MCME Carell, a joint venture of Elliott Investment Management and Morning Calm Management, closed its $7.00‑per‑share purchase of City Office REIT, Inc. (NYSE: CIO) on January 9 2026, ending the REIT’s public listing and transferring all outstanding common stock to the buyer. The transaction values CIO at roughly $1.1 billion, based on the $7.00 offer and the company’s then‑outstanding share count.
The $7.00 per‑share price represents a premium of 26% over City Office REIT’s closing price of $6.96 on the day before the announcement and 39% over the 90‑day volume‑weighted average price. The premium reflects the buyer’s confidence in the long‑term value of the Sun‑belt office portfolio and the strategic benefit of taking the REIT private in a market where office demand is under pressure from remote‑work trends and rising vacancy rates.
City Office REIT’s financial trajectory has been shaped by a deliberate deleveraging program that cut debt from $647 million in 2023 to $398 million in 2025, and by the sale of its Phoenix portfolio for $296 million (first closing $266 million). The company reported a GAAP net loss of $107.2 million, or ($2.66) per fully diluted share, in Q2 2025, with core FFO of $11.8 million ($0.28 per share) and AFFO of $3.0 million ($0.07 per share). These figures illustrate the REIT’s focus on cash‑generating assets while managing debt and operating losses in a challenging sector.
The strategic rationale for the deal centers on City Office REIT’s concentration in high‑growth Sun‑belt markets, which have shown resilience amid national office‑sector headwinds such as remote work, higher interest rates, and increased vacancy rates. By going private, the REIT can pursue a longer‑term, asset‑centric strategy without the quarterly earnings pressure of a public market. MCME Carell’s portfolio of Sun‑belt office properties aligns with this focus, positioning the combined entity to capture demand for quality, well‑located office space as corporate real‑estate needs evolve.
Management integration will see City Office REIT’s board and senior executives absorbed into MCME Carell’s governance structure. CEO James Farrar stated the transaction “delivers immediate and significant value to our shareholders,” while Mukang Cho, CEO of Morning Calm Management, expressed excitement about creating value within the portfolio and confidence in the office sector’s recovery. The integration is expected to streamline operations, reduce overhead, and unlock synergies from shared services and portfolio optimization.
The completion was met with strong investor support, reflected in the over 98% shareholder approval rate. The deal’s premium and the strategic alignment with Sun‑belt growth prospects signal confidence in the long‑term value of the combined portfolio, while the debt reduction and Phoenix portfolio sale provide a solid financial foundation for future growth.
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