Compass Point reiterated a Buy rating and $15.50 price target on City Office REIT (NYSE: CIO) following the company's 3Q earnings report. During 3Q15 CIO acquired 2 properties for an aggregate purchase price of approximately $101M. With these acquisitions the company has completed $172.3M of acquisitions YTD and has therefore employed all of the capital raised in 4Q14. According to Management, CIO has one acquisition left in the pipeline for FY15, which it will fund with proceeds from the sale of Corporate Parkway.

Analyst Wilkes Graham commented, "We reiterate our Buy rating and $15.50 PT on shares of CIO. 3Q15 AFFO amounted to $0.26 per share versus a $0.235 dividend. During the quarter, CIO incurred notably higher free rent expenses, which we expect to carry into 2016. Even so, we still anticipate that CIO will continue to cover its dividend with AFFO on a quarterly basis going forward. Further, with shares of CIO stock remaining significantly undervalued, on the earnings call Management once again vocalized their aversion to raising equity at these levels. Instead, the Company will satisfy short-term capital needs with the sale of Corporate Parkway, one of its non-core assets, in 4Q15, and in the meantime work to raise valuations by increasing per share operating metrics and internalizing the management contract (in February 2016)."

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Shares of City Office REIT closed at $11.25 yesterday.