Acres Commercial Realty Corp. · NYSE:ACR
Acres Commercial Realty — Resource Capital — Credit Suisse Real Estate Conference 2007
24 slides from Acres Commercial Realty's conference presentation, Apr 12, 2007
Slide 1: Credit Suisse Real Estate Conference April 11, 2007
Credit Suisse Real Estate Conference April 11, 2007 CONFIDENTIAL
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the statements in this presentation constitute forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not his
Slide 3: Business Overview
Exchange / Ticker NYSE : "RSO" 144A Offering March 2005 $214.8 million Initial Public Offering - February 2006 27.6 million Follow-on Offering - December 2006 103.0 million Market Capitalization (1) 405.9 million Trust preferred - May / September 2006 50.0 million Investment Portfolio 1.8 billion Ex
Slide 4: Resource Capital Corporation
Resource Capital Corporation A commercial finance business structured as a REIT with substantial focus on commercial mortgage investments as well as commercial loans Provides high value, customized financing solutions Whole loans B notes Mezzanine loans Bank loans Small business loans and leases Sta
Slide 5: RCC - Investment Highlights
RCC - Investment Highlights Attractive Returns Declared 1Q07 dividend of $0.39, an annualized $1.56 run rate High Yielding Portfolio $1.8 billion portfolio with an average yield of 7.7% Predominantly secured commercial mortgages and rated secured corporate loans Match Funding Principle Have issued 4
Slide 6: RCC - Accomplishments
RCC - Accomplishments Built Out Origination Platform Bolstered capability to originate commercial real estate loans through addition of senior originators Have opened Los Angeles Office to focus on originating loans west of Denver Have continued to add originators and asset managers in New York, Phi
Slide 7: Resource America Relationship
Resource America Relationship Resource Capital is externally managed by a subsidiary of Resource America (Nasdaq:REXI) Resource America is a specialized asset management company that uses industry specific expertise to generate and administer investment opportunities for its own account and for outs
Slide 8: Experienced Senior Management
Experienced Senior Management David J. Bryant Alan F. Feldman Andrew Shook Crit DeMent Jeffrey D. Blomstrom Christopher D. Allen Kyle Geoghegan Darryl Myrose Jonathan Z. Cohen Edward E. Cohen David E. Bloom Gretchen L. Bergstresser Chairman 35 Chief Executive Officer 11 Chief Financial Officer 25 SV
Slide 9: Illustrative Portfolio Strategy
Illustrative Portfolio Strategy Illustrative Fully Deployed Portfolio Mix Asset Allocation Equity Allocation The flexibility of the Resource America platform provides access to attractive investments across a variety of economic environments 1st Qtr Commercial Real Estate-Related 0.36 ABS 0.24 Comme
Slide 10: Attractive Risk Adjusted Returns
Attractive Risk Adjusted Returns RCC portfolio is generating very attractive returns with CRE origination platform continuing to grow After Follow-on Offering, assumes fully ramped After Follow-on Offering, assumes fully ramped After Follow-on Offering, assumes fully ramped Portfolio Equity / Trups
Slide 11: RCC: Comprehensive Commercial Lending Platform
RCC: Comprehensive Commercial Lending Platform Apidos CDO I Apidos CDO III Term Facility Ischus CDO II Total Assets: $350 million $285 million $88 million $403 million Closing Date: 8/4/05 5/9/06 5/2006 7/27/05 Leverage: 11.3x 11.4x 19.7x 13.9x Ratings: Average of Ba3 to B1 Average of Ba3 to B1 N/A
Slide 12: Originated Loans vs. Investments
Originated Loans vs. Investments Whole Loans Whole Loans B-Notes Fees 1.0% in & out 1.0% in & out None Fixed/Floating Floating Floating Fixed Spread /Coupon L + 250 L + 250 8.16% LTV 79.9% 83.7% 79.9% Levered Yield 21.6% 23.5% 17.4% Term 2 years, 0.5 year extension 1.5 years, 0.5 year extension 10 y
Slide 13: Growth Strategy - Commercial RE Originations
Growth Strategy - Commercial RE Originations Commercial real estate and net lease market $3+ trillion Portfolio of approximately $730 million at 03/31/07 Approximately 70% of common equity and proceeds from TRUPS invested into Commercial RE Bolstered capability to originate commercial real estate lo
Slide 14: Power of the RRE Platform: Sourcing Capability
Power of the RRE Platform: Sourcing Capability Well over $4 billion in investments made RRE has deep knowledge of all major U.S. markets Strong relationships Deep relationships with borrowers, middle-market contacts and high-end brokers Established relationships bring repeat business Ability to cust
Slide 15: Full Service Real Estate Asset Management Platform
Full Service Real Estate Asset Management Platform Finance CFO Finance VP, Finance Finance Assistant Controller Finance Senior Accountant Finance Accountant Mgr. Finance A/P Specialist Finance Staff Accountant Finance Sr. Accountant Legal General Counsel RRE SVP Director of Acquisitions Sales & Mark
Slide 16: RCC Real Estate Team
RCC Real Estate Team As in its other businesses, Resource America has developed a strong team with extensive experience in the commercial real estate sector: Edward E. Cohen Chairman Jonathan Z. Cohen President & CEO Steven J. Kessler CFO of RAI John Boyt Executive VP Debt Origination 7 Additional P
Slide 17: Benefits of Direct Origination
Benefits of Direct Origination Produces collateral at increased spreads by eliminating the 'middle- man' Whole loan has an inherent benefit in long-term financing. Investment grade component of whole loans yield higher advance rates and lower borrowing cost Origination & Exit fees of up to 1% each i
Slide 18: RCC Platform Produces Enhanced Yields
RCC Platform Produces Enhanced Yields Strong Residential Rental Market Core San Francisco properties Limited new housing supply Experienced Local Borrower / Owner Acquisition and re-tenanting of nine building portfolio High net-worth, 3rd generation San Francisco property owner-manager Upside to Pro
Slide 19: Origination Process and Disciplined Credit Culture
Origination Process and Disciplined Credit Culture RRE's strategy is built on a foundation of deep market knowledge combined with the disciplined credit culture that Resource America brings to all of its operations: Market assessment - methodically assess real estate markets for trends, risks and op
Slide 20: CRE Loans Breakdown
CRE Loans Breakdown Funded Loans - Property Type Funded Loans - Property Location 1st Qtr Whole Loan 0.38 A Note 0.03 B Note 0.28 Mezz 0.31 1st Qtr CA 0.21 CT 0.02 FL 0.03 HI 0.04 NV 0.06 OR 0.01 NY 0.14 TX 0.03 AZ 0.05 CO 0.03 IL 0.03 IN 0.02 Other 0.3 TN 0.03 1st Qtr Condo-Conv 0.05 Hotel 0.22 Sto
Slide 21: Asset-Liability Management
Asset-Liability Management RCC actively manages the interest rate and mark-to-market risk associated with its investments Commercial Real Estate-Related Assets, Bank Loans and ABS-RMBS are match- funded via permanent CDO funding Closed RREF CDO 2006-1 that financed $345 million of commercial real es
Slide 22: Strong Financial Performance
Strong Financial Performance REIT Taxable Earnings ($ in millions) Dividends Declared Per Share Dividends Declared / Beginning Book Value (annualized) Regular Dividend Special Dividend 1Q06 0.239 2Q06 0.404 3Q06 0.49 4Q06 0.577 0.175 1Q07 0.655 2Q06 0.1103 3Q06 0.117 4Q06 0.1205 IQ07 0.1266 2Q06 6.4
Slide 23: Resource America Relationship
Resource America Relationship Resource America oversees day-to-day management of the REIT Corporate officers, asset management professionals, administrative personnel Asset sourcing, due diligence, servicing, monitoring, troubled asset resolution Infrastructure and proprietary analytics Hedging and
Slide 24: Investment Highlights
Investment Highlights An Integrated Commercial Finance Platform with Substantial Focus on Originating Commercial Mortgage Investments Disciplined Credit Culture With Proven Results Active Management of Interest Rate Risk Ability to Originate Transactions Offering a Comprehensive Solution to the Borr
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