City Office REIT Inc Q4 2020 Earnings Call Transcript

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

Question: Craig Gerald Kucera - B. Riley Securities, Inc., Research Division - Analyst : I wanted to talk about the Cherry Creek disposition, particularly the timing. Was the decision to sell that without an additional acquisition teed up, driven by the pricing you were getting? Or were there considerations surrounding the Midland loan refinancing?

Question: Craig Gerald Kucera - B. Riley Securities, Inc., Research Division - Analyst : Got it. And just as a housekeeping item, did the large renewal at Sorrento Mesa begin paying cash rents in December? Or is there any free rent period there?

Question: Craig Gerald Kucera - B. Riley Securities, Inc., Research Division - Analyst : Okay. And one more for me. I just want to talk about your occupancy assumptions. Your -- this year, in your prepared remarks, you said that leasing -- this was the largest amount of leasing you had ever done. And clearly, fourth quarter was strong as well, but you're also mentioning that you're assuming sort of muted leasing in the first half of the year. Is that just being conservative in your guidance? Or have you seen any real shift here as we move sort of midway through first quarter as far as demand?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Jamie, I wanted to talk a little bit about the Sorrento Mesa asset. And I know Tony kind of mentioned or maybe it was you, Jamie, sorry, but -- about the ability to lease a vacant block. I mean what's the discussions like on that property and the prospects of leasing that?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : And once that lease is signed, I guess, how long will the build-out take and how quickly could rents commence? I mean is there -- how much free rent will be provided? And let's say, if you signed it today, would the cash rent not commence until the end of this year?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. And then can you talk a little bit about the upcoming lease expirations? And I think you still have about 8% of your leases rolling in '21. How are those discussions going? And specifically, I think you still have a large tenant at Florida Research Park, what's the progress of that lease?

Question: Michael Albert Carroll - RBC Capital Markets, Research Division - Analyst : Okay. Great. And then, I guess, Jamie, can you talk a little bit about the investment activity? I know you talked about it in the earlier part of the call. I guess, what do you have to see to get comfortable to start deploying some capital? I mean are these going to be more stabilized-type acquisitions you're looking for? I guess, how do you view the post-COVID type of environment? And is there different types of deals you're looking at versus, let's say, 12 months ago?

Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst : Two questions. Number one, on that stabilized run rate, assuming you make the acquisition in the fourth quarter. What would that number be if you finance that acquisition, 60% or 70% equity?

Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst : Yes. Yes. Just to not change your capital structure from where you are today?

Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst : Yes. I just -- you've done a good job bringing the leverage level down. I assume you want to keep it in this range, if not go a little bit lower. Is that fair?

Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst : Yes. Okay, fair. The land parcel you discussed earlier really sounds like interesting and exciting and value-creating opportunity. But you wouldn't

Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst : What do you think the cost would be per foot? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 25, 2021 / 4:00PM, CIO.N - Q4 2020 City Office REIT Inc Earnings Call

Question: William Andrew Crow - Raymond James & Associates, Inc., Research Division - Analyst : Life science could be north of 1,000.