InvenTrust Properties Corp. · NYSE:IVT
InvenTrust Properties — Investor Presentation (July 2015)
55 slides from InvenTrust Properties's investor presentation, July 2015
Slide 1: Investor Presentation
Investor Presentation July 2015
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements in this presentation, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical, including statements regarding man
Slide 3: InvenTrust Properties Overview
InvenTrust Properties Overview Tom McGuinness – CEO & President
Slide 4: Frequent Questions from Stockholders
Frequent Questions from Stockholders Estimated Liquidity? Share Value? Distribution Rate? InvenTrust is Taking a Balanced Approach to our 170K Stockholders with the goal of driving stockholder value. 3
Slide 5: A New REIT – More than a Name Change
A New REIT – More than a Name Change Investment Thesis: Key Executive Hires: Committed to NAV • Tailor portfolio into targeted • EVP – Portfolio Mgmt. Growth asset classes (student • SVP – Transactions • Disciplined distribution housing & retail) • SVP – Asset Mgmt. policy • Focus & concentrate on •
Slide 6: Accomplishments Align with Announced Strategy
Accomplishments Align with Announced Strategy $460 million apartment portfolio sale to 2013 Announced $1.8 billion sale of net lease (non-core) assets to Internalization of management and began implementing best-in-class systems $395 million modified “Dutch Auction” tender offer (Repurchased
Slide 7: Why Change the Name from Inland American to InvenTrust Properties?
Why Change the Name from Inland American to InvenTrust Properties? • Creates Clarity in the Market Some vendors, tenants, lenders, and business partners assumed that Inland Group & Inland American were the same company For example – tenant lease or property acquisition negotiations Investors a
Slide 8: What Did the Hotel Select Service Sale Provide Stockholders?
What Did the Hotel Select Service Sale Provide Stockholders? • Select Service Transaction Closed on the sale of 52 select service hotels for $1.1 billion in Q4 ‘14 Robust, competitive auction process Net proceeds from the transaction = approximately $480 million Aligned with both Xenia’s and
Slide 9: What Did the Xenia Hotels & Resorts Spin-Off Provide Stockholders?
What Did the Xenia Hotels & Resorts Spin-Off Provide Stockholders? • Spin-off and listing of Xenia occurred in early Feb Ticker symbol “XHR” on the New York Stock Exchange • Benefit to Stockholders Meaningful liquidity option provided to stockholders Potential value appreciation Xenia 3-mont
Slide 10: Moving Forward
Moving Forward Maintain flexible capital structure – Take advantage of historically attractive debt rates • Loan-to-value has declined from 54.6% in 2012 to 36.5% Q1 2015 • Provides optionality for sources of debt • Prepared for unexpected disruptions in the credit markets Refine and reduce the brea
Slide 11: InvenTrust at a Glance
InvenTrust at a Glance Focused Strategy of Balance Sheet Management, Capital Allocation & Rotation, and Concentration on People, Process & Systems Non-Traded REIT that Became Self-Managed in 2014 Portfolio Consists of $4.9 billion* in Total Assets 142 Properties in 24 States Rebranded to InvenTrust
Slide 12: Student Housing Platform
Student Housing Platform Travis Roberts - President
Slide 13: Overview of University House
Overview of University House Vertically Integrated Platform – Located in Dallas Strong team with long-working relationship in student housing. Key strategic hires will move company into the next stage of life cycle Best-in-class portfolio built through development pipeline and tactical acquisitions
Slide 14: University House Management Team
University House Management Team Travis Roberts Troy Manson David Pierce Carlie Cresse President EVP Investments EVP Development SVP Operations 13 Years in 13 Years in 10 Years in Student 15 Years in Student Housing Student Housing Housing Student Housing • Team previously managed the student housin
Slide 15: University House National Footprint
University House National Footprint* Midwest Northeast Beds: 537 (5.0%) Beds: 498 (4.7%) Washington North Dakota Minnesota Montana The Fields Eugene Indiana University Maine Wisconsin Vermont Oregon South Dakota Idaho UH Arena District Wyoming Michigan U of Oregon** New York Iowa Nebraska Connecticu
Slide 16: Quality Over Quantity – Best-In-Class Portfolio
Quality Over Quantity – Best-In-Class Portfolio* Distance to Campus Age of Assets 10 0.8 10 0.6 0.7 0.53 8 In Years In Miles 4 0.6 6 0.5 4 0.4 2 0.3 0 Public Peer Set UHC Public Peer Set UHC Acceptance Rate of Schools in Portfolio % Top 150 Schools 68% 63% 70% 62% 70% 56% 60% 60% 50% 50% 40% 40% Pub
Slide 17: Quality Over Quantity – Best-In-Class Portfolio
Quality Over Quantity – Best-In-Class Portfolio* Beds Occupancy** 66,547 97% 80,000 96% 100% 60,000 40,000 90% 9,848 20,000 0 80% Public Peer Set UHC Public Peer Set UHC Avg. Rent Per Bed** $764 $800 After developments come online in 2016, $673 Loan-to Value is less portfolio will contain than 40% $
Slide 18: University House Strategy
University House Strategy Markets with high barriers to entry Well-positioned assets with strong market position Universities with competitive student acceptance rates, stable or growing enrollment & Division I athletics ACQUISITIONS Newer assets within walking distance to campus DEVELOPMENT Univers
Slide 19: Continued Portfolio Growth
Continued Portfolio Growth University House Communities Beds 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015* 2016* 2017* * Includes UH Arena District and development pipeline 18
Slide 20: Development Properties – University of Texas
Development Properties – University of Texas • Located just one block west of the University of Texas in the popular West Campus neighborhood of Austin • Scheduled to open August of 2016 • Property features premier amenities including amenity deck, sky lounge, fitness center, and study areas 19
Slide 21: Development Properties – Georgia Tech
Development Properties – Georgia Tech. • Located in the popular Midtown area of Atlanta • Opens in August - 706 beds & approximately 9,000 square feet of retail space • 100 % pre-leased by spring of 2015 • 19-story residential tower offering one-, two-, three- and four- bedroom units • High-end stud
Slide 22: How Does Student Investment Benefit Stockholders?
How Does Student Investment Benefit Stockholders? • Potential Value Appreciation New acquisitions & developments can bring increased value to platform Development yields well above current cap rates providing strong value creation Low leverage = Access to lower cost of debt Recycle capital t
Slide 23: Value of an Education Remains High = Industry Tailwinds
Value of an Education Remains High = Industry Tailwinds Unemployment Rate by Educational Attainment Median Annual Earnings by Education Level 12.00% $100,000 10.00% $80,000 8.00% $60,000 6.00% $40,000 4.00% 2.00% $20,000 0.00% $0 Unemployment Rate by Educational Attainment Median Annual Earnings by
Slide 24: Multi-Tenant Retail Platform
Multi-Tenant Retail Platform David Collins – EVP of Portfolio Management
Slide 25: Retail Landscape
Retail Landscape Minimal Retailers are Bricks and Consumer New Expanding Clicks VS. Experience is Development Again - Bricks or Important Cautiously Clicks 24
Slide 26: The InvenTrust Retail Strategy
The InvenTrust Retail Strategy Market Concentration – core market focus / reducing number of markets “Hub and Spoke” strategy – leveraging the strategy to drive operating efficiencies and align with local & national tenants Vertical Integrated Management & Leasing Platform – enhances leverage and ma
Slide 27: Multi-Tenant Retail Snapshot
Multi-Tenant Retail Snapshot* Portfolio Breakdown by Square Feet Power Centers 62% Community & 38% Neighborhood Center 125 24 18.4 93.2% # of Properties # of States Million Retail Sq. Ft. Occupancy InvenTrust has a national diversified high-quality multi-tenant retail portfolio *Includes 17 centers
Slide 28: Retail Strategy – Core Markets
Retail Strategy – Core Markets* InvenTrust’s largest markets are expected to have high job growth, population growth, and income growth in the next five years Top Markets by GLA 16.0% 12.8% 12.5% 12.0% 8.1% 8.0% 6.8% 5.2% 4.3% 4.2% 4.2% 4.0% 2.7% 2.5% 0.0% (1) Houston Dallas Altanta Oklahoma Ralei
Slide 29: Operating Strategy / Hub & Spoke
Operating Strategy / “Hub & Spoke” “Hub and Spoke” strategy will generate operating efficiencies and cost synergies that will drive bottom line growth Vertically Integrated Property Development Leasing Management Enhanced Tenant Efficiency & Cost Relationships Savings Increased Occupancy Mar
Slide 30: Focus on Deep Tenant Relationships
Focus on Deep Tenant Relationships Given scale and locations in growing vibrant markets, InvenTrust has developed favorable relationships with top local and national tenants Top Retail Tenants by GLA* Ross Dress for Less 5.0% Publix 3.4% Tom Thumb 3.4% Best Buy 3.0% Bed Bath & Beyond 2.7% PetSmart
Slide 31: Retail Lease Expiration Brings Value Creation Opportunity
Retail Lease Expiration Brings Value Creation Opportunity Leases rolling during predicted inflationary time period = opportunity to grow rental rates Lease Expiration by % of Total Annualized Rent* 20.0% 15.4% 15.0% 14.5% 13.3% 11.4% 10.5% 10.0% 5.7% 5.0% 0.0% 2015 2016 2017 2018 2019 2020 As of 3
Slide 32: Retail Strategy Designed for Growth
Retail Strategy Designed for Growth InvenTrust Retail Strategy Results Investments in markets with high job, Key Market population and income growth Significant Improved Average Base Rents Concentration Premium yielding assets with strong demographics Creates operating efficiencies and cost Ve
Slide 33: Market Fundamentals / Capital Allocation / Acquisition & Disposition Strategies
Market Fundamentals / Capital Allocation / Acquisition & Disposition Strategies Michael Podboy – CIO
Slide 34: Asset Acquisition Procedure (Retail & Student Housing)
Asset Acquisition Procedure (Retail & Student Housing) Deals Reviewed by Internal A Diligent & Transaction Team Disciplined Approach Every Deal Presented to & Reviewed by Investment Committee Comprehensive Due Diligence Performed Asset Acquired 33
Slide 35: Timing: In-Step with Retail Market Opportunity
Timing: In-Step with Retail Market Opportunity Current Location in Retail Cycle U.S. retail is in recovery phase Retailers are expanding again, although new construction remains historically low Retail sales continue to grow moderately and are above pre-recession peak *Source: REIS - Q2 2015/
Slide 36: Multi-Tenant Retail Acquisition Strategies
Multi-Tenant Retail Acquisition Strategies • Open-Air Centers - grocery-anchored centers, necessity-based community centers and power centers Location, Location, Location • Properties with strong demographics Job & wage growth Population growth High education rate • Focus on key retail marke
Slide 37: Retail Market Concentration Matches Expected Demographic Growth
Retail Market Concentration Matches Expected Demographic Growth Growth in Top 30 Markets(1) Scale: From 4 (Strong) to (4) Weak InvenTrust Current 4 Market Focus 3 3 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 (1) (1) (1) (2) (2) (2) (2) (3) (3) (3) (3) (4) (4) (4) (5) Columbus Pheonix Raleigh-Durham
Slide 38: Recent Multi-Tenant Retail Acquisitions
Recent Multi-Tenant Retail Acquisitions The Highlands of Westpark Shopping The Shops at Walnut Flower Mound Center Creek • Outside Dallas • Richmond, VA • Outside Denver • Acquired June 2015 as • Acquired May 2015 • Acquired April 2015 part of IAGM JV • Power Center • Power Center • Power Center • $
Slide 39: Market Fundamentals for Student Housing
Market Fundamentals for Student Housing • Recent institutional investor acceptability (within last 10 years) Investor Base • Investors seeking more opportunities to invest in this asset class • 2013: ~ $2.8 billion • 2014: ~ $3.0 billion Transaction Volume • 2015: ~ $4.0 billion (est.) • In 2014, ~8
Slide 40: Student Housing Acquisition Strategies
Student Housing Acquisition Strategies • Student Housing Acquisition Strategy Increase the scale of our platform through strategic acquisitions and developments University House Denver purchased in Dec. 2014 Key characteristics: Property located within walking distance to campus Competitiv
Slide 41: Disposition Strategy / Non-Core
Disposition Strategy / Non-Core • Our long-term corporate strategy includes selling our non- core assets or engaging in other strategic transactions Executing on this strategy since 2013 Properties no longer match our strategic focus Outlook for value appreciation does not match our targeted a
Slide 42: Financial Results & Balance Sheet Overview
Financial Results & Balance Sheet Overview Jack Potts - CFO
Slide 43: Estimated Per Share Value Information (February ’15)
Estimated Per Share Value Information (February ‘15) • $4.00 per share (after Xenia Spin-Off) Calculated and published after Xenia spin-off Same-Store values for Multi-Tenant Retail and Student Housing Platforms increased Non-Core portfolio values decreased • Calculated by independent third-pa
Slide 44: Estimated Per Share Value Information (February ’15)
Estimated Per Share Value Information (February ‘15) • NAV method used FINRA – NTR required method Used a 10-year discounted cash flow model for each individual property Projected net operating income Less capital expenditures Applied a market supported discount rate and capitalization rat
Slide 45: Change in Distribution Rate (February ’15)
Change in Distribution Rate (February ‘15) Elimination of Xenia Cash Flow after Spin-Off Capital for Acquisitions & Developments for Retail & Student Housing Platforms Capital to Address Future Lease Renewals in our Non-Core / Legacy Portfolio Disposition Strategy of Properties in our Non-Core / Leg
Slide 46: Select Total Company First Quarter Results
Select Total Company First Quarter Results $4.9B = Total Assets Undepreciated $1.8B = Total Debt Same-Store NOI = $73.1M FFO per Share = $0.07 (includes one-month of Xenia results) 45
Slide 47: Multi-Tenant Retail / Student Housing Rent Metrics
Multi-Tenant Retail / Student Housing Rent Metrics Retail Rent per Sq. Ft. Student Housing Rent per Bed $14.00 $775 $761 $13.87 $13.87 $13.80 $750 $742 $13.67 $729 $13.60 $725 $13.40 $700 12/31/2013 12/31/2014 3/31/2015 2013 2014 Q1 2015 46
Slide 48: Balance Sheet Improvement & Strength
Balance Sheet Improvement & Strength Declining Debt & Improving LTV1 Disciplined Balance Management $8.0 54.6% 60% 7.00 5.2% 6.23 6.13 5.03% 45.7% 5.10% 5.0% $6.0 6.00 36.9% 40% 4.95% 36.5% $6.0 5.10 5.45 4.8% $4.0 5.00 $3.6 4.6% 20% $2.0 $3.2 4.00 $1.8 4.4% 5/13 New LOC 4.44% $- 0% 3.00 4.2% 2012 2
Slide 49: Capital Structure as of 3/31/15
Capital Structure as of 3/31/15 Balance Sheet Composition Balance Sheet Capacity $1,250 11% $1,000 LOC $750 Capacity $600 89% $500 Marketable Securities $284 $250 Cash $198 $- Fixed Rate Debt Floating Rate Debt Funding Sources Manageable Mortgage Debt Maturities $1,000 $750 $500 $250 $- 2015 2016 20
Slide 50: Balance Sheet Strategy
Balance Sheet Strategy • Be positioned to access capital at all times in multiple forms Line of credit Property level financing • Preserve a strong liquidity position Liquidate marketable securities • Strong balance sheet metrics Fixed Coverage: 2.13x Loan-to-Value: 36.5% Weighted Averag
Slide 51: InvenTrust Properties
Inventrust Properties
Slide 52: Key Themes & Areas of Focus
Key Themes & Areas of Focus Committed to Enhancing Portfolio and Increasing NAV Experienced Management Team with Robust National Operating Platform Committed to Sustainable Dividends Strong, Flexible Balance Sheet & Capital Structure Growth Initiatives Include Acquisitions, Development and Redevelop
Slide 53: Appendix
Inventrust Properties
Slide 54: InvenTrust Management Team
InvenTrust Management Team Tom McGuinness Jack Potts Michael Podboy Anna Fitzgerald President & CEO EVP - CFO EVP - CIO EVP - CAO Travis Roberts David Collins Scott Wilton President of EVP – Portfolio EVP – General University House Management Counsel & Secretary 53
Slide 55: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Three Months Ended (In thousands) March 31, 2015 March 31, 2014 Net income (loss) 5,833 130,481 Net income (loss) of noncontrolling interests (8) - Net income (loss) attributable to Company 5,825 130,481 Add: Depreciation and Amortization related to investment proper
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