Chicago Atlantic Real Estate Finance, Inc. · NASDAQ:REFI
Chicago Atlantic Real Estate Finance — Q1 2024 Earnings Presentation
23 slides from Chicago Atlantic Real Estate Finance's earnings presentation, May 7, 2024
Slide 1: First Quarter 2024 Earnings Supplemental
First Quarter 2024 Earnings Supplemental May 7, 2024
Slide 2: Important Disclosure Information
Important Disclosure Information 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
Slide 3: Company Overview
Company Overview Successful IPO in December 2021 (NASDAQ: REFI) $2.1B+ 70+ in loans closed since cannabis loans closed Track record of identifying market inefficiencies, platform inception(1) across platform(1) particularly where risk is fundamentally mispriced Ability to redeploy capital quic
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 F
Slide 5: Industry-Leading Management and Investment Team
Industry-Leading Management and Investment Team Deep Cannabis, Credit and Real Estate Expertise With Entrepreneurial Approach John Mazarakis(1) Tony Cappell(1) Andreas Bodmeier(1) Peter Sack(1) Phil Silverman Executive Chairman Co-CEO President and CIO Co-CEO CFO Originated over $500mm in Debt i
Slide 6: Veteran Independent Directors
Veteran Independent Directors Significant Public Board, REIT, Financial and Corporate Governance Expertise Jason Papastavrou Donald Gulbrandsen Fredrick C. Herbst Brandon Konigsberg Michael Steiner Lead Independent Director Current investor in Chicago Audit Committee Chair Former CFO at J.P.
Slide 7: Investment Portfolio Activity
Investment Portfolio Activity COMMITMENTS (in millions) $7.5 $11.2 $14.2 $13.6 Weighted average yield $371.3 $373.7 to maturity of ~19.4% $344.7 $313.7 $315.6 as of March 31, 2024 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Drawn Future Funding Chicago Atlantic Real Estate Finance, Inc. | 7
Slide 8: Portfolio Diversification
Portfolio Diversification Our portfolio is diversified across operators, geographies, and asset types P R I N C I P A L O U T S T A N D I N G (1) By Loan By Location By Real Estate Collateral Type 2% 1% 0% 3% 3% 2% 18.0% 15% 3% 35.5% 39.2% 6% 4.3% WA Loan 14% $377.6M 7.8% Size = 5.5% 7% $377.6M 7% 6
Slide 9: Portfolio Diversity (Continued)
Portfolio Diversity (Continued) Our portfolio is diversified across operators, geographies, and asset types PRINCIPAL OUTSTANDING1 By Operator Integration By Construction Component2 Percentage of Real Estate Collateral by State and Operator Type3 30.0% 26.7% 25.0% 20.0% $377.6M $377.6M 15.0% 10.0% 7
Slide 10: Loan Collateral Coverage
Loan Collateral Coverage 40.5% loan to enterprise value and 1.3x real estate collateral coverage P R I N C I P A L B Y L T E V R A T I O (1) R E A L E S T A T E C O L L A T E R A L C O V E R A G E (2) 140,000,000 50% 120,000,000 45% 40% 100,000,000 35% 29% 29% 80,000,000 30% 21% 29% 25% 60,000,000 2
Slide 11: Portfolio Overview (as of March 31, 2024)
Portfolio Overview1 (as of March 31, 2024) Initial Funding Maturity Total Principal Carrying Percent of Future YTM Loan Location(s) Date Date Commitment Balance Value Portfolio Fundings Fixed/Floating Cash Rate PIK Rate All-In Rate IRR 1 Various 10/27/2022 10/30/2026 $ 30,000,000 $ 29,820,000 $ 29,2
Slide 12: Loan Origination Pipeline
Loan Origination Pipeline Driven by proprietary deal sourcing Over 700 Qualified Deals Total current pipeline of Sourced and Reviewed ~$585mm1 Continued legalization at the state level creates a new influx of $18.6mm1 in Potential Fundings opportunities Increase in M&A activity requires addition
Slide 13: Compelling Market Opportunity
Compelling Market Opportunity U . S . C A N N A B I S S A L E S (1) MARKET DRIVERS ($ in billions) Sales of the U.S. cannabis industry expected to rival beer $56.9 ($100bn), spirits ($97bn) and wine ($62bn) by 2030 $53.5 $49.7 $14.1 Continued legalization at state level expected to drive $13.5 $
Slide 14: Compelling Market Opportunity
Compelling Market Opportunity LEGISLATIVE TAILWINDS C U R R E N T L E G A L I Z A T I O N (1): 4 0 S T A T E S Continued state-level legalization, including transition from medical to adult-use cannabis. Adult-use sales began during the first quarter of 2023 in Missouri and Connecticut. Adult-
Slide 15: Competitive Landscape
Competitive Landscape COMPETITORS: GROUPS COMPETITIVE ADVANTAGES Shorter loan durations Better diversification Sale/ Mortgage BDCs Leaseback REITs REITs Lower LTVs Deal leads Close relationships with Ability to upsize Cannabis- Community management teams Focused Banks Lenders REIT shares 50% of the
Slide 16: Market Performance | Total Net Return (Index Comparison)
Market Performance | Total Net Return (Index Comparison) For the period from December 2021 (IPO) through March 31, 2024 Sources: Bloomberg, S&P Global Data Repository (assumes dividend reinvestment) Chicago Atlantic Real Estate Finance, Inc. | 16
Slide 17: Market Performance | Price / Book Value per Share (Peers)
Market Performance | Price / Book Value per Share (Peers) For the period from January 1, 2023 through March 31, 2024 Sources: Bloomberg, Capital IQ, Company Filings Note: Book value per share amounts are based on latest reported metrics at the time of stock trading; Book values are defined as common
Slide 18: Appendix
Appendix Q1 2024 Financial Overview Chicago Atlantic Real Estate Finance, Inc. | 18
Slide 19: Consolidated Balance Sheets
Consolidated Balance Sheets Chicago Atlantic Real Estate Finance, Inc. | 19
Slide 20: Consolidated Statements of Operation
Consolidated Statements of Operation Chicago Atlantic Real Estate Finance, Inc. | 20
Slide 21: Reconciliation of Distributable Earnings and Adjusted Distributable Earnings to GAAP Net Income
Reconciliation of Distributable Earnings and Adjusted Distributable Earnings to GAAP Net Income Chicago Atlantic Real Estate Finance, Inc. | 21
Slide 22: Real Estate Collateral Overview
Real Estate Collateral Overview Amounts as of March 31, 2024. Chicago Atlantic Real Estate Finance, Inc. | 22
Slide 23: Management Agreement Overview
Management Agreement Overview External Manager Management Agreement and Equity Incentive Plan Externally-managed by Chicago Atlantic REIT Manager, LLC, a Initial term of three years subsidiary of Chicago Atlantic Group, LLC Following the initial term, the agreement automatically renews every
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