The city office buys and sells commercial property. The REIT pays a lot of attention to good office buildings.
The CIO was in charge of 60 properties. Most of them were Class A core assets with good tenants. About 70% of their total portfolio is made up of investment-grade tenants, and the average time left on their leases is about 12 years.
Even during the pandemic, they got 99% of their rent, which shows that their tenants are reliable.Most of the properties are near the Sun Belt of the United States, where the population has grown quickly since the pandemic.
The CIO’s recent financial success could be due in part to this fast growth. The trust made a lot of money in the third quarter. The net income and net profit margins were both higher than the same time last year by more than 100%.
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Funds from Operations (FFO) also shocked the market by coming in 2.5% higher than expected. FFO is a key financial metric used to measure the operating performance of REITs, and analysts pay close attention to it when deciding whether or not to buy a REIT.
The CIO has beaten the consensus of FFO analysts for four consecutive quarters, which shows that the company is doing better than expected and making more money. Even though it has done well overall, the CIO has had trouble keeping up its price performance.
As investors flee to safer investments because interest rates are going up, shares have fallen along with the rest of the REIT sector. CIO is almost 61% lower than its all-time high in January 2022, and it’s getting close to its all-time low of $6.
But since the market cap is only $332 million, the direction of the price could change a lot if the market conditions were right. The most surprising thing about the trust’s value is that CIO’s price-to-earnings ratio is only 0.82x, which is very low for the REIT sector. At 5.40x, its P/FFO, which is another REIT metric, is also low.
No one knows if or when the stock price will go up again, but in the meantime, shareholders can enjoy a generous dividend of 9.55%. That’s not bad, given that the average return on the stock market is 10% per year.
On January 24, 2023, all stockholders who owned shares as of the end of business on January 10, 2023, will get their next quarterly dividend payment. The difference between the financial performance and the share price could be a sign that investors have a chance to make money.