Blackstone Mortgage Trust, Inc. · NYSE:BXMT
Blackstone Mortgage Trust — Capital Trust — Investor Presentation (November 2005)
29 slides from Blackstone Mortgage Trust's investor presentation, Nov 2, 2005
Slide 1: Company Presentation November 2005
Company Presentation November 2005
Slide 2: Disclaimer
Disclaimer Except for historical information contained herein, the statements in this presentation regarding the Company's business, strategy, portfolio management and results of operations are forward-looking statements that are dependent upon certain risks and uncertainties, including those relate
Slide 3: Table of Contents
I. Overview II. Investment Strategy III. Financial Information TABLE OF CONTENTS
Slide 4: Capital Trust
o CAPITALTRUST
Slide 5: Capital Trust
Capital Trust Largest dedicated commercial real estate subordinate debt investor in the US Founded by Sam Zell and John Klopp in 1997 Originated $5.6 billion of investments since inception Unparalleled track record Less than 0.65% loss experience on the entire portfolio Fully integrated internal man
Slide 6: Unique Business Model
OVERVIEW I - 2 CT Investment Management Co., LLC (TRS) 100% CT Mezzanine Partners II LP Unique Business Model Balance Sheet Net Interest Margin Investment Management Fee Income CT Mezzanine Partners III, Inc. + Capital Trust, Inc. (NYSE: “CT”) (Management Contracts) Investment Manager CDO Collateral
Slide 7: Recent Highlights
OVERVIEW I - 3 Recent Highlights Investment Volume YTD originations of $1.2 billion on balance sheet and for funds under management (through 9/30/05) Efficient Debt Placement Issued second floating rate CDO (3/05): $338 million at L + 0.49% / 0.71% Issued first fixed rate CDO (8/05): $341 million at
Slide 8: Share Price and Valuation Metrics
NYSE: CT Share Price (Close) Current (10/31/05) $30.62 High (5/31/05) $34.97 Low (1/24/05) $28.86 Valuation Metrics CT Peers (1) Price/Book 1.4x 1.4x P/E TTM 12.3x 12.1x Div. Yield (TTM) 7.0% 8.1% TTM Return 11.3% 12.2% Daily Volume Average (10/31/04-10/31/05) 33,390 Trailing 12-Month Performance 3Q
Slide 9: Growth Strategy
OVERVIEW I - 5 Growth Strategy Continue to grow balance sheet assets Continue to grow investment management business through the sponsorship of additional funds Create the most efficient capital structure through the use of CDOs and other structured products Expand our franchise Incubate and/or acqu
Slide 10: Seasoned Management Team
Lending/Investing Asset Management Administration Finance Capital Markets CEO, John Klopp Board of Directors Sam Zell Thomas Dobrowski Martin Edelman Craig Hatkoff Edward Hyman John Klopp Henry Nassau Josh Polan Lynne Sagalyn OVERVIEW I - 6 38 Professionals CFO, Geoffrey Jervis COO, Stephen Plavin S
Slide 11: Investment Strategy
Investment Strategy
Slide 12: A Large and Dynamic Market
II - 1 Note: (1) Source: Federal Reserve Data. INVESTMENT STRATEGY A Large and Dynamic Market CMBS has taken a larger share of a growing market Market Growth 2x CMBS Growth 8x ($52B) ($423B)
Slide 13: Growth of Securitization
II - 2 INVESTMENT STRATEGY Growth of Securitization Record issuance of $93 billion in 2004 Note: (1) 2005 YTD as of 6/30/05. (1)
Slide 14: Evolving Capital Structure
Equity 1 st Mortgage A Note Equity Equity IG CMBS Equity II - 3 Traditional Early Stage Mezzanine Current Multiple Tranches of B Notes, Mezz.Loans, Preferred Equity and CMBS INVESTMENT STRATEGY Evolving Capital Structure
Slide 15: Securitized Capital Structures
AAA A AA BBB Equity Equity Equity Equity AAA A AA BBB Equity Equity Equity Equity II - 4 Floating Rate $13 Billion 2004 INVESTMENT STRATEGY Securitized Capital Structures Fixed Rate $80 Billion 2004 B Note/ Mezz B Note/ Mezz B Note/ Mezz B Note/ Mezz B BB NR
Slide 16: Relative Value
Equity AAA to A CMBS BBB AAA to A CMBS BBB Equity II - 5 Floating Rate 5 – 15%+ Senior B Note Junior B Note Junior Mezzanine Senior Mezzanine L + 125 to 200 bps L + 200 to 375 bps L + 375 to 500 bps L + 500 to 1000+ bps INVESTMENT STRATEGY Relative Value B BB NR Fixed Rate Gross Unleveraged Returns
Slide 17: Collateralized Debt Obligation Model
IG CDO Notes CDO Equity Sold to 3 rd Parties Retained by Capital Trust II - 6 Below IG CDO Notes INVESTMENT STRATEGY Collateralized Debt Obligation Model Mezzanine Loans B Notes Subordinate CMBS Capital Trust RE CDO 2004-1 $324 million of collateral / Reinvesting Capital Trust RE CDO 2005-1 $338 mil
Slide 18: Competitive Advantages
II - 7 INVESTMENT STRATEGY Competitive Advantages Investment Origination Broad Network/Established Relationships Structural Creativity and Flexibility Quick Turnaround/Certainty of Closing Transaction Execution Credit Underwriting Expertise Financial Structuring Experience Proven Process Capital Acc
Slide 19: Senior Debt Provided by Lenders on Selected Investments
Senior Debt Provided by Bank of America 717 Fifth Avenue New York, NY $165 Million Senior Debt Provided by Wells Fargo DRA/DDR Portfolio Nationwide $175 Million Senior Debt Provided by Merrill Lynch GGP Portfolio Nationwide $1 Billion Senior Debt Provided by IXIS Real Estate Capital Cerberus Hotel P
Slide 20: Investment Process
Origination Asset Mgmt. Approval Underwriting II - 9 Originators Due Diligence Senior Lenders Borrowers Brokers Deal Team Business Credit Team Finance/Capital Markets Team Legal Structure Investment Committee Board of Directors Credit Providers Partners Asset Mgmt. Team Credit Team Finance/Capital M
Slide 21: Risk Management Principles
II - 10 INVESTMENT STRATEGY Risk Management Principles Create diversified portfolios Asset category, property type and geographic market Prudently employ leverage Enhance returns Increase the size and diversity of the portfolios Manage a matched book Control asset/liability mix (index & duration) Us
Slide 22: Financial Information
Financial Information
Slide 23: Capital Trust, Inc. Structure and Balance Sheets
Capital Trust, Inc. 9/30/05 Assets $1,333 Liabilities $1,000 Equity $333 CT Investment Management Co., LLC (TRS) (100% owned) (Management Contracts) CT Mezzanine Partners II LP 9/30/05 Assets $71 Liabilities $46 Equity $25 (4.7% owned) (5.9% owned) III - 1 Net Interest Margin Base and Incentive Mana
Slide 24: Assets
III - 2 FINANCIAL INFORMATION Assets ($000s) Assets Cash Loans CMBS Fund Investments Total Return Swap Interest Rate Hedge (Swap) Other Total Assets Liabilities Secured Debt CDO Debt Other Total Liabilities Common Equity 9/30/05 $16,501 815,225 454,260 16,503 4,000 1,070 25,196 $1,332,755 $157,774 8
Slide 25: Portfolio Breakdown
III - 3 FINANCIAL INFORMATION Portfolio Breakdown
Slide 26: Liabilities and Equity
Assets Cash Loans CMBS Fund Investments Total Return Swap Interest Rate Hedge (Swap) Other Total Assets Liabilities Secured Debt CDO Debt Other Total Liabilities Common Equity 9/30/05 $16,501 815,225 454,260 16,503 4,000 1,070 25,196 $1,332,755 $157,774 823,817 18,557 $1,000,148 $332,607 Liabilities
Slide 27: Investment Management
CT Investment Management Co., LLC (TRS) CT Mezzanine Partners II LP 9/30/05 Assets $71 Liabilities $46 Equity $25 III - 5 FINANCIAL INFORMATION Investment Management $1.2 billion of investments Investment period expired 1.3% mgmt. fee per annum 20% of profits after 10% pref. return and 100% return o
Slide 28: Income Statement
Portfolio Net Interest Margin Interest Income Interest Expense Net Interest Margin Other Revenue Fund Management Fees Fund Investment Income Other Subtotal Other Expenses G&A D&A Subtotal Income Taxes Net Income Net Income per share (diluted) Dividends per share 9/30/05 $22,751 10,325 12,426 1,517 2
Slide 29: Conclusion
FINANCIAL INFORMATION III - 7 Conclusion Dominant franchise in an attractive/growing market niche Organic growth through: Balance sheet investments – net interest margin Assets under management – base and incentive management fees Stable capital structure through the use of CDOs and other structured
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