8-K: City Office REIT Acquired by MCME Carell for $7.00/Share

City Office REIT, Inc. has completed its acquisition by MCME Carell, with common stockholders receiving $7.00 per share in cash.

Summary

• City Office REIT, Inc. completed its merger with MCME Carell Merger Sub, LLC, a wholly owned subsidiary of MCME Carell Holdings, LP, on January 9, 2026.
• Each share of common stock was cancelled and converted into the right to receive $7.00 in cash, without interest and subject to withholding tax.
• Each share of 6.625% Series A Cumulative Redeemable Preferred Stock was redeemed for $25.00 per share, plus any accrued and unpaid distributions, subject to withholding tax.
• All outstanding Company RSU Awards and Company PSU Awards became fully vested and converted into cash payments based on the merger consideration.
• The Credit Agreement, dated March 15, 2018, was paid off and terminated, discharging all outstanding obligations and related guarantees, liens, and security interests.
• City Office REIT's common stock and Series A Preferred Stock were suspended from trading on the New York Stock Exchange (NYSE) effective prior to the opening of trading on January 9, 2026, and will be delisted.
• The company intends to file a Form 15 with the SEC to suspend its reporting obligations under Sections 13 and 15(d) of the Exchange Act.
• Over 98% of voting stockholders supported the acquisition, reinforcing the merits of the transaction.

Sentiment

Score: 7

Explanation: The completion of a previously announced merger at the agreed-upon terms, with strong shareholder support, is a positive and expected outcome for the selling company's shareholders. The acquirer expresses optimism about future value creation in the office sector. The delisting and cessation of the company's public existence are inherent to the transaction but represent a loss of public investment opportunity.

Positives

• The acquisition delivered immediate and significant value to City Office REIT's shareholders.
• The transaction received strong support from stockholders, with over 98% of voting stockholders approving the acquisition.
• MCME Carell expressed excitement to commence work on creating value within the acquired portfolio.
• MCME Carell views this investment as furthering its partnership with Elliott Investment Management L.P. in the US commercial real estate space.
• MCME Carell maintains a continued belief in the recovery of the office sector and plans to invest in high-quality commercial real estate assets where value is seen from market dislocation.

Negatives

• City Office REIT's common stock and Series A Preferred Stock will no longer be listed on any public market.
• The separate existence of City Office REIT ceased, as it merged into Merger Sub.
• Holders of common and preferred stock ceased to have any rights as security holders of the Company, other than the right to receive the merger consideration.

Risks

• The outcome of any legal proceedings that have been or may be instituted against the Company and others following the announcement of 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 could impact the future operations of the acquired assets.
• Changes in global, regional, or local political, economic, business, competitive, market, regulatory, and other factors.

Future Outlook

MCME Carell is committed to creating value within the acquired portfolio and plans to continue investing in high-quality commercial real estate assets. This strategy is underpinned by a belief in the recovery of the office sector and an intention to capitalize on opportunities arising from market dislocation.

Management Comments

• "Today's closing concludes the delivery of immediate and significant value to CIO's shareholders as a result of the acquisition." James Farrar, City Office REIT's Chief Executive Officer.
• "This outcome, with over 98% of voting stockholders supporting the acquisition, reinforces the merits of the transaction and speaks to the hard work our team has done throughout this process." James Farrar.
• "We are pleased to have completed this transaction and are excited to have commenced our work to create value within this portfolio." Mukang Cho, Chief Executive Officer of Morning Calm Management, LLC.
• "This investment furthers our partnership with Elliott to pursue opportunities in the US commercial real estate space and underscores our partnership's continued belief in the recovery of the office sector." Mukang Cho.
• "We expect to continue to invest in high-quality commercial real estate assets where we see value resulting from the dislocation of the broader sector." Mukang Cho.

Industry Context

The acquisition of City Office REIT by MCME Carell, a joint venture of Elliott Investment Management and Morning Calm Management, signals a strategic move to capitalize on perceived value in the US commercial real estate sector, particularly within the office market. This transaction reflects a belief in the recovery of the office sector and an intent to invest in high-quality assets amidst broader market dislocation, aligning with trends of institutional investors seeking opportunities in potentially undervalued real estate segments.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders (Common Stock): Received $7.00 per share in cash, concluding their investment in the public company.
• Shareholders (Preferred Stock): Received $25.00 per share plus accrued distributions, concluding their investment.
• Employees: Equity award holders received cash payments. Potential difficulties in employee retention were mentioned as a risk in forward-looking statements.
• Creditors: The Credit Agreement was paid off and terminated, discharging all outstanding obligations.
• Management/Directors: Board members resigned; officers of the acquiring entity assumed roles in the surviving company.

Next Steps

• The NYSE will file a Form 25 Notification of Removal from Listing and/or Registration under Section 12(b) of the Exchange Act.
• The Company intends to file a Form 15 under the Exchange Act to suspend its reporting obligations.
• MCME Carell plans to create value within the acquired portfolio.
• MCME Carell expects to continue investing in high-quality commercial real estate assets.

Key Dates

Recommendation

For existing shareholders, the recommendation is effectively 'sell' as the company has been acquired, and shares are converted to cash. There is no longer a public market for the stock, and the company will be delisted. For new investors, the stock is no longer available for purchase on public exchanges.

Keywords

City Office REIT, CIO, Merger, Acquisition, MCME Carell, Elliott Investment Management, Morning Calm Management, Commercial Real Estate, Office Sector, Delisting, REIT, Stock Acquisition, Preferred Stock Redemption