City Office REIT (CIO) AI Stock Analysis

• Market Cap: $280.53M
• Dividend Yield: 5.76%
• Average Volume (3M): 391.25K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.88
• Revenue Growth: -3.69%
• EPS Growth: -777.30%
• Country: US
• Employees: 20
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Office
• EPS (TTM): -2.66
• Shares Outstanding: 40,363,640
• 10 Day Avg. Volume: 592,957
• 30 Day Avg. Volume: 391,254
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 3.37
• Enterprise Value/Revenue: 5.60
• Enterprise Value/Gross Profit: 9.27
• Enterprise Value/Ebitda: -36.83
• 1Y Price Target: $7.00
• Price Target Upside: 0.72% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 2

• Rating: 65 Neutral
• Price Target: $7.50 ▲(7.91% Upside)

City Office REIT's overall stock score reflects a mix of financial challenges and strategic opportunities. The company's financial performance is a concern due to negative profitability and cash flow volatility. However, strong technical indicators and strategic corporate events, such as the merger and asset sale, provide a positive outlook. The earnings call further supports a favorable long-term trajectory despite short-term challenges.

Positive Factors

Strategic Asset Sale

The asset sale enhances financial flexibility by reducing debt and streamlining operations, allowing the company to focus on core markets and improve its balance sheet.

Merger with MCME Carell Holdings

The merger provides a strategic advantage by potentially increasing market reach and operational scale, offering long-term growth opportunities in a challenging sector.

Positive Financial Performance

Improved financial metrics indicate operational efficiency and effective cost management, supporting sustainable cash flow generation and long-term profitability.

Negative Factors

Negative Profitability

Persistent losses highlight challenges in achieving profitability, which may limit reinvestment capabilities and impact long-term financial health.

Cash Flow Volatility

Volatile cash flows can hinder strategic investments and operational flexibility, posing risks to sustaining business operations and growth initiatives.

Stagnant Revenue Growth

Limited revenue growth suggests challenges in market expansion and competitive positioning, potentially affecting long-term value creation and shareholder returns.

City Office REIT Business Overview & Revenue Model

Company Description

City Office REIT, Inc. (NYSE: CIO) invests in high-quality office properties in 18-hour cities with strong economic fundamentals, primarily in the Southern and Western United States. At September 30, 2020, CIO owned office complexes comprising 5.8 million square feet of net rentable area (NRA).

How the Company Makes Money

City Office REIT generates revenue primarily through leasing office spaces to tenants, which provides a steady stream of rental income. The company typically enters into long-term lease agreements, allowing for predictable cash flows. Additionally, City Office REIT may earn revenue from ancillary services related to property management and maintenance. The company also benefits from appreciation in property values, which can enhance returns when properties are sold or refinanced. Strategic partnerships with local property management firms and brokers can further contribute to its earnings by optimizing occupancy rates and tenant mix, ultimately driving higher rental income.

City Office REIT Financial Statement Overview

Summary

City Office REIT faces significant financial challenges, with negative profitability and fluctuating cash flows. While the company maintains a balanced leverage position, its ability to generate returns for shareholders is limited. The stable gross profit margin indicates some operational efficiency, but stagnant revenue growth and negative net income highlight the need for strategic improvements. Overall, the financial health of the company is moderate, with potential risks due to its current financial trajectory.

Income Statement

City Office REIT's income statement shows a challenging financial position. The TTM data indicates a negative net profit margin of -71.27%, and EBIT margin of -51.22%, reflecting significant losses. Revenue growth is stagnant at 0.1%, indicating limited expansion. Historical data shows fluctuating revenue growth with a peak in 2022, but recent years have seen declining profitability. The gross profit margin remains relatively stable around 60%, suggesting some operational efficiency.

Balance Sheet

The balance sheet reveals a moderate financial structure with a debt-to-equity ratio of 1.06 in the TTM period, indicating a balanced leverage position. However, the return on equity is negative at -17.06%, highlighting inefficiencies in generating returns for shareholders. The equity ratio is approximately 46.3%, suggesting a reasonable level of equity financing. Historical data shows fluctuating debt levels, with a peak in 2022, but a general trend towards reducing leverage.

Cash Flow

Cash flow analysis shows a mixed picture. The TTM free cash flow growth rate is negative at -3.69%, indicating challenges in generating cash. The operating cash flow to net income ratio is 0.17, reflecting limited cash generation relative to net income. However, the free cash flow to net income ratio is 1.0, suggesting that the company is able to convert its net income into free cash flow effectively. Historical data shows volatility in cash flow growth, with significant fluctuations over the years.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	168.89M	171.13M	179.10M	180.49M	164.04M	160.84M
Gross Profit	102.08M	101.67M	109.10M	112.75M	106.04M	102.53M
EBITDA	-25.70M	75.16M	94.26M	97.75M	90.55M	91.84M
Net Income	-120.38M	-17.68M	-2.68M	25.20M	484.39M	-21.84M
Balance Sheet
Total Assets	1.33B	1.46B	1.51B	1.57B	1.60B	1.16B
Cash, Cash Equivalents and Short-Term Investments	34.50M	18.89M	30.08M	28.19M	21.32M	25.30M
Total Debt	652.92M	646.97M	669.51M	890.60M	653.65M	677.24M
Total Liabilities	712.72M	721.13M	738.74M	771.26M	730.92M	739.42M
Stockholders Equity	614.94M	733.86M	772.23M	802.83M	869.62M	416.93M
Cash Flow
Free Cash Flow	52.54M	58.86M	57.22M	97.11M	65.03M	52.13M
Operating Cash Flow	52.54M	58.86M	57.22M	106.68M	73.22M	59.92M
Investing Cash Flow	-33.09M	-40.29M	-41.34M	-47.05M	-17.38M	-27.80M
Financing Cash Flow	-28.29M	-28.01M	-16.75M	-57.63M	-59.53M	-73.69M

City Office REIT Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CIO, the sentiment is Positive. The current price of 6.95 is above the 20-day moving average (MA) of 6.94, above the 50-day MA of 6.64, and above the 200-day MA of 5.40, indicating a bullish trend. The MACD of 0.07 indicates Positive momentum. The RSI at 72.41 is Negative, neither overbought nor oversold. The STOCH value of 69.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CIO.

City Office REIT Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIO	65 Neutral	$280.53M	―	-17.53%	5.76%	-3.69%	-777.30%
HPP	53 Neutral	1.07B	-0.99	-12.34%	―	-9.68%	-69.03%
ONL	52 Neutral	152.61M	-1.96	-13.48%	8.86%	-15.14%	16.61%
OPI	50 Neutral	41.93M	-0.12	-27.60%	7.05%	-11.93%	-1877.17%
FSP	49 Neutral	170.05M	-3.18	-8.56%	2.44%	-18.12%	24.44%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%

City Office REIT Corporate Events

City Office REIT Sells Phoenix Properties for $266 Million

On August 15, 2025, City Office REIT, Inc. completed the sale of six office properties in Phoenix, Arizona, for $266 million to an unaffiliated buyer, as part of a previously announced disposition plan. Concurrently, the company amended its credit agreement, reducing the revolving credit facility to $150 million and securing borrowings with certain assets. This strategic move aims to streamline operations and improve financial flexibility, potentially impacting the company’s market positioning and stakeholder interests.

City Office REIT Announces Merger with MCME Carell Holdings

On July 23, 2025, City Office REIT entered into a merger agreement with MCME Carell Holdings, where City Office will be acquired for $7.00 per share in a transaction valued at approximately $1.1 billion. This merger, approved by the board, includes the sale of the company’s Phoenix portfolio and is expected to close in the fourth quarter of 2025, subject to shareholder approval and other customary conditions. The transaction offers a significant premium over the current stock price, reflecting a strategic move in a challenging office sector environment. Additionally, City Office announced the sale of its Phoenix assets for $296 million, with proceeds intended to repay debt and for general corporate purposes. The sale is scheduled to close on August 14, 2025, and is not contingent upon the merger’s completion.