City Office REIT, Inc. (NYSE:CIO-A) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On October5, 2017, a subsidiary (the “Borrower”) of City Office REIT, Inc. (the “Company”) entered into a Loan Agreement (the “Loan Agreement”) with Metropolitan Life Insurance Company, as lender (the “Lender”). The Loan Agreement provides for a $47,000,000 loan (the “Mission City Loan”) with a fixed interest rate of 3.78%per annum and a scheduled maturity date of November1, 2027 (the “Maturity Date”). The Mission City Loan is evidenced by a promissory note made by the Borrower in favor of the Lender and was funded in a single draw at closing on October5, 2017. The promissory note is secured by a first mortgage and assignment of leases and rents at the Mission City Corporate Center, acquired by the Company on September29, 2017 as part of the Company’s previously-disclosed acquisition of a ten-building portfolio and five-acre land parcel in San Diego, California.
Monthly payments under the Loan Agreement shall be interest only in the amount of $148,050.00 per month for the first sixty months following the initial funding date and will consist of principal and interest in the amount of $218,465.19 per month thereafter until the Maturity Date, at which time all accrued interest and outstanding principal shall be due. The Loan Agreement prohibits any prepayment of the Mission City Loan balance before March1, 2021, at which time the Borrower shall have the right to prepay amounts outstanding under the Mission City Loan, subject to certain prepayment fees and premiums. In addition, beginning 120 days prior to the Maturity Date, the Mission City Loan may be prepaid in full without payment of any prepayment fees or premiums.
The Loan Agreement contains customary representations, warranties, covenants, terms and conditions. The occurrence of an event of default under the Loan Agreement could result in the Mission City Loan and other obligations becoming immediately due and payable and allow the Lender to exercise all rights and remedies available to it.
|Item 1.01.||Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.|
The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.