Cto Realty Growth, Inc. · NYSE:CTO
Cto Realty Growth — Consolidated Tomoka Land — Proxy Contest (April 2018)
50 slides from Cto Realty Growth's proxy contest presentation, Apr 18, 2018
Slide 1: Building on Our Success - 1st Quarter 2018 Investor Presentation
Opportunistic Investment Single-Tenant Acquisition Single-Tenant Acquisition Self-Developed Single-Tenant BUILDING ON OUR SUCCESS NYSE American: CTO 1st QUARTER 2018 INVESTOR PRESENTATION Hyman Ave & Hunter St. Aspen, Colorado The Grove at Winter Park Winter Park, Florida Wells Fargo Building Portla
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS CONSOLIDATED TOMOKA 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. Word
Slide 3: Why CTO
WHY CTO CONSOLIDATED TOMOKA As of April 13, 2018 (unless otherwise noted) Discount to NAV Organic Capital Source Portfolio Quality Trading at Meaningful Discount to NAV Land Sales Provide Organic Source of Capital Faster Income Growth (vs Peers) Better Portfolio Balance/Diversification (vs Peers) Fo
Slide 4: Q1 2018 Transaction Highlights
Q1 2018 TRANSACTION HIGHLIGHTS CONSOLIDATED TOMOKA Continuing to Execute Our Strategy 4 MONETIZING LAND (and SUBSURFACE INTERESTS) CONVERT PROCEEDS TO INCOME IMPROVE and ENHANCE INCOME PROPERTY PORTFOLIO 1st Buc-ee’s in Florida Construction expected Summer 2018 SALES PRICE: $13.9 million ACRES: 34.9
Slide 5: CTO's Shareholder Return
CTO’S SHAREHOLDER RETURN CONSOLIDATED TOMOKA Strong Performance Despite Wintergreen Overhang 5 Source: Bloomberg 1 Year Return vs Peers & Indices (including reinvestment of dividends) Consolidated-Tomoka Land Co. 2018 Peer Group MSCI REIT Index Russell 2000 Consolidated-Tomoka Land Co. St. Joe Home
Slide 6: Track Record of Strong Operating Results
’12 – ’17 CAGR 40.7% Total Revenues ($000’s) TRACK RECORD OF STRONG OPERATING RESULTS CONSOLIDATED TOMOKA Annual Results for 2013 – 2017 and Q1 2018 Operating Income Book Value Per Share Earnings Per Share (1) ($000’s) ’12 – ’17 CAGR 115.6% ’12 – ’17 CAGR 137.3% ’12 – ’17 CAGR 11.0% Consistent Growt
Slide 7: Cash Flow Growth
CASH FLOW GROWTH(1) CONSOLIDATED TOMOKA Significant Free Cash Flow For the Fiscal Years-Ended 7 2015 2016 2017 2018 (K) Income Property NOI(2) $14,724 $17,172 $21,323 $27,500 Interest Income from Loan Investments(2) 2,691 2,588 2,053 Cash Flows from Golf Operations(3) (721) (773) (864) Other Cash Fl
Slide 8: CTO Snapshot
CTO SNAPSHOT CONSOLIDATED TOMOKA A Lot More Income than Land Percentages based on values derived on NAV worksheet on Slide #10 As of April 17, 2018 36 Properties ≈2.1 million Sq. Ft. Retail and Office NOI $27.5 million (C) Subsurface Interests 460,000 Acres 2 Loans Avg. Yield 9.7% $11.9mm Principa
Slide 9: NAV Worksheet
NAV WORKSHEET (A)(F)(I) CONSOLIDATED TOMOKA Indicative of Meaningful Discount in our Stock Price 9 Cap Rate on NOI (C) Contract amounts As of April 17, 2018 As of March 31, 2018 Excludes intangible lease liabilities (5) Excludes NOI for Grove at Winter Park Highlighted Components of NAV Basis for Va
Slide 10: Organic Source of Capital
ORGANIC SOURCE OF CAPITAL Self-Funding Capital Source for Growth CONSOLIDATED TOMOKA $88.5mm +/- Potential Proceeds @ ≈$43.0k per Acre (1)(A) $137.7mm (A) Potential Proceeds NOI MONETIZING 8,100 ACRES OF LAND ≈ 6,000 Acres (A) Under Contract or Term Sheet ≈ 2,065 Acres (Not Under Contract) $0 CONVER
Slide 11: Momentum Monetizing Land
MOMENTUM MONETIZING LAND CONSOLIDATED TOMOKA Monetizing Land With Tax Deferred Strategy (Land Sales in $000’s) Dramatic Acceleration Monetizing Land Annual Land Sales for 2011 – Q1 2018(2) & Pipeline(A) as of 4/16/18 11 (1) 2011 – YTD 2018 Total Sales $109.7mm Acres Sold 2,685 (2) Total Pipeline
Slide 12: Pipeline of Potential Land Sales
PIPELINE OF POTENTAL LAND SALES(A) As of April 17, 2018 SF –Single Family; AR –Age Restricted, MF – Multi-Family RV – Recreational Vehicle Park Substantial Pipeline for Continued Growth to Income Note: For footnotes #1 through #5 see slide 50 CONSOLIDATED TOMOKA 12 Total Acreage East of I- 95 1,10
Slide 13: Land Under Contract - Tomoka Town Center
LAND UNDER CONTRACT(A) CONSOLIDATED TOMOKA Total Acres (Remaining Under Contract) 35 Sales Price $14.4mm Price Per Acre $409,000 Expected Closing Q4 ‘18 Tomoka Town Center Big Box Retail Power Center 13 www.nadg.com/property/Tomoka-town-center
Slide 14: Land Under Contract
CONSOLIDATED TOMOKA LAND UNDER CONTRACT(A) Total Acres 123 Sales Price $29.3mm Price Per Acre $238,000 Expected Closing ‘19 Commercial/Retail 14
Slide 15: Land Under Contract
CONSOLIDATED TOMOKA LAND UNDER CONTRACT(A) Total Acres 9 Sales Price $3.3mm Price Per Acre $367,000 Expected Closing Q4 ‘18 Commercial/Retail 15
Slide 16: Land Under Contract - Distribution Center
CONSOLIDATED TOMOKA LAND UNDER CONTRACT(A) Total Acres 71 Sales Price $5.0mm Price Per Acre $70,000 Expected Closing ‘19 Distribution/Warehouse 400,000 SF Distribution Center 16
Slide 17: Land Under Contract - Multi-Family
CONSOLIDATED TOMOKA LAND UNDER CONTRACT(A) Total Acres 45 Sales Price $5.2mm Price Per Acre $116,000 Expected Closing Q3 ’18 & ’20 Multi-Family 17
Slide 18: Absorption of Land West of I-95
ABSORPTION OF LAND WEST OF I-95(A) Largest Area of Land Holdings Parcel Use Acres $ Amount Amount per Acre Est. Timing 1 ICI 1,016 $21.0mm $21k ’19 2 Minto 1,614 $26.5mm $16k Q4 ’18 3 Mitigation Bank (1) 2,492 $15.3mm $6k Q2 ’18 4 ICI 146 $1.4mm $10k Q4 ’18 5 Residential 200 $3.3mm $17k Q4 ’18 & ‘20
Slide 19: Mitigation Bank Transaction
MITIGATION BANK TRANSACTION(A) Opportunity: Convert approx. 2,500 acres into wetland mitigation bank in Tiger Bay Basin serving eastern Volusia & southern Flagler Counties. Acres: 2,492 Potential JV Closing: Q2 2018 Est. Initial Credit Sales (1) : Q3 2018 Status: Interest purchase agreement executed
Slide 20: Available Land Parcel
CONSOLIDATED TOMOKA AVAILABLE LAND PARCEL (A) Development Opportunity at Williamson Crossing 20 Total Acres 23 Value Range per Acre(A) $210k - $210k Value Range $(A) $4.6mm - $4.8mm Conceptual Site Plan
Slide 21: Portfolio Highlights
PORTFOLIO HIGHLIGHTS CONSOLIDATED TOMOKA Tripled NOI – Upgraded & Diversified the Portfolio 22 Portfolio Transformation Total Square Feet 589,000 Total NOI (annualized) $9.1mm Properties 29 Properties vacant/subleased 6 2011(1) 2018(2) Total Square Feet 2,092,968 Total NOI(C) (annualized) $27.5mm Pr
Slide 22: Portfolio Highlights
PORTFOLIO HIGHLIGHTS As of April 13, 2018 CONSOLIDATED TOMOKA Transitioning to Single-Tenant Over Time 23 Portfolio Mix Annual NOI (C) ≈$27.5mm Wgtd. Avg. Lease Term 8.0 yrs. 13 States Square Feet ≈2.1mm High Quality & Diversified Portfolio 43% 57% Office Retail 70% 30% Single-Tenant Multi-Tenant
Slide 23: Portfolio Highlights
PORTFOLIO HIGHLIGHTS CONSOLIDATED TOMOKA As of April 13, 2018 Total Properties Annualized NOI (1) (C) Total Square Feet (2) Weighted Average Lease Term Investment Grade Tenants Different Industries in Tenant Mix States Single Tenants >10% of NOI (C) 36 $27.5 ≈2.1 8.0 43% 16 13 1 Stronger Markets Str
Slide 24: Property Highlights
CONSOLIDATED TOMOKA PROPERTY HIGHLIGHTS (ranked by NOI) LOCATION: Raleigh, NC SQ. FEET: 450,393 TENANT: Wells Fargo CREDIT: A+ REMAINING TERM: 6.5 % of CTO NOI: 10.1% PURCHASE PRICE: $42.3 million PRICE/Sq. Ft. : $98 CAP RATE: 6.53% LOCATION: Hillsboro, OR SQ. FEET: 211,863 TENANT: Wells Fargo CREDI
Slide 25: Property Highlights
Date Acquired: July 2015 Date Acquired: January 2013 CONSOLIDATED TOMOKA PROPERTY HIGHLIGHTS (ranked by NOI) LOCATION: Jacksonville, FL SQ. FEET: 136,856 TENANT: Multiple CREDIT: NR REMAINING TERM (1): 3.6 % of CTO NOI: 7.1% PURCHASE PRICE: $25.1 million PRICE/Sq. Ft. : $183 CAP RATE: 7.76% Diversit
Slide 26: Property Highlights
CONSOLIDATED TOMOKA PROPERTY HIGHLIGHTS (ranked by NOI) LOCATION: Fort Worth, TX SQ. FEET: 136,185 TENANT: Albertsons & others CREDIT: B REMAINING TERM (1) : 4.2 % of CTO NOI: 3.4% PURCHASE PRICE: $15.3 million PRICE/Sq. Ft. : $112 CAP RATE: 6.02% Diversity & Balance Credit & Value Multi-Tenant Reta
Slide 27: Opportunistic Investments
OPPORTUNISTIC INVESTMENTS CONSOLIDATED TOMOKA Entitled for >1 million sq. ft. vertical development 6.04 acres Daytona Beach The Beach Parcel 2 Single-Tenant Net Lease Properties (restaurants) Total Square Feet: 12,044 Total Investment at Completion: $18.5 million (1) Est. investment yield (for 2 res
Slide 28: Opportunistic Investments - The Grove at Winter Park
OPPORTUNISTIC INVESTMENTS CONSOLIDATED TOMOKA Finding Value Creating Organic Returns Organic Income Growth for 2018 ≈112,000 sq. ft. situated on 14.35 acres Anchor Opened February 2017 Outparcel Total est. investment: ≈$12.5 million (H) Current 63% Leased (1) NOI in 2018 Q1 2018 = $135k Est. renovat
Slide 29: Target Market Map
Income Properties in Top 25 Markets Investment – Indicates ranking of acquisition capital into respective market Development – Indicates ranking of development capital into respective market Source: ‘2018 Emerging Trends in Real Estate’ publication by Urban Land Institute and PWC TARGET MARKET MAP S
Slide 30: Acquisition Methodology
ACQUISITION METHODOLOGY CONSOLIDATED TOMOKA INVESTMENT TARGET Real Estate Attributes Demo – graphics Land Value Market Comps Alternative Use Parking Access Visibility Traffic Counts Location Property Level Sales Credit- Worthiness Tenant Attributes Store Comparisons Rent Coverage Tenant’s Market Pre
Slide 31: Top Tenants Versus Peers
TOP TENANTS VERSUS PEERS CONSOLIDATED TOMOKA Better Real Estate Better Credit BB- 5.1% B- 4.1% B+ 3.8% B+ 3.4% NR 4.2% BBB 6.5% BBB 5.1% BBB 3.9% B+ 4.0% BB+ 3.6% BBB 3.3% BB+ 3.2% BBB 3.0% BBB 2.7% B- 6.5% 8.0 9.6 10.5 11.4 9.5 14.0 37.8% (2) 29.8% 24.3% 28.5% 44.2% 35.2% 57%/43% 80%/5%/15% 100%/0%
Slide 32: How CTO's Portfolio Stacks Up
HOW CTO’S PORTFOLIO STACKS UP CONSOLIDATED TOMOKA Stronger Demographics = Better Markets & Long-Term Real Estate 33 Three Mile Population(1)(3) Implied Cap Rate(2) 3-Mile Median Household Income(1)(3) 3-Mile Avg. Household Income(1)(3) CTO info as of April 2018 Peer implied cap rates as of April 13,
Slide 33: Golf Operations
GOLF OPERATIONS CONSOLIDATED TOMOKA To Grow Membership Rooftops Will Make the Difference 34 Revenue Membership $ in Millions Transition to Arcis Golf Transition to Arcis Golf 307 355 366 391 406 390 0 100 200 300 400 500 2013 2014 2015 2016 2017 Q1 2018 $5.07 $5.13 $5.24 $5.19 $5.10 $1.40 $- $1.00 $
Slide 34: Efficient Overhead
EFFICIENT OVERHEAD CONSOLIDATED TOMOKA Efficient Despite Costs Caused by Actions of Largest Shareholder 35 (% of Total Revenues as of December 31, 2017) (1) (2) (1) (1) (3) (1) Weighted average of 12.43% 2018 peer group Adjusted for ≈ $1.6 million in legal, accounting, and other expenses associated
Slide 35: Liquidity & Leverage
LIQUIDITY & LEVERAGE CONSOLIDATED TOMOKA 64% of Debt at Fixed rate ≈73% Unsecured Weighted Average Rate ≈4.00% Average Duration 4.8 years As of March 31, 2018 Debt Schedule ($ in millions) Liquidity Position ($ in 000’s) Total Commitment of Credit Facility = $130 million Amount Outstanding at face v
Slide 36: Returning Capital to Shareholders
RETURNING CAPITAL to SHAREHOLDERS (B)(D) CONSOLIDATED TOMOKA Cumulative From 2012 Through Q1 2018 Disciplined Approach to Returning Capital 37 Cumulative Shares Purchased Cumulative $ Repurchased ($ in millions) Aggregate Average Price/Share $50.39 Annualized Dividend per Share Consistent Approach –
Slide 37: Q1 '18 Actuals vs FY '18 Guidance
Q1 ‘18 ACTUALS vs FY ‘18 GUIDANCE CONSOLIDATED TOMOKA Strong Start Recycling Capital 38 2018 Guidance YTD 2018 Actuals Earnings Per Share (Basic) (1) (2) $7.25 - $8.25 $1.97 Acquisition of Income-Producing Assets $80mm - $120mm $26.5mm Target Investment Yield (Initial Yield – Unlevered) 5.75% - 7.25
Slide 38: Single-Tenant Portfolio
CONSOLIDATED TOMOKA (1) Two properties Single-Tenant Portfolio (C) APPENDIX 39 100% Occupied 100% Leased As of April 13, 2018 (1) Tenant/Building S&P Credit Rating Location Property Type Rentable Square Feet Remaining Lease Term % of NOI Wells Fargo A+ Portland, OR Office 211,863 7.8 11.6% Wells Far
Slide 39: Multi-Tenant Portfolio
CONSOLIDATED TOMOKA Multi-Tenant Portfolio APPENDIX 40 (C) As of April 13, 2018 Tenant/Building Class Location Property Type Rentable Square Feet Remaining Lease Term % of NOI 3600 Peterson NR Santa Clara, CA Office 75,841 4.0 8.7% 245 Riverside Ave N/A Jacksonville, FL Office 136,856 3.6 7.1% Whole
Slide 40: Appendix - The Map
APPENDIX CONSOLIDATED TOMOKA The Map 41
Slide 41: Intersection of Economic Development
APPENDIX CONSOLIDATED TOMOKA Intersection of Economic Development Intersection of I-95 and LPGA Boulevard Under Construction Under Construction Under Construction Under Construction 42 3,400 Homes 1,200 Homes
Slide 42: Active Adult Community Development
APPENDIX CONSOLIDATED TOMOKA ≈ 100 Homebuyers Moved In by Q2 2018 Active Adult Community – 1st Phase: 3,400 homes Development in Progress on Land Sold by CTO 43 1st Inventory Release 300+ Homes
Slide 43: Single-Family Residential Community
APPENDIX CONSOLIDATED TOMOKA Homes Deliveries Starting in 2018 Single-Family Residential Community – ≈1,200 homes Development in Progress on Land Sold by CTO 44
Slide 44: Development Adds to Surge of Growth Along LPGA
APPENDIX CONSOLIDATED TOMOKA Development Adds to Surge of Growth Along LPGA Development in the News (posted April 12, 2018) 45 DAYTONA BEACH — Another big piece is being added to the white hot development puzzle already taking shape just west of Interstate 95. On Saturday, ICI Homes will hold a gran
Slide 45: Tomoka Town Center Retail Power Center
APPENDIX CONSOLIDATED TOMOKA North American – Tomoka Town Center ≈400,000 Square Foot Retail Power Center Development in Progress on Land Sold by CTO 46
Slide 46: 276-Unit Luxury Rental Community
APPENDIX CONSOLIDATED TOMOKA At Tomoka Town Center 276-Unit Luxury Rental Community Development in Progress on Land Sold by CTO 47 Projected development costs $39 million Final Site Approval expected Feb ’18 Construction start date Spring ‘18 Opening expected Q2 2019 Tomoka Pointe TO BE UPDATED
Slide 47: Distribution Center
APPENDIX CONSOLIDATED TOMOKA Opened Q1 2018 ≈400,000 Square Foot Distribution Center Development in Progress on Land Sold by CTO 48
Slide 48: Honda Dealership
APPENDIX CONSOLIDATED TOMOKA Honda Dealership Adjacent to CarMax Development in Progress on Land Sold by CTO 49
Slide 49: End Notes
END NOTES CONSOLIDATED TOMOKA 50 IMPORTANT ADDITIONAL INFORMATION AND WHERE TO FIND IT The Company, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from the Company’s shareholders in connection with the matters to be considered at t
Slide 50: Contact Us
Consolidated-Tomoka Land Co. 1140 N. Williamson Blvd, Suite 140 Daytona Beach, FL 32114 Contact Us Investor Relations: Mark E. Patten mpatten@ctlc.com Info@ctlc.com www.ctlc.com NYSE American: CTO BUILDING ON OUR SUCCESS For additional information, please see our most recent Annual Report on Form 10
Consolidated Tomoka Land — Proxy Contest (April 2018) on 6ix