Real Estate Investment Trust (City Office) to undergo private acquisition worth approximately $1.1 billion in forthcoming transactions

City Office REIT, a real estate investment trust focused on office properties primarily in Sun Belt U.S. markets, is being taken private by MCME Carell Holdings in a deal valued at approximately US$1.1 billion.

The acquisition, announced in late July 2025, will see MCME Carell paying $7 per common share in cash, representing a 26% premium over City Office’s closing stock price before the announcement and a 39% premium to the 90-day volume-weighted average. Preferred shareholders will be compensated with $25 per share plus accrued distributions.

MCME Carell is a joint venture affiliated with Elliott Investment Management and Morning Calm Management, firms known for multi-strategy investing and commercial real estate credit, managing extensive property portfolios and real estate strategies totaling tens of millions of square feet.

The deal includes the assumption of City Office REIT's debt and is subject to meeting various conditions, including the sale of specific properties. The closing of the deal is scheduled for the last quarter of the year, but is not guaranteed and is subject to meeting all necessary conditions.

City Office REIT owns and operates over 5 million square feet of office space mainly in 18-hour cities across the Southern and Western United States, including Phoenix, which is subject to a portfolio sale condition in the merger agreement. The office sector has been challenging recently due to evolving work patterns, hybrid and remote work trends, and market uncertainties impacting office demand and valuations.

The acquisition allows MCME Carell and its affiliates to manage and potentially reposition City Office’s portfolio with longer-term horizons and less short-term market scrutiny. It reflects a continuing trend of private equity and real estate credit firms capitalizing on dislocations in the office sector by acquiring assets at potentially attractive valuations with plans to adapt or redevelop.

For City Office shareholders, the deal delivers immediate cash value with a notable premium despite broader office sector headwinds. The deal provides a shorter timetable for City Office REIT's shareholders to realize $7/share of value.

Shares of City Office REIT rose more than 24% to $6.92 in morning trading, their highest since March 2023. The deal was not influenced by the recent rise in City Office REIT's share price.

The pandemic has led to a significant decrease in demand for office spaces, pushing vacancy rates to historic lows. Higher borrowing costs have made it more expensive for builders to finance or re-finance their properties.

City Office REIT owns office buildings in various cities beyond those mentioned earlier. Vancouver-based City Office REIT has agreed to be taken private by MCME Carell, an affiliate of hedge fund Elliott Investment. Morning Calm Management, another affiliate of MCME Carell, believes in the recovery of the office sector and its interest in acquiring high-quality office assets in strong growth markets.

The deal signals ongoing consolidation and repositioning activity within office REITs, especially those concentrated in Sun Belt markets where office demand dynamics remain in flux. Robert Stevenson, analyst at financial advisory firm Janney Montgomery Scott, mentioned that the deal takes additional upside off the table.

In summary, MCME Carell’s acquisition of City Office REIT amid a troubled office real estate environment highlights a strategic retreat from public markets for City Office and an opportunity for the buyer to leverage private ownership in navigating sector challenges and opportunities.

[1] GlobeSt.com. (2025, July 30). MCME Carell to Acquire City Office REIT for $1.1 Billion. Retrieved from https://www.globest.com/news/national-news/243336-mcme-carell-to-acquire-city-office-reit-for-1-1-billion

[2] Yahoo Finance. (2025, July 30). City Office REIT to be taken private in $1.1 billion deal. Retrieved from https://finance.yahoo.com/news/city-office-reit-taken-private-1-1-billion-deal-142300977.html

[3] The Wall Street Journal. (2025, July 30). City Office REIT Agrees to Be Taken Private by MCME Carell. Retrieved from https://www.wsj.com/articles/city-office-reit-agrees-to-be-taken-private-by-mcme-carell-11627410200

[4] National Real Estate Investor. (2025, August 3). Office REITs: The Troubled Sector. Retrieved from https://www.nreionline.com/office/office-rets-troubled-sector

The acquisition of City Office REIT by MCME Carell, a joint venture known for multi-strategy investing and commercial real estate credit, reflects a trend of private equity and real estate credit firms capitalizing on dislocations in the office sector, particularly in Sun Belt markets, as they aim to adapt or redevelop assets at potentially attractive valuations.
Despite the challenging office sector environment, the deal between City Office REIT and MCME Carell provides immediate cash value with a notable premium to City Office shareholders, allowing them to realize $7 per share swiftly, highlighting a strategic retreat from public markets for City Office and an opportunity for the buyer to navigate sector challenges and opportunities through private ownership.

Real Estate Investment Trust (City Office) to undergo private acquisition worth approximately $1.1 billion in forthcoming transactions