Rlj Lodging Trust · NYSE:RLJ
Rlj Lodging Trust — Investor Presentation (October 2014)
30 slides from Rlj Lodging Trust's investor presentation, October 2014
Slide 1: Investor Presentation
Investor Presentation October 2014
Slide 2: Investment Highlights
Investment Highlights • Seasoned management team with proven track record of success • Proven investment strategy focused on upscale, focused-service and compact full-service hotels • Attractive platform with significant scale and high-quality portfolio • Strong internal and external growth prospect
Slide 3: Demonstrated Track Record as a Public Company
Demonstrated Track Record as a Public Company RLJ has consistently met or exceeded its guidance, with more than three years of solid performance. Since going public, RLJ has: • Acquired 27 properties in key high-growth markets totaling more than $1.1 billion • Generated significant RevPAR growth (~3
Slide 4: Attractive Relative Valuation vs. Lodging REIT Peers
Attractive Relative Valuation vs. Lodging REIT Peers TEV/2014E EBITDA (1) TEV/2015E EBITDA (1) 20.0x 19.1x 20.0x 17.7x 18.0x 17.0x 18.0x 16.6x 15.7x 15.5x 15.2x 15.4x 16.0x 14.9x 14.8x 14.7x 14.4x 14.4x 16.0x 14.0x 13.9x 13.8x 13.7x 13.7x 13.6x 13.5x 13.3x 14.0x 14.0x 12.7x 12.6x 12.6x 12.0x 12.0x 1
Slide 5: Delivering Attractive Shareholder Total Returns
Delivering Attractive Shareholder Total Returns Since its IPO, RLJ has delivered a total return of approximately 83% • RLJ’s prudent capital allocation, proactive balance sheet management and operational excellence continue to produce attractive returns to investors • RLJ’s strong performance and so
Slide 6: Attractive Relative Total Returns
Attractive Relative Total Returns Absolute and Relative Performance vs. Peers Stock Price as of Relative Relative Ticker 5/10/2011 9/26/2014 Total Returns to RMZ (%) to RLJ (%) RMZ 33.8% -- (49.5%) Public Lodging REITs CHSP $17.27 $29.45 100.8% 67.0% 17.5% PEB $21.31 $38.61 96.9% 63.1% 13.6% RLJ $18
Slide 7: Experienced Management with Proven Track Record
Experienced Management with Proven Track Record Deep and experienced senior management team that has worked together for over ten years and has over 150 years of combined lodging and real estate experience • Strong platform with significant expertise in acquisitions, asset management and portfolio m
Slide 8: Proven Investment Strategy
Proven Investment Strategy Create shareholder value through prudent capital investments and aggressive asset management • Acquire premium branded focused-service and compact full- service hotels with Marriott, Hilton and Hyatt flags Investment Thesis − Courtyard by Marriott, Hilton Garden Inn, Hyatt
Slide 9: Q2 2014 Highlights
Q2 2014 Highlights • Operational − Pro forma RevPAR increased 6.6% year-over-year for Q2 2014 − Pro forma Hotel EBITDA margin increased 95 basis points to a quarterly record high of 38.5%(1) − Pro forma Consolidated Hotel EBITDA increased 8.9% to $114.6 million (1) • Capital Allocation − Acquired th
Slide 10: Significant Value Creation
Significant Value Creation Extensive experience creating significant value through complex renovations / conversions • Create additional revenue opportunities through increased room count and rebrandings Humble Tower Apartments -> SpringHill Suites Vantaggio Suites Cosmo -> Courtyard Residence Inn A
Slide 11: Recent Brand Conversion Ramp Up
Recent Brand Conversion Ramp Up Ramp up of recent brand conversions has driven significant RevPAR growth • RevPAR growth for the five recent conversions increased 12.7% in Q2 2014 over prior year • Acquiring opportunistic properties is part of core investment strategy • Scale of RLJ portfolio and ex
Slide 12: Increasing West Coast Presence – Hyatt Portfolio
Increasing West Coast Presence – Hyatt Portfolio Acquisition of a 10-hotel portfolio from Hyatt significantly increases RLJ’s presence on the West Coast • Acquired a portfolio of 10 Hyatt, Hyatt Place and Hyatt House branded hotels totaling 1,560 rooms located primarily in California • Exemplifies t
Slide 13: Hyatt Portfolio Transaction
Hyatt Portfolio Transaction Hyatt House Emeryville SF Bay Area – Hyatt Market Street, the Woodlands – Hyatt House Santa Clara – 234 rooms 70 rooms 150 rooms Hyatt House Charlotte / Center City – Hyatt House San Jose / Silicon Valley – Hyatt Place Madison / Downtown – 163 rooms 164 rooms 151 rooms 13
Slide 14: Recent Acquisitions
Recent Acquisitions Continue to execute investment strategy in core urban markets • Acquired Hilton Cabana Miami Beach for $71.7 million at a significant discount to replacement cost − The hotel’s RevPAR is expected to be more than a 60% premium to RLJ’s reported 2013 RevPAR(1) • Acquired newly reno
Slide 15: Active Capital Recycling Program
Active Capital Recycling Program Disciplined disposition process – sold 15 assets for approximately $130M based on operating performance, market concentration, and pending capital requirements (1) RevPAR Comparison ADR Comparison $125.00 $150.00 $141.25 $106.11 $100.00 $125.00 $104.69 $71.56 $100.00
Slide 16: Strong Balance Sheet – Limited Near Term Debt Maturities
Strong Balance Sheet – Limited Near Term Debt Maturities RLJ continues to strengthen its balance sheet by increasing the number of unencumbered assets, reducing interest rates, and staggering debt maturities • Unencumbered asset pool of 116 assets, representing approximately 73% of 2013 Pro forma Co
Slide 17: Significant Cash From Operations
Significant Cash From Operations RLJ’s portfolio generates significant cash from operations to fund acquisitions, value-add renovations, and dividends • Since going public, RLJ has conducted only two follow-on offering with net proceeds of approximately $560 million Dividends (1) Free Cash Flow (2)
Slide 18: Guiding Principles
Guiding Principles Continue to execute proven investment strategies Drive operating performance − Increase RevPAR premiums and operating margins through aggressive asset management and asset repositioning Prudent capital allocation − Continue to enhance portfolio quality through selective acquisit
Slide 19: Company Overview
Company Overview
Slide 20: Superior Focused-Service / Compact Full-Service Model
Superior Focused-Service / Compact Full-Service Model Target premium branded focused-service and compact full-service hotels J.D. Power & Associates 2014 North American Hotel Guest Satisfaction Guest Satisfaction Ranking Among… Rank Brand Strong 1 Loyalty Programs 2 Upper Extended Stay Segment 3 1 W
Slide 21: Geographic Diversification and Strong Market Presence
Geographic Diversification and Strong Market Presence RLJ owns 150 properties, 148 hotels with approximately 23,300 rooms and two planned hotel conversions located in 21 states and the District of Columbia • Approximately 98% of the portfolio is Marriott, Hilton or Hyatt branded (1) • RLJ’s top 50 h
Slide 22: Strong Platform with Significant Scale
Strong Platform with Significant Scale RLJ is the 2nd largest lodging REIT and the largest REIT in the focused-service category (1) Adjusted Corporate EBITDA (TTM as of June 30, 2014) (2) ($ in millions) $1,331 $500 $400 $333 $327 $333 $300 $276 $234 $220 $216 $200 $185 $149 $137 $111 $100 $63 $0 Ho
Slide 23: Significant Growth Potential
Significant Growth Potential
Slide 24: Existing Portfolio Positioned for Outsized Growth
Existing Portfolio Positioned for Outsized Growth Strong growth embedded within existing portfolio • Acquired 51 assets for a total purchase price of approximately $2.2 billion over the past four years in core urban markets Portfolio Mix Change − New York City, Washington D.C., Los Angeles, Boston,
Slide 25: Superior Asset Management Program
Superior Asset Management Program RLJ has a proven asset management platform that supports investment efforts • In-house operational expertise strengthens investment underwriting process • Asset management expertise promotes effective utilization of capital − Franchise requirements − Asset preservat
Slide 26: Value Add – Complex Renovations
Value Add – Complex Renovations In-house design and construction team with extensive experience navigating complex renovations • Dedicated design and construction team Brand Conversions Location Status performs thorough due diligence prior to Red Roof Inn → Fairfield Inn & Suites DC Complete any ass
Slide 27: Attractive Focused-Service Acquisition Environment
Attractive Focused-Service Acquisition Environment More targets with less competition: RLJ benefits from both a large universe of acquisition targets and a limited universe of competing public buyers Domestic System-Wide Hotels by Brand Premium Branded Focused-Service – 5,752 Hotels Upper Upscale Fu
Slide 28: Disciplined Investment Strategy
Disciplined Investment Strategy Proven track record of completing attractive acquisitions • Focus on limited bid and off-market transactions • Leverage relationships with developers, owners, managers and lenders to access deals • Strong balance sheet provides a significant advantage • Continue to pu
Slide 29: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, and the assumptions upon which those statements are ba
Slide 30: Significant Growth Potential
Significant Growth Potential
RLJ Lodging Trust — Investor Presentation (October 2014) on 6ix