City Office REIT Announces Definitive Merger Agreement with MCME Carell Holdings, LP and MCME Carell Holdings, LLC

Strategic Insights -

City Office REIT, Inc. has entered into a definitive merger agreement with MCME Carell Holdings, LP and MCME Carell Holdings, LLC, under which MCME Carell will acquire all of City Office's issued and outstanding shares of common stock for $7.00 per share in cash. The transaction, valued at approximately $1.1 billion, is subject to customary closing conditions and is expected to close in the fourth quarter of 2025.

The transaction represents a premium of 26% to City Office's common stock closing share price on the NYSE on the last trading day prior to the announcement of the Transaction, and a 39% premium to the volume-weighted average share price on the NYSE over the previous 90 days. Upon the closing of the Transaction, holders of City Office's 6.625% Series A Cumulative Preferred Stock will receive cash equal to $25.00 per share, plus all accrued and unpaid distributions (whether or not declared, and subject to deduction for any withholding tax) up to, but excluding, the date the Transaction is consummated.

"After conducting an extensive process to explore potential strategic alternatives, we are pleased to have reached an agreement with MCME Carell," said James Farrar, City Office's Chief Executive Officer. "In light of a challenging environment for the office sector, this Transaction delivers immediate and significant value to our shareholders."

Key Takeaways:

  • City Office REIT has entered into a definitive merger agreement with MCME Carell Holdings, LP and MCME Carell Holdings, LLC, under which MCME Carell will acquire all of City Office's issued and outstanding shares of common stock for $7.00 per share in cash.
  • The transaction is valued at approximately $1.1 billion and is subject to customary closing conditions.
  • Upon the closing of the Transaction, holders of City Office's 6.625% Series A Cumulative Preferred Stock will receive cash equal to $25.00 per share, plus all accrued and unpaid distributions (whether or not declared, and subject to deduction for any withholding tax) up to, but excluding, the date the Transaction is consummated.
  • James Farrar, City Office's Chief Executive Officer, stated that the Transaction delivers immediate and significant value to the shareholders in light of a challenging environment for the office sector.
  • The Transaction has been unanimously approved by City Office's Board of Directors.
  • The Transaction is expected to close in the fourth quarter of 2025.
  • The closing of the Transaction is subject to customary conditions, including the approval of City Office shareholders.
  • City Office will pay its previously announced second quarter dividend on July 24, 2025, but the City Office Board of Directors has resolved to suspend future quarterly common stock dividend payments through the expected close of the Transaction.

Statistics:

  • The transaction is valued at approximately $1.1 billion, including the assumption or repayment of indebtedness, the redemption of the Company's issued and outstanding preferred stock, and the sale of the Company's Phoenix portfolio.
  • The Transaction represents a premium of 26% to City Office's common stock closing share price on the NYSE on the last trading day prior to the announcement of the Transaction.
  • The Transaction represents a 39% premium to the volume-weighted average share price on the NYSE over the previous 90 days.
  • The closing of the Transaction is expected to occur in the fourth quarter of 2025.

Sources:

  • City Office REIT, Inc. press release dated July 24, 2025.
  • Form 8-K filed by City Office REIT, Inc. on July 24, 2025.
  • Annual Report on Form 10-K for the year ended December 31, 2024 filed by City Office REIT, Inc. on February 20, 2025.
  • Proxy statement filed by City Office REIT, Inc. on March 12, 2025.