Cto Realty Growth, Inc. · NYSE:CTO
Cto Realty Growth — Consolidated Tomoka Land — Q2 2017 Earnings Presentation
52 slides from Cto Realty Growth's earnings presentation, Jul 20, 2017
Slide 1: On the Right Path Q2 2017
On the Right Path Q2 2017 Investor Presentation July 19, 2017 (NYSE MKT: CTO) Whole Foods Market Center Sarasota, Florida
Slide 2: Forward Looking Statements
Forward Looking Statements 2 Forward Looking Statements If we refer to “we,” “us,” “our,” or “the Company,” we mean Consolidated-Tomoka Land Co. and its consolidated subsidiaries. Certain statements contained in this presentation (other than statements of historical fact) are forward-looking stateme
Slide 3: CTO's Strategy
CTO’s Strategy 3 From 2012 to June 30, 2017 As of June 30, 2017 As of July 17, 2017 Consistently Executed Since 2011 Monetizing Land (Using 1031 structure) Grow, Improve, Enhance and Diversify Convert into Income Efficient Overhead - Conservative Balance Sheet Return Capital to Shareholders Commitme
Slide 4: Reasons to Consider CTO
Reasons to Consider CTO? Trading at Discount to NAV Free Cash Flow Positive Self-Funding Investment Platform – Organically Created Capital from Monetizing Land on Tax Deferred Basis through 1031 Structure Not serial issuer of equity Active Share Repurchase Program (B)(D) Strong Pipeline of Land Sale
Slide 5: Track Record of Strong Operating Results
5 Total Revenues ($000’s) Operating Income ($000’s) Basic Earnings Per Share Book Value Per Share Track Record of Strong Operating Results Annual Results for 2012 – 2016 and YTD 2017 (as of June 30, 2017) Consistent Growth in Key Metrics 2016 Highest Annual EPS in CTO History 2012 – 2016 CAGR 43.9%
Slide 6: CTO Snapshot
CTO Snapshot 6 As of June 30, 2017 (unless otherwise noted) Operating Segments Land Holdings (2) Income Properties Loan Investments Subsurface Interests (2) As of July 17, 2017 Land holdings and subsurface interests are part of the real estate operations segment Based on announced Q3 Quarterly Divid
Slide 7: Implied Value of Our Land
Implied Value of Our Land 7 As of July 17, 2017 Includes book value of Beach Parcel Meaningful Discount to Average Price Per Acre Equity Market Cap [closing price $56.13] (1) $316mm Debt (E) $173mm 1031 Tax Deferred Liabilities $68mm Total Adjusted Enterprise Value (TAEV)(1) (E) $557mm Less: Income
Slide 8: Momentum Monetizing Land
8 (Land Sales in $000’s) Momentum Monetizing Land Monetizing Land With Tax Deferred Strategy Annual Land Sales for 2005 – 2016, YTD 2017 & Pipeline (A) as of 6/30/17 2012 – YTD 2017 Total Sales $88.3mm Acres Sold 2,620 Current Management Team 2005 – 2011 Total Sales $86.7mm Acres Sold 1,077
Slide 9: Analysis of Price/Acre (since 2012)
9 Analysis of Price/Acre (since 2012) Demonstrating Value Value Indicators for Remaining Land Holdings East of I-95 West of I-95 Under Contract as of June 30, 2017 (A) Total Average Price per Acre $33k (Sales Price & Avg. Price Per Acre in $000’s) $9,600 $11,100 $12,400 $17,200 $18,600 $21,300 $29
Slide 10: Pipeline of Potential Land Sales
10 SF – Single Family; AR – Age Restricted Commercial/Retail 7 Different Buyers; 26% of Remaining Land Pipeline of Potential Land Sales (A) As of June 30, 2017 Substantial Pipeline for Continued Growth 1 2 4 7 3 6 5 Contract/Parcel Acres Contract Amount (rounded) Price per Acre (rounded) Timing Mint
Slide 11: Land Under Contract: Tomoka Town Center
11 Land Under Contract (A) Tomoka Town Center Acres already purchased by NADG 38 acres 24 acres Total Acres (Remaining Under Contract) 62 Sales Price $17mm Price Per Acre $273,000 Expected Closing ‘17 – ‘18 Big Box Retail Power Center Acres under contract with NADG
Slide 12: Land Under Contract: Buc-ee's
12 Land Under Contract (A) Commercial/Retail First Buc-ee’s Outside Texas Total Acres 35 Sales Price $14.0mm Price Per Acre $400,000 Expected Closing ‘18 – ‘19 35 Acres Under Contract
Slide 13: Land Under Contract: National Specialty Grocer
13 Land Under Contract (A) Total Acres 9 Sales Price $2.7mm Price Per Acre $300,000 Expected Closing ‘18 – ‘19 Commercial/Retail National Specialty Grocer Under Contract
Slide 14: Absorption of Land West of I-95
14 Absorption of Land West of I-95 (A) Largest Area of Land Holdings Parcel Use Acres Contract Amount or Est. Value per Acre Timing A Residential 1,686 $31.4mm ‘18 – ‘19 B Residential 146 $1.4mm ‘18 – ‘19 C Residential 129 $2.8mm ‘18 – ‘19 D Mitigation Bank 2,492 $5k - $7k ‘18 – ‘19 E Residential 1,
Slide 15: Other Notable Parcels
15 Other Notable Parcels (A) Key Elements of Land Valuation F A B E C H G D (1) M LOCATION POTENTIAL END USE APPROX. TOTAL ACRES EST. RANGE OF POTENTIAL VALUES North of LPGA Blvd. & East of I-95 Commercial/Industrial 203 $150k - $250k Industrial Park West of I-95 Industrial - Distribution 850 $30k -
Slide 16: Mitigation Bank Opportunity
16 Mitigation Bank Opportunity (A) Potential Opportunity for Joint Venture Acres: 2,492 Estimated Credits Created: 299 UMAM Est. Timing First Credit Sales: Q2 2018 Potential Monetization in 2018 Opportunity to convert approximately 2,500 acres of land into a much needed wetland mitigation bank in Ti
Slide 17: Other Notable Parcels
17 Other Notable Parcels (A) Potential Value Range: $150k - $250k Per Acre The value range is an estimate only and there can be no assurances that the value ultimately realized for this land will fall within the estimated range. Well-Positioned Land: North of LPGA Blvd. & East of I-95 East of I-95 U
Slide 18: Other Notable Parcels
18 Other Notable Parcels (A) Potential Value Range: $30k - $50k Per Acre The value range is an estimate only and there can be no assurances that the value ultimately realized for this land will fall within the estimated range. West of I-95 Well-Positioned Land: Industrial – Distribution Under Contra
Slide 19: Other Notable Parcels
19 Other Notable Parcels (A) Parcels A thru F Blended Value Range: $60k - $80k Per Acre Well-Positioned Land: East of I-95 A D C B The value range is an estimate only and there can be no assurances that the value ultimately realized for this land will fall within the estimated range. Under Contract
Slide 20: Other Notable Parcels
20 Other Notable Parcels (A) East of I-95 Potential Value Range: $125k - $150k Per Acre The value range is an estimate only and there can be no assurances that the value ultimately realized for this land will fall within the estimated range. Well-Positioned Land: MOB/Retail/Multi-Family
Slide 21: Other Notable Parcels
21 Other Notable Parcels (A) Potential Value Range: $80k - $125k Per Acre Well-Positioned Land: Industrial – Distribution East of I-95 The value range is an estimate only and there can be no assurances that the value ultimately realized for this land will fall within the estimated range.
Slide 22: Income Property Investments
22 Income Property Investments ($000’s) Converting Land into Income Annual Acquisitions for 2005 – 2016 & YTD 2017 as of 6/30/17 2012 – YTD 2017 Total Acquisitions $320.4mm Current Management Team 2005 – 2011 Total Acquisitions $59.6mm 7 years ≈ 6 years Current CEO Hired August 2011 Diversified
Slide 23: Total Portfolio Annual NOI
23 Total Portfolio – Annual NOI ≈ $22.0mm Diversified High Quality Portfolio As of June 30, 2017 City % of NOI Raleigh 15.4% Santa Clara 10.5% Jacksonville 9.6% Orlando 8.6% Sarasota 7.0% All Other 48.9% Largest Markets Approx. 40% of NOI from Investment Grade Tenants (G) 16 Different Industries in
Slide 24: Diversified High Quality Portfolio
24 Diversified High Quality Portfolio As of June 30, 2017 36 Income Properties 20 Markets SF >1.9 million 7.5 Wtd./ Avg. Lease Term 3600 Peterson Santa Clara, CA 245 Riverside Ave. Jacksonville, FL Wells Fargo Raleigh, NC Carrabba’s Austin, TX Bank of America Monterey, CA Outback Steakhouse Charlott
Slide 25: Target Market Map
25 Target Market Map Rank CTO MSA Investment Development 1 Austin, TX 3rd 1st 2 Dallas/Ft. Worth, TX 1st 5th 3 Portland, OR 8th 2nd 4 Seattle, WA 2nd 8th 5 Los Angeles, CA 6th 6th 6 Nashville, TN 9th 3rd 7 Raleigh/Durham, NC 13th 4th 8 Orange County, CA 5th 10th 9 Charlotte, NC 12th 7th 10 San Franc
Slide 26: 2017 Acquisitions Sarasota, Florida
26 2017 Acquisitions Sarasota, Florida $4.1 Million Investment High Growth Market Strong Infill Location Single Tenant Retail 5.0 yrs. remaining lease term 18,120 Square Feet 1.20 Acres Rent escalation - $1/Sq. Ft. at each option renewal Build-to-Suit built in 2012 Investment basis $225/Sq. Ft Acq
Slide 27: 2017 Acquisitions Sarasota, Florida
27 2017 Acquisitions Sarasota, Florida Single Tenant Property High Growth Market Strong Infill Location DOWNTOWN SARASOTA
Slide 28: 2017 Acquisitions Fort Worth, Texas
28 2017 Acquisitions Free-standing Grocery-anchored center; 4 single-tenant buildings Dense infill location near TCU Below market rents 96% occupied Underutilized 4.1 yrs. wtd. avg. remaining lease term 136,000 Square Feet/10.3 acres 3-mi. population: 122,000 3-mi. avg household income: $75,000 Acqu
Slide 29: 2017 Acquisitions Fort Worth, Texas
29 2017 Acquisitions Fort Worth, Texas 4 Single tenant properties, 1 Multi-tenant Strong Infill Location Rent Growth Potential
Slide 30: 2017 Acquisitions Saugus, Massachusetts
30 2017 Acquisitions Saugus, Massachusetts $6.3 Million Investment High Barriers to Entry Strong Urban Market Single Tenant Retail 12 yrs. remaining lease term; early extension 22,500 Square Feet/2.6 acres 7.35% rent escalation during initial term Build-to-Suit built in 2008 Investment basis $281/
Slide 31: 2017 Acquisitions Saugus, Massachusetts
31 2017 Acquisitions Saugus, Massachusetts Single Tenant High Barriers to Entry Strong Urban Market
Slide 32: 2017 Acquisitions Brandon, Florida
32 2017 Acquisitions Brandon, Florida $12.7 Million Investment Strong Market Strong Infill Location Metro Tampa Bay Area Single Tenant Retail Property 14.8 yrs. remaining lease term 45,000 Square Feet 10% rent escalation every 5 yrs. during initial term Built in 2006 Investment basis $282/Sq Ft; be
Slide 33: 2017 Acquisitions Brandon, Florida
33 2017 Acquisitions Brandon, Florida $1.9 Million Investment Strong Market Strong Infill Location Metro Tampa Bay Area Multi-Tenant Retail Property 7.4 yrs. Avg. remaining lease term 6,715 Square Feet 1st tenant: >2% annual rent escalation 2nd tenant: Per sq. ft. increase in 5th year Built in 2006
Slide 34: 2017 Acquisitions Brandon, Florida
34 2017 Acquisitions Brandon, Florida Single Tenant and Multi-Tenant Property Strong Market Strong Infill Location Metro Tampa Bay Area
Slide 35: Single-Tenant Portfolio
35 Single-Tenant Portfolio Strong Cash Flows As of June 30, 2017 2 Properties Tenant/Building S&P Credit Rating Location Property Type Rentable Square Feet Remaining Lease Term NOI % of NOI Wells Fargo AA- Raleigh, NC Office 450,393 7.3 $2,761,000 12.5% Hilton Grand Vacations BB+ Orlando, FL Office
Slide 36: Multi-Tenant Portfolio
36 Multi-Tenant Portfolio Strong Cash Flows As of June 30, 2017 2 Properties Tenant/Building Class Location Property Type Rentable Square Feet Remaining Lease Term NOI % of NOI 3600 Peterson NR Santa Clara, CA Office 75,841 4.8 $2,309,000 10.5% 245 Riverside Ave N/A Jacksonville, FL Office 136,856 4
Slide 37: How CTO's Portfolio Stacks Up
37 How CTO’s Portfolio Stacks Up Stronger Demographics Higher Density 3-Mile Population (1) 3-Mile Avg. Household Income (1) 3-Mile Median Household Income (1) Implied Cap Rate (1) Source: FBR & Co. as of June 26, 2017 85,534 58,580 54,502 53,043 51,526 51,452 0 20,000 40,000 60,000 80,000 100,000
Slide 38: Top Tenants versus Peers
38 Top Tenants versus Peers Better Credit Better Real Estate BBB BBB BBB B+ BB+ BBB AA A NR NR AA- BB+ BBB- A B+ Raleigh, NC Orlando, FL Sarasota, FL Katy, TX Brandon, FL NR B+ BB- B+ NR A- Avg. Lease Term Leverage Level Top 3 States (by Rent) 7.8 33.3% (1) FL, NC, TX 9.7 27.8% TX, CA, IL 10.6 18.
Slide 39: Opportunistic Investments in Income: Beach Parcel
Potential investment yield (near term investment): 7% - 11% unlevered (I) Expected opening Q1 2018 Total estimated investment: $16.8 million Prior owner (developer) acquired the land in 2007 for approximately $34.5 million Received entitlement for 1 million sq. ft. 39 Opportunistic Investments in In
Slide 40: Beach Parcel Appendix
Beach Parcel 40 APPENDIX Groundbreaking July 12, 2017
Slide 41: Opportunistic Investments in Income: The Grove at Winter Park
Potential stabilized yield: 8%-10% unlevered (I) 41 Opportunistic Investments in Income The Grove at Winter Park ≈112,000 sq. ft. situated on 14.35 acres Anchor Tenant Opened February 2017 Outparcel Tenant Effectively vacant property at acquisition Total estimated investment: $12.5 million Currently
Slide 42: Liquidity & Leverage
79% of Debt at Fixed rate 64.1% Unsecured Weighted Average Rate <4.00% 42 Liquidity & Leverage As of June 30, 2017 Debt Schedule ($ in millions) Liquidity Position ($ in 000’s) Total Commitment of Credit Facility = $75 million Amount Outstanding at face value for Convertible Notes Stated rate = 30-D
Slide 43: Returning Capital to Shareholders
43 Cumulative Shares Purchased Cumulative From 2012 Through July 17, 2017 Returning Capital to Shareholders (B)(D) Buybacks per Year $ Amount # of Shares 2012 $453,654 14,634 2013 $- - 2014 $927,913 25,836 2015 $6,484,844 119,403 2016 $7,431,896 151,453 YTD 2017 $5,512,960 104,098 Total $20,811,267
Slide 44: 2017 Guidance
44 2017 Guidance (B)(D) Executing our Strategy and Business Plan Original 2017 Guidance Updated 2017 Guidance YTD 2017 Earnings Per Share (Basic) $2.25 - $2.45 $2.95 - $3.10 $2.95 (1) Acquisition of Income-Producing Assets $50mm - $70 mm No change $40.0mm Target Investment Yields (Initial Yield – Un
Slide 45: Management Team
45 Management Team John P. Albright President & Chief Executive Officer Archon Capital, a Goldman Sachs Company Morgan Stanley Crescent Real Estate Equities Mark E. Patten Senior Vice President & Chief Financial Officer Simply Self Storage CNL Hotels & Resorts Vistana Inc. KPMG Daniel E. Smith Senio
Slide 46: Board of Directors
46 Board of Directors William L. Olivari Certified Public Accountant, Formerly Partner with Olivari & Associates PA Howard C. Serkin Chairman, Heritage Capital, Inc. Thomas P. Warlow, III Chairman, Georgetown Enterprises, Inc. President & Chairman, The Martin Andersen-Gracia Foundation, Inc. Laura M
Slide 47: Age Restricted Residential Development Progress
Appendix 48 APPENDIX Age Restricted Residential First Latitude Margaritaville in U.S. Development Progress on Land Sold by CTO
Slide 48: 1,000+ Residential Homes Development Progress
Appendix 49 APPENDIX 1,000 + Residential Homes Development Progress on Land Sold by CTO
Slide 49: 400,000 Sq. Ft. Distribution Center
Appendix 50 APPENDIX 400,000 Sq. Ft. Distribution Center Development Progress on Land Sold by CTO
Slide 50: RaceTrac at Williamson Crossing
Appendix 51 APPENDIX RaceTrac at Williamson Crossing Development Progress on Land Sold by CTO
Slide 51: End Notes
End Notes 52 End note references utilized in this presentation There can be no assurances regarding the value ultimately received for the Company’s assets, or in the case of the transactions under contract, the likelihood that such transactions shall be closed or the timing or final terms thereof. T
Slide 52: Contact Us
Consolidated-Tomoka Land Co. 1530 Cornerstone Boulevard, Suite 100 Daytona Beach, FL 32117 P: 386.274.2202 Info@ctlc.com www.ctlc.com NYSE MKT: CTO Investor Relations: Mark E. Patten P: 386.944.5643 mpatten@ctlc.com Contact Us (NYSE MKT: CTO) July 19, 2017 Whole Foods Market Center Sarasota Florida
Consolidated Tomoka Land — Q2 2017 Earnings Presentation on 6ix