Cto Realty Growth, Inc. · NYSE:CTO
Cto Realty Growth — Consolidated Tomoka Land — Shareholder Meeting (April 2016)
43 slides from Cto Realty Growth's shareholder meeting presentation, Apr 27, 2016
Slide 1: Annual Meeting of Shareholders
Annual Meeting of Shareholders April 27, 2016
Slide 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 statements. Words such as “believe,” “estimate,” “expect,” “int
Slide 3: Snapshot
Snapshot OPERATING SEGMENTS LAND INCOME PROPERTIES LOAN INVESTMENTS SUBSURFACE INTERESTS 10,500 Acres 1.6 million sq. feet (2) 4 Loans 500,000 Acres >2,300 Acres under Contract Retail & Office Hotel & Retail Under Contract Potential Proceeds $68 million (2) NOI = $17.4 million (2) $38.5 million Pote
Slide 4: What We Did in 2015
What We did in 2015 $22.5 million Land Sales (114 acres – average $198k/acre) $96.2 million in Investments (1) $24.3 million in Income Property Dispositions 2015 – Year in Review Results $1.44 in EPS vs. $1.11 of EPS in 2014 Total amount of acquisitions includes originated loan and investment in rea
Slide 5: 2016 - Looking Ahead
$68 million Land Sales under contract(> 2,300 acres – 22% of land) $24 million contract on sale of Subsurface Interests >$60 million in potential Income Property Dispositions $10.6 million completed year-to-date 2016 – Looking Ahead Potential Results Potentially record breaking EPS ($2.62/sh in 2005
Slide 6: 2016 - Looking Ahead Goals
National Grocer (Regional Distrib. Center) National Outlet Developer International Residential Developer International Retail Developer 2016 - Looking Ahead Goals Drive Strong Free Cash Flow Continue to Improve Quality of CTO’s Assets (and Locations) Bring highly regarded Developers, Employers, and
Slide 7: Other Transactions
SUBSURFACE INTERESTS Under Contract: $24 million [Est. Gain $22.6 or $2.40/share, after tax] Potential Closing: By year end 2016 INVESTMENT SECURITIES Sold all of the company’s investment securities in Q1 ’16 DEBT FINANCINGS $75mm Convertible Notes Issuance (Unsecured) 5 yrs. at 4.50% $25mm Non-Reco
Slide 8: Annual Results for 2011 – 2015
Total Revenues ($000’s) Operating Income ($000’s) Annual Results for 2011 – 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Basic Earnings Per Share Positive Trends Book Value Per Share CAGR: 35.0% CAGR: 224.5% CAGR: 4.1% CAGR: 188.8%
Slide 9: Income Properties: 2015 Acquisitions
Income Properties 2015 Income Property Acquisitions Property Asset Type Location Remaining Lease Term (1) Purchase Price PSF (2) Wells Fargo Single Tenant Raleigh, NC 9.1 yrs. $42.3 $94 245 Riverside Multi-Tenant Jacksonville, FL 5.4 yrs. (3) $25.1 $183 Container Store Single-Tenant Glendale, AZ 14.
Slide 10: Income Properties: Dispositions
Income Properties Location Term (1) Sales Price PSF (2) CVS Sanford, FL (Vacant) 8.7 yrs $3.2 $236 CVS Sebastian, FL (Vacant) 8.7 yrs $3.2 $227 CVS Clermont, FL 7.1 yrs $4.2 $304 CVS Sanford, FL 5.1 yrs $5.2 $435 CVS Vero Beach, FL 8.3 yrs $5.3 $388 CVS Melbourne, FL (Sublease) 10.3 yrs $3.2 $292 Wt
Slide 11: Income Properties: Upgrading the Portfolio
Income Properties Upgrading the Portfolio – 1031 Exchange Replacement Asset: $42.3 million investment Wells Fargo Office building, Raleigh NC Closed November 2015 Sold Assets: $24 million in proceeds Portion of proceeds from Sam’s Club land sale and proceeds from two Land Sales to North American Dev
Slide 12: Income Properties: Geographic Diversity
Income Properties Location of Loan Investments (also one in Puerto Rico) Number of Income Property Investments CTO Headquartered in Daytona Beach, FL 1 3 9 3 14 1 1 2 1 3 Income Producing Investments % of total rent revenues as of April 22, 2016 (excluding self-developed multi-tenant properties) Geo
Slide 13: Income Properties: Top Single Tenants by Rent
Income Properties Top Single Tenants by Rent As of April 22, 2016 Approx. 57.7% of rent from Investment Grade tenants Guaranteed by Holiday CVS, L.L.C. a wholly-owned subsidiary of CVS Caremark Under contract to sell (including only 2 of the properties leased to Walgreens) NOI = Rental income less d
Slide 14: Wells Fargo Building (Raleigh, NC)
2015 Acquisition Income Properties Core Investment Wells Fargo Building (Raleigh, NC) Single-Tenant $42.3mm Investment Single-Tenant Class A Office Rent @ 50% below market Investment basis - $94/sq. ft. or approx. 50% below replacement cost 9.1 years weighted average remaining on lease @ acquisition
Slide 15: Wells Fargo Building (Raleigh, NC)
2015 Acquisition Income Properties Core Investment Wells Fargo Building (Raleigh, NC) Single-Tenant Potential for additional density on site
Slide 16: Riverside (Jacksonville, FL)
2015 Acquisition Income Properties Core Investment 245 Riverside (Jacksonville, FL) Multi-Tenant $25.1mm Investment Class A Office Strong Retail/Residential development activity in area Investment basis ($183/sq ft) below replacement cost 5.4 years weighted average remaining on leases @ acquisition
Slide 17: Potential Disposition: Taking Advantage of Core Pricing
Income Properties Potential Disposition: Taking Advantage of core pricing Bank of America Laguna Beach, CA Tenant Tenant Type Market Bank of America Single Tenant Garden Grove, CA Bank of America Single Tenant Westminster, CA Bank of America Single Tenant Laguna Beach, CA Bank of America Single Tena
Slide 18: Opportunistic Investment: Grove at Winter Park
Opportunistic Investment Income Properties Future Income Growth Approx. 112,000 sq ft 14.35 acres 548 Parking Spaces 3-mi Pop. 93,236 3-mi Avg HHI $59,994 Immediate area experiencing strong real estate growth/new development Grove at Winter Park (Winter Park, FL) Multi-Tenant $3.1mm Investment Ancho
Slide 19: Land Holdings: Land Sales
Land Holdings Buyer Use Sales Price Acres Price/Acre Tanger Outlets [U/C] Retail $9.7 38.93 $249k North American Dev. Group Retail $5.2 37.26 $139k Sam’s Club Retail $4.5 18.10 $249k Integra Land Company [U/C] Multi-Family $2.4 14.98 $159k Physicians Organization [U/C] Medical Office $0.5 3.02 $167k
Slide 20: Monetizing our Land – Executing our Strategy
Land Holdings Monetizing our Land– Executing our Strategy Annual Land Sales for 2005 – 2015 & Pipeline as of 4/22/16 (Land Sales in $000’s) Note: Multi-family included in residential There can be no assurances regarding the likelihood or timing of these potential land transactions or, if any occur,
Slide 21: Land Pipeline
Land Holdings Land Pipeline I-95 Intended Use Acres Estimated Timing Minto Communities West Residential 1,600 2nd half 2016 ICI Homes West Residential 600 YE 2016 Transaction 3 West Commercial 18 +/- Q4 2016 Transaction 4 West Residential 18 +/- 2nd half 2017 Transaction 5 East Residential 70 +/- Q4
Slide 22: Potential Land Sales Map
Land Holdings WEST OF I-95 Potential Transaction Buyer: Minto Communities Approx. 1,600 acres Buyer: ICI Homes Approx. 600 +/- acres Potential Transaction Approx. 18 +/- acres Potential Transaction Approx. 18 +/- acres EAST OF I-95 Potential Transaction Approx. 70 +/- acres Potential Transaction Buy
Slide 23: Tomoka Town Center
Land Holdings Tomoka Town Center (A) (A) As of March 31, 2016 Infrastructure work approx. 66% complete (A) Option Parcels totaling 81.55 acres under contract with North American Development Group
Slide 24: 2015 Land Sale – Tanger Outlets
Land Holdings 2015 Land Sale – Tanger Outlets Transformational Transaction Upscale Outlet Shopping Center Estimated development cost - $100mm 350,000 square feet 80-90 Retail Stores No restaurant/F&B retail w/in the Outlet Projected jobs 400 construction/900 full & part time Projected opening holida
Slide 25: Tanger Outlets Conceptual
Land Holdings Tanger Outlets Conceptual
Slide 26: 2015 Land Sale – Integra Land Co.
Land Holdings 2015 Land Sale – Integra Land Co. Approx. 14.98 Acre Parcel Multi-Family Residential Estimated 260+ apartments Received planning/entitlement approvals Expected completion in Q4 2016 Multi-Family Project Under Construction
Slide 27: Integra Land Co. Multi-Family Project
Land Holdings 2015 Land Sale – Integra Land Co. Multi-Family Project
Slide 28: Potential Land Sale – Minto Communities
Land Holdings Potential Land Sale – Minto Communities Approximately 1,600 Acre Parcel Age-Restricted Planned Residential Community Across from LPGA International Golf Club 3,400+/- single-family homes Golf-cart friendly lifestyle Resort-style town center with clubhouse, restaurants, and recreational
Slide 29: Minto Communities Residential Community
Land Holdings Potential Land Sale – Minto Communities Residential (Age-Restricted) Community
Slide 30: Potential Land Sale – ICI Homes
Land Holdings Potential Land Sale – ICI Homes Approximately 600 Acre Parcel Planned Residential Community Adjacent to Bayberry Community/LPGA 870 +/- single-family homes There can be no assurances regarding the likelihood or timing of this potential transaction or, if it occurs, the final terms incl
Slide 31: Strong Economic Activity on CTO Land
Land Holdings Strong Economic Activity on CTO Land There can be no assurances regarding the likelihood or timing of the potential transaction with Minto or, if it occurs, the final terms including sales price Date Sold Acres Investment (1) Size (Sq Ft) Jobs (1) Open Date (1) Distribution Center Aug
Slide 32: Where does the Stock Market Value our Land?
Land Holdings Where does the Stock Market Value our Land? As of March 31, 2016 (unless otherwise noted) Convertible Debt included at $75mm face value, excludes debt issue costs Amount excluding Def Tax Liability for 1031 gains = deferred tax asset (net) Assumed a 7% cap rate for value of Income Prop
Slide 33: Commercial Loan Investments
Loan Investments Commercial Loan Investments As of March 31, 2016 $10.0mm Mezzanine Loan Dallas, TX Rate: LIBOR + 725 Maturity: Sept. ‘16 $9.0mm B-Note Sarasota, FL Rate: LIBOR + 750 Maturity: June ‘16 $5.0mm Mezzanine Loan Atlanta, GA Rate: 12% fixed Maturity: Feb ‘19 $38.5 million invested (1) Wtd
Slide 34: Subsurface Interests
Approximately 95% of total subsurface acres Remaining 5% of total subsurface acres Subsurface Interests Subsurface Interests (500,000 Acres) Under Contract Sales Price $24 million Est. Gain$22.6 million EPS (after tax)$2.40/sh There can be no assurances regarding the likelihood or timing of this pot
Slide 35: Golf Operations
Golf Operations Golf Operations Operating Results ($millions) Membership Count For 2012 through Q1 2016 2012 2013 2014 2015 Q1 2016 Total Revenue Operating Income/(Loss) Expecting improved results w/Minto and ICI developments
Slide 36: Liquidity and Leverage
Liquidity and Leverage Liquidity Position (excluding restricted cash) ($ in 000’s) Debt Schedule ($ in millions) Total Commitment of Credit Facility = $75 million Amount outstanding is face value of the Convertible Notes 30-Day LIBOR plus 135-225 bps Maturity includes first 10 years I/O Debt on port
Slide 37: The Convertible Notes
The Issuance Issued $75 million in March 2015 Conversion Price = $68.90, premium to current price (1) of 46.3% and 27.5% at issuance 4.5% coupon rate Unsecured Covenant light (no coverage tests, no LTV test) Benefits of the Convert to CTO Attractive pricing for a small cap company with no equity res
Slide 38: 2015 Actual Results - 2016 Guidance
2015 Actual 2016 Guidance (Issued Feb 2016) Earnings per share $1.44/ share $2.75-$3.00/share Acquisition of Income-Producing Assets $96.2mm (1) $70mm - $85mm Target Investment Yields (Initial Yield – Unlevered) 6% - 8% 6% - 8% Disposition of Non-Core Income Properties $24.3mm $15.0mm - $25mm (2) Ta
Slide 39: Share Repurchase Program
Share Repurchase Program Share Repurchase Program (Authorized in 2008)$8.0 million New Share Repurchase Program (Authorized in 2015) (A) $10.0 million Year Shares Repurchased Investment Average Price/Share YTD 2016 28,862 $1,339,613 $46.41 Year Shares Repurchased Investment Average Price/Share Prior
Slide 40: Shareholder Friendly / Strategic Alternatives Review Underway
Hired Deutsche Bank in Feb. 2016 to explore Strategic Alternatives Share repurchases: approx. 193,000 shares since 2012 Board of Directors reduced to 7 in 2014 from 11 in 2011 Increased dividend since 2011 – from $0.04 to $0.08 per share (annualized) Annual election of Directors (eliminated staggere
Slide 41: Strategic Alternatives Review Process
November 2015 - Received shareholder proposal requesting Board engage independent advisor to evaluate a sale of the Company or the orderly liquidation of its assets The Board initiated the process called for by the Shareholder Proposal - solicited proposals from a number of financial advisory firms
Slide 42: Well-Positioned Land as of March 31, 2016
Well-Positioned Land as of March 31, 2016
Slide 43: Slide 43
Consolidated Tomoka Land — Shareholder Meeting (April 2016) on 6ix