City Office REIT Inc Q2 2020 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Jamie, can you talk a bit -- a little bit about the Lake Vista Pointe property, the short-term renewal that was completed? I know that's a pretty big tenant, and I think that they had that lease expiration. So what's their thought process behind the short-term renewal? Is that going to -- is that just to tide them over until they can make their final decision? Or are they planning on doing something bigger there?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. And is there any property in that area that could support their needs? And I mean I think that before they needed more space, I'm not sure if this current environment changes that for them a little bit, but is there a brighter prospect that they're going to renew there?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. Great. I know you have another big expiration at Carillon Point coming up, too. I guess what's the discussions going on there? And is there a prospect of them renewing the lease sometime soon?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. Great. And then I guess, finally, can you talk about the Sorrento Mesa renewal that you completed? I know there was a pretty big rent step-ups that you've been talking about for a little while. Is there any TI component related to that or incremental investments that you need to make into that property?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. Great. And then finally, Tony, can you talk a little bit about your leverage targets? I mean, where do you want your balance sheet to be at today and especially given the stock repurchase program that you just kind of highlighted that you put into place? I'm assuming that given where leverage is today that you don't really want to execute on that yet. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 06, 2020 / 3:00PM, CIO.N - Q2 2020 City Office REIT Inc Earnings Call

Question: Craig Gerald Kucera - B. Riley FBR, Inc., Research Division - Analyst : Now that you've created so much value at Sorrento Mesa, do those assets now potentially become disposition candidates? Or are you more likely to hold onto them?

Question: Craig Gerald Kucera - B. Riley FBR, Inc., Research Division - Analyst : Okay. Great. And just to circle back to Cherry Creek on the expansion there that now being basically a single-tenant in those buildings. Did you get a lease extension when they agreed to take that expansion space?

Question: Craig Gerald Kucera - B. Riley FBR, Inc., Research Division - Analyst : Okay. And 1 more for me. I know you're not actively looking at transactions for 2020. But I'm curious to see if you're seeing any thaw in the transaction market, and if so kind of what kind of changes you're seeing in pricing in a post-COVID environment.

Question: Craig Gerald Kucera - B. Riley FBR, Inc., Research Division - Analyst : Okay. Just 1 more for me. Tony, with you guys reauthorizing a $50 million buyback, but not really likely to utilize it in the near term, are you still going to likely run the balance sheet with, call it, $55-ish million of cash today after the third quarter buybacks? Or are you likely to pay down the line? Because it does seem that you have a bit more of a positive outlook, certainly given your guidance raise and your reduction in bad debt expectations?