City Office REIT Inc Q2 2021 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, related to the Sorrento Mesa portfolio, I kind of want to walk through the options that you highlighted. I mean were the 2 options that you kind of highlighted in your prepared remarks was, one, sell the entire portfolio; or two, form a joint venture to pursue a development on the available land side? Are those the 2 that you're thinking about right now?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : And I know last quarter, the talk with that available land site was to potentially do a JV to do the development and/or just sell that land. It seems like you're not planning on just selling the land anymore. I'm assuming, and correct me if I'm wrong here, is that the potential acquirer would prefer to have the entire portfolio within Sorrento Mesa, including that land, and that's why you're pursuing that potential disposition?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. And then what we heard in one of the stats is that the -- what developable life science land is trading in these top cluster markets is about $200 a developable square foot. I mean is that kind of in line with what you're thinking on the 1 million square feet that you have within Sorrento Mesa?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. Great. And then just last one from me on the Sorrento Mesa portfolio. I know you have an available block there. Is that something that you're pursuing to lease right now? Or does a potential acquirer of this would prefer to have that available for them to lease it up or do what they want? I mean are you still proactively pursuing tenant discussions to lease that space today? 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 05, 2021 / 3:00PM, CIO.N - Q2 2021 City Office REIT Inc Earnings Call

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. Great. And then, Tony, related to the lease expiration schedules, is Ally and Toyota, are those leases still reflected in the, what, the 2022 and 2023 expirations? Or have those been -- specifically Ally since they renewed, is that kind of now their new expiration date?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : And then when did Ally officially renew?

Question: Craig Gerald Kucera - B. Riley Securities, Inc., Research Division - Analyst : I noted that you pulled your acquisition and disposition guidance from your overall guidance here. I think in the first quarter guide, acquisitions was $43 million to $100 million. A couple of questions here. I guess, first of all, does the high end of the range in your revised guidance include that additional acquisition?

Question: Craig Gerald Kucera - B. Riley Securities, Inc., Research Division - Analyst : Okay. Got it. And I guess looking to your leasing volume, it accelerated again this quarter, particularly on the new leasing front. Would you say a lot of that activity is from tenants that you had been in discussions previously with? Or are these effectively new folks that are walking in and wanting space in more recent discussions? 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 05, 2021 / 3:00PM, CIO.N - Q2 2021 City Office REIT Inc Earnings Call

Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst : Jamie, you seem pretty confident that we'd see a push in the return to office, I guess, September on. Just wondering whether tenants are starting to talk about pushing that back because of the Delta outbreak.

Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst : When you talk to the tenants, how much uncertainty exists over commitment to space versus, say, a year ago? Have they become more definite in their plans? Or is there still this massive amount of uncertainty and how hybrid work might play out?

Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst : Okay. And then finally from me, on Park Tower, I don't know how long BB&T had been in this space, but a 5% increase seems on the modest side. But hey, it's 5% positive. So it's good. How do you actualize the economics of Park Tower playing out relative to your underwriting originally?

Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst : So you're running in line with expectations when you bought it, is that fair?