decision to maintain dividends for the fourth quarter of 2024 reflects its stable financial performance and occupancy rates, despite the challenging office REIT sector. The company's modest dividend yield and stable payout policy provide income-focused investors with a reliable source of returns, even as it navigates the current market environment.