CIO
City Office REIT, Inc.
$6.99
Real Estate Investment Trust
85%
P/FFO × Office REIT Multiple
Strong
·
Conviction
Undervalued
Trading 51.6% below fair value
You pay
$6.99
Bear
$11.29
Fair
$14.44
Bull
$17.59
Bear
$11.29
+61.5%
$1.03 FFO × 13x
Fair
$14.44
+106.6%
$1.03 FFO × 17x
Bull
$17.59
+151.7%
$1.03 FFO × 21x
Adjust Assumptions
16.9x
$
Key Value Driver
FFO/share ($1.03) × office P/FFO multiple
Implied Market Multiple
6.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$15.00
Divergence from AlphaVal
4%
Summary
At $1.03 FFO/share with a 17x office REIT multiple, the base-case value is $14.44 per share. Dividend yield: 5.7%. DDM cross-check: $7.45.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 5.7% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $7.45 (48% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify