D/b/a Centerspace · NYSE:CSR
D/b/a Centerspace — Investors Real Estate Trust — Investor Presentation (January 2019)
22 slides from D/b/a Centerspace's investor presentation, Jan 9, 2019
Slide 1: Investor Presentation January 2019
Investor Presentation January 2019
Slide 2: Safe Harbor Statement and Legal Disclosure
SAFE HARBOR STATEMENT AND LEGAL DISCLOSURE Certain statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual resu
Slide 3: Why IRET?
WHY IRET? Experienced Well-respected, experienced board of trustees and Leadership management team with a sound strategic plan Focused Transitioned from a diversified REIT to a pure-play Team multifamily REIT Increased Strong balance sheet with solid credit metrics and Flexibility sufficient liquidi
Slide 4: Company Snapshot
COMPANY SNAPSHOT . Pure-play multifamily owner/operator with 13,702 homes in differentiated markets . Founded in 1970 % of PF Average . Publicly traded since 1997 Region 2019 NOI(1) Homes Rent(2) . Net Asset Value (NAV) - $71 per Share(3) Minneapolis, MN 20.9% 1,988 $1,528 (4) . Enterprise value of
Slide 5: Management Overview
MANAGEMENT OVERVIEW IRET’s Board and management team brings extensive industry experience and multifamily expertise Board of Trustees Jeffrey P. Michael T. Mark O. Emily Nagle Linda J. Terrance P. John A. Mary J. Caira Dance Decker Jr. Green Hall Maxwell Schissel Twinem •Former Director – •Former EV
Slide 6: Capital Structure
CAPITAL STRUCTURE $ in thousands, except where noted $1.5B Total Capitalization % of Weighted Weighted Debt Summary Amount Total Avg. Rate Avg. Maturity $99M $664M Total Secured Debt $449,414 68% 4.59% 4.5 Years Preferred Total Debt Equity (1) Secured Debt Unsecured LOC Balance $69,500 10% 3.72% 3.8
Slide 7: Portfolio Scale and Quality Improving
PORTFOLIO SCALE AND QUALITY IMPROVING Total Multifamily NOI Average Revenue / Home $90M $1,797 $1,079 $41M $724 (1) FY 2012 FY 2018 FY 2012 Current Current Non- (2) (2) Same-Store Same-Store Multifamily Homes Increasing Exposure in Target Markets % of Multifamily NOI 13,702 29% 27% 36% 34% 33% 32% 9
Slide 8: Operational and Margin-Enhancing Initiatives
OPERATIONAL AND MARGIN-ENHANCING INTITIATIVES Focusing efforts to harvest organic growth from operational enhancements and margin-enhancing initiatives Margin Expansion Initiative • Goal to increase FY18 margin of 55.9% by 5% within 3-5 years • Improvement in financial performance to be generated fr
Slide 9: Driving Internal Growth
DRIVING INTERNAL GROWTH Focus on expense containment and revenue generating strategies is starting to bear fruit YoY Same-Store NOI and Revenue % Change 20.0% 8.7% 10.0% 5.8% 4.7% 2.8% 0.0% (2.3%) (3.3%) (3.4%) (5.1%) (5.0%) (5.1%) (5.5%) (10.0%) (7.4%) (10.8%) (20.0%) (30.0%) (40.0%) (50.0%) (60.0%
Slide 10: Operations Improving
OPERATIONS IMPROVING Industry-leading 8.7% Same-Store NOI growth for Q2 FY19 has been fueled by both revenue growth and expense containment Revenues Expenses NOI Region Homes Included FY19Q2 FY18Q2 % Change FY19Q2 FY18Q2 % Change FY19Q2 FY18Q2 % Change Minneapolis 1,711 $ 6,187 $ 5,990 3.3% $ 2,463
Slide 11: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Prudent capital allocation provides greater opportunities to reinvest in and grow our business Continue Disciplined Investment Strategy • Improve portfolio efficiency and quality through targeted redevelopment of existing assets and new acquisitions • Continue active po
Slide 12: Capital Recycling
CAPITAL RECYCLING Significantly improved the quality of our portfolio since the beginning of FY18 • Used disposition proceeds to purchase two multifamily communities in Denver and two multifamily communities in Minneapolis, originate two multifamily loans, reduce debt, repurchase shares, and reduce
Slide 13: Minneapolis & Denver vs. Other Top MSAs
MINNEAPOLIS & DENVER VS. OTHER TOP 25 MSAs Targeted geography has strong market fundamentals DENVER 2010-2017 Population CAGR 1.77% Unemployment Rate 3.0% Median Household Income $76,643 Median Home Price $462,900 MINNEAPOLIS-ST. PAUL Multifamily % of Housing Stock(1) 26.8% 2010-2017 Population CAGR
Slide 14: Competitive with Coastal Markets
COMPETITIVE WITH COASTAL MARKETS The Minneapolis – St. Paul and Denver boast extremely tight job markets, characterized by a highly educated workforce % of Adult Population with Bachelor's Degree or Higher Unemployment Rate (1) Washington-Arlington-Alexandria, DC-VA-MD-WV 50.8% 3.2% 3.0% San Francis
Slide 15: Minneapolis–St. Paul Is Strong
MINNEAPOLIS–ST. PAUL IS STRONG Economic Drivers 19 Fortune 500 Companies • The Minneapolis–St. Paul economy is supported by large Rank Company Rank Company corporations in diverse industries that generate stable job 5 United Health Group 216 Land O' Lakes growth. Nineteen Fortune 500 companies and e
Slide 16: Denver's Economy Is Thriving
DENVER’S ECONOMY IS THRIVING Economic Drivers 130 Total Nonfarm Payrolls (SA 2010-present) Indexed to Jan 2010 = 100 +27% • Denver’s advantageous location, livability, skilled workforce, 125 and attractiveness for doing business have prompted job creation throughout the metro area as employers reloc
Slide 17: Understanding Our Secondary Markets
UNDERSTANDING OUR SECONDARY MARKETS These five markets, plus Minneapolis-St. Paul and Denver are expected to make up 77% of proforma CY19 NOI Rochester, MN Omaha, NE Grand Forks, ND St. Cloud, MN Bismarck, ND Population 218,280 933,316 102,414 197,759 132,142 Median Household Income $71,985 $65,619
Slide 18: Recent Investment Highlights
RECENT INVESTMENT HIGHLIGHTS Oxbo Park Place Dylan Westend Location St. Paul, MN Plymouth, MN Denver, CO Denver, CO Homes 191 (11,500 retail sf) 500 274 390 Constructed 2017 1985 2016 2015 Purchase Price $61.5M $92.3M $90.6M $128.7M Located in Target Growth Market – Minneapolis & Denver Over
Slide 19: Value Add Opportunity
VALUE ADD OPPORTUNITY Highlights • We are moving forward to deliberately mine the opportunities in our portfolio • Approximately 41% of apartment homes have not been renovated since before 2008 • Inventorying entire portfolio for value-add opportunities – starting in Minnesota, moving to Omaha/Linco
Slide 20: Value Add Case Study – Park Place
VALUE ADD CASE STUDY – PARK PLACE Opportunity • Redevelop up to 488 homes at Park Place Apartments, a Class B BEFORE multifamily community located in a highly desirable suburb of Minneapolis • Take advantage of significant disparity between current rents and rents on newer, Class A product and other
Slide 21: Investment Highlights
INVESTMENT HIGHLIGHTS Best in Class Governance Flexible Balance Sheet Internal Growth Opportunities Differentiated Market Exposure Value Add Opportunities www.iretapartments.com January 2019 21
Slide 22: Investor Relations Contact
Investor Relations Contact: Jon Bishop ir@iret.com 952.401.4827
Investors Real Estate Trust — Investor Presentation (January 2019) on 6ix