Slide 1: Regency Affiliates (OTC: RAFI) Investor Presentation
Regency Affiliates (OTC: RAFI) Investor Presentation October 24-25, 2016
Slide 2: Slide 2
Slide 3: Disclaimers
Disclaimers Not an Offer to Sell Securities This presentation is not, and under no circumstances is to be construed as, an offer to sell, or the solicitation of an offer to buy, securities. An offering of securities, if any, in connection herewith will only be made in compliance with the registratio
Slide 4: Presenters
Presenters Laurence Levy Chairman and Chief Executive Officer John Ryan Chief Financial Officer 3
Slide 5: Agenda
Agenda Topic Page # Company Overview 5 Valuation – Why We are Here Today 10 Self-Storage Overview 17 Security West and Mobile Energy 25 Appendix 27 4
Slide 6: Company Overview
COMPANY OVERVIEW REGENCY
Slide 7: Company Overview
Company Overview Description Current Corporate Structure • Regency Affiliates, Inc. (OTC: RAFI) is an OTC listed company with a focus on investing in assets that generate long-term, predictable and sustainable returns on shareholder capital • The Company targets hard assets in the infrastructure, 50
Slide 8: Overview of Current Holdings
Overview of Current Holdings Portfolio of assets with long-tenured, blue chip customers (U.S. Government and Kimberly Clark) and recession-proof dynamics Security West Mobile Energy Storage Depot Description A limited partnership interest in the A partnership interest alongside Detroit A portfolio o
Slide 9: Regency Affiliates' Timeline
Regency Affiliates’ Timeline Since Hyde Park’s initial investment, Regency has been focused on growth and value generation for shareholders Nov 1994 Oct 2002 Apr 2004 Mar / Apr 2016 2016+ Regency Affiliates Hyde Park Regency acquires Regency raises ~$9 million Regency pursues acquires 50% identifies
Slide 10: Investment Highlights
Investment Highlights Regency is well-positioned to leverage our core assets to expand the portfolio and continue delivering attractive, predictable returns Stable, Predictable Cash Flow Aligned Quarterly Management and Dividend Shareholders (2.5% Yield) Significantly Diverse Portfolio Undervalued M
Slide 11: Valuation – Why We Are Here Today
VALUATION – WHY WE ARE HERE TODAY 10
Slide 12: Sum of the Parts
Sum of the Parts A simple, conservative sum of the parts showcases the underlying value of our assets A+ B + C +D= E Security Mobile Self Cash Regency West Energy Storage Asset Value In the following slides we present both a conservative and an upside scenario for each component of Regency, ultimate
Slide 13: A: Security West Valuation
A: Security West Valuation In 2015 we completed an appraisal on the facility; 15 year lease is up for renewal in October 2018 Conservative Upside Security Valuation $54 million $67 million West Rationale Lease is not renewed Lease is renewed $54 - $67 Million The appraiser provided a valuation In a
Slide 14: B: Mobile Energy Valuation
B: Mobile Energy Valuation Fifteen year offtake agreement with Kimberly Clark is up for renewal in 2019 Conservative Upside Valuation Mobile (Present Value) $10 million $28 million Energy Rationale Contract is not renewed Contract is renewed $10 - $28 Million We would continue to receive a With a ne
Slide 15: C: Self-Storage Valuation
C: Self-Storage Valuation Recently acquired portfolio of self-storage assets are exceeding expectation and generating strong cash flow Conservative Upside Self Valuation $10 million $12 million Storage Rationale In April 2016 we invested $11.2 million of equity in our $10 - $12 self-storage assets.
Slide 16: Sum of the Parts – Conservative + Upside Cases
Sum of the Parts – Conservative + Upside Cases In both the conservative case and the upside case, our asset value far outpaces the level our share price implies Security Mobile Self Asset Conservative + + + Cash = West Energy Storage Value $54 $10 $10 $5 $78 Million Million Million Million Million S
Slide 17: Upside to Current Share Price
Upside to Current Share Price Conservative Upside $ in millions except for share price $ in millions except for share price Conservative Asset Value $78.3) Upside Asset Value $111.8) Less: Estimate of Overhead1 ($8.4) Less: Estimate of Overhead1 ($8.4) Equity Value $69.9 Equity Value $103.4 Shares O
Slide 18: Self-Storage Overview
SELF-STORAGE OVERVIEW 17 AFFILIATES
Slide 19: Investment Rationale
Investment Rationale Self-storage represents an opportunity to generate significant returns with minimal downside risk Self-Storage Thesis Key Facts • Self-storage is one of the most secure, predictable and downside- • The top 6 self-storage companies (Public Storage, Extra Space, protected asset cl
Slide 20: Key Metrics and Public Comparables
Key Metrics Strong ROI with Low Volatility Representative Unit Pricing Over Time $200 $176.85 $180 $160 $140.07 $139.56 $140 $120 $109.00 $100 $80 $60 $40 $20 $0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Non Climate Controlled 10x10 Climate Controlled 10x10 Source: National Storage Affiliate
Slide 21: Self-Storage Investment Highlights
Self-Storage Investment Highlights Stable, Predictable Cash Flow Positive Barriers to Entry Occupancy and Demand Trends Self Storage Capital-Efficient Strong Pipeline of Acquisition Opportunities Structure Outsized Revenue Partnership with Growth Sector Experts Opportunities 20
Slide 22: Existing Assets Overview
Existing Assets Overview Description Overview • In April 2016, Regency acquired a portfolio of five self- storage facilities in and around Harrisburg, Pennsylvania • Harrisburg is a growing metropolis with favorable demographic and household income dynamics, which are both leading indicators of dema
Slide 23: Overview of Harrisburg, PA Facilities
Overview of Harrisburg, PA Facilities Portfolio of properties with strong local population dynamics and opportunity for growth Property Northeast East North West South Address 6325 Allentown Blvd 321 Milroy Rd 4401 N. 6th Street 350 S. 7th Street 115 Cumberland Pkwy Area Harrisburg Harrisburg Harris
Slide 24: Overview of Harrisburg, PA Facilities (Cont…)
Overview of Harrisburg, PA Facilities (Cont…) Clean and attractive facilities located just a few miles apart allowing managers to allocate customers appropriately and price efficiently 1. Northeast 3. North 5. South 2. East 4. West North Northeast East West South 23
Slide 25: Storage Depot – Financial Projections
Storage Depot – Financial Projections Key Metrics Purchase Price $35,000,000 Regency Equity Investment $11,223,698 Cap Rate at Purchase 6.1% Harrisburg (Storage Depot) TTM at Close Year 1 Year 2 Year 3 Year 4 Year 5 Rental Revenue (net of losses / vacancies) $3,058,982 $3,309,355 $3,535,142 $3,691,0
Slide 26: Security West and Mobile Energy
SECURITY WEST AND MOBILE ENERGY 25
Slide 27: Overview
Overview Regency’s two other assets provide a steady stream of earnings to support future acquisitions and dividend growth Security West Mobile Energy • Security West has been the Social Security Administration’s (SSA) • In partnership with Detroit Edison, we own and manage a power headquarters buil
Slide 28: Appendix
APPENDIX REGENCY 27
Slide 29: Management Team
Management Team Laurence S. Levy, CEO • Founder and Chairman of Hyde Park Holdings, LLC, an investment firm focused on middle market businesses founded in 1987 • Since its founding, Hyde Park and its co-investors (a broad cross section of institutional investors, public equity markets and family off
Slide 30: Slide 30
Slide 31: Contact
570 Lexington Avenue 44th Floor New York, NY 10022 (212) 644-3450 www.regencyaffiliates.com