Cto Realty Growth, Inc. · NYSE:CTO
Cto Realty Growth — Consolidated Tomoka Land — Investor Presentation (June 2018)
54 slides from Cto Realty Growth's investor presentation, Jun 4, 2018
Slide 1: Investor Presentation
Hyman Ave. & Hunter St. Aspen, Colorado CVS Dallas, Texas The Beach Restaurants Daytona Beach, Florida INVESTOR PRESENTATION Whole Foods Market Sarasota, Florida Lowe’s Katy, Texas NYSE American: CTO 3600 Peterson Santa Clara, CA
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: Key Takeaways About CTO
KEY TAKEAWAYS ABOUT CTO CONSOLIDATED TOMOKA 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 Net Lease Peers) Better Portfolio Balance/Diversification (vs Net Lease Peers) Focusing Por
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 (ACQUISITIONS) IMPROVE and ENHANCE INCOME PROPERTY PORTFOLIO 1st Buc-ee’s in Florida Construction expected Summer 2018 SALES PRICE: $13.9 mill
Slide 5: Track Record of Strong Operating Results
’12 – ’17 CAGR 41% 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 116% ’12 – ’17 CAGR 137% ’12 – ’17 CAGR 11% Consistent Growth in Key
Slide 6: Cash Flow Growth
CASH FLOW GROWTH(1) CONSOLIDATED TOMOKA Significant Free Cash Flow Growth For the Fiscal Years-Ended 6 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
Slide 7: CTO Snapshot
CTO SNAPSHOT CONSOLIDATED TOMOKA A Lot More Income than Land Percentages based on values derived on NAV worksheet on Slide #8 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 Principal Max Maturity - 2018
Slide 8: NAV Worksheet
NAV WORKSHEET (A)(F)(I) CONSOLIDATED TOMOKA Indicative of Meaningful Discount in our Stock Price 8 Cap Rate on NOI (C) Contract amounts As of June 1, 2018 As of March 31, 2018 Excludes intangible lease liabilities (5) Excludes NOI for Grove at Winter Park Highlighted Components of NAV Basis for Valu
Slide 9: 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 6/1/18 9 (1) 2011 – YTD 2018 Total Sales $109.7mm Acres Sold 2,685 (2) Total Pipeline(A
Slide 10: Economic Impact of CTO's Land Sales
CONSOLIDATED TOMOKA ECONOMIC IMPACT OF CTO’S LAND SALES Development = Favorable Impact on Value of Remaining Land 10 Impact of Development on Land CTO Sold (Since 2011) >$1.5 Billion in total capital investment (actual-to-date & projected)(1) >3,500 added jobs (would reduce unemployment in Volusia C
Slide 11: Pipeline of Potential Land Sales
PIPELINE OF POTENTAL LAND SALES(A) As of June 1, 2018 SF –Single Family; AR –Age Restricted, MF – Multi-Family Substantial Pipeline for Continued Growth to Income CONSOLIDATED TOMOKA 11 Total Acreage East of I- 95 1,100 Acres Total Acreage West of I-95 7,000 Acres 1 12 2 3 4 8 9 11 10 5 6 7 13 1
Slide 12: Land Under Contract: Industrial Park
CONSOLIDATED TOMOKA LAND UNDER CONTRACT(A) Total Acres 850 Sales Price $34mm Price Per Acre $40,000 Expected Closing ’19 – ‘20 Industrial Park 12
Slide 13: Land Under Contract: Commercial/Retail
CONSOLIDATED TOMOKA LAND UNDER CONTRACT(A) Total Acres 123 Sales Price $29.3mm Price Per Acre $238,000 Expected Closing ‘19 Commercial/Retail 13
Slide 14: Land Under Contract: Residential Multi-Family
CONSOLIDATED TOMOKA LAND UNDER CONTRACT(A) Total Acres 80 Sales Price $16.0mm Price Per Acre $200,000 Expected Closing ‘19 Residential (Multi-Family) 14
Slide 15: 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 15 www.nadg.com/property/Tomoka-town-center
Slide 16: Land Under Contract: Multi-Family
CONSOLIDATED TOMOKA LAND UNDER CONTRACT(A) Total Acres 45 Sales Price (26 acres - $3.2mm; 19 acres - $2.0mm) $5.2mm Price Per Acre $116,000 Expected Closing 26 Acres Q3 ’18 19 Acres ’20 Multi-Family 16 26 acres
Slide 17: Land Under Contract: Distribution/Warehouse
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 17
Slide 18: Land Under Contract: Commercial/Retail
CONSOLIDATED TOMOKA LAND UNDER CONTRACT(A) Total Acres 9 Sales Price $3.3mm Price Per Acre $367,000 Expected Closing Q4 ‘18 Commercial/Retail 18
Slide 19: 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 20: 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 21: Available Land Parcel
CONSOLIDATED TOMOKA AVAILABLE LAND PARCEL (A) Development Opportunity at Williamson Crossing 21 Total Acres 23 Value Range per Acre(A) $200k - $210k Value Range $(A) $4.6mm - $4.8mm Conceptual Site Plan
Slide 22: Development Activity on Land Sold by CTO
DEVELOPMENT ACTIVITY ON LAND SOLD BY CTO CONSOLIDATED TOMOKA Intersection of Economic Development Intersection of I-95 and LPGA Boulevard 22 3,400 Homes 1,200 Homes Completed – In Operation Under Construction Construction set for Summer 2018
Slide 23: Income Property Investments
INCOME PROPERTY INVESTMENTS (1) Converting into Income ($000’s) Annual Acquisitions for 2011 – 2017, YTD 2018 and 2018 Guidance (H) Diversified Markets Higher Quality Properties Remaining acquisitions at the mid-point of 2018 guidance range (H) Net of master tenant purchase contribution of $1.5 mill
Slide 24: Portfolio Highlights
PORTFOLIO HIGHLIGHTS CONSOLIDATED TOMOKA Tripled NOI – Upgraded & Diversified the Portfolio 24 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 25: Portfolio Highlights
PORTFOLIO HIGHLIGHTS As of June 1, 2018 CONSOLIDATED TOMOKA Transitioning to Single-Tenant Over Time 25 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 26: Portfolio Highlights
PORTFOLIO HIGHLIGHTS CONSOLIDATED TOMOKA As of June 1, 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 7.9 43% 16 13 1 Stronger Markets Stron
Slide 27: Self-Developed Single-Tenant Net Lease
SELF-DEVELOPED SINGLE-TENANT NET LEASE 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 yie
Slide 28: Single-Tenant Retail Investment
SINGLE-TENANT RETAIL INVESTMENT CONSOLIDATED TOMOKA $26.5 Million (1) 20-Year Master Lease 19,596 Square Feet Increasing Yield Opportunity under Master Lease Structure 28 Net of master tenant contribution of $1.5 million of Purchase Price New Modern Construction – Master leased to prominent real est
Slide 29: Recycling Capital into Single-Tenant
RECYCLING CAPITAL INTO SINGLE-TENANT CONSOLIDATED TOMOKA Gain $3.7 million Daytona Beach, Florida Sq. Feet: 68,092 Sales Price/Sq. Ft.: $168 Harvesting Value Redeploying Capital 29 Redeployed into single-tenant office in target market with A+ credit tenant Portland (Metro), Oregon CAP RATE: 7.95% Mo
Slide 30: Market Focus Targeting Long-Term Real Estate
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 31: Acquisition Methodology
ACQUISITION METHODOLOGY CONSOLIDATED TOMOKA 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 Presence Rent Relativ
Slide 32: 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% 7.9 9.6 10.5 11.4 9.5 14.0 37.5% (2) 30.4% (4) 25.6% (4) 27.7% (4) 42.8% (4) 34.6% (4) 57%/43
Slide 33: 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 cap rates per Janney Montgomery S
Slide 34: Efficient Overhead
EFFICIENT OVERHEAD CONSOLIDATED TOMOKA Efficient Despite Costs Caused by Actions of Largest Shareholder 34 (% of Total Revenues as of December 31, 2017) (1) (2) (1) (1) (3) (1) Weighted average of 12.43% 2018 peer group Adjusted for ≈ $1.6 million in legal, accounting, and other expenses associated
Slide 35: Liquidity & Leverage
LIQUIDITY & LEVERAGE CONSOLIDATED TOMOKA 64% of Debt at Fixed rate ≈73% Unsecured Weighted Average Rate ≈4.00% Average Duration 4.8 years As of March 31, 2018 (unless otherwise noted) Debt Schedule ($ in millions) Liquidity Position ($ in 000’s) (1) Total Commitment of Credit Facility = $150 million
Slide 36: Returning Capital to Shareholders
RETURNING CAPITAL to SHAREHOLDERS (B)(D) CONSOLIDATED TOMOKA Cumulative From 2012 Through 6/1/18 Disciplined Approach to Returning Capital 36 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 37 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: Appendix
CONSOLIDATED TOMOKA 38 APPENDIX
Slide 39: Single-Tenant Portfolio
CONSOLIDATED TOMOKA (1) Two properties Single-Tenant Portfolio (C) APPENDIX 39 As of June 1, 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 7.6 11.6% Wells Fargo A+ Raleigh, NC Office 450
Slide 40: Multi-Tenant Portfolio
CONSOLIDATED TOMOKA Multi-Tenant Portfolio APPENDIX 40 (C) As of June 1, 2018 Tenant/Building Class Location Property Type Rentable Square Feet Remaining Lease Term % of NOI 3600 Peterson NR Santa Clara, CA Office 75,841 3.8 8.7% 245 Riverside Ave N/A Jacksonville, FL Office 136,856 3.5 7.1% Whole F
Slide 41: Property Highlights
CONSOLIDATED TOMOKA PROPERTY HIGHLIGHTS (ranked by NOI) LOCATION: Raleigh, NC SQ. FEET: 450,393 TENANT: Wells Fargo CREDIT: A+ REMAINING TERM: 6.3 % 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 42: 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): 3.5 % of CTO NOI: 7.1% PURCHASE PRICE: $25.1 million PRICE/Sq. Ft. : $183 CAP RATE: 7.76% Diversit
Slide 43: 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) : 4.0 % 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 44: The Map
APPENDIX CONSOLIDATED TOMOKA The Map 44
Slide 45: 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 45 1st Inventory Release ≈ 350 Homes Homes Sold Since November 2017 ≈ 300 Homes
Slide 46: 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 46
Slide 47: Tomoka Town Center
APPENDIX CONSOLIDATED TOMOKA Tomoka Town Center – Stores Opening Fall 2018 ≈400,000 Square Foot Retail Power Center Development in Progress on Land Sold by CTO 47
Slide 48: Tomoka Pointe Luxury Rental Community
APPENDIX CONSOLIDATED TOMOKA At Tomoka Town Center 276-Unit Luxury Rental Community Development in Progress on Land Sold by CTO 48 Projected development costs: $39 million Tomoka Pointe Opening expected: Q2 2019
Slide 49: Completed Development on Land Sold by CTO
APPENDIX CONSOLIDATED TOMOKA >1 Million Square Feet – Distribution, Outlet Retail, Office Completed Development on Land Sold by CTO 49 >100,000 Sq. Feet >600,000 Sq. Feet >400,000 Sq. Feet >67,000 Sq. Feet
Slide 50: Top Institutional Shareholders
APPENDIX CONSOLIDATED TOMOKA Top Institutional Shareholders ≈62% of Outstanding Shares 50 Wintergreen Advisers LLC (1) BlackRock Fund Advisors 27.8% 5.52% Dimensional Fund Advisors LP 4.18% The Vanguard Group, Inc. 3.38% Fidelity Management & Research Co. 3.21% Carlson Capital LP 2.91% Fenimore Asse
Slide 51: Board of Directors
APPENDIX CONSOLIDATED TOMOKA Board of Directors 51 THOMAS P. WARLOW, III Chairman, Georgetown Enterprises, Inc. President & Chairman, The Martin Andersen-Gracia Foundation, Inc. HOWARD C. SERKIN (VICE CHAIRMAN) Chairman, Heritage Capital, Inc. JOHN P. ALBRIGHT President & Chief Executive Officer, Co
Slide 52: Executive Management Team
APPENDIX CONSOLIDATED TOMOKA Executive Management Team 52 TERESA THORNTON-HILL Vice President & Corporate Counsel ICI Homes Cobb Cole Rogers Towers, P.A. E. SCOTT BULLOCK Vice President of Real Estate International Speedway Corporation Crescent Resources (Duke Energy) Pritzker Realty Group Disney De
Slide 53: End Notes
END NOTES CONSOLIDATED TOMOKA 53 End Notes references utilized in this presentation Certain transactions require the Company to incur the cost to provide mitigation credits necessary for applicable regulatory permits for the buyer. Pipeline refers to estimated proceeds from land under contract, howe
Slide 54: Contact Us
Hyman Ave. & Hunter St. Aspen, Colorado CVS Dallas, Texas The Beach Restaurants Daytona Beach, Florida INVESTOR PRESENTATION Whole Foods Market Sarasota, Florida Lowe’s Katy, Texas NYSE American: CTO 3600 Peterson Santa Clara, CA Contact Us Investor Relations: Mark E. Patten P: 386.944.5643 mpatten@
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