Chicago Atlantic Real Estate Finance, Inc. · NASDAQ:REFI
Chicago Atlantic Real Estate Finance — Q1 2022 Earnings Presentation
24 slides from Chicago Atlantic Real Estate Finance's earnings presentation, May 12, 2022
Slide 1: First Quarter 2022 Earnings Supplemental
First Quarter 2022 Earnings Supplemental May 12, 2022
Slide 2: Forward-looking statements
This presentation contains forward - looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995 , regarding future events and the future results of the Company that are based on current expectations, estimates, forecasts, projections about the industry in which th
Slide 3: Company Overview
■ Successful IPO in December 2021 (NASDAQ: REFI) ■ Track record of identifying market inefficiencies, particularly where risk is fundamentally mispriced ■ Ability to redeploy capital quickly ■ Access to Sponsor’s leading cannabis lending platform as lead or co - lead ■ Proprietary sourcing network a
Slide 4: Investment Highlights
Investment Highlights Pioneer in cannabis lending with first - mover advantage Proprietary and extensive deal sourcing capabilities Differentiated investment approach Compelling opportunity in rapidly growing cannabis market Lender of choice to leading cannabis operators Chicago Atlantic Real Estate
Slide 5: Industry-Leading Management and Investment Team
Industry - Leading Management and Investment Team Deep Cannabis, Credit and Real Estate Expertise With Entrepreneurial Approach Note: (1) Denotes member of Investment Committee Peter Sack (1) Co - President Former Principal at BC Partners Credit, leading their cannabis practice Underwritten $138mm i
Slide 6: Veteran Independent Directors
Veteran Independent Directors Significant Public Board, REIT, Financial and Corporate Governance Expertise Michael Steiner Current investor in Chicago Atlantic Founder and President of Service Energy and Petroleum Equipment, which are engaged in distribution of petroleum products Expert in highly re
Slide 7: Investment Portfolio Activity
Investment Portfolio Activity $129.5 $200.4 $281.5 $306.1 $43.0 $34.7 $39.6 $31.2 Q3 2021 Q1 2022 Unfunded As of May 10, 2022 Q4 2021 Funded CO MMI T ME NT S (in millions) $172.5 $235.1 $321.1 $337.3 Weighted average yield to maturity of ~17.5% as of May 10, 2022 Chicago Atlantic Real Estate Finance
Slide 8: Portfolio Diversity
Portfolio Diversity Our portfolio is diversified across operators, geographies, and asset types PR I N C I PA L O U TSTA N D I N G (1 ) By Loan By Location 10% 2% 10% 6% 4% 4% 0.5% 1% 6% 5% 3% 0.1% 7% 7% 3% 2% 1% 2% 5% 10% 6% 6% 85.3% 0.1% 14.5% Retail/Industrial Retail Industrial By Real Estate Col
Slide 9: Loan Collateral Coverage
Loan Collateral Coverage 1.8x real estate collateral coverage ADDI T I O NAL CO L L AT E RAL 1 - 1.5x 1.5 - 2x Portfolio Weighted Average (1.8x) Our loans to owner operators in the state - licensed cannabis industry are secured by additional collateral, including personal guarantee where applicable
Slide 10: Portfolio Overview (as of March 31, 2022)
Total Commitment: $321.1M Chicago Atlantic Real Estate Finance, Inc. | 10 Portfolio Overview (as of March 31, 2022) Loan Initial Funding Date (1) Maturity Date (2) Total Commitment (3) Principal Balance as of 3/31/2022 Percentage of Our Loan Portfolio Future Fundings Interest Rate (4) Periodic Payme
Slide 11: Portfolio Overview (continued)
Portfolio Overview (continued) Notes: Chicago Atlantic Real Estate Finance, Inc. | 11 (1) All loans originated prior to April 1, 2021 were purchased from affiliated entities at fair value plus accrued interest on or subsequent to April 1, 2021. (2) Certain loans have extension options from original
Slide 12: Loan Origination Pipeline
Loan Origination Pipeline Driven by proprietary deal sourcing Total current pipeline of approximately $911mm 1 ■ Recent legalization at the state level creates a new influx of opportunities ■ Increase in M&A activity requires additional debt financing ■ Robust set of profitable operators and refinan
Slide 13: Compelling Market Opportunity
$7.4 $11.2 $13.4 $18.2 $21.8 $25.0 $27.4 $5.9 $9.1 $11.5 $13.0 $14.0 $14.8 $15.5 2019 2020 2023E 2024E 2025E 2021E 2022E Adult - Use Sale s Medical Sales $13.2 $20.3 $24.9 $31.2 $35.7 $39.7 $42.9 Note: (1) Per New Frontier Data U. S . CANNABI S S AL E S (1) MA R K E T D R I V E R S Compelling Market
Slide 14: Compelling Market Opportunity
Note: (1) Per DISA Global Solutions, as of March 2022 Compelling Market Opportunity Chicago Atlantic Real Estate Finance, Inc. | 14 Legalized Medical and/or Decriminalized CBD Only or Fully Prohibited LEG I SLA TI VE TA I LW I N D S CURRE NT L E G AL I Z AT I O N (1) : 3 7 S T A T E S ■ Continued st
Slide 15: Competitive Landscape
Shorter loan durations Better diversification Lower LTVs Deal leads Ability to upsize Close relationships with management teams We negotiate the deal REIT shares 50% of the origination fee Underwrite enterprise value in the borrowers Our borrower’s only source of debt Competitive Landscape CO M P E
Slide 16: Appendix: Q1 2022 Financial Overview
Appendix Q1 2022 Financial Overview Chicago Atlantic Real Estate Finance, Inc. | 16
Slide 17: Portfolio Overview (as of May 10, 2022)
Total Commitment: $337.3M Chicago Atlantic Real Estate Finance, Inc. | 17 Portfolio Overview (as of May 10, 2022) Loan Initial Funding Date (1) Maturity Date (2) Total Commitment (3) Principal Balance as of 5/10/2022 (13) Percentage of Our Loan Portfolio Future Fundings Interest Rate (4) Periodic Pa
Slide 18: Portfolio Overview (continued)
Portfolio Overview (continued) Chicago Atlantic Real Estate Finance, Inc. | 18 Notes: (1) All loans originated prior to April 1, 2021 were purchased from affiliated entities at amortized cost plus accrued interest on or subsequent to April 1, 2021.Certain loans have extension options from original m
Slide 19: Collateral Overview (as of March 31, 2022)
Collateral Overview (as of March 31, 2022) (2) Real estate is based on appraised value as is, or on a comparable cost basis, as completed. The real estate values shown in the collateral table are estimates by a third - party appraiser of the market value of the subject real property in its current p
Slide 20: Collateral Overview notes
Notes: (1) Senior Real Estate Corporate Loans are structured as loans to owner operators secured by real estate. Senior Loans are loans to a property owner and leased to third party tenant.. (2) Real estate is based on appraised value as is, or on a comparable cost basis, as completed. The real esta
Slide 21: Balance Sheet (unaudited)
Balance Sheet (unaudited) Chicago Atlantic Real Estate Finance, Inc. | 21 March 31, 2022 December 31, 2021 Assets Loans held for investment $ 278,826,914 $ 196,984,566 Current expected credit loss reserve (182,838) (134,542) Loans held for investment, net 278,644,076 196,850,024 Cash 6,078,178 80,24
Slide 22: Statement of Operations (unaudited)
Statement of Operations (unaudited) Chicago Atlantic Real Estate Finance, Inc. | 22 Three months ended Three months ended March 31, 2022 December 31, 2021 Revenues Interest income $ 9,833,053 $ 5,779,304 Total revenues 9,833,053 5,779,304 Expenses Management and incentive fees, net 671,505 905,123 G
Slide 23: Reconciliation of Distributable Earnings to GAAP Net Income
Reconciliation of Distributable Earnings and Adjusted Distributable Earnings to GAAP Net Income Chicago Atlantic Real Estate Finance, Inc. | 23 Three months ended Three months ended March 31, 2022 Dec. 31, 2021 Net Income $ 7,803,952 $ 4,360,364 Adjustments to net income Non - cash equity compensati
Slide 24: Management Fees and Agreement Overview
MA N A G E ME N T F E E S Annual Base Management Fee (on Equity) 1.5% Origination Fees (Rebated to REIT) 50.0% Incentive Compensation Terms: Incentive Fees (of Core Earnings) 20.0% Hurdle Amount (on Avg. Equity) 8.0% Chicago Atlantic Real Estate Finance, Inc. | 24 External Manager ■ Externally - man
Chicago Atlantic Real Estate Finance — Q1 2022 Earnings Presentation on 6ix