UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2015
City Office REIT, Inc.
(Exact Name of Registrant as Specified in Its Charter)
|
|
|
|
|
|
|
Maryland
|
|
001-36409
|
|
98-1141883
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(Commission
File Number)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
|
|
1075 West Georgia Street, Suite 2600,
Vancouver, British Columbia,
|
|
V6E 3C9
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
(604) 806-3366
(Registrant’s telephone number, including area code)
Not Applicable
(Former
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions:
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
Item 1.01.
|
Entry into a Material Definitive Agreement.
|
On April 21, 2014, City Office REIT, Inc. (the
“Company”), through its operating partnership, City Office REIT Operating Partnership, L.P. (the “Operating Partnership”), as parent borrower, entered into a credit agreement (the “Credit Agreement”) with KeyBank
National Association (“KeyBank”), as administrative agent, the other lenders party thereto and KeyBanc Capital Markets, as sole lead arranger and sole book manager, providing for a secured revolving credit facility in an aggregate
principal maximum amount at that time of $15,000,000 (the “Original Secured Credit Facility”), with a maturity date of April 21, 2016, subject to the Operating Partnership’s right to a 12-month extension. At the time of
execution, the Secured Credit Facility provided the Operating Partnership with the ability from time to time to increase the size of the Secured Credit Facility up to a total of $150,000,000 (the “Accordion Feature”). On June 13,
2014, in connection with the addition of a property known as Plaza 25, located in Greenwood Village, Colorado, as an additional collateral property, the Company, through the Operating Partnership, exercised a portion of the Accordion Feature of the
Secured Credit Facility and entered into an amendment to the Credit Agreement (the “First Amendment to Credit Agreement” and the Original Secured Facility collectively the “Secured Credit Facility”), thereby increasing the
aggregate principal maximum amount available for borrowing under the Secured Credit Facility to $30,000,000.
On February 4, 2015, in connection with
the addition of a property known as Logan Tower, located in Denver, Colorado as further described under Item 8.01 of this Current Report on Form 8-K, as an additional collateral property under the Secured Credit Facility, CIO Logan Tower,
Limited Partnership, an indirect wholly-owned subsidiary of the Company, entered into, among other security documents pursuant to which it granted a lien on the Logan Tower property and personalty located thereon, a joinder agreement pursuant to
which it became a Subsidiary Borrower, a Borrower and a Maker under the Secured Credit Facility (the “Joinder Agreement”).
A copy of the
Joinder Agreement is included as Exhibit 10.1 hereto and is incorporated by reference herein. The foregoing description of the Joinder Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the
agreement.
|
Item 2.03
|
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
|
The information set forth under Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.
On February 4, 2015, the Company, through a wholly-owned subsidiary, closed on the
acquisition of a 69,968 square foot office property in Denver’s downtown submarket (the “Property”), pursuant to the Purchase and Sale Contract with New Logan Tower, LLC (the “Seller”) dated January 14, 2015, as
amended. The Seller does not have a material relationship with the Company and the acquisition was not an affiliated transaction.
The contract purchase
price for the Property was $10.5 million, exclusive of closing costs. The purchase was closed with cash and the Property will be contributed to the Company’s Secured Credit Facility as additional security. The Property was 95% occupied as of
the date of the closing. The tenants have varying renewal options under their leases.
|
Item 9.01
|
Financial Statements and Exhibits.
|
(d) Exhibits:
|
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
|
10.1
|
|
Joinder Agreement, dated February 4, 2015, by CIO Logan Tower, Limited Partnership
|
|
|
|
|
99.1
|
|
Press Release, dated February 4, 2015
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
|
|
CITY OFFICE REIT, INC.
|
|
|
|
|
|
|
Date: February 10, 2015
|
|
|
|
By:
|
|
/s/ James Farrar
|
|
|
|
|
|
Name:
|
|
James Farrar
|
|
|
|
|
|
Title:
|
|
Chief Executive Officer
|
EXHIBIT INDEX
|
|
|
|
|
Exhibit
No.
|
|
Description
|
|
|
|
|
10.1
|
|
Joinder Agreement, dated February 4, 2015, by CIO Logan Tower, Limited Partnership
|
|
|
|
|
99.1
|
|
Press Release, dated February 4, 2015
|
Exhibit 10.1
JOINDER AGREEMENT
THIS JOINDER AGREEMENT (“
Joinder Agreement
”) is executed as of February 4, 2015, by CIO LOGAN TOWER, LIMITED
PARTNERSHIP, a Delaware limited partnership (“
Joining Party
”), and delivered to KeyBank National Association, as Agent, pursuant to §5.5 of the Credit Agreement dated as of April 21, 2014, as amended by that certain First
Amendment to Credit Agreement dated as of June 13, 2014 and from time to time in effect (the “
Credit Agreement
”), among CITY OFFICE REIT OPERATING PARTNERSHIP, L.P. (the “
Parent Borrower
”), the Subsidiary
Credit Parties, KeyBank National Association, for itself and as Agent, and the other Lenders from time to time party thereto. Terms used but not defined in this Joinder Agreement shall have the meanings defined for those terms in the Credit
Agreement.
RECITALS
A. Joining Party is required, pursuant to §5.5 of the Credit Agreement, to become an additional Subsidiary Credit Party under the Credit
Agreement, the Notes, and the Indemnity Agreement.
B. Joining Party expects to realize direct and indirect benefits as a result of the
availability to Borrowers of the credit facilities under the Credit Agreement.
NOW, THEREFORE, Joining Party agrees as follows:
AGREEMENT
1.
Joinder
. By this Joinder Agreement, Joining Party hereby becomes a “Subsidiary Borrower”, a “Borrower” and a “Maker” under the Credit Agreement, the Notes, the Indemnity Agreement, and the other Loan Documents
with respect to all the Obligations of Borrowers now or hereafter incurred under the Credit Agreement and the other Loan Documents. Joining Party agrees that Joining Party is and shall be bound by, and hereby assumes, all representations,
warranties, covenants, terms, conditions, duties and waivers applicable to a Subsidiary Borrower, a Borrower and a Maker under the Credit Agreement, the Notes, the Indemnity Agreement and the other Loan Documents from and after the Effective Date.
2.
Representations and Warranties of Joining Party
. Joining Party represents and warrants to Agent that, as of the Effective Date
(as defined below), except as disclosed in writing by Joining Party to Agent on or prior to the date hereof and approved by the Agent in writing (which disclosures shall be deemed to amend the Schedules and other disclosures delivered as
contemplated in the Credit Agreement), the representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects as applied to Joining Party as a Subsidiary Borrower and a
Borrower on and as of the Effective Date as though made on that date. As of the Effective Date, all covenants and agreements in the Loan Documents of the Subsidiary Credit Parties are true and correct with respect to Joining Party and no Default or
Event of Default shall exist or might exist upon the Effective Date in the event that Joining Party becomes a Subsidiary Borrower.
3.
Joint and Several
. Joining Party hereby agrees that, as of the Effective Date, the
Credit Agreement, the Notes, the Indemnity Agreement and the other Loan Documents heretofore delivered to the Agent and the Lenders shall be a joint and several obligation of Joining Party to the same extent as if executed and delivered by Joining
Party, and upon request by Agent, will promptly become a party to the Credit Agreement, the Notes, the Indemnity Agreement and the other Loan Documents to confirm such obligation.
4.
Further Assurances
. Joining Party agrees to execute and deliver such other instruments and documents and take such other action, as
the Agent may reasonably request, in connection with the transactions contemplated by this Joinder Agreement.
5.
GOVERNING LAW
.
THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION UNDER, AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6.
Counterparts
. This Agreement may be executed in any number of counterparts which shall together constitute but one and the same
agreement.
7. The effective date (the “Effective Date”) of this Joinder Agreement is February 4, 2015.
IN WITNESS WHEREOF, Joining Party has executed this Joinder Agreement under seal as of the day
and year first above written.
|
|
|
|
|
|
|
“JOINING PARTY”
|
|
|
|
|
|
CIO LOGAN TOWER, LIMITED PARTNERSHIP, a
Delaware limited partnership
|
|
|
|
|
By:
|
|
CIO Logan Tower GP, LLC,
|
|
|
|
a Delaware limited liability company,
|
|
|
|
its sole General Partner
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ James Farrar
|
|
|
|
Name:
|
|
James Farrar
|
|
|
|
Title:
|
|
President
|
|
|
|
|
|
|
|
|
|
[SEAL]
|
ACKNOWLEDGED:
|
|
|
|
|
KEYBANK NATIONAL ASSOCIATION, as Agent
|
|
|
|
|
By:
|
|
/s/ Christopher T. Neil
|
|
Name:
|
|
Christopher T. Neil
|
|
Title:
|
|
Vice President
|
Exhibit 99.1
City Office REIT Acquires Office Property in Denver, Colorado
VANCOUVER—February 4, 2015—City Office REIT, Inc. (NYSE: CIO), announced today that it has acquired Logan Tower in Denver, Colorado for a purchase
price of $10.5 million. Logan Tower is a 69,968 square foot multi-tenant office building that is 95% occupied and located in downtown Denver. The acquisition is anticipated to generate an initial full-year cash net operating income yield of
approximately 8.0% based on the purchase price. The purchase was closed all cash and the property will be contributed to City Office REIT’s credit facility as additional security.
“Logan Tower is well located in Denver’s uptown submarket and is adjacent to both the central business district and the State Capitol. The property
was recently renovated and has a diversified and stable tenant base. The acquisition price is approximately $150 per square foot, which offers great value and a significant discount to replacement cost” said James Farrar, Chief Executive
Officer of City Office REIT. “Logan Tower provides an attractive in-place cash flow in one of our key target markets, with substantial upside as leases roll. The current gross rental rate is approximately $18.00 per square foot which is an
estimated $5.00 per square foot below current market rates. Over the next five years, we expect to generate materially higher net operating income as under market leases rollover.”
About City Office REIT, Inc.
City Office REIT is a real
estate company focused on owning high-quality office properties in attractive markets primarily in the Southern and Western United States. City Office REIT currently owns or has an interest in 2.4 million square feet of office properties.
Additional information about City Office REIT is available on the company’s website at
www.cityofficereit.com.
The Company intends to elect to be taxed as a real estate investment trust for U.S. federal income tax purposes.
Forward-looking Statements
This press release contains
“forward looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements that are not statements of historical
facts are, or may be deemed to be, forward looking statements. Forward looking statements reflect our current expectations concerning future results, objectives, plans and goals, and involve known and unknown risks, uncertainties and other factors
that are difficult to predict and which may cause future results, performance or achievements to differ. These risks, uncertainties and other factors include factors described in our news releases and filings with the Securities and Exchange
Commission. The Company does not have any obligation to publicly update any forward looking statements to reflect subsequent events or circumstances.
Contact
City Office
REIT, Inc.
Anthony Maretic
+1-604-806-3366
investorrelations@cityofficereit.com