Granite Point Mortgage Trust Inc. · NYSE:GPMT
Granite Point Mortgage Trust — Investor Presentation (November 2018)
27 slides from Granite Point Mortgage Trust's investor presentation, Nov 9, 2018
Slide 1: Investor Presentation Third Quarter 2018
Investor Presentation Third Quarter 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains, in addition to historical information, certain forward-looking statements that are based on our current assumptions, expectations and projections about future performance and events. In particular, statements regarding future economic performance, fi
Slide 3: Company Overview
Company Overview • Business formed in early 2015 to establish a commercial real estate lending platform for Two Harbors Investment Corp. (NYSE:TWO) • Investment strategy focused on direct origination of floating- rate, senior loans secured by institutional quality properties • To capitalize on the e
Slide 4: Granite Point Investment Highlights
Granite Point Investment Highlights . EXPERIENCED AND Each senior CRE team member has over 20 years of experience in the commercial real estate debt markets CYCLE-TESTED . Extensive experience in investment management and structured finance SENIOR CRE TEAM . Broad and long-standing direct relationsh
Slide 5: Commercial Real Estate Market Overview
Commercial Real Estate Market Overview
Slide 6: Market Environment
Market Environment DEMAND FOR COMMERCIAL REAL ESTATE LOANS REMAINS HIGH… Over $1.5 trillion of loans maturing Sale transaction volume has recovered and remains strong over the next 5 years(1) post-global economic crisis(2) $500 $600 $400 $300 $500 U.S. Investors $200 $ $ billions in Foreign Investor
Slide 7: Market Environment (Cont'd)
Market Environment (Cont’d) …AND MARKET FUNDAMENTALS REMAIN STRONG Capitalization rates have been favorable versus historical Historically low level of new construction over past several averages(1) years has constrained supply of properties(3) 2.30% 11% 800 700 9% 2.15% 600 7% 500 2.00% 5% 400 1.85
Slide 8: Investment Strategy and Origination Platform
Investment Strategy and Origination Platform
Slide 9: Investment Philosophy
Investment Philosophy OUR TEAM HAS DEVELOPED A SUCCESSFUL INVESTMENT PHILOSOPHY THAT HAS BEEN TESTED THROUGH SEVERAL ECONOMIC, INTEREST RATE AND REAL ESTATE CYCLES • Long-term, fundamental value-oriented investing philosophy; focus on relative value • Emphasize selectivity and diversification • Prio
Slide 10: Investing in Primary & Secondary Markets
Investing in Primary & Secondary Markets(1) PRIMARY AND SECONDARY MARKETS CONTINUE TO OFFER ATTRACTIVE INVESTMENT CHARACTERISTICS ALIGNED WITH OUR INVESTMENT THESIS • We target the top 25 and generally up to the top 50 MSAs, searching for value nationwide • We actively participate in the top 5 marke
Slide 11: Investment Strategy Overview
Investment Strategy Overview INVESTMENT STRATEGY PRIMARY VS SECONDARY MARKETS • Focus on generating stable and attractive • Active lender in both the primary and secondary earnings while maintaining a conservative markets risk profile • Direct origination of senior loans funding: • Property acquisit
Slide 12: Target Investments
Target Investments PRIMARY TARGET INVESTMENTS • Floating rate senior loans secured by income-producing U.S. commercial real estate • Loans of $25 million to $150 million (averaging $35-40 million) • Institutional-quality properties located in the primary and secondary markets • Secured by major prop
Slide 13: Investment Strategy Targeting Senior Loans
Investment Strategy Targeting Senior Loans SENIOR FLOATING RATE LOANS PROVIDE EXPOSURE TO COMMERCIAL REAL ESTATE SECTOR THROUGH A DE-RISKED POSITION WITHIN A PROPERTY'S CAPITAL STRUCTURE • Our senior loans are senior to our borrower’s I LLUSTRATIVE P ROP E RT Y C A P ITAL ST RUC TURE significant equ
Slide 14: Origination Platform Overview
Origination Platform Overview OUR ORIGINATION APPROACH PRODUCES A LARGE UNIVERSE OF OPPORTUNITIES FROM WHICH WE CAN SELECT THE MOST ATTRACTIVE INVESTMENTS FOR OUR PORTFOLIO RELATIONSHIPS PORTFOLIO GROWTH OVER TIME(1) • Extensive and longstanding direct relationships with a wide array of private equi
Slide 15: Credit Culture Based on Key Principles
Credit Culture Based on Key Principles OUR CREDIT CULTURE HAS BEEN DEVELOPED AND NURTURED OVER OUR SENIOR CRE TEAM’S LONG-TENURE IN COMMERCIAL REAL ESTATE DEBT MARKETS • Portfolio construction on a loan-by-loan basis with each investment standing on its own merits and adhering to our overall credit
Slide 16: Portfolio Overview
Portfolio Overview ala Eee Gene
Slide 17: Investment Portfolio as of September 30, 2018
Investment Portfolio as of September 30, 2018 KEY PORTFOLIO STATISTICS PROPERTY TYPE GEOGRAPHY Industrial, Midwest, Outstanding Retail(1), 8.0% 5.0% $2.8b Southeast, Principal Balance 11.0% 11.8% Northeast, Total Loan Office, 37.6% $3.2b Hotel, Commitments 50.9% Southwest, 14.5% 21.8% Number of Mult
Slide 18: Well-Positioned For Rising Short-Term Rates
Well-Positioned For Rising Short-Term Rates • A 100 basis point increase in U.S. LIBOR would increase our annual net interest income per share by approximately $0.17 NET INTEREST INCOME PER SHARE SENSIVITY TO PORTFOLIO FLOATING VS FIXED CHANGES IN US LIBOR(1) $0.20 Fixed, 1.9% $0.18 $0.16 $0.14 $0.1
Slide 19: Case Studies
Case Studies(1) • $30 million floating rate, first mortgage loan secured by two • $68 million floating rate, first mortgage loan secured by a apartment buildings totaling 62 units in Brooklyn, NY Class A, LEED-Gold certified office building • Strong, infill location benefitting from significant rece
Slide 20: Financial Highlights
Financial Highlights CO | Ae Pare ee MOCO ala Eee Gene
Slide 21: Summary of Investment Portfolio
Summary of Investment Portfolio(1) All-in Yield Original Maximum Loan Principal Carrying Cash at Maturity Stabilized ($ in millions) Commitment Balance Value Coupon(2) Origination (Years) Initial LTV(3) LTV(4) Senior Loans $3,125.8 $2,684.3 $2,661.7 L + 4.13% L + 4.91% 3.3 67.2% 62.7% Subordinated L
Slide 22: Diversified Capital Sources
Diversified Capital Sources(1) WELL-DIVERSIFIED CAPITALIZATION PROFILE SUPPORTING SENIOR FLOATING RATE INVESTMENT STRATEGY . REPRUCHASE 5 large institutional providers of long-term revolving financing AGREEMENTS . Total borrowing capacity of $2.3 billion(2) . COLLATERALIZED Financed a portfolio of $
Slide 23: GPMT 2018-FL1 CRE CLO Overview
GPMT 2018–FL1 CRE CLO Overview(1) $826 MILLION CLO FINANCING 25 EXISTING INVESTMENTS AT INITIAL ADVANCE RATE OF APPROXIMATELY 80% AND WEIGHTED AVERAGE COST OF FUNDS AT ISSUANCE OF LIBOR + 1.27%(2) T RA NSAC TION H IG HLIGHT S • $826 million total collateral across 25 investments • $660 million inves
Slide 24: Illustrative Senior Whole Loan Economics
Illustrative Senior Whole Loan Economics(1) LEVERED SENIOR WHOLE LOAN L+9.68% • We generally target low double-digit gross asset level returns that are also positively levered to increases in LIBOR • Applying moderate amount of leverage to a senior loan L+4.00% investment generates attractive risk a
Slide 25: Appendix
Appendix 2A ee ee ala Eee Gene
Slide 26: Investment Portfolio Detail
Investment Portfolio Detail(1) Maximum All-in Original Origination Loan Principal Carrying Cash Yield at Maturity Property Stabilized ($ in millions) Type Date Commitment Balance Value Coupon(2) Origination(3) (Years) State Type Initial LTV(5) LTV(6) Asset 1 Senior 07/18 144.3 110.3 108.7 L + 3.34%
Slide 27: Granite Point Mortgage Trust
GRANITE POINT. MORTGAGE TRUST
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