Slide 1: Q4 2020 Investor Presentation
Q4 2020 Investor Presentation
Slide 2: Cautionary Statement
Cautionary Statement Forward-Looking Information Certain statements contained herein constitute “forward-looking statements” as such term is used in applicable Canadian securities laws. These statements relate to analysis and other information based on forecasts of future results, estimates of amoun
Slide 3: Mainstreet Equity Corp.
Mainstreet Equity Corp. Q3 Investor Pitchbook We are a Corporation not a REIT We are an add-value consolidator of mid-market multi-family apartment buildings Mid-Market Characteristics § Typically less than 100 units § Fragmented Mom & Pop ownership § Owner neglect and mismanagement § Greater deferr
Slide 4: Apartment Business Driver
Apartment Business Driver The #1 Driver in the Apartment Business Q3 Investor Pitchbook Existing rental apartments trading significantly below replacement cost. Management believes: Current market rents do not justify new construction due to high costs Increasing demand and limited supply will conti
Slide 5: Apartment Demand
Apartment Demand EDMONTON Population Growth: 22,510 (2020F) [29% of total rental universe] Rental Universe: 78,604 (2019) Calculation of ownership Premium = Principal & Interest for Avg. Resale Home minus [Mid-market: 58,258 (74%)] (2019) Avg. 2-bedroom Apt. Rent: $831 (Fall 2019) Vacancy Rate: 4.3%
Slide 6: Our Value Creation
Our Value Creation ACQUISITIONS Identify and buy under-performing rental units at prices well below replacement costs. CAPITAL IMPROVEMENTS Increase the asset value of Mainstreet’s portfolio by renovating acquired properties. OPERATIONAL EFFICIENCIES Minimize operating costs through professional man
Slide 7: 5 Pillar Competitive Advantage
5 Pillar Competitive Advantage Q3 Investor Pitchbook © All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 7
Slide 8: The Mainstreet 'Spec'
The Mainstreet ‘Spec’ © All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 8
Slide 9: Mainstreet: Adding Value
Mainstreet: Adding Value Mainstreet Park, Edmonton Mainstreet Estates, Surrey Improve NOI from Improve NOI from (-$281K) to $1,373K $69K to $2,340K Huntsville, Calgary West Meadow, Saskatoon Improve NOI from Improve NOI from $0 to $586K $1,175K to $1,952K © All Rights Reserved - MAINSTREET EQUITY CO
Slide 10: Mainstreet: Adding Value
Mainstreet: Adding Value Saskatoon 1310, Saskatoon Bow River Townhomes, Calgary Mainstreet Place, Calgary Avenue Tower, Calgary © All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 10
Slide 11: Operating Efficiencies
Operating Efficiencies EXPENSE REDUCTION 1. Mainstreet’s aggressive renovation program has resulted in significant expense reductions in key areas such as: § Electrical (install compact fluorescent bulbs: LED bulbs for emergency exit signs) § Water (‘Ultra-high efficiency’ toilets; low-flow aerators
Slide 12: Mid-Market Efficiencies
Mid-Market Efficiencies Higher operating margins versus larger concrete complexes Low rise properties have relatively less operating expenses such as: § Limited or no elevator maintenance § No repair heat or maintenance of underground parking garage § Amenities Lower realty taxes versus larger struc
Slide 13: Clustering Strategy
Clustering Strategy Abbotsford Calgary Edmonton Through clustering assets Mainstreet has maximized efficiencies and growth, transforming a single asset into a network of apartment complexes. Saskatoon Regina Surrey We achieved this through: Clustering assets within a 5 block radius Requiring fewer r
Slide 14: ICE District Strategy Properties [2,955 units]
ICE District Strategy 103 Properties [2,955 units] 9 © All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 14
Slide 15: Market Growth Potential
Market Growth Potential Mainstreet's strategy benefits Target Markets Rental Apartment Universe from a large target market <100 Units/ Total Rental % Mid-Market building Universe with less competition. Abbotsford 4,294 4,666 92% Surrey 5,179 6,006 86% Kamloops 3,844 3,954 97% Calgary CMA 28,125 44,5
Slide 16: Potential Target Market Growth
Potential Target Market Growth 25,000 22,915 21,769 20,623 19,477 20,000 18,332 17,186 16,040 14,894 15,000 13,674 Units 10,000 5,000 0 11.9% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% Estimated Potential Rental Apartment Total Mid-Market Share * Numbers obtained from CMHC, the potential target
Slide 17: A 'Value Creation' Company
A ‘Value Creation’ Company SIGNIFICANT GROWTH WITH LIMITED EQUITY DILUTION (YTD) § Listed on the TSX in 2000, Mainstreet has grown its portfolio from 272 units with a market value of $17 million to 13,674 units (YTD) with a market value of $2.2 billion with limited equity dilution. § As of September
Slide 18: Value-Add Case Studies
Value-Add Case Studies Edmonton, AB § Mainstreet Park Vancouver Lower Mainland § Mainstreet Estates (Surrey) Calgary, AB § Huntsville Saskatoon, SK § West Meadows © All Rights Reserved - MAINSTREET EQUITY CORP. TSX:MEQ 18
Slide 19: Value-Add Model: Mainstreet Park, Edmonton, AB
Value-Add Model: Mainstreet Park, Edmonton, AB Mainstreet purchased the above property (178 units) in August 2016. It took approximately 12 months to complete the stabilization process and we financed the property in November 2017. Financial results for the property before and after stabilization an
Slide 20: Value-Add Model: Mainstreet Estates, Surrey, BC
Value-Add Model: Mainstreet Estates, Surrey, BC Mainstreet purchased the above property (331 units with 5 buildings) in January 2015. It took approximately 6 months to complete the stabilization process and we financed the property in November 2016. Financial results for the property before and afte
Slide 21: Value-Add Model: Huntsville, Calgary, AB
Value-Add Model: Huntsville, Calgary, AB Mainstreet purchased the above property (52 units) in April 2012. It took approximately 29 months to complete the stabilization process and we financed the property in September 2014. Financial results for the property before and after stabilization and refin
Slide 22: Value-Add Model: West Meadow, Saskatoon
Value-Add Model: West Meadow, Saskatoon Mainstreet purchased the above property (240 units) in June 2019. It took approximately 16 months to complete the stabilization process and we financed the property in September 2020. Financial results for the property before and after stabilization and refina
Slide 23: Gross Book/Appraised Value
Growing The Portfolio ASSET GROWTH ($MM) $2,500 # of outstanding shares Billions 0.01 $2,183 $2,020 0 $2,000 1,866 -0 .01 Gross Book Value $1,632 Gross Book/Appraised Value $1,500 Appraised Value $1,386 $1,400 $1,406 -0 .02 $1,293 $1,259 # of Outstanding Shares # of outstanding shares $1,150 $1,148
Slide 24: Risk Management
Risk Management CMHC INSURED MORTGAGES 2019 Mortgage Maturity § As of September 30, 2020, Mainstreet has $1,207 as of September 30, 2020 million of mortgages, of which $1,164 million (96%) are CMHC insured (fixed) at an average interest rate of 2.69% and the balance of $43 million are fixed conventi
Slide 25: 2021 Drivers
2021 Drivers 2020 NOI growth after complete rent increase and stabilization Annualized Annualized Annualized Annualized NOI based on Additional NOI at Additional Additional Annualized Q4 2020 95% occupancy NOI without NOI at full Optimum § Stabilization of existing non-stabilized results rate conces
Slide 26: 2018 Acquisitions
2018 Acquisitions Q1 2018 Acquisitions City Address # of Units Purchase Price Appraised Value Price per door Saskatoon 102, 529 Avenue X South 1 50,000 120,153 50,000 Edmonton 10609, 115 Street NW 22 2,193,000 2,750,000 99,682 Saskatoon Emerald Park 8, 2309 – 17 Street S 1 50,000 120,513 50,000 Sask
Slide 27: 2019 Acquisitions
2019 Acquisitions Q1 2019 Acquisitions City Address # of Units Purchase Price Appraised Value Price per door Saskatoon 4234 & 4238 DeGreer St East 64 6,688,000.00 TBD 104,500 Edmonton 10735 107 St NW 24 2,380,000.00 TBD 99,167 Calgary Vista Group 125 18,300,000.00 TBD 146,400 Regina 1424 Victoria &
Slide 28: 2019 Acquisitions
2019 Acquisitions Q3 2019 Acquisitions City Address # of Units Purchase Price Appraised Value Price per door Calgary 1937 11 Ave SW 8 1,197,500 TBD 149,688 Saskatoon 402 Ave P South 31 1,550,000 TBD 50,000 Calgary 6347 Bowview Rd NW 74 13,000,000 TBD 175,676 Calgary 626 57 Ave SW 29 4,814,000 TBD 16
Slide 29: 2020 Acquisitions
2020 Acquisitions Q1 2020 Acquisitions City Address # of Units Purchase Price Appraised Value Price per door Calgary 4311 75 St NW 8 1,040,000 TBD 130,000 Saskatoon 1306, 1310, 1320 20 St W 54 1,320,000 TBD 24,444 Edmonton 10719 110 St NW 23 1,918,000 TBD 83,391 Kamloops 627 Lilac Ave - Kamloops 48
Slide 30: 2020 Acquisitions
2020 Acquisitions Q3 2020 Acquisitions City Address # of Units Purchase Price Appraised Value Price per door Calgary 1624 16 Ave SW 28 $3,360,000 TBD $120,000 Edmonton 10730 102 St NW 33 $2,000,000 TBD $60,606 TOTAL Q3 2020 61 $5,360,000 Q4 2020 Acquisitions City Address # of Units Purchase Price Ap
Slide 31: Residual Land Conversion Value
Residual Land Conversion Value RESIDUAL LAND § Trevella Park Townhomes - Calgary, AB (~14 acres of High Density Residential Land) § Highland Park Townhomes – Lethbridge, AB (13.1 acres of High Density Residential Land) § Dover – Calgary, AB (Residual Land) § Imperial Court - Surrey, BC (High Density
Slide 32: Condo Conversion Value
Condo Conversion Value Alberta British Columbia CONDOMINIUM CONVERSION § Trevella Park – Calgary, AB § Sunshine complex, BC § Highland Park – Lethbridge, AB § Pinetree complex, BC The opportunity exists to convert the existing portfolio § Wedgewood – Edmonton, AB § Hanna Estates, Abbotsford, BC in i