D/b/a Centerspace · NYSE:CSR
D/b/a Centerspace — Investors Real Estate Trust — Investor Presentation (June 2016)
23 slides from D/b/a Centerspace's investor presentation, Jun 6, 2016
Slide 1: Highlights
Highlights 1 Only Upper Midwest Focused REIT Commitment to Core Properties and Strategic Repositioning Trading at Discount to NAV Deepened Focus on Capital Allocation & Balance Sheet Management Red 20 Minneapolis, MN 71 France Edina, MN Colonial Villa Minneapolis, MN 6/3/2016 On June 6th, the Compan
Slide 2: Company Overview
Company Overview 2 IRET owns a portfolio primarily comprised of high-quality multifamily and healthcare properties in the Upper Midwest Multifamily properties make up ~63% of total value On January 23, 2015 IRET announced a Strategic Repositioning to refine its strategy and focus on its core assets
Slide 3: Overview of Strategic and Capital Plan
Overview of Strategic and Capital Plan Management has completed a review of its operating platform, value creation strategy, and target markets and developed a three-pronged approach to sustaining growth 3 6/3/2016 Pure-play multifamily Continue with asset sales of non-core, non-multifamily assets F
Slide 4: Recent Accomplishments
Recent Accomplishments Multifamily 4 Acquisitions $62mm in acquisitions over the nine months ended 1/31/2016 350 multifamily units Announced a $72mm acquisition on March 22, 2016 Core market of Rochester, MN 393 multifamily units $134mm of total acquisitions in the 12 months ended 4/30/2016 Capital
Slide 5: Progress So Far
Progress So Far 5 Portfolio as of January 31, 2016 Portfolio as of January 31, 2015 Note: Proportions of property types are based on property cost by segment. The Company did add a non-core Industrial asset in the last year as a result of a redevelopment. The Company has gone from 69% multifamily an
Slide 6: Where We Are Going
Where We Are Going 6 12% 13% 15% 10% 8% 8% 12% 7% 7% 3% 3% 2% % of Multifamily NOI: Same-Store Units (as of 1/31/2016) Multifamily Healthcare Industrial Other Non-core assets Goal: 100% pure-play Upper Midwest-focused multifamily REIT ID MT WY ND SD NE KS IA MN WI 6/3/2016 1,370 1,230 1,104 1,042 1,
Slide 7: Investment Thesis
7 Investment Thesis Pure-Play Multifamily IRET will be the only public pure-play multifamily REIT focused on the Upper Midwest Strong total returns enhanced by prudent development and value-add repositioning Upper Midwest Multifamily Focused Lowest unemployment of any region in the U.S. Generally, t
Slide 8: Same-Store Multifamily Benchmarking
8 Same-Store Multifamily Benchmarking Market-Leading Product Pure-Play Multifamily 1 Peer Range(1) Peers include AIV, APTS, BRG, IRT, MAA, MST, and NXRT. Annual figure as of 4/30/2015, which includes recurring and non-recurring capital expenditures. Represents average of total multifamily portfolio.
Slide 9: Upper Midwest Multifamily Focus: Unemployment
9 Upper Midwest Multifamily Focus 2 U.S. Multifamily Cycle vs. U.S. Unemployment Unemployment Rate of IRET Markets vs. National Average The unemployment rate has always been a good, clear cyclical indicator highly correlated with real estate The average unemployment rate of IRET’s target markets is
Slide 10: Upper Midwest Multifamily Focus: Markets
10 Upper Midwest Multifamily Focus 2 Markets % of Multifamily NOI Median Household Income Population Growth (2010 – 2014) Home Ownership (2010 – 2014) Market Drivers Rochester, MN 15% $66,214 4.4% 69.6% Home to world-renowned Mayo Clinic and a large presence by IBM Grand Forks, ND 13% $49,691 4.9% 5
Slide 11: Upper Midwest Multifamily Focus: Cap Rates and Vacancy
11 Upper Midwest Multifamily Focus 2 Source: Integra Realty Resources 2016 Annual Viewpoint Note: Central Region consists of: Chicago, IL, Cincinnati, OH, Cleveland, OH, Columbus, OH, Dayton, OH, Detroit, MI, Indianapolis, IN, Kansas City, MO/KS, Louisville, KY, Minneapolis, MN, St. Louis, MN Cap Ra
Slide 12: IRET's Competitive Advantage
12 IRET’s Competitive Advantage 3 2011 – 2016 Units: +48% 2011 – 2016 Rents: +37% IRET’s unique competitive advantage has enabled it to add scale to its multifamily platform and the improving portfolio quality is reflected in its rents 6/3/2016 8,661 9,161 10,280 10,779 11,844 12,792 $697 $724 $781
Slide 13: Recent Developments
Dakota Commons Southgate Cypress Court I & II Red 20 River Ridge Quarry Ridge Number of Units 44 341 196 130 146 313 Occupancy 86.4% 93.5% 96.4% 94.6% 95.2% 99.0% Location Williston, ND Minot, ND St. Cloud, MN Minneapolis, MN Bismarck, ND Rochester, MN Placed in Service 7/15/2014 Landings (108): 9/4
Slide 14: Developments in Lease-Up
Deer Ridge Cardinal Point 71 France(1) Renaissance Heights Chateau II Monticello Crossings Number of Units 163 251 3 buildings / 241 units 288 72 202 Occupancy (as of 4/30/2016) 50.9% 44.2% 53.0% 43.8% 84.7% 0.0% Location Jamestown, ND Grand Forks, ND Edina, MN Williston, ND Minot, ND Monticello, MN
Slide 15: Rochester Acquisitions
Strategy Expands IRET’s holdings to 1,773 units in the Rochester market Complements existing strategy of selling non-core assets and recycling capital into higher-quality institutional properties About The Portfolio Four properties consisting of 393 luxury townhomes Acquired in March 2016 for $72.5m
Slide 16: Strategic Initiatives for Value Creation
16 Portfolio Simplification In process of divesting its non-core property segments Unique competitive advantage to buy and operate multifamily assets in the Upper Midwest Improving Effective Operations Technology-enabled rent optimization to maximize margins Scalable operating platform that is effic
Slide 17: Portfolio Simplification
17 Portfolio Simplification Multifamily Arcata, Golden Valley, MN 51.8% of three months ended NOI as of Q3 2016 Leading publicly-traded owner of multi-family properties in the Upper Midwest $152.8mm of acquisitions since January 2015 1 18.4% of three months ended NOI as of Q3 2016 34 senior housing
Slide 18: Improving Effective Operations
18 LRO rent optimization software rolling out to all properties in FY 2017 2 Improving Effective Operations 4/30/2016 Anticipated 7/12/2016 Value-add program achieving 8% - 10% ROI by opportunistically repositioning specific assets Brookfield Village Topeka, KS Cimarron Hills Omaha, NE Focus on Top-
Slide 19: Value-Add Program Overview
19 Overview In October 2015, IRET initiated a Value-Add Program for certain properties in order to respond to demand and achieve higher rents Apartment remodeling Upgrading amenities Enhancement of interior and exterior common areas Currently, 22 properties representing 3,608 units are in the progra
Slide 20: Continue Balance Sheet Optimization
Continue Balance Sheet Optimization 20 Committed to utilize a portion of sale proceeds to reduce debt Goal of growing unencumbered asset pool and obtaining unsecured line of credit Long-term goal to achieve credit rating metrics in line with peers with an investment grade rating Well-Laddered Debt M
Slide 21: Only Upper Midwest Focused REIT
21 Only Upper Midwest Focused REIT Commitment to Core Properties and Strategic Repositioning Trading at Discount to NAV Deepened Focus on Capital Allocation & Balance Sheet Management Thomasbrook Lincoln, NE West Stonehill St. Cloud, MN 6/3/2016 Company Overview Regency Park Estates St. Cloud, MN On
Slide 22: Safe Harbor Statement and Legal Disclosure
Safe Harbor Statement and Legal Disclosure 22 Certain statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual r
Slide 23: Safe Harbor Statement and Legal Disclosure
Safe Harbor Statement and Legal Disclosure Certain statements inthis presentation are “forward-looking statements” within the meaning ofthe Private Securities Litigation Reform Act of 1995, Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual result
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