Gramercy Property Trust — Investor Presentation (October 2013)
39 slides from Gramercy Property Trust's investor presentation, Oct 7, 2013
Slide 1: Business Plan Update October 7, 2013
Business Plan Update October 7, 2013
Slide 2: Forward-Looking Information/NOI and Cap Rate Disclaimers
Forward - Looking Information/NOI and Cap Rate Disclaimers Cautionary Note Regarding Forward - Looking Information This investment presentation contains "forward - looking statements" based upon the Company's current best judgment and expectations . You can identify forward - looking statements by t
Slide 3: Introduction
Introduction See es GRAMERCY PROPERTY TRUST 2
Slide 4: Business Plan – 2013-2015
Business Plan – 2013 - 2015 ▪ Sell CDOs – Sold servicing contracts, bonds in Q1 - 2013 ▪ Invest cash to create recurring cash flow – S ince July 2012, 19 transactions closed, generating total pro forma cash NOI of $ 30.8MM in Year - 1* ▪ Maximize Gramercy Asset Management profit center – N et pre -
Slide 5: Private Placement Offering Summary
Private Placement Offering Summary ▪ Gramercy Property Trust (NYSE: GPT ) ▪ Private placement of common stock ▪ $4.11 per share ▪ 11.5 million primary shares , $47.4 million in aggregate ▪ < 20% (per NYSE 20% limitation ) ▪ One contingent value right (“CVR”) will be issued per share; detachable, wit
Slide 6: Our Company
□ Gramercy Property Trust is a fully - integrated, self - managed commercial real estate investment company focused on acquiring and managing income - producing office and industrial properties net leased to high quality tenants in major markets throughout the United States. We also operate an asset
Slide 7: Gramercy's Transformation
7 Gramercy’s Transformation We are 15 months into the transformation and momentum is building June 2012 Strategic review completion – GPT will remain independent and focus on building shareholder value by deploying the Company's capital into income - producing net leased real estate March 2013 Dispo
Slide 8: Top-10 Tenants and Overall Portfolio
Top-10 Tenants Year-1 GAAP NOI % of GAAP NOI Bank of America (NYSE: BAC) $13,886,847 41% KAR Auction Services (NYSE: KAR) 5,677,370 17% Preferred Freezer 2,347,500 7% Five Below (NASDAQ: FIVE) 1,820,390 5% YRC / New Penn (NASDAQ: YRCW) 1,740,532 5% Nestle (VTX: NESN) 1,068,600 3% FedEx (NYSE: FDX) 9
Slide 9: Industrial / Specialty Portfolio
Industrial / Specialty Portfolio 9 Dallas Miami Indianapolis Memphis NY/NJ Philadelphia Baltimore / Washington Atlanta Houston Orlando Warehouse/ Distribution Cross Dock Terminal Freezer / Cold Storage Specialty Markets Property Type Gramercy is targeting industrial properties in primary and strong
Slide 10: Asset Management Business
Asset Management Business ▪ Fully integrated real estate property and asset management business specializing in managing office and branch facilities leased to financial Institutions » A pproximately 550 facilities, 14.5 million square feet, $1 billion + in AUM » Approximately 60 people with offices
Slide 11: Investment Update
Investment Update See es GRAMERCY PROPERTY TRUST "
Slide 12: Investment Activity
Investment Activity 12 ▪ 19 investments closed - $363 MM (Q4 2012 – Present )* − Acquisition cap rate of 9.1% ( GAAP), 8.5% ( cash) − 12.1 - year average lease term − Approximately $30.8 MM in Year - 1 property level cash NOI ▪ 7 Pipeline Transactions - $130 MM** − Acquisition cap rate of 8.5% ( GAA
Slide 13: Current Liquidity Position (as of 9/12/2013)
Current Liquidity Position (as of 9/12/2013) ▪ Unrestricted cash balance of $40.0 MM* ▪ Additional Sources of Cash totaling $103.5 MM: $9.9MM from asset sales $10.7MM from servicer advance reimbursements $63.8MM from revolver availability from existing borrowing base + $19.1MM capacity for pip
Slide 14: Current Capitalization (as of 10/4/2013)
Current Capitalization (as of 10/4/2013 ) 14 *shares outstanding includes shares issued to PIPE investors, share price of $4.04 as of 10/4/2013 ** includes preferred equity outstanding of approx. $88MM ▪ Total Common and Preferred Equity Market Cap. of $376MM ** ▪ Total Common Equity Market Cap. of
Slide 15: Current Portfolio and Liquidity (as of 9/12/2013)
Current Portfolio and Liquidity (as of 9/12/2013 ) 15 Acquisition Capacity Sources Current Corporate Cash 9/10/13 39,980,000$ Line of Credit Proceeds on Borrowing Base 63,757,516$ Borrowing Capacity - Unsecured Pipeline 19,111,918$ CDO Servicing Advances 9,892,000$ Future BOA JV Sale Proceeds 10,687
Slide 16: Pipeline
Property Type Location Purchase Price Cap Rate GAAP Cap Rate Year-1 GAAP NOI Year-1 Cash NOI Lease Term Industrial Property Austin, TX $9,490,000 7.65% 8.44% $800,956 $725,985 15.0 Industrial Property Harrisburg, PA 8,613,000 6.90% 7.86% 676,982 594,297 10.3 Industrial Portfolio IN, IL, CA 55,800,00
Slide 17: Current Portfolio Acquisitions
Tenant Location MSA Sqft Purchase Price/sqft Rent/sqft Lease Expiration Acq. Cap Rate (cash) Acq. Cap Rate (GAAP) Year-1 GAAP NOI Year-1 Cash NOI Office Portfolio Phillips HQ (25%) Phillips Electronics Somerset, NJ New York/New Jersey 199,900 251.38$ 17.60$ Jan-21 7.16% 7.22% 907$ 879$ Phoenix Ops C
Slide 18: Appendix A
Appendix A See es GRAMERCY PROPERTY TRUST 18
Slide 19: Indianapolis Industrial Portfolio
Indianapolis Industrial Portfolio ▪ $27.1 million ($ 50 psf), $2.3 million GAAP NOI, $2.0 Cash NOI ▪ 100% occupied, > 80% investment grade * ▪ 10.2 - year average lease term ▪ Nestlé Waters North America. – division of Nestlé Waters , the world’s largest bottled water company, serving 130 countries
Slide 20: Bank of America Portfolio - Core
Bank of America Portfolio - Core ▪ $ 140.3 million ($ 92 psf), $ 13.9 million GAAP NOI (Gramercy interest ), $13.5 Cash NOI ▪ 98% occupied, 100% investment grade tenancy ▪ 10.1 - year average lease term ▪ Tenant: Bank of America, N.A., credit rating of Baa2/A - ▪ 1,530,000 sq. ft. (pro rata ) ▪ Cap
Slide 21: Five Below – Olive Branch, MS
Five Below – Olive Branch, MS (Memphis MSA) Distribution facility in the Olive Branch submarket of Memphis, TN ▪ Gramercy purchased for $24.7 million ($41 psf) in March 2013 ▪ Cap Rate 7.4% (GAAP), 7.0% (Cash) ▪ 100% leased to Five Below, Inc. through Dec. 2022 − Tenant has a termination option in 2
Slide 22: Apex Tool – Garland, Texas
Apex Tool – Garland, Texas (Dallas MSA) Manufacturing/distribution facility in the Garland submarket of Dallas, TX ▪ Gramercy purchased for $10.7 million ($31 psf) in March 2013 ▪ Cap Rate 7.8% (GAAP), 7.1% (Cash) ▪ 100% leased to Apex Tool Group, LLC through Sept. 2032 : − Apex is a global manufact
Slide 23: Con-way Truck Terminal – East Brunswick, NJ
Con - way Truck Terminal – East Brunswick, NJ ▪ Gramercy purchased for $11.7 million ($115,842/door) in March 2013 ▪ Cap Rate 8.1% (GAAP, Cash), CPI escalations ▪ 100 % leased to Con - way Freight Inc. through Jan. 2019 with three 10 - year renewal options: − Con - Way: $5.6 billion revenue in 2012,
Slide 24: Federal Express Freight – Atlanta, GA
Federal Express Freight – Atlanta, GA ▪ Gramercy purchased for $8.0 million ($44,663/door) in May 2013 ▪ Cap Rate 8.4% (GAAP), 7.6% (Cash) ▪ 100 % leased to FedEx Freight (guaranteed by FedEx Corp.) through May 2020 with two 5 - year renewal options: − FedEx Freight is the market leader in the LTL s
Slide 25: Federal Express Corp. – Bellmawr, NJ
Federal Express Corp. – Bellmawr, NJ (Philadelphia MSA) Shipping Facility serving Southern NJ / Philadelphia MSA ▪ Gramercy purchased for $4.2 million ($67 psf) in April 2013 ▪ Cap Rate 7.5% (GAAP), 7.0% (Cash) ▪ 100 % leased to FedEx Express through Oct. 2022 with two 5 - year renewal options: − Fe
Slide 26: Preferred Freezer – Hialeah, FL
Preferred Freezer – Hialeah, FL (Miami MSA) ▪ Build - to - suit agreement closed in May 2013 ▪ Gramercy will fund up to $25.0 million ($ 208 psf) though April 2014. Gramercy paid an initial advance of $1.4 million ▪ Cap Rate 9.39% (GAAP), 8.0% (Cash) ▪ 120,311 sf to - be - built cold storage facilit
Slide 27: Sovereign Bank Branch – Emmaus, PA
Sovereign Bank Branch – Emmaus, PA ▪ Gramercy purchased for $ 1.6 million ($ 333 psf) in June 2013 ▪ Cap Rate 10.3% (GAAP), 9.5% (Cash) ▪ 100 % leased to Sovereign Bank, N.A. through February 2019, with two 5 - year renewal options: − Sovereign is a private regional bank in the northeast U.S. As of
Slide 28: PNC Bank Branch – Calabash, NC
PNC Bank Branch – Calabash, NC ▪ Gramercy purchased for $ 600,000 ($ 293 psf) in June 2013 ▪ Cap Rate 13.0% (GAAP), 12.3% (Cash) ▪ 100% leased to PNC Bank, N.A. through December 2018: − As of December 2012, PNC Financial Services had ~$300 billion in total assets and ~$260 billion in total liabiliti
Slide 29: YRC Truck Terminal – Deer Park, NY
YRC Truck Terminal – Deer Park, NY ▪ Gramercy purchased for $3.9 million ($72,222/door) ▪ Cap Rate 7.7% (GAAP, Cash), CPI Escalations ▪ 100 % leased to YRC Worldwide Inc. through December 2019, with three 10 - year renewal options: − YRC had 2012 revenue of $ 4.9 billion and operating profit (EBIT)
Slide 30: New Penn Truck Terminal – Elkridge, MD
New Penn Truck Terminal – Elkridge, MD (Baltimore MSA) ▪ Gramercy purchased for $5.9 million ($96,721/door) in May 2013 ▪ Cap Rate 8.3% (GAAP, Cash), CPI Escalations ▪ 100 % leased to New Penn Motor Express, Inc., through May 2019 with two 10 - year renewal options: − New Penn is a subsidiary of YRC
Slide 31: YRC Truck Terminal – Orlando, FL
YRC Truck Terminal – Orlando, FL ▪ Purchase price of $5.0 million ($69,944/door) ▪ Cap Rate 7.7% (GAAP, Cash), CPI Escalations ▪ 100 % leased to YRC Worldwide Inc. through January 2019, with three 10 - year renewal options: − YRC had 2012 revenue of $ 4.9 billion and operating profit (EBIT) of $14 m
Slide 32: YRC Truck Terminal – Houston, TX
YRC Truck Terminal – Houston, TX ▪ Purchase Price of $6.9 million ($36,582/door) ▪ Cap Rate 8.2% (GAAP, Cash), CPI Escalations ▪ 100 % leased to YRC Worldwide Inc. through January 2019, with three 10 - year renewal options: − YRC had 2012 revenue of $ 4.9 billion and operating profit (EBIT) of $14 m
Slide 33: KAR Adesa – Automotive Auction Facility
KAR Adesa – Automotive Auction Facility (Dallas MSA) ▪ Gramercy purchased a 175 - acre auto auction site (“the Property”) located in Hutchins, TX (Dallas MSA) for $58.5 million ($335,051/acre ) in June 2013. Cap Rate 9.7% (GAAP), 8.4% (Cash) 175 acres (7.6 million sf): 158 - acre paved site and 17
Slide 34: Albert's Organics (UNFI) – Logan Township, NJ
Albert’s Organics (UNFI) – Logan Township, NJ (Philadelphia MSA) Class A Cold S torage facility located at the LogistiCenter in Logan Township, NJ ▪ Gramercy purchased for $11.8 million ($168 psf / $6 pcf) in June 2013 ▪ Cap Rate 7.2% (GAAP), 6.2% (Cash) ▪ 100% leased to Albert’s Organics through Ma
Slide 35: Morristown, NJ Bank Office / Operations location
Morristown, NJ Bank Office / Operations location ▪ Gramercy purchased for $ 4.9 million ($ 117 psf) in August 2013 ▪ Cap Rate 7.6% (GAAP), 7.2%( Cash ) ▪ 41,861 sf office / retail property 100% occupied by two tenants: Wells Fargo Bank occupies 29,537 sf and is NNN leased through September 30, 202
Slide 36: KapStone Distribution Warehouse – Atlanta, GA
KapStone Distribution Warehouse – Atlanta, GA Bulk distribution warehouse located in the I - 20 West/Fulton Industrial submarket ▪ GPT purchased for $ 4.0 million ($ 30 psf) in August 2013 ▪ Cap Rate 8.9 % (GAAP ), 8.0% (Cash) ▪ 100 % leased to KapStone Paper and Packaging Company through April 2023
Slide 37: Access Information Protected – Manassas Park, VA
Access Information Protected – Manassas Park, VA ▪ Gramercy purchased two flex document storage facilities for $8.8 million ($106 psf) in September 2013 − 43,047 flex warehouse on 1.76 acres & 40,018 flex warehouse on 2.89 acres (includes expansion land) − Rents are at $7.36psf, in line with current
Slide 38: Appendix B
Appendix B See es GRAMERCY PROPERTY TRUST 38
Slide 39: Disclosure of Commitments and Contingencies
Disclosure of Commitments and Contingencies ▪ In December 2010, the Company sold the Company's 45% joint venture interest in the leased fee of the 2 Herald Square property in New York, New York, for approximately $25.6 million, plus assumed mortgage debt of approximately $86.1 million (the “2 Herald
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