[10-Q] CITY OFFICE REIT, INC. Quarterly Earnings Report

Rhea-AI Filing Summary

City Office REIT (CIO) swung to a heavy quarterly loss after writing down its soon-to-be-sold Phoenix Portfolio. Q2-25 rental revenue was flat at $42.3 million, but a $102.2 million impairment pushed operating results to a $96.6 million operating loss and a $105.3 million net loss (-$2.66 EPS) versus -$3.6 million (-$0.14 EPS) a year ago. Six-month net loss widened to $106.8 million. NOI was $26.0 million, up 4.7 % YoY, and operating cash flow remained positive at $25.4 million.

Balance-sheet capacity tightened: total assets fell to $1.33 billion from $1.46 billion at year-end, while debt was little changed at $647 million (4.5× annualised NOI). Cash and restricted cash totalled $34.5 million. Occupancy sat at 82.5 % with 3.6 % of leases expiring in 2H-25; several assets remain under covenant-triggered cash sweeps.

Strategic actions are reshaping the portfolio and capital structure. • 18 Jun 25: signed agreement to sell the 7-property Phoenix Portfolio for $296 million; assets and $16.8 million of liabilities reclassified as held for sale.
• 14 Jan 25: sold Superior Pointe for $12 million at book value.
• 23 Jul 25 (subsequent): entered a definitive merger agreement with MCME Carell to acquire all outstanding shares for $7.00 cash, subject to shareholder and customary approvals.

The board maintained the $0.10 quarterly common dividend (6.0 % annual yield at the $7.00 offer). Management continues to market non-core assets and manage refinancing risks ahead of the November 2025 unsecured facility maturity.

Positive

• $7.00-per-share all-cash merger announced 23 Jul 2025, offering immediate liquidity at a premium, pending approval.
• $296 million Phoenix Portfolio sale agreement adds expected proceeds to deleverage balance sheet and repay related mortgages.
• Operating cash flow remained positive at $25.4 million for 1H-25 despite sector headwinds.

Negative

• $102.2 million impairment on Phoenix assets drove a Q2 net loss of $105.3 million (-$2.66 EPS).
• Occupancy only 82.5 % and multiple properties under DSCR covenant cash sweeps indicate ongoing tenant and credit pressure.
• Retained earnings fell 66 % to $60.9 million and total equity declined $119 million since year-end.

Insights

Portfolio Manager

TL;DR: $7 cash bid provides immediate upside; operations weak after $102 M impairment.

The Q2 numbers themselves are ugly—flat rent, 13 % vacancy and a triple-digit impairment cut retained earnings by two-thirds. However, the announced buy-out at $7.00 delivers a clear liquidity event and limits further downside for equity holders. The Phoenix Portfolio sale should add $280-plus million of net proceeds, enough to retire the 2025 unsecured facility and improve leverage. Investors now focus less on near-term fundamentals and more on deal certainty (shareholder vote, financing and ground-lease reassignments). If the merger closes, equity value is locked; if it fails, CIO faces refinancing risk and soft office demand. Overall impact skews positive given the binding cash offer.

Real Estate Risk Analyst

TL;DR: Large write-downs and covenant issues highlight structural office risk.

The impairment confirms ongoing price erosion in second-tier Sun Belt office assets. Occupancy below 83 % and multiple DSCR failures triggered cash sweeps at key properties, signalling stressed collateral. Even after the Phoenix sale, $290 million of debt matures within 18 months. The merger premium suggests limited standalone value; any hiccup could leave CIO over-levered with declining NOI. Credit profile therefore remains fragile.

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36409

CITY OFFICE REIT, INC.

(Exact name of registrant as specified in its charter)

Maryland		98-1141883
(State or other jurisdiction		(IRS Employer
of incorporation or organization)		Identification No.)

666 Burrard Street

Suite 3210

Vancouver, BC

V6C 2X8

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (604) 806-3366

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of each Exchange on Which Registered
Common Stock, $0.01 par value 6.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share		“CIO” “CIO.PrA”		New York Stock Exchange New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☐		Accelerated filer		☒
Non-accelerated filer		☐		Smaller reporting company		☐
				Emerging Growth Company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of Common Stock, $0.01 par value, of the registrant outstanding at July 28, 2025 was 40,363,640.

Table of Contents

City Office REIT, Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended June 30, 2025

Table of Contents

				Page
PART I.		FINANCIAL INFORMATION		1
Item 1.		Financial Statements		1
		Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024		1
		Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024		2
		Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2025 and 2024		3
		Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2025 and 2024		4
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024		5
		Notes to the Condensed Consolidated Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.		Quantitative and Qualitative Disclosures About Market Risk		26
Item 4.		Controls and Procedures		27
PART II.		OTHER INFORMATION		27
Item 1.		Legal Proceedings		27
Item 1A.		Risk Factors		27
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 3.		Defaults Upon Senior Securities		29
Item 4.		Mine Safety Disclosures		29
Item 5.		Other Information		29
Item 6.		Exhibits		30
Signatures				31

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

City Office REIT, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except par value and share data)

		June 30, 2025				December 31, 2024
Assets
Real estate properties
Land		$	146,309			$	190,372
Building and improvement			838,567				1,169,793
Tenant improvement			118,404				163,569
Furniture, fixtures and equipment			236				1,368
			1,103,516				1,525,102
Accumulated depreciation			(198,726	)			(251,956	)
			904,790				1,273,146
Cash and cash equivalents			18,264				18,886
Restricted cash			16,237				15,073
Rents receivable, net			40,472				52,311
Deferred leasing costs, net			21,643				25,291
Acquired lease intangible assets, net			25,423				34,631
Other assets			5,147				23,744
Assets held for sale			296,167				12,588
Total Assets		$	1,328,143			$	1,455,670
Liabilities and Equity
Liabilities:
Debt		$	647,188			$	646,972
Accounts payable and accrued liabilities			22,637				34,535
Deferred rent			5,265				7,010
Tenant rent deposits			5,241				7,257
Acquired lease intangible liabilities, net			4,069				6,301
Other liabilities			11,499				16,879
Liabilities related to assets held for sale			16,816				2,176
Total Liabilities			712,715				721,130
Commitments and Contingencies (Note 9)
Equity:
6.625% Series A Preferred stock, $0.01 par value per share, 5,600,000 shares authorized,    4,480,000 issued and outstanding as of June 30, 2025 and December 31, 2024			112,000				112,000
Common stock, $0.01 par value, 100,000,000 shares authorized, 40,358,240 and    40,154,055 shares issued and outstanding as of June 30, 2025 and December 31, 2024			403				401
Additional paid-in capital			443,481				442,329
Retained earnings			60,901				179,838
Accumulated other comprehensive loss			(1,847	)			(713	)
Total Stockholders’ Equity			614,938				733,855
Non-controlling interests in properties			490				685
Total Equity			615,428				734,540
Total Liabilities and Equity		$	1,328,143			$	1,455,670
Subsequent Events (Note 12)

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Table of Contents

City Office REIT, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share data)

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Rental and other revenues		$	42,343			$	42,342			$	84,602			$	86,836
Operating expenses:
Property operating expenses			16,314				17,492				32,585				35,237
General and administrative			4,327				3,820				8,055				7,531
Depreciation and amortization			16,063				14,723				31,189				29,798
Impairment of real estate			102,229				—				102,229				—
Total operating expenses			138,933				36,035				174,058				72,566
Operating (loss)/income			(96,590	)			6,307				(89,456	)			14,270
Interest expense:
Contractual interest expense			(8,339	)			(8,129	)			(16,618	)			(16,228	)
Amortization of deferred financing costs and debt fair value			(380	)			(343	)			(734	)			(661	)
			(8,719	)			(8,472	)			(17,352	)			(16,889	)
Net loss on disposition of real estate property			—				(1,462	)			—				(1,462	)
Net loss			(105,309	)			(3,627	)			(106,808	)			(4,081	)
Less:
Net income attributable to non-controlling interests in properties			(57	)			(125	)			(228	)			(260	)
Net loss attributable to the Company			(105,366	)			(3,752	)			(107,036	)			(4,341	)
Preferred stock distributions			(1,855	)			(1,855	)			(3,710	)			(3,710	)
Net loss attributable to common stockholders		$	(107,221	)		$	(5,607	)		$	(110,746	)		$	(8,051	)
Net loss per common share:
Basic		$	(2.66	)		$	(0.14	)		$	(2.75	)		$	(0.20	)
Diluted		$	(2.66	)		$	(0.14	)		$	(2.75	)		$	(0.20	)
Weighted average common shares outstanding:
Basic			40,358				40,154				40,332				40,126
Diluted			40,358				40,154				40,332				40,126
Dividend distributions declared per common share		$	0.10			$	0.10			$	0.20			$	0.20

The accompanying notes are an integral part of these condensed consolidated financial statements.

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City Office REIT, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(In thousands)

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Net loss		$	(105,309	)		$	(3,627	)		$	(106,808	)		$	(4,081	)
Other comprehensive (loss)/income:
Unrealized cash flow hedge (loss)/gain			(421	)			650				(1,007	)			3,557
Amounts reclassified to interest expense			(79	)			(1,131	)			(158	)			(2,249	)
Other comprehensive (loss)/income			(500	)			(481	)			(1,165	)			1,308
Comprehensive loss			(105,809	)			(4,108	)			(107,973	)			(2,773	)
Less:
Comprehensive income attributable to non-controlling interests in    properties			(45	)			(122	)			(197	)			(283	)
Comprehensive loss attributable to the Company		$	(105,854	)		$	(4,230	)		$	(108,170	)		$	(3,056	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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City Office REIT, Inc.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

(In thousands)

	Number of shares of preferred stock			Preferred stock			Number of shares of common stock			Common stock			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total stockholders’ equity			Non- controlling interests in properties			Total equity
Balance —December 31, 2024		4,480		$	112,000			40,154		$	401		$	442,329		$	179,838		$	(713	)	$	733,855		$	685		$	734,540
Restricted stock award grants and vesting		—			—			204			2			249			(59	)		—			192			—			192
Common stock dividend distribution declared		—			—			—			—			—			(4,036	)		—			(4,036	)		—			(4,036	)
Preferred stock dividend distribution declared		—			—			—			—			—			(1,855	)		—			(1,855	)		—			(1,855	)
Contributions		—			—			—			—			—			—			—			—			24			24
Distributions		—			—			—			—			—			—			—			—			(161	)		(161	)
Net (loss)/income		—			—			—			—			—			(1,670	)		—			(1,670	)		171			(1,499	)
Other comprehensive loss		—			—			—			—			—			—			(646	)		(646	)		(19	)		(665	)
Balance —March 31, 2025		4,480		$	112,000			40,358		$	403		$	442,578		$	172,218		$	(1,359	)	$	725,840		$	700		$	726,540
Restricted stock award grants and vesting		—			—			—			—			903			(60	)		—			843			—			843
Common stock dividend distribution declared		—			—			—			—			—			(4,036	)		—			(4,036	)		—			(4,036	)
Preferred stock dividend distribution declared		—			—			—			—			—			(1,855	)		—			(1,855	)		—			(1,855	)
Contributions		—			—			—			—			—			—			—			—			35			35
Distributions		—			—			—			—			—			—			—			—			(290	)		(290	)
Net (loss)/income		—			—			—			—			—			(105,366	)		—			(105,366	)		57			(105,309	)
Other comprehensive loss		—			—			—			—			—			—			(488	)		(488	)		(12	)		(500	)
Balance —June 30, 2025		4,480		$	112,000			40,358		$	403		$	443,481		$	60,901		$	(1,847	)	$	614,938		$	490		$	615,428
	Number of shares of preferred stock			Preferred stock			Number of shares of common stock			Common stock			Additional paid-in capital			Retained earnings			Accumulated other comprehensive (loss)/income			Total stockholders’ equity			Non- controlling interests in properties			Total equity
Balance —December 31, 2023		4,480		$	112,000			39,938		$	399		$	438,867		$	221,213		$	(248	)	$	772,231		$	402		$	772,633
Restricted stock award grants and vesting		—			—			216			2			42			(45	)		—			(1	)		—			(1	)
Common stock dividend distribution declared		—			—			—			—			—			(4,015	)		—			(4,015	)		—			(4,015	)
Preferred stock dividend distribution declared		—			—			—			—			—			(1,855	)		—			(1,855	)		—			(1,855	)
Distributions		—			—			—			—			—			—			—			—			(444	)		(444	)
Net (loss)/income		—			—			—			—			—			(589	)		—			(589	)		135			(454	)
Other comprehensive income		—			—			—			—			—			—			1,763			1,763			26			1,789
Balance —March 31, 2024		4,480		$	112,000			40,154		$	401		$	438,909		$	214,709		$	1,515		$	767,534		$	119		$	767,653
Restricted stock award grants and vesting		—			—			—			—			1,139			(56	)		—			1,083			—			1,083
Common stock dividend distribution declared		—			—			—			—			—			(4,015	)		—			(4,015	)		—			(4,015	)
Preferred stock dividend distribution declared		—			—			—			—			—			(1,855	)		—			(1,855	)		—			(1,855	)
Contributions		—			—			—			—			—			—			—			—			442			442
Distributions		—			—			—			—			—			—			—			—			(104	)		(104	)
Net (loss)/income		—			—			—			—			—			(3,752	)		—			(3,752	)		125			(3,627	)
Other comprehensive loss		—			—			—			—			—			—			(478	)		(478	)		(3	)		(481	)
Balance —June 30, 2024		4,480		$	112,000			40,154		$	401		$	440,048		$	205,031		$	1,037		$	758,517		$	579		$	759,096

The accompanying notes are an integral part of these condensed consolidated financial statements.

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City Office REIT, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

		Six Months Ended June 30,
		2025				2024
Cash Flows from Operating Activities:
Net loss		$	(106,808	)		$	(4,081	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization			31,189				29,798
Amortization of deferred financing costs and debt fair value			734				661
Amortization of above and below market leases			30				(64	)
Straight-line rent/expense			(351	)			32
Non-cash stock compensation			1,757				2,154
Net loss on disposition of real estate property			—				1,462
Impairment of real estate			102,229				—
Changes in non-cash working capital:
Rents receivable, net			(1,016	)			1,128
Other assets			(538	)			(218	)
Accounts payable and accrued liabilities			(1,286	)			880
Deferred rent			(481	)			(472	)
Tenant rent deposits			(80	)			422
Net Cash Provided By Operating Activities			25,379				31,702
Cash Flows to Investing Activities:
Additions to real estate properties			(20,295	)			(11,570	)
Net proceeds from sale of real estate property			13,574				—
Reduction of cash on disposition of real estate property			—				(2,477	)
Deferred leasing costs			(4,771	)			(4,647	)
Net Cash Used In Investing Activities			(11,492	)			(18,694	)
Cash Flows to Financing Activities:
Debt issuance and extinguishment costs			(200	)			(516	)
Proceeds from borrowings			4,500				9,000
Repayment of borrowings			(4,769	)			(8,645	)
Dividend distributions paid to stockholders			(11,761	)			(11,719	)
Distributions to non-controlling interests in properties			(451	)			(548	)
Shares withheld for payment of taxes on restricted stock unit vesting			(723	)			(1,072	)
Contributions from non-controlling interests in properties			59				442
Net Cash Used In Financing Activities			(13,345	)			(13,058	)
Net Increase/(Decrease) in Cash, Cash Equivalents and Restricted Cash			542				(50	)
Cash, Cash Equivalents and Restricted Cash, Beginning of Period			33,959				43,392
Cash, Cash Equivalents and Restricted Cash, End of Period		$	34,501			$	43,342
Reconciliation of Cash, Cash Equivalents and Restricted Cash:
Cash and Cash Equivalents, End of Period			18,264				28,005
Restricted Cash, End of Period			16,237				15,337
Cash, Cash Equivalents and Restricted Cash, End of Period		$	34,501			$	43,342
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest		$	16,997			$	16,434
Purchase of additions in real estate properties included in accounts payable		$	3,511			$	11,004
Purchase of deferred leasing costs included in accounts payable		$	3,046			$	1,874

The accompanying notes are an integral part of these condensed consolidated financial statements.

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City Office REIT, Inc.

Notes to the Condensed Consolidated Financial Statements

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 of limited partnership interest in the Operating Partnership (“common units”).

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 Operating Partnership’s partnership agreement to manage and conduct the Operating Partnership’s business, subject to limited approval and voting rights of the limited partners.

The Company has elected to be taxed and expects to continue to operate in a manner that will allow it to continue to qualify as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). 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, for years prior to 2018, any applicable alternative minimum tax.

2. Summary of Significant Accounting Policies

Basis of Preparation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with Securities and Exchange Commission (“SEC”) 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 condensed 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, 2024.

3. Real Estate Investments

Disposition of Real Estate Property

Superior Pointe

On January 14, 2025, the Company sold the Superior Pointe property in Denver, Colorado for a gross sales price of $12.0 million. No gain or loss was recognized on the sale as the property was carried at fair value less cost to sell on the date of disposition.

Cascade Station

On June 27, 2024, the Company entered into an assignment in lieu of foreclosure agreement to transfer possession and control of the Cascade Station property to the lender as a result of an event of default as defined in the property’s non-recourse loan agreement. Given the terms of the assignment in lieu of foreclosure agreement, the Company assessed whether the entity holding the property should be reassessed for consolidation as a Variable Interest Entity (“VIE”) in accordance with ASC 810 – Consolidation.

Based on its analysis, the Company concluded that it is not the primary beneficiary of the VIE and therefore deconsolidated the property as of June 27, 2024. The Company deconsolidated the net carrying value of real estate assets of $17.9 million, the mortgage loan of $20.6 million, cash and restricted cash of $2.5 million and net current assets of $1.7 million. For the three months ended June 30, 2024, the Company recognized a loss on deconsolidation of $1.5 million, which has been included within net loss on disposition of real estate property on the Company’s condensed consolidated statement of operations and statement of cash flows.

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Assets Held for Sale

On June 18, 2025, the Company entered into a purchase and sale agreement (the “Phoenix Sale Agreement”) to sell Block 23, Pima Center, 5090 N 40th St, SanTan, Papago Tech, The Quad, and Camelback Square (the “Phoenix Portfolio”) for $296.0 million, which excludes closing costs and credits. The Company determined that the Phoenix Portfolio met the criteria for classification as held for sale as of June 30, 2025. Upon classification as held for sale, the Company recognized an impairment of $102.2 million to lower the carrying amount of the Phoenix Portfolio to its estimated fair value less cost to sell. Refer to “Impairment of Real Estate” below. As of June 30, 2025, the Company had received an initial deposit of $2.0 million, which was recorded in restricted cash along with a corresponding liability in other liabilities on the Company’s condensed consolidated balance sheets. Subsequent to June 30, 2025, the Company received an additional deposit of $18.0 million and upon receipt, the total of the two deposits became non-refundable. The sale is subject to customary closing conditions and the sale of Block 23 and Pima Center are separately subject to the successful reassignment of their respective ground leases.

The properties were classified as held for sale as of June 30, 2025 (in thousands):

Phoenix Portfolio		June 30, 2025
Real estate properties, net		$	261,507
Deferred leasing costs, net			5,801
Acquired lease intangibles assets, net			3,277
Rents receivable, prepaid expenses and other assets			25,582
Assets held for sale		$	296,167
Acquired lease intangibles liability, net			1,081
Accounts payable, accrued liabilities, deferred rent, tenant rent deposits, and other liabilities			15,735
Liabilities related to assets held for sale		$	16,816

On November 1, 2024, the Company entered into a purchase and sale agreement to sell the Superior Pointe property for
$12.0 million, which excludes closing costs and credits. The Company determined that the property met the criteria for classification
as held for sale as of December 31, 2024. Upon classification as held for sale, the Company recognized an impairment of $8.5 million
to lower the carrying amount of the property to its estimated fair value less cost to sell. Refer to “Impairment of Real Estate” below.
As of December 31, 2024, the Company had received a deposit of $0.3 million, which was recorded in restricted cash along with a
corresponding liability in other liabilities on the Company’s condensed consolidated balance sheets. On January 14, 2025, the Company completed the sale of the Superior Pointe property.

The property was classified as held for sale as of December 31, 2024 (in thousands):

Superior Pointe		December 31, 2024
Real estate properties, net		$	10,637
Deferred leasing costs, net			382
Rents receivable, prepaid expenses and other assets			1,569
Assets held for sale		$	12,588
Accounts payable, accrued liabilities, deferred rent, tenant rent deposits, and other liabilities			2,176
Liabilities related to assets held for sale		$	2,176

Impairment of Real Estate

During the three and six months ended June 30, 2025, the Company recognized an impairment of real estate of $102.2 million to lower the carrying amount of the Phoenix Portfolio to its estimated fair value less cost to sell.

There was no impairment of real estate during the six months ended June 30, 2024.

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4. Lease Intangibles

Lease intangibles and the value of assumed lease obligations as of June 30, 2025 and December 31, 2024 were comprised of the following (in thousands):

		Lease Intangible Assets																Lease Intangible Liabilities
June 30, 2025		Above Market Leases				In Place Leases				Leasing Commissions				Total				Below Market Leases				Below Market Ground Lease				Total
Cost		$	14,507			$	51,716			$	23,017			$	89,240			$	(9,924	)		$	(138	)		$	(10,062	)
Accumulated amortization			(9,657	)			(38,970	)			(15,190	)			(63,817	)			5,931				62				5,993
		$	4,850			$	12,746			$	7,827			$	25,423			$	(3,993	)		$	(76	)		$	(4,069	)
		Lease Intangible Assets																Lease Intangible Liabilities
December 31, 2024		Above Market Leases				In Place Leases				Leasing Commissions				Total				Below Market Leases				Below Market Ground Lease				Total
Cost		$	16,596			$	69,760			$	30,987			$	117,343			$	(14,294	)		$	(138	)		$	(14,432	)
Accumulated amortization			(10,584	)			(51,893	)			(20,235	)			(82,712	)			8,071				60				8,131
		$	6,012			$	17,867			$	10,752			$	34,631			$	(6,223	)		$	(78	)		$	(6,301	)

The estimated aggregate amortization expense for lease intangibles for the next five years and in the aggregate are as follows (in thousands):

2025		$	2,648
2026			4,986
2027			4,019
2028			3,468
2029			2,624
Thereafter			3,609
		$	21,354

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5. Debt

The following table summarizes the indebtedness as of June 30, 2025 and December 31, 2024 (dollars in thousands), including the impact of the effective interest rate swaps described in Note 6:

Property			June 30, 2025			December 31, 2024		Interest Rate as of June 30, 2025 (1)			Maturity
Unsecured Credit Facility (2)(3)		$	257,500		$	255,000		SOFR + 1.50%	(1)(2)		November 2025	(2)
Term Loan (3)			25,000			25,000		6.00%	(3)		January 2026
Mission City			44,633			45,095		3.78%			November 2027
Circle Point			37,816			38,109		4.49%			September 2028
Canyon Park (4)			37,760			38,159		4.30%			March 2027
The Quad (11)			30,600			30,600		4.20%			September 2028
SanTan (5)(11)			30,396			30,773		4.56%			March 2027
Intellicenter (6)			29,708			30,042		4.65%			October 2025
2525 McKinnon			27,000			27,000		4.24%			April 2027
FRP Collection			25,525			25,736		7.05%	(7)		August 2028
Greenwood Blvd (8)			20,077			20,299		6.34%	(8)		May 2028
AmberGlen			20,000			20,000		3.69%			May 2027
5090 N. 40th St (11)			19,676			19,912		3.92%			January 2027
Central Fairwinds			15,379			15,497		7.68%	(9)		June 2029
FRP Ingenuity Drive (10)			14,096			14,096		4.44%			December 2026
Carillon Point			14,079			14,196		7.05%	(7)		August 2028
Total Principal			649,245			649,514
Deferred financing costs, net			(2,057)			(2,542)
Total		$	647,188		$	646,972

(1)As of June 30, 2025, the daily-simple Secured Overnight Financing Rate (“SOFR”) was 4.45%.

(2)Borrowings under our unsecured credit facility (the “Unsecured Credit Facility”) bear interest at a rate equal to the daily-simple SOFR rate plus a margin of between 135 to 235 basis points depending upon the Company’s consolidated leverage ratio. On February 9, 2023, the Company entered into a three-year interest rate swap for a notional amount of $140 million, effective March 8, 2023, effectively fixing the SOFR component of the borrowing rate for $140 million of the Unsecured Credit Facility at 4.19%. As of June 30, 2025, the Unsecured Credit Facility had $257.5 million drawn and a $2.5 million letter of credit to satisfy escrow requirements for a mortgage lender. The Unsecured Credit Facility matures in November 2025 and may be extended by 12 months at the Company’s option 90 days prior to maturity, provided there is no event of default, the Company affirms the representations and warranties set forth in the Amended and Restated Credit Agreement, dated November 16, 2021 for the Unsecured Credit Facility (the Amended and Restated Credit Agreement”), and the Company pays the extension fee. The Unsecured Credit Facility requires the Company to maintain a fixed charge coverage ratio of no less than 1.50x.

(3)On January 5, 2023, the Company entered into a second amendment to the Amended and Restated Credit Agreement and entered into a three-year $25 million term loan, increasing its total authorized borrowings from $350 million to $375 million. Borrowings under the $25 million term loan bear interest at a rate equal to the daily-simple SOFR rate plus a margin of 210 basis points. In conjunction with the term loan, the Company also entered into a three-year interest rate swap for a notional amount of $25 million, effectively fixing the SOFR component of the borrowing rate of the term loan at 3.90%.

(4)The mortgage loan anticipated repayment date (“ARD”) is March 1, 2027. The final scheduled maturity date can be extended up to 5 years beyond the ARD. If the loan is not paid off at ARD, the loan’s interest rate shall be adjusted to the greater of (i) the initial interest rate plus 200 basis points or (ii) the yield on the five year “on the run” treasury reported by Bloomberg market data service plus 450 basis points.

(5)In the second quarter of 2023, the Debt Service Coverage Ratio (“DSCR”) and debt yield covenants for SanTan were not met, which triggered a ‘cash-sweep period’ that began in the second quarter of 2023. As of June 30, 2025, the DSCR and debt yield covenants were still not met. As of June 30, 2025 and December 31, 2024, total restricted cash for the property was $0.7 million and $1.6 million, respectively.

(6)In April 2025, a 'cash-sweep period' began at the Intellicenter property following the DSCR covenant not being met. As of June 30, 2025, total restricted cash for the property was $1.4 million.

(7)The FRP Collection and Carillon Point loans bear interest at a rate equal to the daily-simple SOFR rate plus a margin of 275 basis points. The SOFR component of the borrowing rate is effectively fixed for the remainder of the five-year term via interest rate swaps at 4.30%.

(8)On May 28, 2025, the Company entered into an amended and restated loan agreement for Greenwood Blvd, extending the term for an additional three years and amending the interest rate from fixed to floating. The loan bears interest at a rate equal to the daily-simple SOFR rate plus a margin of 250 basis points. The Company also entered into a three-year interest rate swap agreement, effectively fixing the SOFR component of the borrowing rate of the loan at 3.84%.

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(9)The Central Fairwinds loan bears interest at a rate equal to the daily-simple SOFR rate plus a margin of 325 basis points. The SOFR component of the borrowing rate is effectively fixed for the remainder of the five-year term via an interest rate swap at 4.43%.

(10)Under the terms of the FRP Ingenuity Drive loan modification and extension agreement signed in the second quarter of 2024, the property will be in a ‘cash-sweep period’ which will continue through the maturity of the loan. As of June 30, 2025 and December 31, 2024, total restricted cash for the property was $1.4 million and $3.6 million, respectively.

(11)On June 18, 2025, the Company entered into a purchase and sale agreement to sell the Phoenix Portfolio which includes 5090 N 40th St, SanTan and The Quad. The mortgage loans associated with these properties are expected to be repaid upon the closing of the transaction.

The scheduled principal repayments of indebtedness as of June 30, 2025, without consideration of extension options, are as follows (in thousands):

2025		$	289,650
2026			44,267
2027			177,104
2028			123,733
2029			14,491
Thereafter			—
		$	649,245

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

In January 2023, the Company entered into an interest rate swap for a notional amount of $25.0 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 3.90% for the three-year term.

In February 2023, the Company entered into an interest rate swap for a notional amount of $140.0 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.19% for the three-year term.

In August 2023, the Company entered into an interest rate swap at FRP Collection for an initial notional amount of $26.3 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.30% for the five-year term. The notional amount of the interest rate swap amortizes over the term consistent with the balance of the corresponding loan.

In August 2023, the Company entered into an interest rate swap at Carillon Point for an initial notional amount of $14.5 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.30% for the five-year term. The notional amount of the interest rate swap amortizes over the term consistent with the balance of the corresponding loan.

In May 2024, the Company entered into an interest rate swap at Central Fairwinds for an initial notional amount of $15.6 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 4.43% for the five-year term. The notional amount of the interest rate swap amortizes over the term consistent with the balance of the corresponding loan.

In May 2025, the Company entered into an interest rate swap at Greenwood Blvd for an initial notional amount of $20.1 million. The interest rate swap effectively fixes the SOFR component of the corresponding loan at approximately 3.84% for the three-year term. The notional amount of the interest rate swap amortizes over the term consistent with the balance of the corresponding loan.

The fair value of the interest rate swaps have been classified as Level 2 fair value measurements.

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The interest rate swaps have been designated and qualify as cash flow hedges and have been recognized on the condensed consolidated balance sheets at fair value, presented within other assets and other liabilities. Gains and losses resulting from changes in the fair value of derivatives that have been designated and qualify as cash flow hedges are reported as a component of other comprehensive income/(loss) and reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings.

The following table summarizes the Company’s derivative financial instruments as of June 30, 2025 and December 31, 2024 (in thousands):

										Fair Value Assets/(Liabilities)
		Notional Value June 30, 2025				Effective Date		Maturity Date		June 30, 2025				December 31, 2024
Interest Rate Swap		$	25,000			January 2023		January 2026		$	29			$	50
Interest Rate Swap			140,000			March 2023		November 2025			18				(75	)
Interest Rate Swap			25,525			August 2023		August 2028			(700	)			(275	)
Interest Rate Swap			14,079			August 2023		August 2028			(386	)			(152	)
Interest Rate Swap			15,379			May 2024		June 2029			(600	)			(284	)
Interest Rate Swap			20,077			May 2025		May 2028			(261	)			—
		$	240,060							$	(1,900	)		$	(736	)

For the six months ended June 30, 2025, approximately $0.2 million of net realized gains were reclassified to interest expense due to payments made to or received from the swap counterparty. For the six months ended June 30, 2024, approximately $2.2 million of net realized gains were reclassified to interest expense due to payments made to or received from the swap counterparty.

Cash and Cash Equivalents, Restricted Cash, Rents 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 loans 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 $285.2 million and $301.8 million (compared to a carrying value of $291.7 million and $314.1 million) as of June 30, 2025 and December 31, 2024, respectively. Accordingly, the fair value of mortgage loans payable have been classified as Level 3 fair value measurements.

7. Related Party Transactions

Administrative Services Agreements

During the six months ended June 30, 2025 and 2024, the Company earned $0.1 million and $0.1 million, respectively, in administrative services performed for Second City Real Estate II Corporation, Clarity Real Estate Ventures GP, Limited Partnership and their affiliates.

8. Leases

Lessor Accounting

The Company is focused on acquiring, owning and operating office properties for lease to a stable and diverse tenant base. The Company’s properties have both full-service gross and net leases which are generally classified as operating leases. Rental income related to such leases is recognized on a straight-line basis over the remaining lease term. The Company’s total revenue includes fixed base rental payments provided under the lease and variable payments, which principally consist of tenant expense reimbursements for certain property operating expenses as provided under the lease.

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The Company recognized fixed and variable lease payments for operating leases for the three and six months ended June 30, 2025 and 2024 as follows (in thousands):

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Fixed payments		$	37,079			$	36,042			$	73,525			$	73,634
Variable payments			5,194				6,237				10,788				13,015
		$	42,273			$	42,279			$	84,313			$	86,649

The Company ceased recognizing rental lease income with respect to the Cascade Station property on the deconsolidation of the entity on June 27, 2024. Refer to Note 3 for further details.

Future minimum lease payments to be received by the Company as of June 30, 2025 under non-cancellable operating leases for the next five years and thereafter are as follows (in thousands):

2025		$	63,602
2026			124,214
2027			106,555
2028			93,759
2029			73,689
Thereafter			149,157
		$	610,976

The Company’s leases may include various provisions such as scheduled rent increases, renewal options and termination options. The majority of the Company’s leases include defined rent increases rather than variable payments based on an index or unknown rate.

Lessee Accounting

As a lessee, the Company has ground and office leases which are classified as operating and financing leases. Leases at properties classified as held for sale as at June 30, 2025 have been excluded from the following disclosures. Refer to Note 3 for further details. As of June 30, 2025, the Company's leases had remaining terms of one to 11 years and a weighted average remaining lease term of 10 years. Right-of-use assets and lease liabilities have been included within other assets and other liabilities on the Company’s condensed consolidated balance sheets as follows (in thousands):

		June 30, 2025				December 31, 2024
Right-of-use asset – operating leases		$	1,692			$	10,101
Lease liability – operating leases		$	1,661			$	8,286
Right-of-use asset – financing leases		$	—			$	9,593
Lease liability – financing leases		$	—			$	1,637

Lease liabilities are measured at the commencement date based on the present value of future lease payments. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The Company used a weighted average discount rate of 5.0% in determining its lease liabilities. The discount rates were derived from the Company’s assessment of the credit quality of the Company and adjusted to reflect secured borrowing, estimated yield curves and long-term spread adjustments.

Right-of-use assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option.

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Future minimum lease payments to be paid by the Company as a lessee for operating leases as of June 30, 2025 for the next five years and thereafter are as follows (in thousands):

		Operating Leases
2025		$	163
2026			310
2027			173
2028			173
2029			173
Thereafter			1,098
Total future minimum lease payments			2,090
Discount			(429	)
Total		$	1,661

9. Commitments and Contingencies

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, 2025, 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.

10. Stockholders’ Equity

Share Repurchase Plan

On May 4, 2023, the Company's Board of Directors (the “Board of Directors”) approved a share repurchase plan (“Repurchase Program”) authorizing the Company to repurchase up to $50 million of its outstanding shares of common stock or Series A Preferred Stock. Under the share repurchase program, the shares may be repurchased from time to time using a variety of methods, which may include open market transactions, privately negotiated transactions or otherwise, all in accordance with the rules of the SEC and other applicable legal requirements.

Repurchased shares of common stock will be classified as authorized and unissued shares. The Company recognizes the cost of shares of common stock it repurchases, including direct costs incurred, as a reduction in stockholders’ equity. Such reductions of stockholders equity due to the repurchases of shares of common stock will be applied first, to reduce common stock in the amount of the par value associated with the shares of common stock repurchased and second, to reduce additional paid-in capital by the amount that the purchase price for the shares of common stock repurchased exceed the par value.

There were no shares repurchased during the six months ended June 30, 2025 and 2024.

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Common Stock and Common Unit Distributions

On June 13, 2025, the Board of Directors approved and the Company declared a cash dividend distribution of $0.10 per common share for the quarterly period ended June 30, 2025. The dividend was paid subsequent to quarter end on July 24, 2025 to common stockholders and common unitholders of record as of the close of business on July 10, 2025, resulting in an aggregate payment of $4.0 million.

Preferred Stock Distributions

On June 13, 2025, the Board of Directors approved and the Company declared a cash dividend distribution of $0.4140625 per share of the Company’s 6.625% Series A Preferred Stock (“Series A Preferred Stock”) for an aggregate amount of $1.9 million for the quarterly period ended June 30, 2025. The dividend was paid subsequent to quarter end on July 24, 2025 to the holders of record of Series A Preferred Stock as of the close of business on July 10, 2025.

Equity Incentive Plan

The Company has an equity incentive plan (“Equity Incentive Plan”) for executive officers, directors and certain non-executive employees, and with approval of the Board of Directors, for subsidiaries 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 the grant of Operating Partnership long-term incentive plan 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 “Compensation Committee”). On May 1, 2025, the Company's stockholders approved an amendment to the Equity Incentive Plan increasing the maximum number of shares of common stock that may be issued under the Equity Incentive Plan from 3,763,580 shares to 5,763,580 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.

On May 2, 2024, each of the Board of Directors and the Compensation Committee approved a new form of performance-based restricted unit award agreement (the “Performance RSU Award Agreement”) that will be used to grant performance-based restricted stock unit awards (“Performance RSU Awards”) pursuant to the Equity Incentive Plan. The Performance RSU Awards are based upon the total stockholder return (“TSR”) of the Company’s common stock over a three-year measurement period beginning January 1 of the year of grant (the “Measurement Period”) relative to the TSR of a defined peer group list of other US Office REIT companies (the “Peer Group”) as of the first trading date in the year of grant. The payouts under the Performance RSU Awards are evaluated on a sliding scale as follows: TSR below the 30th percentile of the Peer Group would result in a 50% payout; TSR at the 50th percentile of the Peer Group would result in a 100% payout; and TSR at or above the 75th percentile of the Peer Group would result in a 150% payout. Payouts are mathematically interpolated between these stated percentile targets, subject to a 150% maximum. To the extent earned, the payouts of the Performance RSU Awards are intended to be settled in the form of shares of the Company’s common stock, pursuant to the Equity Incentive Plan. Upon satisfaction of the vesting conditions, dividend equivalents in an amount equal to all regular and special dividends declared with respect to the Company’s common stock during each annual measurement period during the Measurement Period are determined and paid on a cumulative, reinvested basis over the term of the applicable Performance RSU Award, at the time such award vests and based on the number of shares of the Company’s common stock that are earned. Shares of the Company’s common stock issuable pursuant to the Performance RSU Awards and dividend equivalents granted pursuant to the Performance RSU Award Agreement, taken together with the shares issuable pursuant to any other grants under the Equity Incentive Plan, shall not exceed the annual limitation set forth in Section 6 of the Equity Incentive Plan.

During the first quarter of 2025, the Performance RSU Awards granted in January 2022, with a January 1, 2022 through December 31, 2024 Measurement Period, were earned at 50% of the target number of shares granted based on achievement of a TSR that was at or above the 26th percentile of the 2022 Peer Group.

During the first quarter of 2024, the Performance RSU Awards granted in January 2021, with a January 1, 2021 through December 31, 2023 Measurement Period, were earned at 120% of the target number of shares granted based on achievement of a TSR that was at or above the 60th percentile of the 2021 Peer Group.

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The following table summarizes the activity of the awards under the Equity Incentive Plan for the three and six months ended June 30, 2025:

		Number of RSUs				Number of Performance RSUs
Outstanding at December 31, 2024			588,089				629,840
Granted			292,261				275,701
Issuance of dividend equivalents			11,624				—
Vested			(290,979	)			(90,000	)
Outstanding at March 31, 2025			600,995				815,541
Issuance of dividend equivalents			12,075				—
Outstanding at June 30, 2025			613,070				815,541

The following table summarizes the activity of the awards under the Equity Incentive Plan for the three and six months ended June 30, 2024:

		Number of RSUs				Number of Performance RSUs
Outstanding at December 31, 2023			451,741				424,888
Granted			324,414				324,952
Issuance of dividend equivalents			8,290				—
Vested			(228,747	)			(120,000	)
Outstanding at March 31, 2024			555,698				629,840
Issuance of dividend equivalents			12,161				—
Outstanding at June 30, 2024			567,859				629,840

During the six months ended June 30, 2025 and June 30, 2024, the Company granted the following restricted stock unit awards (“RSU Awards”) and Performance RSU Awards to directors, executive officers and certain non-executive employees:

		Units Granted												Weighted Average Grant
		RSUs				Performance RSUs				Fair Value (in thousands)				Fair Value Per Share
2025			292,261				275,701			$	2,874			$	5.06
2024			324,414				324,952				3,539				5.45

The RSU Awards are contractually scheduled to vest in three equal, annual installments on each of the first three anniversaries of the date of grant. The Performance RSU Awards are contractually scheduled to vest on the last day of the Measurement Period.

During the three months ended June 30, 2025 and June 30, 2024, the Company recognized net compensation expense for the RSU Awards and Performance RSU Awards as follows (in thousands):

		RSUs				Performance RSUs				Total
2025		$	417			$	426			$	843
2024			642				441				1,083

During the six months ended June 30, 2025 and June 30, 2024, the Company recognized net compensation expense for the RSU Awards and Performance RSU Awards as follows (in thousands):

		RSUs				Performance RSUs				Total
2025		$	899			$	858			$	1,757
2024			1,284				870				2,154

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11. Segment Information

The Company is a REIT focused on real estate investments and currently operates in one operating segment: Office Properties. As a group, the Company’s Chief Executive Officer, Chief Operating Officer and Chief Financial Officer have collectively been identified as the chief operating decision makers (“CODM”), as defined by GAAP. The CODM review financial information presented on a consolidated basis when making decisions. Additionally, the Company does not group its operations on a geographical basis for the purpose of measuring performance.

The CODM use both consolidated net income and net operating income (“NOI”) as the profit or loss measures to evaluate the performance of our operating segment and allocate resources. Refer to the accompanying condensed consolidated statements of operations for the presentation of consolidated net loss for the three and six months ended June 30, 2025 and 2024. NOI is a measure which includes the revenues and certain expenses directly attributable to our office properties. NOI is defined as rental and other revenues less property operating expenses. NOI is used by the CODM to make operating decisions as we believe it provides information useful in understanding the core operations and operating performance of our portfolio. Total assets are not utilized by the CODM to assess performance.

The following table presents segment NOI for the three and six months ended June 30, 2025 and 2024 (in thousands):

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Rental and other revenues		$	42,343			$	42,342			$	84,602			$	86,836
Property operating expenses			16,314				17,492				32,585				35,237
Segment net operating income		$	26,029			$	24,850			$	52,017			$	51,599

Presented below is a reconciliation of the reportable segment NOI to the consolidated net loss for the three and six months ended June 30, 2025 and 2024 (in thousands):

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Segment net operating income		$	26,029			$	24,850			$	52,017			$	51,599
General and administrative			(4,327	)			(3,820	)			(8,055	)			(7,531	)
Depreciation and amortization			(16,063	)			(14,723	)			(31,189	)			(29,798	)
Impairment of real estate			(102,229	)			—				(102,229	)			—
Contractual interest expense			(8,339	)			(8,129	)			(16,618	)			(16,228	)
Amortization of deferred financing costs and debt fair value			(380	)			(343	)			(734	)			(661	)
Net loss on disposition of real estate property			—				(1,462	)			—				(1,462	)
Consolidated net loss		$	(105,309	)		$	(3,627	)		$	(106,808	)		$	(4,081	)

12. Subsequent Events

On July 23, 2025, the Company entered into a definitive merger agreement (the “Merger Agreement”) with MCME Carell Holdings, LP and MCME Carell Merger Sub, LLC (collectively, “MCME Carell” or the “Buyer”) under which, subject to the satisfaction of the conditions set forth in the Merger Agreement, MCME Carell will acquire (other than shares owned by the Buyer, the Company or their respective affiliates) all of the issued and outstanding shares of the Company for $7.00 per share of common stock in cash (the “Transaction” or “Merger”). The Transaction is subject to the satisfaction of a number of customary closing conditions more thoroughly described in the Merger Agreement, including the approval of the Company's shareholders.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is based on, and should be read in conjunction with, the condensed consolidated financial statements and the related notes thereto of the City Office REIT, Inc. contained in this Quarterly Report on Form 10-Q (this “Report”).

As used in this section, unless the context otherwise requires, references to “we,” “our,” “us,” and “our company” refer to City Office REIT, Inc., a Maryland corporation, together with our consolidated subsidiaries, including City Office REIT Operating Partnership L.P., a Maryland limited partnership, of which we are the sole general partner and which we refer to in this section as our Operating Partnership, except where it is clear from the context that the term only means City Office REIT, Inc.

Cautionary Statement Regarding Forward-Looking Statements

This Report, including “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains both historical and forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have used the words “approximately,” “anticipate,” “assume,” “believe,” “budget,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “hypothetical,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will” and similar terms and phrases to identify forward-looking statements in this Report. All of our forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we are expecting, including:

•the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement or the Phoenix Sale Agreement;

•the outcome of any legal proceedings that may be instituted against the Company and others following the announcement of the Merger Agreement;

•the inability to complete the proposed Merger due to the failure to satisfy the conditions to the Merger, including obtaining the approval of the Company's shareholders and other closing conditions more fully described in the Merger Agreement;

•risks that the proposed Merger disrupts current plans and operations of the Company;

•potential difficulties in employee retention as a result of the proposed Merger;

•legislative, regulatory and economic developments;

•risks related to disruption of management's attention from the Company's ongoing business operations due to the proposed merger;

•our inability to successfully realize all of the expected benefits of the Merger or that such benefits may take longer to realize than expected;

•our inability to successfully complete our pending disposition of our Phoenix Portfolio on the terms and timing we expect, or at all;

•adverse economic or real estate developments in the office sector or the markets in which we operate;

•increased interest rates, the failure of interest rates to decrease according to market expectations, any resulting increase in financing or operating costs, the impact of inflation or stagflation, disruptions to tenants’ business, financial condition and ability to pay rent related to tariffs and other trade or sanction issues or any stall in economic growth or an economic recession;

•changes in local, regional, national and international economic conditions, including as a result of recent pandemics or any future epidemics or pandemics;

•the extent to which “work-from-home” and hybrid work policies impact long-term office space demand;

•the extent to which artificial intelligence use impacts long-term office space demand;

•our inability to compete effectively;

•our inability to collect rent from tenants or renew tenants’ leases on attractive terms if at all;

•our dependence upon significant tenants, bankruptcy or insolvency of a major tenant or a significant number of small tenants or borrowers, or defaults on or non-renewal of leases by tenants;

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•demand for and market acceptance of our properties for rental purposes, including as a result of near-term market fluctuations or long-term trends that result in an overall decrease in the demand for office space;

•decreased rental rates or increased vacancy rates;

•our failure to obtain necessary financing or access the capital markets on favorable terms or at all;

•changes in the availability of acquisition opportunities;

•availability of qualified personnel;

•the possibility that we may have to recognize any additional impairment charges under ASC 360 in the future;

•our failure to successfully operate acquired properties and operations;

•changes in our business, financing or investment strategy or the markets in which we operate;

•our failure to generate sufficient cash flows to service our outstanding indebtedness;

•environmental uncertainties and risks related to adverse weather conditions and natural disasters;

•our failure to maintain our qualification as a REIT for U.S. federal income tax purposes;

•government approvals, actions and initiatives, including the need for compliance with environmental requirements;

•outcome of claims and litigation involving or affecting us;

•financial market fluctuations;

•changes in real estate, taxation and zoning laws and other legislation and government activity and changes to real property tax rates and the taxation of REITs in general; and

•other factors described in our news releases and filings with the SEC, including but not limited to those described in our Annual Report on Form 10-K for the year ended December 31, 2024 under the sections captioned “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” and in our subsequent reports filed with the SEC.

The forward-looking statements contained in this Report are based on historical performance and management’s current plans, estimates and expectations in light of information currently available to us and are subject to uncertainty and changes in circumstances. There can be no assurance that future developments affecting us will be those that we have anticipated. Actual results may differ materially from these expectations due to the factors, risks and uncertainties described above, changes in global, regional or local political, economic, business, competitive, market, regulatory and other factors described in our news releases and filings with the SEC, including but not limited to those described in our Annual Report on Form 10-K for the year ended December 31, 2024 under the heading “Risk Factors” and elsewhere in this Form 10-Q and any updates to those factors set forth in our subsequent Quarterly Reports on Form 10-Q or other public filings with the SEC, many of which are beyond our control. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove to be incorrect, our actual results may vary in material respects from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. Any forward-looking statement made by us in this Report speaks only as of the date of this Report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.

Overview

Company

We were formed as a Maryland corporation on November 26, 2013. On April 21, 2014, we completed our IPO of shares of common stock. We contributed the net proceeds of the IPO to our Operating Partnership in exchange for common units in our Operating Partnership. Both we and our Operating Partnership commenced operations upon completion of the IPO and certain related formation transactions.

On July 23, 2025, the Company entered into a Merger Agreement with MCME Carell under which, subject to the satisfaction of the conditions set forth in the Merger Agreement, MCME Carell will acquire (other than shares owned by the Buyer, the Company or their respective affiliates) all of the issued and outstanding shares of the Company for $7.00 per share of common stock in cash. The Transaction is subject to the satisfaction of a number of customary closing conditions more thoroughly described in the

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Merger Agreement, including the approval of the Company's shareholders. The Merger Agreement is attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on July 24, 2025.

Revenue Base

As of June 30, 2025, we owned 22 properties comprised of 54 office buildings with a total of approximately 5.4 million square feet of net rentable area (“NRA”). As of June 30, 2025, our properties were approximately 82.5% leased.

Office Leases

Historically, most leases for our properties have been on a full-service gross or net lease basis, and we expect to continue to use such leases in the future. A full-service gross lease generally has a base year expense “stop,” whereby we pay a stated amount of expenses as part of the rent payment while future increases (above the base year stop) in property operating expenses are billed to the tenant based on such tenant’s proportionate square footage in the property. The property operating expenses are reflected in operating expenses; however, only the increased property operating expenses above the base year stop recovered from tenants are reflected as tenant recoveries within rental and other revenues on our condensed consolidated statements of operations. In a triple net lease, the tenant is typically responsible for all property taxes and operating expenses. As such, the base rent payment does not include any operating expenses, but rather all such expenses are billed to or paid by the tenant. The full amount of the expenses for this lease type is reflected in operating expenses, and the reimbursement is reflected as tenant recoveries. We are also a lessor for a fee simple ground lease at the AmberGlen property.

Factors That May Influence Our Operating Results and Financial Condition

Economic Environment and Inflation

The broader economy in the U.S. has experienced increased levels of inflation, higher interest rates and tightened monetary and fiscal policies. The banking and lending sector in particular has been impacted by the interest rate environment. Recently, interest rates, monetary policy and inflation have begun to shift towards an improved economic environment. Office capital markets activity continues to be suppressed, largely driven by limited debt availability for the sector. However, it remains difficult to predict the full impact of recent events and any future changes in interest rates or inflation, and this evolving economic environment impacts our operating activities as:

•business leaders may generally become more reticent to make large capital allocation decisions, such as entry into a new lease, given the uncertain economic environment;

•our cost of capital has increased due to higher interest rates and credit spreads, and private market debt financing and re-financing is significantly more challenging to arrange; and

•retaining and attracting new tenants has become increasingly challenging due to potential business layoffs, downsizing and industry slowdowns.

Despite the current economic environment, there is increasing evidence that many businesses have or will strengthen their in-person work policies particularly if economic conditions worsen. Many of these companies have increased their workforce and requirements for their workforce to work from the office, without increasing their available space. We expect these factors will help offset, at least partially, the headwinds to office space demand.

Work-From-Home Trends

Our business has been impacted by tenant uncertainty regarding office space needs given the evolving remote and hybrid working trends. In addition, we are monitoring potential demand impacts from increased usage of artificial intelligence, which may decrease employment and therefore decrease use of office space. Usage of our assets in the near future depends on corporate and individual decisions regarding return to usage of office space, which is impossible to estimate. As of June 30, 2025, 13.2% of NRA under our portfolio was vacant, when excluding committed leases, as compared to 12.7% as of June 30, 2024.

Leasing activity has been impacted by work-from-home trends. We have experienced uncertainty over existing tenants’ long-term space requirements. Overall, this could reduce our anticipated rental revenues. In addition, certain tenants in our markets have and may explore opportunities to sublease all or a portion of their leased square footage to other tenants or third parties. While subleasing generally does not impact the ability to collect payment from the original lessee and will not result in any decrease in the rental revenues expected to be received from the primary tenant, this trend could reduce our ability to lease incremental square footage to new tenants, increase the square footage of our properties that “go dark,” reduce anticipated rental revenue should tenants determine

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their long-term needs for square footage are lower than originally anticipated, and impact the pricing and competitiveness for leasing office space in our markets.

We will continue to actively evaluate business operations and strategies to optimally position ourselves given current economic and industry conditions.

Business and Strategy

We focus on owning office properties in our footprint of growth markets predominantly in the Sun Belt. Our markets generally possess growing populations with above-average employment growth forecasts, a large number of government offices, large international, national and regional employers across diversified industries, generally lower-cost centers for business operations and a high quality of life. We believe these characteristics have made our markets desirable, as evidenced by domestic net migration generally towards our geographic footprint. A majority of our properties are well located, have good access and functionality to our markets, are new or in new condition, attract high-quality tenants and are professionally managed. We utilize our management’s market-specific knowledge and relationships as well as the expertise of local real estate property and leasing managers to identify acquisition opportunities that we believe will offer cash flow stability and long-term value appreciation.

On April 14, 2025, we announced our intention, subject to a variety of conditions, to enter into a joint venture that would result in us having an ownership interest in a condominium development in St. Petersburg, Florida. Although we intend to continue to focus on owning office properties in growth markets predominantly in the Sun Belt, we will continue to evaluate a broad array of potential opportunities that we believe could maximize shareholder value.

Rental Revenue and Tenant Recoveries

The amount of net rental revenue generated by our properties will depend principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space and space that becomes available from lease terminations. As of June 30, 2025, the operating properties in our portfolio were 82.5% leased, with 3.6% of our leases scheduled to expire over the remainder of the calendar year, without regard to renewal options. The amount of rental revenue generated also depends on our ability to maintain or increase rental rates at our properties. Our leases typically include rent escalation provisions designed to provide annual growth in our rental income as well as an ability to pass through cost escalations to our tenants, and in the normal course of business we do not typically waive these rent escalation provisions. Certain leases contain termination provisions which permit the tenant to terminate the arrangement generally upon payment of a termination fee, which we believe acts as a deterrent to cancelling the lease. These early termination provisions applied to approximately 16.7% of the NRA in our portfolio as of June 30, 2025. In 2025, no tenant has exercised an early termination provision. Negative trends in one or more of these factors could adversely affect our rental revenue in future periods. We continually monitor our tenants’ ability to meet their lease obligations to pay us rent to determine if any adjustments should be reflected currently. General Services Administration (“GSA”) tenants represent approximately 4.0% of the base rental revenue from our properties as of June 30, 2025, with all federal or state governmental agencies representing 6.0%. Future economic downturns or regional downturns affecting our markets or submarkets or downturns in our tenants’ industries, including as a result of high interest rates and the fluctuating likelihood of a U.S. recession, that impair our ability to renew or re-let space and the ability of our tenants to fulfill their lease commitments, as in the case of tenant bankruptcies, could adversely affect our ability to maintain or increase rental rates at our properties. In addition, growth in rental revenue will also partially depend on our ability to acquire additional properties that meet our investment criteria.

Leasing Activity

The following table presents our leasing activity for the three months ended June 30, 2025.

Three Months Ended June 30, 2025 Leasing Activity		New Leasing				Renewal Leasing				Total Leasing
Square Feet (000's)			163				192				355
Average Effective Rents per Square Foot		$	31.45			$	33.02			$	32.30
Tenant Improvements per Square Foot		$	49.18			$	7.05			$	26.38
Leasing Commissions per Square Foot		$	20.10			$	8.79			$	13.98
% Change in Renewal Cash Rent vs. Expiring							4.9	%
Retention Rate %							49	%

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Our Properties

As of June 30, 2025, we owned 22 properties comprised of 54 office buildings with a total of approximately 5.4 million square feet of NRA in the metropolitan areas of Dallas, Denver, Orlando, Phoenix, Portland, Raleigh, San Diego, Seattle and Tampa. The following table presents an overview of our portfolio as of June 30, 2025.

Metropolitan Area		Property		Year of Construction		Economic Interest				NRA (000’s Square Feet)				In Place Occupancy				Annualized Average Effective Rent per Square Foot(1)				Annualized Base Rent per Square Foot				Annualized Gross Rent per Square Foot(2)				Annualized Base Rent(3)  ($000’s)
Tampa, FL		Park Tower		1973			94.8	%			481				92.3	%		$	29.31			$	29.92			$	29.92			$	13,302
(19.4% of NRA)		City Center		1984			95.0	%			241				77.0	%		$	34.06			$	34.96			$	34.96			$	6,478
		Intellicenter		2008			100.0	%			204				76.1	%		$	24.31			$	26.46			$	26.46			$	4,100
		Carillon Point		2007			100.0	%			124				100.0	%		$	30.40			$	31.78			$	31.78			$	3,947
Denver, CO		Denver Tech		1997; 1999			100.0	%			381				78.4	%		$	23.08			$	24.01			$	32.83			$	7,174
(12.1%)		Circle Point		2001			100.0	%			272				92.9	%		$	20.22			$	21.24			$	36.90			$	5,375
Orlando, FL		Florida Research Park		1999			96.6	%			398				94.8	%		$	26.31			$	27.21			$	28.68			$	10,249
(13.3%)		Central Fairwinds		1982			97.0	%			168				87.3	%		$	27.87			$	29.59			$	29.59			$	4,346
		Greenwood Blvd		1997			100.0	%			155				57.2	%		$	25.20			$	25.74			$	25.74			$	2,284
Raleigh, NC		Bloc 83		2019; 2021			100.0	%			493				94.6	%		$	41.25			$	40.18			$	40.53			$	18,750
(9.1%)
Dallas, TX		The Terraces		2017			100.0	%			173				85.6	%		$	39.00			$	39.22			$	59.72			$	5,796
(5.2%)		2525 McKinnon		2003			100.0	%		111					45.9	%		$	29.83			$	31.09			$	50.09			$	1,590
San Diego, CA		Mission City		1990-2007			100.0	%			281				95.6	%		$	39.27			$	40.97			$	40.97			$	11,020
(5.2%)
Seattle, WA		Canyon Park		1993; 1999			100.0	%			207				100.0	%		$	22.31			$	25.32			$	31.32			$	5,235
(3.8%)
Portland, OR		AmberGlen		1984-1998			76.0	%			203				59.4	%		$	25.44			$	27.70			$	27.70			$	3,350
(3.8%)
Total / Weighted Average - Excluding Assets Held for Sale(4)											3,892				85.7	%		$	29.96			$	30.88			$	34.65			$	102,996
Phoenix, AZ		Block 23(5)		2019			100.0	%			307				89.0	%		$	27.66			$	29.65			$	33.16			$	7,383
(28.1%)		Pima Center		2006-2008			100.0	%			272				60.8	%		$	28.28			$	30.06			$	30.06			$	4,965
		SanTan		2000-2003			100.0	%			267				55.8	%		$	32.98			$	34.36			$	34.36			$	5,110
		5090 N 40th St		1988			100.0	%			173				75.1	%		$	33.80			$	36.34			$	36.34			$	4,726
		Camelback Square		1978			100.0	%			174				77.6	%		$	36.47			$	39.40			$	39.40			$	5,316
		The Quad		1982			100.0	%			163				89.4	%		$	32.98			$	34.85			$	35.20			$	5,080
		Papago Tech		1993-1995			100.0	%			163				79.2	%		$	25.43			$	26.96			$	26.96			$	3,473
Total / Weighted Average - June 30, 2025(4)											5,411				82.5	%		$	30.13			$	31.32			$	34.36			$	139,049

(1)Annualized Average Effective Rent accounts for the impact of straight-line rent adjustments, including the amortization of rent escalations and base rent concessions (e.g., free rent abatements) contained in the lease. The square foot result per property is calculated by multiplying (i) Average Effective Rent for the month ended June 30, 2025 by (ii) 12, divided by the occupied square footage in that period.

(2)Annualized gross rent per square foot includes adjustment for estimated expense reimbursements of triple net leases.

(3)Annualized base rent is calculated by multiplying (i) rental payments (defined as cash rents before abatements) for the month ended June 30, 2025 by (ii) 12.

(4)Averages weighted based on the property’s NRA, adjusted for occupancy.

(5)Annualized base rent per square foot for Block 23 excludes percentage rent leases.

Operating Expenses

Our operating expenses generally consist of utilities, property and ad valorem taxes, insurance and site maintenance costs. Increases in these expenses over tenants’ base years (until the base year is reset at expiration) are generally passed along to tenants in our full-service gross leased properties and are generally paid in full by tenants in our net leased properties.

Conditions in Our Markets

Positive or negative changes in economic or other conditions in the markets we operate in, including state budgetary shortfalls, employment rates, natural hazards and other factors, may impact our overall performance. While we generally expect the trend of positive population and economic growth in our Sun Belt cities to continue, there is no way for us to predict whether these trends will continue, especially in light of inflation and elevated interest rates as well as potential changes in tax policy, trade policy, immigration policy, fiscal policy and monetary policy. It is uncertain and impossible to estimate the potential impact that the work-from-home trend or the effects of widespread use of artificial intelligence will have on the short- and long-term demand for office space in our markets.

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Critical Accounting Policies and Estimates

The interim condensed consolidated financial statements follow the same policies and procedures as outlined in the audited consolidated financial statements for the year ended December 31, 2024 included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Results of Operations

Comparison of Three Months Ended June 30, 2025 to Three Months Ended June 30, 2024

Rental and Other Revenues. Rental and other revenues include net rental income, including parking, signage and other income, as well as the recovery of operating costs and property taxes from tenants. Rental and other revenues remained relatively flat at $42.3 million for the three months ended June 30, 2025 and 2024. Revenue increased at Greenwood Blvd by $0.9 million mainly due to termination fee income recognized during the period. Revenue also increased year over year at Bloc 83 and Mission City by $0.6 million and $0.4 million, respectively, due to higher occupancy. Offsetting these increases, revenue decreased year over year due to the dispositions and tenant departures at Superior Pointe in January 2025 and Cascade Station in June 2024 which reduced revenue by $0.9 million and $0.4 million, respectively. Revenue also decreased at 2525 McKinnon and AmberGlen by $0.5 million and $0.5 million, respectively, due to lower occupancy at the properties compared to the prior year. The remaining properties’ rental and other revenues were marginally higher in comparison to the prior year period.

Operating Expenses

Property Operating Expenses. Property operating expenses are comprised mainly of building common area and maintenance expenses, insurance, property taxes, property management fees, as well as certain expenses that are not recoverable from tenants, the majority of which are related to costs necessary to maintain the appearance and marketability of vacant space. In the normal course of business, property expenses fluctuate and are impacted by various factors including, but not limited to, occupancy levels, weather, utility costs, repairs, maintenance and re-leasing costs. Property operating expenses decreased $1.2 million, or 7%, to $16.3 million for the three months ended June 30, 2025, from $17.5 million for the three months ended June 30, 2024. The disposition of Superior Pointe in January 2025 and Cascade Station in June 2024 decreased property operating expenses by $0.6 million and $0.3 million, respectively. The remaining property operating expenses were $0.3 million lower in comparison to the prior period primarily due to lower property taxes.

General and Administrative. General and administrative expenses are comprised of public company reporting costs and the compensation of our employees and Board of Directors, as well as non-cash stock-based compensation expenses. General and administrative expenses increased $0.5 million, or 13%, to $4.3 million for the three months ended June 30, 2025, from $3.8 million reported in the prior year period. General and administrative expenses increased primarily due to $0.7 million in legal expenses related to transaction costs.

Depreciation and Amortization. Depreciation and amortization increased $1.4 million, or 9%, to $16.1 million for the three months ended June 30, 2025, from $14.7 million reported in the prior year period. Greenwood Blvd and Florida Research Park's Ingenuity Drive increased by $0.9 million and $0.4 million, respectively, due to higher amortization of tenant-related assets. The increase at Greenwood Blvd was due to accelerated amortization of tenant-related assets recorded in the current year associated with an early lease termination at the property. Offsetting these increases, the dispositions of Superior Pointe in January 2025 and Cascade Station in June 2024 decreased depreciation and amortization expense by $0.3 million and $0.2 million, respectively. The remaining properties’ depreciation expenses were $0.6 million higher in comparison to the prior year period.

Impairment of Real Estate. Impairment of real estate was $102.2 million for the three months ended June 30, 2025 compared to nil in the prior year period. The impairment was related to the write down of the carrying amount of the Phoenix Portfolio, which was classified as held for sale as of June 30, 2025, to estimated fair value less cost to sell.

Other Expense (Income)

Interest Expense. Interest expense increased $0.2 million, or 3%, to $8.7 million for the three months ended June 30, 2025, from $8.5 million for the three months ended June 30, 2024. Higher interest rates on the refinance of the Central Fairwinds property in May 2024 resulted in $0.1 million higher interest expense year over year. Offsetting this increase, the disposition of Cascade Station in June 2024 decreased interest expense by $0.2 million. The remaining properties’ interest expenses were $0.3 million higher in comparison to the prior year period.

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Net Loss on Disposition of Real Estate Property. During the second quarter of 2024, the Company entered into an assignment in lieu of foreclosure agreement to transfer possession and control of the Cascade Station property to the lender as a result of an event of default as defined in the property’s loan agreement. Given the terms of the assignment in lieu of foreclosure agreement, the Company deconsolidated the entity holding the property and related assets and liabilities during the second quarter of 2024. For the three months ended June 30, 2024, the Company recognized a loss on deconsolidation of $1.5 million.

Comparison of Six Months Ended June 30, 2025 to Six Months Ended June 30, 2024

Rental and Other Revenues. Rental and other revenues include net rental income, including parking, signage and other income, as well as the recovery of operating costs and property taxes from tenants. Rental and other revenues decreased $2.2 million, or 3%, to $84.6 million for the six months ended June 30, 2025 compared to $86.8 million for the six months ended June 30, 2024. Revenue decreased year over year due to the dispositions and tenant departures at Superior Pointe in January 2025 and Cascade Station in June 2024 which reduced revenue by $1.6 million and $1.0 million, respectively. Revenue also decreased at 2525 McKinnon and Intellicenter by $1.0 million and $0.4 million, respectively, due to lower occupancy at the properties compared to the prior year. Revenue also decreased at Block 23 and The Terraces by $1.1 million and $0.6 million, respectively, largely due to the downsize of WeWork resulting in a termination fee received in the prior period and lower income in the current period at those properties. Offsetting these decreases, revenue increased year over year at Bloc 83, Mission City and Florida Research Park’s Ingenuity Drive by $1.1 million, $0.8 million and $0.5 million, respectively, due to higher occupancy. Further, revenue increased at Greenwood Blvd by $0.9 million mainly due to termination fee income recognized during the period. The remaining properties’ rental and other revenues were marginally higher in comparison to the prior year period.

Operating Expenses

Property Operating Expenses. Property operating expenses are comprised mainly of building common area and maintenance expenses, insurance, property taxes, property management fees, as well as certain expenses that are not recoverable from tenants, the majority of which are related to costs necessary to maintain the appearance and marketability of vacant space. In the normal course of business, property expenses fluctuate and are impacted by various factors including, but not limited to, occupancy levels, weather, utility costs, repairs, maintenance and re-leasing costs. Property operating expenses decreased $2.6 million, or 8%, to $32.6 million for the six months ended June 30, 2025, from $35.2 million for the six months ended June 30, 2024. The disposition of Superior Pointe in January 2025 and Cascade Station in June 2024 decreased property operating expenses by $1.0 million and $0.5 million, respectively. Property taxes decreased across the portfolio by $1.5 million, excluding the dispositions noted above, in comparison to the prior year as property tax accruals were lower in the first half of 2025 as compared to the first half of 2024. In 2024, the final property tax assessments received at year end were lower than accrued in the first half of 2024. The remaining property operating expenses were marginally higher in comparison to the prior period.

General and Administrative. General and administrative expenses are comprised of public company reporting costs and the compensation of our employees and Board of Directors, as well as non-cash stock-based compensation expenses. General and administrative expenses increased $0.6 million, or 7%, to $8.1 million for the six months ended June 30, 2025, from $7.5 million reported in the prior year period. General and administrative expenses increased primarily due to $0.7 million in legal expenses related to transaction costs.

Depreciation and Amortization. Depreciation and amortization increased $1.4 million, or 5%, to $31.2 million for the six months ended June 30, 2025, from $29.8 million reported in the prior year period. Greenwood Blvd and Florida Research Park's Ingenuity Drive increased by $1.0 million and $0.5 million, respectively, due to higher amortization of tenant-related assets. The increase at Greenwood Blvd was due to accelerated amortization of tenant-related assets recorded in the current year associated with an early lease termination at the property. Offsetting these increases, the dispositions of Superior Pointe in January 2025 and Cascade Station in June 2024 decreased depreciation and amortization expense by $0.6 million and $0.4 million, respectively. The remaining properties’ depreciation expenses were $0.9 million higher in comparison to the prior year period.

Impairment of Real Estate. Impairment of real estate was $102.2 million for the six months ended June 30, 2025 compared to nil in the prior year period. The impairment was related to the write down of the carrying amount of the Phoenix Portfolio, which was classified as held for sale as of June 30, 2025, to estimated fair value less cost to sell.

Other Expense (Income)

Interest Expense. Interest expense increased $0.5 million, or 3%, to $17.4 million for the six months ended June 30, 2025, from $16.9 million for the six months ended June 30, 2024. Higher interest rates on the refinance of the Central Fairwinds property in May 2024 resulted in $0.3 million higher interest expense. Offsetting this increase, the disposition of Cascade Station in June 2024

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decreased interest expense by $0.4 million. The remaining properties’ interest expenses were $0.6 million higher in comparison to the prior year period.

Net Loss on Disposition of Real Estate Property. During the second quarter of 2024, the Company entered into an assignment in lieu of foreclosure agreement to transfer possession and control of the Cascade Station property to the lender as a result of an event of default as defined in the property’s loan agreement. Given the terms of the assignment in lieu of foreclosure agreement, the Company deconsolidated the entity holding the property and related assets and liabilities during the second quarter of 2024. For the six months ended June 30, 2024, the Company recognized a loss on deconsolidation of $1.5 million.

Cash Flows

Comparison of Six Months Ended June 30, 2025 to Six Months Ended June 30, 2024

Cash, cash equivalents and restricted cash were $34.5 million and $43.3 million as of June 30, 2025 and June 30, 2024, respectively.

Cash flow from operating activities. Net cash provided by operating activities decreased by $6.3 million to $25.4 million for the six months ended June 30, 2025 compared to $31.7 million for the six months ended June 30, 2024. The decrease was primarily attributable to changes in working capital.

Cash flow to investing activities. Net cash used in investing activities decreased by $7.2 million to $11.5 million for the six months ended June 30, 2025 compared to $18.7 million for the six months ended June 30, 2024. The decrease in net cash used in investing activities was primarily attributable to the sale of Superior Pointe in the current year for proceeds of $11.6 million. This decrease was partially offset by an increase in additions to real estate properties for the six months ended June 30, 2025.

Cash flow to financing activities. Net cash used in financing activities increased by $0.2 million to $13.3 million for the six months ended June 30, 2025 compared to $13.1 million for the six months ended June 30, 2024. The increase in net cash used in financing activities was primarily attributable to lower net proceeds from borrowings for the six months ended June 30, 2025.

Non-GAAP Supplemental Measures: NOI

NOI is a non-GAAP measure which includes the revenue and expense directly attributable to our office properties. NOI is calculated as rental and other revenues less property operating expenses.

We use NOI as a supplemental performance measure because, in excluding real estate depreciation and amortization expense, general and administrative expenses, interest expense, gains (or losses) on sale of real estate and other non-operating items, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that NOI will be useful to investors as a basis to compare our operating performance with that of other REITs. However, because NOI excludes depreciation and amortization expense and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties (all of which have real economic effect and could materially impact our results from operations), the utility of NOI as a measure of our performance is limited. Other equity REITs may not calculate NOI in a similar manner and, accordingly, our NOI may not be comparable to such other REITs’ NOI. Accordingly, NOI should be considered only as a supplement to net income as a measure of our performance. NOI should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs. NOI should not be used as a substitute for cash flow from operating activities in accordance with GAAP.

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Refer to Note 11 to our condensed consolidated financial statements for the revenue and expense items comprising NOI. Presented below is a reconciliation of the reportable segment NOI to the consolidated net loss (in thousands):

		Three Months Ended June 30,								Six Months Ended June 30,
		2025				2024				2025				2024
Segment net operating income		$	26,029			$	24,850			$	52,017			$	51,599
General and administrative			(4,327	)			(3,820	)			(8,055	)			(7,531	)
Depreciation and amortization			(16,063	)			(14,723	)			(31,189	)			(29,798	)
Impairment of real estate			(102,229	)			—				(102,229	)			—
Contractual interest expense			(8,339	)			(8,129	)			(16,618	)			(16,228	)
Amortization of deferred financing costs and debt fair value			(380	)			(343	)			(734	)			(661	)
Net loss on disposition of real estate property			—				(1,462	)			—				(1,462	)
Consolidated net loss		$	(105,309	)		$	(3,627	)		$	(106,808	)		$	(4,081	)

Liquidity and Capital Resources

Analysis of Liquidity and Capital Resources

We had approximately $18.3 million of cash and cash equivalents and $16.2 million of restricted cash as of June 30, 2025.

On March 15, 2018, the Company entered into a credit agreement for the Unsecured Credit Facility that provided for commitments of up to $250 million. On September 27, 2019, the Company entered into a five-year $50 million term loan, increasing its authorized borrowings under the Company’s Unsecured Credit Facility from $250 million to $300 million. On November 16, 2021, the Company entered into an Amended and Restated Credit Agreement that increased the total authorized borrowings from $300 million to $350 million. On January 5, 2023, the Company entered into a second amendment to the Amended and Restated Credit Agreement for the Unsecured Credit Facility and entered into a three-year $25 million term loan, increasing its total authorized borrowings from $350 million to $375 million. The Unsecured Credit Facility matures in November 2025 and may be extended by 12 months beginning in August 2025, at the Company’s option upon meeting certain conditions. The Company expects to pursue such an extension. On September 27, 2024, the $50 million term loan matured and was repaid with proceeds from the Unsecured Credit Facility, reducing total authorized borrowings from $375 million to $325 million. As of June 30, 2025, of the $325 million total authorized borrowings, we had approximately $257.5 million outstanding under our Unsecured Credit Facility, $25.0 million outstanding under a term loan and a $2.5 million letter of credit to satisfy escrow requirements for a mortgage lender.

On May 28, 2025, the Company entered into an amended and restated loan agreement for Greenwood Blvd, extending the term for an additional three years and amending the interest rate from fixed to floating. The loan bears interest at a rate equal to the daily-simple SOFR rate plus a margin of 250 basis points. The Company also entered into a three-year interest rate swap agreement, effectively fixing the SOFR component of the borrowing rate of the loan at 3.84%.

On February 26, 2020, the Company and the Operating Partnership entered into equity distribution agreements (collectively, the “Agreements”) with certain investment banks acting as sales agents (the “Sales Agents”), pursuant to which the Company may issue and sell from time to time up to 15,000,000 shares of common stock and up to 1,000,000 shares of Series A Preferred Stock through the Sales Agents, acting as agents or principals (the “ATM Program”). In the event that the Company elects to make sales under the ATM Program, the Company will file a prospectus supplement to the prospectus included in the Company's Registration Statement on Form S-3. The Company did not issue any shares of common stock or Series A Preferred Stock under the ATM Program during the six months ended June 30, 2025.

Following changes in property-level occupancy rates, it is possible that we could fail certain financial covenants within certain property-level mortgage borrowings. For mortgages with financial covenants, the lenders’ remedy of a covenant failure would be a requirement to escrow funds for the purpose of meeting our future debt payment obligations. As of June 30, 2025, the lenders for our mortgage borrowings at the SanTan and Intellicenter properties have elected their right to direct property cash flows into lender-controlled restricted cash accounts to fund property operations until certain thresholds are met. Further, under the terms of the loan modification and extension agreement at the FRP Ingenuity Drive property, signed in the second quarter of 2024, property cash flows from this property will be directed into lender-controlled restricted cash accounts through the maturity of the loan. For these three properties, the total restricted cash as of June 30, 2025 was $3.5 million.

Our short-term liquidity requirements primarily consist of operating expenses and other expenditures associated with our properties, distributions to our limited partners and distributions to our stockholders required to qualify for REIT status, capital

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expenditures and, potentially, acquisitions. We expect to meet our short-term liquidity requirements through net cash provided by operations and reserves established from existing cash. We have further sources such as proceeds from our public offerings, including under our ATM Program, and borrowings under our mortgage loans and our Unsecured Credit Facility.

Our long-term liquidity needs consist primarily of funds necessary for the repayment of debt at maturity, property acquisitions and non-recurring capital improvements. We expect to meet our long-term liquidity requirements with net cash from operations, long-term secured and unsecured indebtedness and the issuance of equity and debt securities. We also may fund property acquisitions and non-recurring capital improvements using our Unsecured Credit Facility pending longer term financing.

We believe we have access to multiple sources of capital to fund our long-term liquidity requirements, including the incurrence of additional debt and the issuance of additional equity securities. However, we cannot assure you that this is or will continue to be the case. Our ability to incur additional debt is dependent on a number of factors, including our degree of leverage, interest rates, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. Our ability to access the equity capital markets is dependent on a number of factors as well, including general market conditions for REITs and market perceptions about us.

In addition to the incurrence of debt and the offering of equity securities, dispositions of properties may serve as additional capital resources and sources of liquidity. We may recycle capital from stabilized assets or from sales of properties. Capital from these types of transactions is intended to be redeployed into property acquisitions, capital improvements, or to pay down existing debt.

Contractual Obligations and Other Long-Term Liabilities

The following table provides information with respect to our commitments as of June 30, 2025, including any guaranteed or minimum commitments under contractual obligations. The table does not reflect available debt extension options.

		Payments Due by Period (in thousands)
Contractual Obligations		Total				2025				2026-2027				2028-2029				More than 5 years
Principal payments on indebtedness		$	649,245			$	289,650			$	221,371			$	138,224			$	—
Interest payments (1)			48,226				15,002				27,031				6,193				—
Tenant-related commitments			15,055				15,055				—				—				—
Lease obligations			2,090				163				483				346				1,098
Total		$	714,616			$	319,870			$	248,885			$	144,763			$	1,098

(1)Contracted interest on the floating rate borrowings under our Unsecured Credit Facility was calculated based on the balance and interest rate at June 30, 2025. Contracted interest on our loans which we have applied interest rate swaps was calculated based on the swap fixing the SOFR component of the borrowing rates.

Inflation

Substantially all of our office leases include expense reimbursement provisions that provide for property operating expense escalations. In addition, most of the leases provide for fixed rent increases. We believe that expense increases due to inflation may be at least partially offset by these contractual rent increases and expense escalations. However, a longer period of inflation could affect our cash flows or earnings, or impact our borrowings, as discussed elsewhere in this Report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. We use derivative financial instruments to manage or hedge interest rate risks related to borrowings. We do not use derivatives for trading or speculative purposes. We have entered, and we will only enter into, contracts with major financial institutions based on their credit rating and other factors. See Note 6 to our condensed consolidated financial statements in Item 1 of this Report for more information regarding our derivatives.

We currently consider our interest rate exposure to be moderate because as of June 30, 2025, approximately $531.7 million, or 81.9%, of our debt had fixed interest rates, or effectively fixed rates when factoring in interest rate swaps, and $117.5 million, or 18.1%, had variable interest rates. The interest rate swaps effectively fix the SOFR component of the borrowing rates until maturity of the debt. A 1% increase in SOFR would result in a $1.2 million increase to our annual interest costs on debt outstanding as of June 30, 2025 and would decrease the fair value of our outstanding debt, as well as increase interest costs associated with future debt issuances or borrowings under our Unsecured Credit Facility. A 1% decrease in SOFR would result in a $1.2 million decrease to our annual

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interest costs on debt outstanding as of June 30, 2025 and would increase the fair value of our outstanding debt, as well as decrease interest costs associated with future debt issuances or borrowings under our Unsecured Credit Facility.

Interest rate risk amounts are our management’s estimates based on our Company’s capital structure and were determined by considering the effect of hypothetical interest rates on our financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur in that environment. We may take actions to further mitigate our exposure to changes in interest rates. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our Company’s financial structure.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on the most recent evaluation, the Company’s Chief Executive Officer and Chief Financial Officer determined that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) were effective as of June 30, 2025.

Management’s Report on Internal Control Over Financial Reporting

There have been no changes to our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We and our subsidiaries are, from time to time, parties to litigation arising from the ordinary course of business. As of June 30, 2025, management does not believe that any such litigation will have a material adverse effect, individually or in the aggregate, on our financial position or results of operations.

Item 1A. Risk Factors

As of the date of this Quarterly Report on Form 10-Q, there have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, except for the one below. Any of those risk factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such factors or disclose additional factors from time to time in our future filings with the Securities and Exchange Commission.

We may engage in development or expansion projects or invest in new asset classes, which would subject us to additional risks that could negatively impact our operations.
 

We may engage in development or other expansion projects, which could subject us to additional or unforeseen costs and capital requirements or require us to obtain additional state and local permits. A decision by any governmental agency not to issue a required permit or substantial delays in the permitting process could cause us to incur penalties, delay us from receiving rental payments or result in us receiving reduced rental payments, or prevent us from pursuing the development or expansion project altogether. Additionally, any such new development or expansion project may not operate at designed capacity or may cost more to operate than we expect. The inability to successfully complete development expansion or other value-added projects or to complete them on a timely basis could adversely affect our business and results of operations.

We have and may continue to make investments and utilize transaction structures that are outside of our traditional business, including entering into new asset classes, such as our previously-announced plan to develop a condominium and mixed use tower in St. Petersburg, Florida, and entering into (or expanding our use of) new transaction structures, such as strategic co-investment ventures or joint ventures. We plan to invest and may continue to invest in new or different assets or enter into new transaction structures that may or may not be closely related to our current business and which could require new or additional processes, controls, systems and personnel. These new assets and transaction structures may have new, different or increased risks than what we are currently exposed to in our business and we may not be able to manage these risks successfully. Such risks include:

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•When investing in new assets or transaction structures, we will be exposed to the risk that those assets or structures, or the income generated thereby, will affect our ability to meet the requirements to maintain our REIT status, or will subject us to additional regulatory requirements or limitations;

•Our partners or investors may share certain approval rights over major decisions or have the ability to appoint persons to governing bodies;

•Our partners or investors may seek to exit or redeem their investment, and may do so simultaneously, causing the venture to seek capital to satisfy these requests on less than optimal terms;

•If our partners or investors fail to fund their share of any required capital contributions, then we may choose to contribute such capital or the venture may have to raise additional capital or incur indebtedness on less than optimal terms;

•Our partners or investors may have economic or other business interests or goals that are inconsistent with our business interests or goals that would affect our ability to operate the venture and adversely impact our consolidated financial position or results of operations;

•The governing agreements may restrict the transfer of an interest in the co-investment venture or may otherwise restrict our ability to sell the interest when we desire or on advantageous terms;

•Our relationships with our partners or investors are likely to be contractual in nature and may be terminated or dissolved under the terms of the agreements, and in such event, the venture may terminate or we may not continue to invest in or manage the assets underlying such relationships resulting in a decrease in our assets under management and a reduction in fee revenues; and

•Disputes between us and our partners or investors may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the applicable co-investment venture to additional risk.

If we are not able to successfully manage the risks associated with such new assets, it could have an adverse effect on our business, results of operations and financial condition.

The announcement and pendency of the Merger Agreement could have an adverse effect on our business, financial condition and results of operations

The announcement and pendency of the Merger could cause disruption in our business, including the potential loss or disruption of commercial relationships prior to the completion of the Merger. For example, some of our tenants, prospective tenants or vendors may delay or defer decisions, which could negatively affect our revenues, earnings, cash flows and expenses, regardless of whether the Merger is completed. Similarly, our current and prospective employees may experience uncertainty about their future roles with the combined company following the Merger, which may adversely affect our ability to attract and retain key personnel during the pendency of the Merger.

The Merger Agreement generally requires us to use commercially reasonable efforts to operate our business in the ordinary course of business pending consummation of the Merger, but includes certain contractual restrictions on the conduct of our business prior to completion of the Merger. Due to these operating restrictions, during the pendency of the Merger Agreement we may be unable to pursue strategic transactions, undertake significant capital projects, undertake certain financing transactions and otherwise pursue other actions, even if such actions would prove beneficial.

The Merger Agreement also contains provisions that limit our ability to pursue alternatives to the Merger and that could discourage a potential competing acquirer of us from making a favorable alternative transaction proposal. In addition, matters relating to the Merger (including integration planning) will require substantial commitments of time and resources by our management, which could divert their time and attention. We have also incurred, and will continue to incur, significant non-recurring costs in connection with the Merger that we may be unable to recover.

Completion of the Merger is subject to the satisfaction or waiver of certain conditions.

Completion of the Merger is subject to the satisfaction or waiver of certain conditions, including, among other things, (a) the affirmative vote of at least a majority of the outstanding shares of Common Stock entitled to vote at the shareholders’ meeting in favor of adopting the Merger Agreement and approving the Merger; (b) the absence of any law, injunction, judgment, order, decree or ruling restraining or prohibiting consummation of the Merger; (c) the receipt of certain third party consents; (d) the receipt of consents from the applicable third parties relating to certain ground leases required under the Phoenix Sale Agreement and the sale of the Phoenix

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Portfolio shall have been consummated pursuant to and in accordance with the Phoenix Sale Agreement; (e) the delivery of a written tax opinion to the effect that, as of December 31, 2014 until the Merger effective time, the Company has been organized and operated in accordance with the requirements for qualification and taxation as a REIT; and (f) no event of default that is incapable of being cured or capable of being cured but still continuing shall have occurred and be continuing under certain of the Company’s loan documents. Each party’s obligation to consummate the Merger is also subject to certain additional conditions, which include the accuracy of the other party’s representations and warranties (subject to materiality qualifiers) and the other party’s compliance with its covenants and obligations in all material respects (in each case, as contained and more fully described in the Merger Agreement).

We cannot provide assurance that these conditions to completing the Merger will be satisfied or waived, and accordingly, that our pending Merger will be completed on the timeline that we anticipate or at all. Failure to complete the Merger could negatively affect our stock price and our future business and financial results.

An adverse outcome in any litigation or other legal proceedings relating to the Merger Agreement could have a material adverse impact on our business and our ability to consummate the transactions contemplated by the Merger Agreement.

Transactions like the Merger are frequently the subject of litigation or other legal proceedings, including actions alleging that either our board of directors breached their respective duties to their shareholders by entering into the Merger Agreement, by failing to obtain a greater value in the transaction for their shareholders or otherwise. We believe that any such litigation or proceedings would be without merit, but there can be no assurance that they will not be brought. If litigation or other legal proceedings are brought against us or against our board in connection with the Merger Agreement, we will defend against it, but we might not be successful in doing so. An adverse outcome in such matters, as well as the costs and efforts of a defense even if successful, could have a material adverse effect on our business, results of operation or financial position, including through the possible diversion of either company’s resources or distraction of key personnel.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits

Exhibit Number		Description
2.1		Agreement and Plan of Merger, dated July 23, 2025, by and among MCME Carell Holdings, LP, MCME Carell Merger Sub, LLC, and City Office REIT, Inc. (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Commission on July 24, 2025).
3.1		Articles of Amendment and Restatement of the Company, as amended and supplemented (incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed with the Commission on March 1, 2018).
3.2		Third Amended and Restated Bylaws of the Company, effective as of August 2, 2023 (incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 3, 2023).
4.1		Certificate of Common Stock of City Office REIT, Inc. (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-11/A filed with the Commission on February 18, 2014).
4.2		Form of certificate representing the 6.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form 8-A filed with the Commission on September 30, 2016).
10.1		Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of June 18, 2025, by and among SWVP Acquisitions LLC, a Delaware limited liability company, as buyer, and CIO 5090, Limited Partnership, a Delaware limited partnership; CIO Block 23, LLC, a Delaware limited liability company; CIO PAPAGO Tech Holdings, LLC, a Delaware limited liability company; CIO SAN TAN I, Limited Partnership, a Delaware limited partnership; CIO SAN TAN II, Limited Partnership, a Delaware limited partnership; CIO PIMA, Limited Partnership, a Delaware limited partnership; CIO QUAD, Limited Partnership, a Delaware limited partnership; and CIO CAMELBACK, Limited Partnership, a Delaware limited partnership, each as a seller (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on July 24, 2025).
10.2		First Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions, dated as of July 23, 2025, by and among SWVP Acquisitions LLC, a Delaware limited liability company, as buyer, and CIO 5090, Limited Partnership, a Delaware limited partnership; CIO Block 23, LLC, a Delaware limited liability company; CIO PAPAGO Tech Holdings, LLC, a Delaware limited liability company; CIO SAN TAN I, Limited Partnership, a Delaware limited partnership; CIO SAN TAN II, Limited Partnership, a Delaware limited partnership; CIO PIMA, Limited Partnership, a Delaware limited partnership; CIO QUAD, Limited Partnership, a Delaware limited partnership; and CIO CAMELBACK, Limited Partnership, a Delaware limited partnership, each as a seller (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission on July 24, 2025).
10.3		Amendment No. 3 to Executive Employment Agreement, dated as of July 23, 2025, by and among City Office Management ULC, City Office REIT Operating Partnership, and James Farrar (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K filed with the Commission on July 24, 2025).
31.1		Certification by Chief Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 †
31.2		Certification by Chief Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 †
32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 †
32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 †
101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document
101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104		Cover page formatted as Inline XBRL and contained in Exhibit 101

† Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

				CITY OFFICE REIT, INC.
Date: July 31, 2025				By:		/s/ James Farrar
						James Farrar
						Chief Executive Officer and Director
						(Principal Executive Officer)
Date: July 31, 2025				By:		/s/ Anthony Maretic
						Anthony Maretic
						Chief Financial Officer, Secretary and Treasurer
						(Principal Financial Officer and Principal Accounting Officer)

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FAQ

What caused City Office REIT's large Q2 2025 net loss?

A $102.2 million non-cash impairment on the Phoenix Portfolio pushed results to a $105.3 million loss and –$2.66 EPS.

How much is the Phoenix Portfolio being sold for?

CIO signed a $296 million purchase-and-sale agreement on 18 Jun 2025; closing is subject to customary conditions and ground-lease reassignments.

What are the terms of the MCME Carell merger with CIO (NYSE: CIO)?

MCME Carell will acquire all outstanding CIO shares for $7.00 in cash, pending shareholder approval and other closing conditions.

What is City Office REIT's occupancy rate as of 30 Jun 2025?

Portfolio occupancy stood at 82.5 % with 3.6 % of leases scheduled to expire in the remainder of 2025.

Did CIO maintain its dividend in Q2 2025?

Yes. The board declared a $0.10 per-share common dividend and a $0.4140625 Series A preferred dividend, both paid 24 Jul 2025.

How much debt does City Office REIT carry and when does its credit facility mature?

Total debt is $647 million; the $257.5 million unsecured credit facility matures in November 2025 with one 12-month extension option.