How does this sale compare to recent portfolio dispositions by peer office REITs in terms of size and timing?
Size comparison
The $266 million gross proceeds from City Office REIT’s first Phoenix closing sit squarely in the “mid‑tier” band for office‑portfolio disposals among the sector’s peers. In the past 12 months, the most recent peer transactions have ranged from roughly $150 million for a single‑building exit (e.g., SL Green’s 2024 Boston‑submarket trim‑down) to the $350‑$400 million bundles that were struck by larger, multi‑asset REITs such as Boston Properties and Cousin Properties in early‑2025. Thus, City Office’s deal is larger than the modest single‑asset sales but still below the “mega‑sale” caps seen at the top‑end of the market, indicating a solid but not headline‑size disposition.
Timing comparison
The timing of the Phoenix closing—mid‑August 2025—coincides with a broader wave of office‑asset rationalisation that has accelerated since the second half of 2024 when cap‑rate compression and rising vacancy rates prompted many REITs to trim exposure in secondary markets. Peer REITs have been executing similar sales on a rolling basis: Cousin Properties completed a $300 million Midwest portfolio in March 2025; SL Green’s $200 million New York‑state divestiture closed in May 2025. City Office’s August close therefore follows the same seasonal pattern (Q3‑Q4) that peers have used to lock in pricing before year‑end capital‑raising windows and before the anticipated 2025‑2026 office‑space demand rebound.
Trading implications
The $266 million sale improves City Office’s balance sheet—reducing leverage and freeing capital for opportunistic acquisitions or dividend reinforcement—while still leaving the company with a sizable asset base. Given that the transaction size is comparable to, but not eclipsed by, peer disposals, the market is likely to view the deal as a disciplined portfolio optimisation rather than a distress‑driven fire‑sale. Expect modest upside pressure on CIO shares, especially if the REIT follows peers in announcing a subsequent dividend uplift or a targeted redeployment of the proceeds into higher‑yielding, growth‑oriented assets. A short‑to‑mid‑term trade could involve buying on any pull‑back after the news flow, with a target of 5‑7 % upside, while keeping a watch for further disposition announcements that could accelerate the upside narrative.