Blackstone Mortgage Trust, Inc. · NYSE:BXMT
Blackstone Mortgage Trust — Capital Trust — Investor Presentation (March 2006)
28 slides from Blackstone Mortgage Trust's investor presentation, Mar 17, 2006
Slide 1: Company Presentation, March 2006
Exhibit 99.1 Company Presentation March 2006
Slide 2: Disclaimer
Disclaimer Except for historical information contained herein, the statements in this presentation regarding the Company's business, strategy, portfolio management and results of operations are forward-looking statements that are dependent upon certain risks and uncertainties, including those relate
Slide 3: Table of Contents
I. Overview II. Investment Strategy III. Financial Information TABLE OF CONTENTS
Slide 4: Capital Trust
o CAPITALTRUST
Slide 5: Capital Trust
Capital Trust Largest dedicated commercial real estate subordinate debt investor in the US Founded by Sam Zell and John Klopp in 1997 Originated $6.2 billion of investments since inception Unparalleled track record Less than 1.0% loss experience on the entire portfolio Fully integrated internal mana
Slide 6: Unique Business Model
OVERVIEW I - 2 CT Investment Management Co., LLC (TRS) 100% CT Mezzanine Partners II LP Unique Business Model Balance Sheet Net Interest Margin Investment Management Fee Income CT Mezzanine Partners III, Inc. + Capital Trust, Inc. (NYSE: “CT”) (Management Contracts) Investment Manager CDO Collateral
Slide 7: Recent Highlights
OVERVIEW I - 3 Recent Highlights Dividend Activity Paid Q4 ‘05 dividend of $0.60 per share (+9%) and a special dividend of $0.20 per share Investment Volume 2005 originations of $1.5 billion on balance sheet and for funds under management (through 12/31/05) Efficient Capital Raising Closed first Tru
Slide 8: Share Price and Valuation Metrics
NYSE: CT Share Price (Close) Current (3/13/06) $32.82 High (5/31/05) $34.97 Low (10/11/05) $28.87 Valuation Metrics CT Peers (1) Price/Book 1.5x 1.5x P/E TTM 11.4x 12.4x Div. Yield (2) 7.3% 8.9% Daily Volume Average (3/13/05-3/13/06) 32,377 Trailing 12-Month Performance 3Q’ 05 Div. Note: (1) Peer gr
Slide 9: Growth Strategy
OVERVIEW I - 5 Growth Strategy Continue to grow balance sheet assets Continue to grow investment management business through the sponsorship of additional funds Create the most efficient capital structure through the use of CDOs and other structured products Expand our franchise Incubate and/or acqu
Slide 10: Seasoned Management Team
Lending/Investing Asset Management Administration Finance Capital Markets CEO, John Klopp Board of Directors Sam Zell Thomas Dobrowski Martin Edelman Craig Hatkoff Edward Hyman John Klopp Henry Nassau Josh Polan Lynne Sagalyn OVERVIEW I - 6 38 Professionals CFO, Geoffrey Jervis COO, Stephen Plavin S
Slide 11: Investment Strategy
Investment Strategy
Slide 12: A Large and Dynamic Market
II - 1 Note: (1) Source: Federal Reserve Data. INVESTMENT STRATEGY A Large and Dynamic Market CMBS has taken a larger share of a growing market Market Growth 3x CMBS Growth 9x
Slide 13: Growth of Securitization
II - 2 INVESTMENT STRATEGY Growth of Securitization Record issuance of $169 billion in 2005 (1)
Slide 14: Evolving Capital Structure
Equity 1 st Mortgage A Note Equity Equity IG CMBS Equity Traditional Early Stage Mezzanine Current Multiple Tranches of Subordinate CMBS, B Notes, Mezzanine Loans and Preferred Equity Evolving Capital Structure INVESTMENT STRATEGY II - 3
Slide 15: Relative Value
Equity AAA to A CMBS BBB AAA to A CMBS BBB Equity II - 4 Senior B Note Junior B Note Junior Mezzanine Senior Mezzanine L + 125 to 200 bps L + 200 to 325 bps L + 300 to 400 bps L + 400 to 1000+ bps INVESTMENT STRATEGY Relative Value B BB NR Gross Unleveraged Returns Gross Unleveraged Returns L + 15 t
Slide 16: Collateralized Debt Obligation Model
IG CDO Notes CDO Equity Sold to 3 rd Parties Retained by Capital Trust II - 5 Below IG CDO Notes INVESTMENT STRATEGY Collateralized Debt Obligation Model Mezzanine Loans B Notes Subordinate CMBS Capital Trust RE CDO 2004-1 $324 million of collateral / Reinvesting Capital Trust RE CDO 2005-1 $338 mil
Slide 17: Competitive Advantages
II - 6 INVESTMENT STRATEGY Competitive Advantages Investment Origination Broad Network/Established Relationships Structural Creativity and Flexibility Quick Turnaround/Certainty of Closing Transaction Execution Credit Underwriting Expertise Financial Structuring Experience Proven Process Capital Acc
Slide 18: Senior Debt Provided by Major Lenders
Senior Debt Provided by Bank of America Sotheby’s Building New York, NY $235 Million Senior Debt Provided by Nomura 401 East Ocean Boulevard Long Beach, CA $14 Million Senior Debt Provided by Merrill Lynch GGP Portfolio Nationwide $1 Billion Senior Debt Provided by IXIS Real Estate Capital Sea-Tac E
Slide 19: Investment Process
Origination Asset Mgmt. Approval Underwriting II - 8 Originators Due Diligence Senior Lenders Borrowers Brokers Deal Team Business Credit Team Finance/Capital Markets Team Legal Structure Investment Committee Board of Directors Credit Providers Partners Asset Mgmt. Team Credit Team Finance/Capital M
Slide 20: Risk Management Principles
II - 9 INVESTMENT STRATEGY Risk Management Principles Create diversified portfolios Asset category, property type and geographic market Prudently employ leverage Enhance returns Increase the size and diversity of the portfolios Manage a matched book Control asset/liability mix (index & duration) Use
Slide 21: Financial Information
Financial Information
Slide 22: Capital Trust, Inc. Structure and Balance Sheet
Capital Trust, Inc. 12/31/05 Assets $1,558 Liabilities $1,219 Equity $339 CT Investment Management Co., LLC (TRS) (100% owned) (Management Contracts) CT Mezzanine Partners II LP 12/31/05 Assets $63 Liabilities $39 Equity $24 (4.7% owned) (5.9% owned) III - 1 Net Interest Margin Base and Incentive Ma
Slide 23: Assets
III - 2 FINANCIAL INFORMATION Assets ($000s) Assets Cash Loans CMBS Fund Investments Total Return Swap Interest Rate Hedge (Swap) Other Total Assets Liabilities Secured Debt CDO Debt Other Total Liabilities Common Equity 12/31/05 $26,238 990,142 487,970 14,301 4,000 2,273 32,606 $1,557,530 $369,751
Slide 24: Portfolio Breakdown
III - 3 FINANCIAL INFORMATION Portfolio Breakdown Notes: (1) Capital Trust portfolio as of 12/31/05.
Slide 25: Liabilities and Equity
Assets Cash Loans CMBS Fund Investments Total Return Swap Interest Rate Hedge (Swap) Other Total Assets Liabilities Secured Debt CDO Debt Other Total Liabilities Common Equity 12/31/05 $26,238 990,142 487,970 14,301 4,000 2,273 32,606 $1,557,530 $369,751 823,744 25,185 $1,218,680 $338,850 Liabilitie
Slide 26: CT Investment Management Co., LLC
CT Investment Management Co., LLC (TRS) CT Mezzanine Partners II LP 12/31/05 Assets $63 Liabilities $39 Equity $24 III - 5 FINANCIAL INFORMATION Investment Management $1.2 billion of investments Investment period expired 1.3% mgmt. fee per annum 20% of profits after 10% pref. return and 100% return
Slide 27: Income Statement
Portfolio Net Interest Margin Interest Income Interest Expense Net Interest Margin Other Revenue Fund Management Fees Fund Investment Income Other Subtotal Other Expenses G&A D&A Subtotal Income Taxes Net Income Net Income per share (diluted) Dividends per share 12/31/05 $28,841 13,521 15,320 5,130
Slide 28: Conclusion
FINANCIAL INFORMATION III - 7 Conclusion Dominant franchise in an attractive/growing market niche Organic growth through: Balance sheet investments – net interest margin Assets under management – base and incentive management fees Stable capital structure through the use of CDOs and other structured