City REIT Buyout Deal Opposed By Major Investor

A Showdown Over City Office REIT’s Future

Oksenholt Capital Management has gone public with sharp criticism of City Office REIT’s board and executive team, reports BusinessWire. The firm is calling for major changes in leadership and strategy. It is also urging shareholders to vote “no” on the company’s pending acquisition by affiliates of Elliott Capital (MCME Carell). In a detailed letter sent to CIO’s board chair, CEO Jon Oksenholt accused City’s leadership of mismanagement and of pushing a lowball deal without transparency or competitive bidding.

Investor Rebellion: “We’ve Lost Confidence”

The Arizona-based investment firm revealed it now owns hundreds of thousands of CIO shares—more than CEO James Farrar—making it a significant shareholder. Oksenholt slammed Farrar for earning over $2.3M in 2024 despite presiding over a sharp decline in stock value. City’s share price plummeted from $21.24 in 2022 to $5.57 by July 2025, wiping out over $600M in market cap.

Oksenholt Capital says it has “lost confidence in City’s present leadership” and criticized the board for failing to act decisively as shareholder value eroded. It also called out the company’s focus on ESG messaging over financial performance and shareholder accountability.

A “Liquidation Sale” Behind Closed Doors

Oksenholt strongly opposes the pending sale to MCME Carell. The firm claims the deal was negotiated privately, with no competitive process. It also argues that the offer severely undervalues the company. Oksenholt pegs City’s true book value closer to $15 per share, nearly triple the pre-merger price. It argues that the merger offer fails to maximize shareholder value.

Instead of selling to private equity on what it describes as unfavorable terms, Oksenholt is calling for an open bidding process. The firm believes this would allow better offers to emerge.

The Fix-It Plan

In its letter, Oksenholt laid out a detailed action plan to turn around the REIT:

• Cut $2–$7M in annual wasteful spending
  
• Reinvest savings into physical asset improvements and tenant retention
  
• Bring leasing in-house and reduce reliance on third-party vendors like JLL
  
• Cancel all Canadian office operations and shift leadership to be fully US-based
  
• Improve asset marketing and launch long-term capital plans
  
• Maintain and grow the current dividend through increased operational efficiency
  

It also calls for a full review of the company’s real estate holdings—especially underutilized land and parking—to unlock additional value.

The Call For New Leadership

Beyond operational reforms, Oksenholt wants a clean slate at the top. It is calling for new independent directors and a new US-based CEO. The firm also wants to end compensation structures that reward executives during periods of underperformance. It also raised concerns about potential conflicts of interest tied to the current management’s administrative agreements.

What’s Next

Oksenholt Capital says it remains committed to CIO’s long-term success and is open to presenting its plan directly to the board. It’s urging shareholders to reject the current merger deal and back a strategic shift to unlock the company’s full potential as a leading Sun Belt office REIT.

As shareholder activism grows in the public REIT space, this could signal a broader trend. Investors are increasingly pushing back against management teams and buyouts they believe undervalue long-term assets.