Blackstone Mortgage Trust, Inc. · NYSE:BXMT
Blackstone Mortgage Trust — Capital Trust — Investor Presentation (September 2008)
28 slides from Blackstone Mortgage Trust's investor presentation, Sep 10, 2008
Slide 1: Company Presentation September 2008
Company Presentation September 2008
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: Overview
Overview o CAPITALT RUST
Slide 5: Capital Trust
Capital Trust Publicly traded (NYSE: "CT") finance and investment management company specializing in loans and securities backed by commercial real estate assets Founded by Sam Zell and John Klopp in 1997 Originated over $10.5 billion of investments since inception Unique business model Balance shee
Slide 6: Unique Business Model
OVERVIEW I - 2 CT Investment Management Co., LLC (TRS) 100% CT Mezzanine Partners III, Inc. Unique Business Model Balance Sheet Net Interest Margin Investment Management Fee Income + Capital Trust, Inc. (NYSE: "CT") (Management Contracts) Investment Manager CDO Collateral Manager Special Servicer CT
Slide 7: Board of Directors and Seasoned Management Team
Board of Directors Sam Zell Thomas Dobrowski Martin Edelman Craig Hatkoff Edward Hyman John Klopp Henry Nassau Joshua Polan Lynne Sagalyn OVERVIEW I - 3 Seasoned Management Team Capital Markets CEO, John Klopp CFO, Geoffrey Jervis COO, Stephen Plavin Finance/Accounting Administration CRE Investing &
Slide 8: Business Strategy
OVERVIEW I - 4 Business Strategy Originate accretive assets for the balance sheet Continue to grow investment management business through the sponsorship of additional vehicles Create the most efficient and stable capital structure through a diversity of financial instruments and providers Expand ou
Slide 9: Investment Strategy
Investment Strategy o CAPITALT RUST
Slide 10: Global Capital Markets
INVESTMENT STRATEGY II - 1 Global Capital Markets 2006/1H 2007 represented the height of the leverage boom Current liquidity crisis and credit crunch reflects a systemic de-leveraging and re- pricing of risk Ultimate economic impact still playing out Source: JPMorgan High Grade Domestic Bond Index a
Slide 11: Debt Market Impact
INVESTMENT STRATEGY II - 2 Debt Market Impact Structured finance meltdown and the deteriorating economic environment have created uncertainty and illiquidity across all debt markets Impact of the dislocation has been acute on the securitized commercial real estate sector Source: JPMorgan, Commercial
Slide 12: INVESTMENT STRATEGY II - Source: JPMorgan, Markit Partners
INVESTMENT STRATEGY II - 3 Source: JPMorgan, Markit Partners
Slide 13: CMBS cash buyers have stepped back Spread volatility Credit concerns Structured product taint Confidence
CMBS cash buyers have stepped back Spread volatility Credit concerns Structured product taint Confidence in ratings Leveraged investors have disappeared SIVs, CDOs and CP Conduits Repo availability Securitized lenders have withdrawn Pricing Other balance sheet pressures Portfolio lenders cannot fill
Slide 14: Market Capacity
INVESTMENT STRATEGY II - 5 Market Capacity Securitized lenders originated +/-50% of all CRE debt in 2006/H1 2007 Portfolio lenders (banks, insurance companies and some pension funds) represent the only active lenders in today's market Current lending universe has insufficient capacity to address fin
Slide 15: The Landscape Today
The Landscape Today Dealer inventory backlogs/forced liquidations by leveraged investors Investor uncertainty + lack of financing = markets have not cleared CMBS and loan spreads remain wide despite recent volatility However, not all collateral has been created equally Tomorrow Delinquencies and def
Slide 16: Market Opportunity
Market Opportunity Result = lenders back in the driver's seat: More conservative valuations Lower advance rates Tighter loan structures Better pricing Current market provides credit driven investors with the opportunity to generate attractive risk adjusted returns at all parts of the real estate cap
Slide 17: CT Platform
INVESTMENT STRATEGY CT Platform Fully integrated platform uniquely qualified to take advantage of today's market opportunities: Broad origination/sourcing network Disciplined underwriting culture and process Deep experience with all financial products Capital access and structuring expertise: Equity
Slide 18: Asset Management
Asset Management Asset Manager for all investments since inception Directly manage all non securities related investments Approved Special Servicer (Fitch, S&P, Moody's) to directly control loan workouts for B Notes and first loss CMBS Experienced CDO collateral manager Proprietary technology platfo
Slide 19: Risk Management Principles
II - 10 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) Us
Slide 20: Financial Information
Financial Information o CAPITALT RUST
Slide 21: Corporate structure and balance sheet summary
CT High Grade MezzanineSM (0.0% owned) (4.7% owned) Capital Trust, Inc. 6/30/08 Assets $3,139 Liabilities $2,659 Equity $481 CT Investment Management Co., LLC (TRS) (100% owned) (Management Contracts) III - 1 Net Interest Margin Base and Incentive Management Fees FINANCIAL INFORMATION ($ millions) (
Slide 22: Assets
FINANCIAL INFORMATION Assets ($000s) Assets Cash Loans CMBS Equity Investments Other Total Assets Liabilities Secured Debt CDO Debt Credit Facility Junior Sub. Debentures Participations Sold Interest Rate Hedges (Swaps) Other Total Liabilities Common Equity 6/30/08 $109,907 2,126,965 861,792 974 39,
Slide 23: Loan Portfolio Breakdown
III - 3 FINANCIAL INFORMATION Loan Portfolio Breakdown Notes: Capital Trust loan portfolio as of 6/30/08.
Slide 24: CMBS Portfolio Breakdown
III - 4 FINANCIAL INFORMATION CMBS Portfolio Breakdown Notes: Capital Trust CMBS portfolio as of 6/30/08. Property Type Office 22% Multi-Family 17% Hotel 19% Retail 26% Industrial 4% Other 8% Healthcare 4% Rating AA 3.2% B 6.6% CC 0.5% CCC 0.6% BB 13.1% D 5.4% NR 4.3% AAA 14.5% A 21.4% BBB 30.4% 70%
Slide 25: Liabilities and Equity
Assets Cash Loans CMBS Equity Investments Other Total Assets Liabilities Secured Debt CDO Debt Credit Facility Junior Sub. Debentures Participations Sold Interest Rate Hedges (Swaps) Other Total Liabilities Common Equity 6/30/08 $109,907 2,126,965 861,792 974 39,577 $3,139,215 $800,742 1,170,573 100
Slide 26: CT Investment Management Co., LLC (TRS)
CT Investment Management Co., LLC (TRS) III - 6 FINANCIAL INFORMATION Investment Management: $2.4 billion of assets under management ($ millions) CT Mezzanine Partners III, Inc. 6/30/08 Assets $49 Liabilities $32 Equity $16 Inv. period expired $1.2B of investments 1.42% mgmt. fee per annum 18.5% of
Slide 27: Income Statement
Portfolio Net Interest Margin Interest Income Interest Expense Net Interest Margin Other Revenue Management & Advisory Fees Incentive Management Fees Other Subtotal Other Expenses G&A D&A Subtotal Gain on extinguishment of debt (Provision)/Recovery of losses on impairment Income/(Loss) from Equity I
Slide 28: Conclusion
FINANCIAL INFORMATION III - 8 Conclusion Best in class management team Fully aligned Internally managed Significant insider ownership Unparalleled track record Unique business model: Balance sheet investments - net interest margin Assets under management - base and incentive management fees Expandab
Capital Trust — Investor Presentation (September 2008) on 6ix