Granite Point Mortgage Trust Inc. · NYSE:GPMT
Granite Point Mortgage Trust — Investor Presentation (May 2018)
25 slides from Granite Point Mortgage Trust's investor presentation, May 23, 2018
Slide 1: Forward-looking statements
This presentation contains, in addition to historical information, certain forward-looking statements that are based on our current assumptions, expectations and projections about future performance and events. In particular, statements regarding future economic performance, finances, and expectatio
Slide 2: Company Overview
Company Overview Business formed in early 2015 to establish a commercial real estate lending platform for Two Harbors Investment Corp. (NYSE:TWO) Investment strategy focused on direct origination of floating-rate, first mortgage loans secured by institutional quality properties To capitalize on the
Slide 3: Granite Point Investment Highlights
Granite Point Investment Highlights 4 EXPERIENCED AND CYCLE-TESTED SENIOR CRE TEAM Each has over 20-year careers in the commercial real estate debt markets Extensive experience in investment management and structured finance Broad and long-standing direct relationships within the commercial real est
Slide 4: Commercial Real Estate Market Overview
Commercial Real Estate Market Overview
Slide 5: Market Environment
Market Environment 6 Source: Trepp LLC and Federal Reserve Bank, dated as of 10/20/2017. Source: Real Capital Analytics. Data from 12/31/2001 to 12/31/2017. Source: Federal Reserve Bank, Fourth Quarter 2017 Flow of Funds. Demand for Commercial Real Estate loans remains high Total CRE Debt: ~$3 trill
Slide 6: Market Environment (Cont'd)
Market Environment (Cont’d) 7 and market fundamentals remain strong Indicates periods when U.S. construction spending as a percent of GDP is below 1993-2009 average Source: Real Capital Analytics. Data from 1/1/2001 through 2/28/2018. Source: MS. Data from 1/1/1983 through 12/31/2017. Source: Census
Slide 7: Investment Strategy and Origination Platform
Investment Strategy and Origination Platform
Slide 8: Investment Philosophy
Investment Philosophy 9 Long-term, fundamental value-oriented investing philosophy; focus on relative value Emphasize selectivity and diversification Prioritize income-producing, institutional quality properties and owners/sponsors Cash flow is a key underwriting metric Intensive diligence with a fo
Slide 9: Primary and Secondary markets continue to offer attractive investment characteristics
10 Primary and Secondary markets continue to offer attractive investment characteristics aligned with our investment thesis We target the top 25 and generally up to the top 50 MSAs, searching for value nationwide We actively participate in the top 5 markets, which are large and liquid The next tier
Slide 10: Investment Strategy Overview
Investment Strategy Overview 11 Investment strategy Primary vs secondary markets Focus on generating stable and attractive earnings while maintaining a conservative risk profile Direct origination of first mortgage loans funding: Property acquisitions Refinancings Recapitalizations / restructurings
Slide 11: Target Investments
Target Investments 12 Primary target investments Floating rate first mortgage loans secured by income-producing U.S. commercial real estate Loans of $25 million to $150 million (averaging $35-40 million) Institutional-quality properties located in the primary and secondary markets Secured by major p
Slide 12: Investment Strategy Targeting Senior Loans
Investment Strategy Targeting Senior Loans 13 ILLUSTRATIVE PROPERTY CAPITAL STRUCTURE SENIOR FLOATING RATE LOANS PROVIDE EXPOSURE TO COMMERCIAL REAL ESTATE SECTOR THROUGH A DE-RISKED POSITION WITHIN A Property's CAPITAL STRUCTURE Our first mortgage loans are senior to our borrower’s significant equi
Slide 13: Origination Platform Overview
Origination Platform Overview Our origination approach produces a large universe of opportunities from which we can select the most attractive investments for our portfolio 14 PORTFOLIO GROWTH OVER TIME(1) Portfolio UPB ($ in millions) relationships Extensive and longstanding direct relationships wi
Slide 14: Credit Culture Based on Key Principles
Credit Culture Based on Key Principles 15 Portfolio construction on a loan-by-loan basis with each investment standing on its own merits and adhering to our overall credit culture Significant amount of resources are committed upfront to ensure comprehensive underwriting and structuring Team originat
Slide 15: Credit Culture Based on Key Principles
Credit Culture Based on Key Principles yN OUR CREDIT CULTURE HAS BEEN DEVELOPED AND NURTURED OVER OUR SENIOR CRE TEAM'S LONG-TENURE IN COMMERCIAL REAL ESTATE DEBT MARKETS * Portfolio construction on a loan-by-loan basis with each investment standing on its own merits and adhering to our overall cred
Slide 16: Investment Portfolio as of March 31, 2018
Investment Portfolio as of March 31, 2018 17 PROPERTY TYPE GEOGRAPHY COUPON STRUCTURE INVESTMENT TYPE Expressed as a monthly equivalent yield. Weighted average yield excludes fixed rate loans. Includes mixed-use properties. Key Portfolio statistics Outstanding Principal Balance $2.4b Total Loan Comm
Slide 17: Well-Positioned For Rising Short-Term Rates
Well-Positioned For Rising Short-Term Rates A 100 basis point increase in U.S. LIBOR would increase our annual net interest income per share by approximately $0.19 18 PORTFOLIO FLOATING VS FIXED NET INTEREST INCOME PER SHARE SENSIVITY TO CHANGES IN US LIBOR(1) Represents estimated change in net inte
Slide 18: Illustrative Investments
19 Illustrative Investments Note: The above loan examples are provided for illustration purposes only. A $23 million senior floating rate loan refinancing of a well located Class A office building in the South Beach sub-market of Miami, Florida Strong cash flow profile and an LTV of 61% Property is
Slide 19: Illustrative Investments
A $23 million senior floating rate loan refinancing of a well located Class A office building in the South Beach sub- market of Miami, Florida Strong cash flow profile and an LTV of 61: Property is currently occupied by one tenant under a long term lease with a layout that can accommodate multiple t
Slide 20: Attractively Yielding Investment Portfolio
Attractively Yielding Investment Portfolio(1) 21 ($ in millions) Maximum Loan Commitment Principal Balance Carrying Value Cash Coupon(2) Yield(3) Original Terms (Years) Initial LTV(4) Stabilized LTV First Mortgages $2,640.0 $2,326.3 $2,306.9 L + 4.41% L + 4.97% 3.4 69.1% 64.0% Subordinated Loans $59
Slide 21: Diversified Capital Sources
Diversified Capital Sources 22 REPRUCHASE AGREEMENTS 5 large institutional providers of long-term revolving financing Total borrowing capacity of $2.3 billion(1) COLLATERALIZED LOAN OBLIGATION Financed a portfolio of $826 million of senior loan investments $660 million of investment grade notes sold
Slide 22: GPMT 2018-FL1 CRE CLO Overview
GPMT 2018–FL1 CRE CLO Overview(1) 23 Transaction Highlights Illustrative Pro forma Financing mix $826 million clo financing 25 existing investments at initial advance rate of approximately 80% and weighted average cost of funds at issuance of LIBOR + 1.27%(2) $826 million total collateral across 25
Slide 23: Illustrative Senior Whole Loan Economics
FOR ILLUSTRATIVE PURPOSES ONLY. The information contained on this page is not meant to be an indicator of current or expected Company returns and, instead, is hypothetical only and subject to many different risks and uncertainties that are out of the Company’s control. See the Safe Harbor statement
Slide 24: Illustrative Senior Whole Loan Economics
Illustrative Senior Whole Loan Economics y LEVERED SENIOR WHOLE LOAN L410.50% + We generally target low double-digit gross asset level returns that are also positively levered to increases in BOR + Applying moderate amount of leverage to a senior loan investment generates attractive risk adjusted re
Slide 25: Granite Point Mortgage Trust
GRANITE POINT. © MORTGAGE TRUST
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