Firm Capital Mortgage Investment Corporation · TSX:FC
Firm Capital Mortgage Investment — Firm Capital American Realty Partners — Investor Presentation (August 2018)
37 slides from Firm Capital Mortgage Investment's investor presentation, August 2018
Slide 1: Debt & Equity Investing in U.S. Real Estate
Debt & Equity Investing in U.S. Real Estate Investor Presentation Q2 2018 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
Slide 2: Table of Contents
Table of Contents • Investment Highlights • Business Overview • Investment Strategy • Market Opportunity • Investment Profile • Experienced Team • Financial Profile • Appendix – Investment Overviews Note: All figures in US$, unless otherwise indicated DISCIPLINED INVESTING ● CAPITAL PRESERVATION 2
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS DISCIPLINED INVESTING ● CAPITAL PRESERVATION 3
Slide 4: Investment Highlights
Investment Highlights • Unique Status as Canada’s Only Exchange Traded Debt & Equity Investor in U.S. Real Estate • The Company provides investors with exposure to debt and equity investments in U.S. real estate in major markets and primarily involving multi-family residential properties • Innovativ
Slide 5: Investment Highlights
Investment Highlights • Experienced Manager with a Strong Track Record of Creating Value • The Firm Capital organization has a 30-year track record of delivering superior investment returns to institutional and retail investors across all parts of the real estate capital structure • Firm Capital man
Slide 6: Investment Highlights
Investment Highlights • Compelling Multi-Family Residential Sector Fundamentals • Tenant demand remains strong as a result of the continued expansion of the U.S. economy and low vacancy is expected to support continued rent growth for apartments • Attractive Growth-Oriented Yield • Quarterly cash di
Slide 7: Business Overview
BUSINESS OVERVIEW DISCIPLINED INVESTING ● CAPITAL PRESERVATION 7
Slide 8: Business Overview
Business Overview • Firm Capital American Realty Partners Corp. (“FCA” or the “Company”), based in Toronto, Ontario, is a Canadian public reporting issuer with U.S. dollar and Canadian dollar denominated shares that trade on the TSXV under the symbols FCA.U and FCA, respectively • The predecessor Co
Slide 9: 2017 Highlights
2017 Highlights Debt Equity Raises Investments Dispositions Repayments DISCIPLINED INVESTING ● CAPITAL PRESERVATION 9
Slide 10: 2018 YTD Highlights
2018 YTD Highlights Debt Debt Financings Investments Dispositions Repayments DISCIPLINED INVESTING ● CAPITAL PRESERVATION 10
Slide 11: Investment Strategy
INVESTMENT STRATEGY DISCIPLINED INVESTING ● CAPITAL PRESERVATION 11
Slide 12: Investment Strategy
Investment Strategy The Company’s investment strategy is The Company is positioned to participate in all executed through the following investment levels of the capital stack for investing in U.S. platforms: real estate: • Income Producing Real Estate Investments: • Acquisition of income producing r
Slide 13: Market Opportunity
MARKET OPPORTUNITY DISCIPLINED INVESTING ● CAPITAL PRESERVATION 13
Slide 14: Market Opportunity
Market Opportunity • Strong US. Economic Outlook • U.S. economy carries strong momentum into 2018 • Employment growth remains strong in a tight labour market • Wealth effect from strong economy fuels retail sales and wage growth III IV Source: Marcus & Millichap; * Forecast; ** Through Q3 DISCIPLINE
Slide 15: Market Opportunity
Market Opportunity • Strong US. Economic Outlook (continued) • Improving consumer and business confidence/optimism boosts growth • Strong household growth exceeds new residential construction III IV Source: Marcus & Millichap; * Forecast; ** Through Q3 DISCIPLINED INVESTING ● CAPITAL PRESERVATION 15
Slide 16: Market Opportunity
Market Opportunity • Strong U.S. Multi-Family Residential Sector Outlook • Tenant demand remains strong as a result of the continued economic expansion • Low overall vacancy, although increased supply starting to impact Class A Source: Marcus & Millichap; * Forecast DISCIPLINED INVESTING ● CAPITAL P
Slide 17: Market Opportunity
Market Opportunity • Strong U.S. Multi-Family Residential Sector Outlook (continued) • Favourable demographic trends create a structural lift to the rental market • Low vacancy supports continued rent growth, especially in Class B/C II I I VI II Source: Marcus & Millichap; ** Estimate DISCIPLINED IN
Slide 18: Market Opportunity
Market Opportunity • Attractive Environment for Transaction Sourcing & Execution • U.S. multi-family residential market is highly liquid, fragmented, and majority privately owned with over $139 billion of transaction volume in 2017 • Investment spreads are tightening, but remain attractive compared
Slide 19: Market Opportunity
Market Opportunity • Attractive Environment for Transaction Sourcing & Execution (continued) • U.S. mortgage origination is expected to increase again in 2018, up to between $300 billion and $305 billion, with government agencies serving as the primary source of originations, due to their efficient
Slide 20: Investment Profile
INVESTMENT PROFILE DISCIPLINED INVESTING ● CAPITAL PRESERVATION 20
Slide 21: Investment Profile
Investment Profile Note: All figures are shown at 100% share DISCIPLINED INVESTING ● CAPITAL PRESERVATION 21
Slide 22: Investment Profile
Investment Profile • The Company’s portfolio of investment properties is comprised of 1,442 residential units across 34 apartment properties in 6 U.S. states and provides a broad platform for further external growth opportunities • In addition, the Company’s mortgage investments include a preferred
Slide 23: Experienced Team
EXPERIENCED TEAM DISCIPLINED INVESTING ● CAPITAL PRESERVATION 23
Slide 24: Experienced Team
Experienced Team • The Company benefits from a management team and a Board of Directors that provide: • An exceptional network of real estate and finance contacts across the U.S.; • Significant public market governance experience, including with Firm Capital’s other publicly traded companies; • Exte
Slide 25: Experienced Team
Experienced Team Board of Directors Geoffrey Bledin • Serves on Board Directors of Firm Capital Mortgage Investment Corporation and Board of Trustees of Firm Chairman Capital Property Trust (Independent) • Past President and CEO of The Equitable Trust Company from 1990 to 2007 • Former Partner with
Slide 26: Financial Profile
FINANCIAL PROFILE DISCIPLINED INVESTING ● CAPITAL PRESERVATION 26
Slide 27: Net Asset Value Summary
Net Asset Value Summary (US$ in millions, except per share amounts) Reported as at Adjustments Pro Forma as at (2)(3)(4) 30-Jun-18 (1) 30-Jun-18 (1) Assets Investment Properties $42.9 $0.0 $42.9 Equity Investments 23.3 0.0 23.3 Preferred Capital Investment 2.5 0.0 2.5 Cash & Cash Equivalents 1.0 (0.
Slide 28: Debt Maturity Summary
Debt Maturity Summary Debt Maturities as at June 30, 2018 (US$ in millions) (1) $40.0 $35.1 $35.0 $30.0 $24.5 $25.0 $21.8 $20.0 $15.0 $11.8 $10.0 $6.6 $6.8 $5.0 $4.0 $0.0 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 & Beyond Unsecured Convertible Debentures Mortgages on Owned Investment Pr
Slide 29: Investment Overviews
Appendix INVESTMENT OVERVIEWS DISCIPLINED INVESTING ● CAPITAL PRESERVATION 29
Slide 30: Partnership Investment: Houston, TX
Partnership Investment: Houston, TX ⚫ On February 28, 2018, FCA acquired a 50% joint venture ownership in an apartment community comprised of 235 units in Houston, TX Acquisition Funding Structure − The joint venture partner is a private real estate investment firm based in New York City and local p
Slide 31: Partnership Investment: Irvington, NJ
Partnership Investment: Irvington, NJ ⚫ On February 28, 2018, FCA acquired a 50% joint venture ownership in a portfolio of 7 apartment properties comprised of 184 residential Acquisition Funding Structure units and 5 retail units in Irvington, NJ − The joint venture partner is a private real estate
Slide 32: Partnership Investment: Bridgeport, CT
Partnership Investment: Bridgeport, CT ⚫ On August 15, 2017, FCA and the Firm Capital Group acquired a 50% joint venture ownership in a portfolio of 14 apartment properties Acquisition Funding Structure comprised of 462 residential units in Bridgeport, CT − The joint venture partner is a private rea
Slide 33: Partnership Investment: Brentwood, MD
Partnership Investment: Brentwood, MD ⚫ On January 18, 2017, FCA and the Firm Capital Group acquired a 50% joint venture ownership in an apartment property comprised of 115 Acquisition Funding Structure residential units in Brentwood, MD, outside of Washington, DC − The joint venture partner is a pr
Slide 34: Partnership Investment: New York City
Partnership Investment: New York City ⚫ On December 20, 2016, FCA and the Firm Capital Group acquired a 50% joint venture ownership in a portfolio of 8 apartment properties, Acquisition Funding Structure comprised of 127 residential units and 2 retail units, in the Harlem neighbourhood of Manhattan,
Slide 35: Direct Investments: Florida & Texas
Direct Investments: Florida & Texas Summerfield Apartments, Sunrise, FL • 100% ownership • 7 buildings and 153 units • 49.7% loan-to-value (includes supplemental loan) • Historical stabilized occupancy at +/- 95% South Congress Commons, Austin, TX • 100% ownership • 4 buildings and 68 units • 31.9%
Slide 36: Preferred Capital Loan: New York City
Preferred Capital Loan: New York City ⚫ On December 18, 2017 the Firm Capital Group issued a $12 million preferred capital loan at a 12.0% coupon for an initial 3-year term to a private real estate investment firm based in New York City, to finance the acquisition of a portfolio of 3 apartment prope
Slide 37: Disclaimer
Disclaimer This presentation contains forward-looking information and statements (collectively, “Forward-Looking Statements”) within the meaning of applicable securities laws. These statements include, but are not limited to, statements made in this presentation, and other statements concerning Firm
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