City Office REIT, Inc. (CIO): ANSOFF MATRIX [Dec-2025 Updated]

You're looking at City Office REIT, Inc. (CIO) right now, and honestly, things are shifting fast with that pending $1.1 billion merger agreement and the $296.0 million cash injection from selling the Phoenix portfolio. As a former head analyst, I see this as the perfect moment to map out where the real growth lies for their core Sun Belt office product, moving beyond just hitting that 82.5% occupancy from Q2 2025. We've got four clear paths-from aggressively pushing renewals to capture more of that 4.4% Same Store Cash NOI growth, to making big bets like residential conversions using their $0.28 Core FFO per share. So, let's cut through the noise and see exactly which strategy makes the most sense for City Office REIT, Inc. (CIO) now; the breakdown is right below.

City Office REIT, Inc. (CIO) - Ansoff Matrix: Market Penetration

You're looking at how City Office REIT, Inc. can maximize revenue from its current portfolio of office properties in its existing Sun Belt markets. This is about squeezing more value out of what City Office REIT, Inc. already owns.

The immediate goal involves pushing the in-place occupancy rate. The target is to move from the 82.5% level recorded as of June 30, 2025, to a level exceeding 90% across core markets. This is a significant jump from the 82.5% in-place occupancy reported for the second quarter of 2025.

Driving Same Store Cash NOI (Net Operating Income) growth is key. The plan is to exceed the 4.4% year-over-year increase achieved in the first quarter of 2025. This growth is directly tied to lease renewals, which previously delivered a healthy 8.5% cash re-leasing spread over the last twelve months ending March 31, 2025.

To capture tenants with shorter time horizons, City Office REIT, Inc. is focused on offering flexible lease structures. This contrasts with the historical norm where renewal leases signed in Q1 2025 had a weighted average lease term of 5.1 years, and Q2 2025 renewals had a weighted average lease term of 4.0 years.

Capital investment is planned to support leasing spreads. The aim is to maintain the 8.5% cash re-leasing spread seen over the last twelve months ending Q1 2025. For context on recent pricing, new leases signed in Q2 2025 had a weighted average effective annual rent of $31.45 per square foot, while renewals in that same quarter averaged $33.02 per square foot.

Maximizing the utilization of the 5.4 million net rentable square feet portfolio is central to this strategy. Targeting existing tenants for expansion space helps secure occupancy and rental income across the total square footage.

Here are the key operational metrics relevant to this market penetration push:

The leasing activity provides further detail on the current environment City Office REIT, Inc. is operating in:

• Executed approximately 355,000 square feet of new and renewal leases in Q2 2025.
• Q2 2025 New Leasing Weighted Average Lease Term was 8.4 years.
• Q1 2025 Renewal Leases Weighted Average Effective Annual Rent was $33.87 per square foot.
• Q2 2025 Renewal Leases Weighted Average Effective Annual Rent was $33.02 per square foot.

The focus remains on extracting maximum revenue from the existing 5.4 million square feet base.

City Office REIT, Inc. (CIO) - Ansoff Matrix: Market Development

Market Development for City Office REIT, Inc. (CIO) centers on expanding its geographic footprint into new, high-growth metropolitan areas while maintaining its focus on high-quality office assets predominantly located in Sun Belt markets. This strategy is heavily supported by recent capital recycling activities, specifically the divestiture of non-core assets.

Acquire high-quality office assets in new, high-growth Sun Belt cities like Austin or Charlotte.

City Office REIT, Inc. already has a strong concentration in Sun Belt markets, which represented 88% of its estimated gross asset value as of December 31, 2024, adjusted for the January 2025 sale of the Superior Pointe property in Denver. The portfolio size as of the second quarter of 2025 was 5.4 million net rentable square feet. The Market Development thrust here is to target new high-growth Sun Belt cities beyond the existing footprint, which includes Dallas, Orlando, Tampa, Raleigh, San Diego, and Seattle. The goal is to deploy capital into markets exhibiting nation-leading employment and population growth trends. You're looking to enter markets like Austin or Charlotte, which are known for strong economic resilience, to further concentrate the portfolio in areas aligning with tenant preferences for quality and amenitized assets.

Enter Southeastern U.S. markets, such as Atlanta, to diversify the Sun Belt concentration.

While City Office REIT, Inc. has a presence in the Southeast via Orlando and Tampa, expanding into a major hub like Atlanta would diversify the existing Sun Belt concentration. This move would be a calculated step to capture growth in a market that shares the desirable characteristics City Office REIT, Inc. seeks: high quality of life and a strong talent pool. The strategy here is about reducing single-market risk within the broader Sun Belt thesis.

Establish a presence in secondary Western markets outside the current footprint of Denver and San Diego.

City Office REIT, Inc. has actively been pruning its Western exposure, having closed the disposition of the Superior Pointe property in Denver, Colorado, for a gross sale price of $12.0 million in January 2025. The company still holds assets in San Diego, which was 5% of the estimated gross asset value at the end of 2024. Market Development in the West would mean looking at secondary markets adjacent to or similar to San Diego, perhaps targeting areas showing strong post-pandemic office demand, but outside the current Seattle and Portland presence. This is about finding the next tier of growth markets.

Use the capital from the Phoenix portfolio sale to fund a focused acquisition strategy in one new market.

This is the immediate action enabling the Market Development. City Office REIT, Inc. completed the first closing of its Phoenix portfolio sale for gross proceeds of $266 million, with the final property, Pima Center, under contract for an additional $30 million, totaling a $296 million gross sale value. This capital, which helps reduce the total principal outstanding debt of approximately $649.2 million as of June 30, 2025, is earmarked to fund a focused acquisition strategy, likely accelerating the move into a single, high-conviction new market. The sale itself was a condition for the $1.1 billion merger closing in Q4 2025. The quick math shows that the sale proceeds provide significant liquidity to execute on this expansion.

Here's a look at the capital event funding the expansion:

Partner with local developers in target cities to quickly establish market knowledge and deal flow.

To mitigate the learning curve in a new geography, City Office REIT, Inc. has shown a willingness to partner. For example, subsequent to Q1 2025, the company entered an agreement with Property Markets Group (PMG) to redevelop a portion of its City Center property in St. Petersburg, Florida, with PMG investing $17 million in predevelopment costs for a 50% interest. This precedent suggests that forming joint ventures with local experts in new markets like Austin or Atlanta could be the most efficient way to source proprietary deals and gain immediate, on-the-ground expertise, which is crucial when deploying significant capital from a portfolio sale.

The company's current financial positioning, with a Q2 2025 Core FFO of $11.8 million and 2025 guidance between $1.10 to $1.14 per share, provides a stable base, but the Market Development hinges on successfully deploying the Phoenix capital into accretive new markets. The stock price as of November 26, 2025, was $6.80.

• Portfolio NRSF as of June 30, 2025: 5.4 million square feet.
• In-place Occupancy as of June 30, 2025: 82.5%.
• New Leasing Spread (Q2 2025): Weighted average effective annual rent of $31.45 per square foot.
• Total Debt as of June 30, 2025: Approximately $649.2 million.

City Office REIT, Inc. (CIO) - Ansoff Matrix: Product Development

You're looking at how City Office REIT, Inc. (CIO) plans to develop new offerings or significantly enhance existing ones within its current markets, which is the Product Development quadrant of the Ansoff Matrix. This strategy relies on making material changes to the physical product-the office space itself-to capture higher rents and better tenant demand.

Repositioning Older Assets and Adding Amenities

City Office REIT, Inc. is actively pursuing significant capital upgrades to reposition older assets, aiming for Class A status. The company expects these strategic property upgrades to be a positive catalyst for driving leasing results. Evidence of this focus is seen in the leasing metrics achieved through Q1 2025, where the company reported a healthy $\mathbf{8.5\%}$ cash re-leasing spread over the trailing twelve months. For new leases executed in Q1 2025, the weighted average effective annual rent was $\mathbf{\$29.97}$ per square foot, while renewals averaged $\mathbf{\$33.87}$ per square foot. By the second quarter of 2025, renewal leasing showed a weighted average effective annual rent of $\mathbf{\$33.02}$ per square foot. These figures suggest that enhancements are supporting strong rental rates relative to the existing base. The portfolio, totaling $\mathbf{5.4}$ million net rentable square feet as of June 30, 2025, saw its Same Store Cash NOI increase by $\mathbf{4.4\%}$ in Q1 2025 compared to Q1 2024, though this growth moderated to $\mathbf{1.8\%}$ for Q2 2025 versus Q2 2024. Specific examples of these enhancements mentioned include lobby and amenity renovation at City Center, amenity renovation at Pima Center, and upgrades to outdoor spaces at 5090.

The focus on tenant-focused amenities is a key part of this product enhancement. The company has highlighted strategic property and common area enhancements to optimally position the portfolio, knowing that tenant demand is highest for well-amenitized, modern spaces.

The following table summarizes key portfolio and leasing metrics relevant to the success of these repositioning efforts through mid-2025:

Exploring Mixed-Use Conversion of Parking Structures

City Office REIT, Inc. is actively executing a major mixed-use conversion project at its City Center property in St. Petersburg, Florida, by transforming the stand-alone parking garage. This project received unanimous site plan approval from the City of St. Petersburg. City Office REIT is entering a partnership with Property Markets Group (PMG) for this redevelopment. The plan is to build an approximately $\mathbf{49}$-story multi-use waterfront tower. The resulting structure is planned to contain approximately $\mathbf{70,000}$ square feet of office space, $\mathbf{15,000}$ square feet of retail space, and $\mathbf{432,000}$ square feet of luxury residential condominium units, marketed under the Waldorf Astoria Residences brand. PMG will handle all predevelopment activities and costs, anticipated at $\mathbf{\$17}$ million in cash for its $\mathbf{50\%}$ membership interest, while City Office REIT contributes the land parcel. Construction is expected to span approximately $\mathbf{three}$ years once preconditions are met.

Converting Office Space to Specialized Labs

While specific 2025 data on new life science conversions isn't detailed in recent reports, City Office REIT, Inc. has prior experience in this product type, having generated a $\mathbf{\$429}$ million gain from a life science portfolio sale in $\mathbf{2021}$. This historical success suggests an established understanding of the requirements for converting underutilized office space into specialized life science or medical office labs, positioning it as a viable product development exploration within their existing markets.

Branded Flexible Workspace Offering

The company's strategy focuses on high-quality, modern, amenitized office assets in Sun Belt markets. While the specific launch details or square footage dedicated to a branded flexible workspace (co-working) offering within Dallas or Tampa properties are not quantified with 2025 financial figures, the general strategy is supported by the leasing activity, which includes securing $\mathbf{144,000}$ square feet of new and renewal leases in Q1 2025, filling the Papago Tech property in Phoenix entirely. The pursuit of higher effective rents and winning greater leasing market share through spec suites indicates an openness to flexible leasing products to meet tenant demand.

• The company's general strategy includes enhancing cash flow through stabilization of recent acquisitions and lease-up of portfolio vacancy.
• They are investing in ready-to-lease spec suites and vacancy conditioning to win greater leasing market share.
• The portfolio is concentrated in Sun Belt markets displaying nation-leading employment and population growth trends.

City Office REIT, Inc. (CIO) - Ansoff Matrix: Diversification

You're looking at City Office REIT, Inc.'s (CIO) moves to shift its business mix, which is a classic diversification play, even as the company navigates a major transaction. The numbers we have for Q2 2025 show the operational baseline from which these strategic shifts are funded or contextualized.

For the second quarter ended June 30, 2025, City Office REIT reported Core Funds From Operations (FFO) of approximately $11.8 million, translating to $0.28 per fully diluted share. This figure is key, as it represents the cash flow available before considering capital expenditures, which would be the source for any small, non-office real estate venture funding you mentioned.

The most concrete example of moving into a new asset class, though within a joint venture structure, is the St. Petersburg City Center project. City Office REIT, Inc. entered an agreement on April 14, 2025, with an affiliate of Property Markets Group (PMG) to redevelop a portion of the City Center property in St. Petersburg, Florida. This redevelopment targets a 49-story residential condominium and mixed-use tower. This is a clear step outside the core office focus, even if it leverages an existing office asset base. The existing 242,115-square-foot Class A office building at that location, owned by a joint venture including CIO, Feldman Equities, and Tower Realty Partners, saw its renovation complete around February 2025.

When mapping out potential diversification into multi-family residential or industrial/logistics, we look at the existing footprint. City Office REIT, Inc. owned or had a controlling interest in 5.4 million net rentable square feet as of June 30, 2025, concentrated in Sun Belt metropolitan areas like Dallas, Denver, Orlando, Portland, Raleigh, San Diego, Seattle, and Tampa. While the core remains office, the planned mixed-use tower in St. Petersburg suggests an appetite for residential components. Regarding industrial or logistics, the search results confirm CIO's focus on office properties in Sun Belt markets; there is no specific reported financial data on CIO acquiring or developing industrial or logistics real estate as a new asset class, nor is there a reported joint venture with a retail developer outside of the mixed-use component at City Center or the street-level retail at Bloc 83 in Raleigh.

Here's a look at the scale and context of the portfolio and the planned divestiture, which frees up capital:

The use of the $0.28 per share Core FFO for funding smaller ventures must be viewed against the backdrop of the pending merger. The company declared a common stock dividend of $0.10 per share for Q2 2025, paid July 24, 2025, but has since suspended future common stock dividends pending the merger close. The total transaction value is approximately $1.1 billion, and the deal is expected to close in the fourth quarter of 2025. This pending transaction fundamentally changes the near-term capital allocation strategy away from organic diversification funding.

Key operational and strategic data points related to the portfolio and diversification efforts include:

• In-place occupancy as of June 30, 2025: 82.5%.
• Occupancy including signed leases not yet occupied: 86.8%.
• Total leasing activity in Q2 2025: approximately 355,000 square feet.
• Same Store Cash NOI increase for the three months ended June 30, 2025: 1.8% year-over-year.
• Preferred Stock (6.625% Series A) dividend paid Q2 2025: $0.4140625 per share.

Finance: draft pro-forma balance sheet reflecting the $296.0 million Phoenix sale by next Tuesday.