Inventrust Properties Corp. · NYSE:IVT
Inventrust Properties — Merger or Acquisition (January 2016)
30 slides from Inventrust Properties's merger presentation, Jan 18, 2016
Slide 1: Highlands Spin-Off & Student Housing Transaction Webcast
Highlands Spin-Off & Student Housing Transaction Webcast January 18, 2016
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements in this presentation, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical, including statements regarding man
Slide 3: InvenTrust's Complex History
InvenTrust’s Complex History The assembly of our $12 billion portfolio primarily focused on credit quality of tenants and length of lease term. A large percentage of assets in the portfolio were purchased before the great recession. The diversified portfolio was effective during the great recession
Slide 4: Many Large, Complex Transactions Were Necessary to Achieve Strategy
Many Large, Complex Transactions Were Necessary to Achieve Strategy $460 million apartment portfolio sale to 2013 Announced $1.8 billion sale of net lease assets to $395 million modified “Dutch Auction” tender offer (Repurchased shares at high-end of the range and all shares properly tendered
Slide 5: Execution of Our Strategy Continues
Execution of Our Strategy Continues Successful liquidity event: spin-off & listing of Xenia on the NYSE Highlighted and developed independent brands and business plans for multi-tenant retail and student housing platforms 2015 Closed on $300M term loan to address upcoming maturities Acquisit
Slide 6: Highlands Spin-Off – Details
Highlands Spin-Off – Details On December 23, 2015, we announced our intent to spin off our non- core assets into a stand-alone company. Company is called Highlands REIT, Inc. Highlands will be an independent, self-managed, public non-traded REIT. Dedicated management team will focus solely on the Hi
Slide 7: Highlands Spin-Off – Why Take this Action?
Highlands Spin-Off – Why Take this Action? • We expect that Highlands REIT, as a separate company, will be better- positioned to focus on this non-core portfolio of assets. • Highlands’ business plan is to liquidate and distribute net proceeds from the disposition of Highlands’ assets to its stockho
Slide 8: Student Housing Transaction - Details
Student Housing Transaction - Details On January 4, 2016, we announced that we entered into a definitive purchase agreement to sell our student housing platform. The agreement’s gross all-cash value is $1.4 billion. Final net proceeds will be determined at the closing of the transaction following th
Slide 9: Student Housing Transaction – Why Now?
Student Housing Transaction – Why Now? After a thorough assessment of the landscape for student housing, we believe now is the right time to sell our student housing platform. We conducted a robust evaluation process to maximize the value we receive for the platform. The selling price for this portf
Slide 10: Estimated Share Value & Distributions
Estimated Share Value & Distributions • InvenTrust is deferring the publication of a new estimated share value Expect a new value to be announced in the next four to six months Closer proximity to the completion of the spin-off and student housing transaction. InvenTrust has engaged an indepen
Slide 11: Update on Estimated Tax Impact of Xenia Distribution
Update on Estimated Tax Impact of Xenia Distribution February 2015 At the time of the Xenia spin- off and listing, we announced that the distribution was going to be a taxable event for InvenTrust stockholders. December 2015 Although InvenTrust previously estimated the Xenia transaction would result
Slide 12: What Does This All Mean?
What Does This All Mean? Will mark the culmination of our non-retail portfolio evolution strategy After completion of transactions, InvenTrust will be a “pure-play” retail REIT Continue & enhance our focus on our retail platform Rotate capital out of “non-strategic” retail assets Move capital into m
Slide 13: Multi-Tenant Retail Platform Strategy
Multi-Tenant Retail Platform Strategy
Slide 14: Retail Landscape
Retail Landscape Minimal Retailers are Bricks and Consumer New Expanding Clicks VS. Experience is Development Again - Bricks or Important Cautiously Clicks 13
Slide 15: Retail Segment Is Designed for Growth
Retail Segment Is Designed for Growth InvenTrust Retail Strategy Results Investments in markets with high job, Key Market population and income growth Concentration – Significant Improved Average Base Rents Premium yielding assets with strong “Hub & Spoke” demographics Creates operating effici
Slide 16: Multi-Tenant Retail Snapshot
Multi-Tenant Retail Snapshot* Portfolio Breakdown by Square Feet Power Centers 68% Community & 32% Neighborhood Center 128 24 18.9 94% # of Properties # of States Million Retail Sq. Ft. Occupancy *Includes 18 centers in the IAGM JV / As of 9/30/15 15
Slide 17: Retail Strategy – Core Markets
Retail Strategy – Core Markets* InvenTrust’s largest markets are expected to have high job growth, population growth, and income growth in the next five years Top Markets by Gross Leasable Area (GLA) 16.0% 13.0% 12.4% 12.0% 7.8% 8.0% 6.6% 5.1% 4.2% 4.1% 4.1% 4.0% 2.6% 2.4% 0.0% (1) Dallas Houston
Slide 18: Retail Lease Expiration Brings Value Creation Opportunity
Retail Lease Expiration Brings Value Creation Opportunity Leases rolling during predicted inflationary time period = opportunity to grow rental rates Lease Expiration by % of Total Annualized Rent 20.0% 16.0% 15.2% 15.0% 14.4% 13.6% 10.0% 8.8% 5.0% 0.0% 2016 2017 2018 2019 2020 As of 9/30/15 Gro
Slide 19: Focus on Deep Tenant Relationships
Focus on Deep Tenant Relationships InvenTrust’s scale and locations in growing vibrant markets promotes favorable relationships with top local and national tenants 18
Slide 20: Capital Allocation and Rotation Strategies / Balance Sheet Management
Capital Allocation and Rotation Strategies / Balance Sheet Management
Slide 21: Timing: In-Step with Retail Market Opportunity
Timing: In-Step with Retail Market Opportunity Current Estimated Location in Retail Cycle Low levels of supply and new development U.S. retail is in recovery phase Retailers are expanding again Retail sales continue to grow moderately and are above pre-recession peak *Source: REIS - Q2 2015/
Slide 22: Multi-Tenant Retail Acquisition Strategies
Multi-Tenant Retail Acquisition Strategies • Open-Air Centers - grocery-anchored centers, necessity-based community centers and power centers Location, Location, Location • Properties with strong demographics Job & wage growth Population growth High education rate • Focus on key retail marke
Slide 23: Retail Market Concentration Matches Expected Demographic Growth
Retail Market Concentration Matches Expected Demographic Growth Growth in Top 30 Markets(1) Scale: From 4 (Strong) to (4) Weak InvenTrust Current 4 Market Focus 3 3 2 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1 0 0 0 0 (1) (1) (1) (2) (2) (2) (2) (3) (3) (3) (3) (4) (4) (4) (5) Columbus Portland Denver San Fr
Slide 24: Recent Retail Acquisitions Match Our Strategy
Recent Retail Acquisitions Match Our Strategy The Highlands of Flower Mound Rio Pinar Plaza • Outside Dallas • Orlando, FL • Acquired June 2015 as part of IAGM • Acquired Nov. 2015 JV • Grocery Anchored - Publix • Power Center • 100% Occupied • $45.8M • $34M • 169K sq. ft. • 124K sq. ft. • 3-mile Av
Slide 25: Recent Retail Acquisitions Match Our Strategy
Recent Retail Acquisitions Match Our Strategy Price Plaza Sonterra Village • Katy, TX • San Antonio, TX • Acquired Nov. 2015 as part of IAGM • Acquired Dec. 2015 • Power Center • Grocery Anchored • $35.8M • $21.5M • 206K sq. ft. • 42.5K sq. ft. • 3-mile Avg. HH Income - $101,000 • 3-mile Avg. HH Inc
Slide 26: Balance Sheet Management
Balance Sheet Management Balance Sheet Composition Declining Debt & Improving LTV1 $8.0 54.6% 60% 45.7% 13% $6.0 36.9% 37.2% 40% $6.0 $4.0 $3.6 87% 20% $2.0 $3.2 $1.9 $- 0% 2012 2013 2014 Q3 2015 Fixed Rate Debt Floating Rate Debt Total Debt in Billions LTV% Manageable Mortgage Debt Maturities as of
Slide 27: Final Thoughts on InvenTrust & Remaining Challenges
Final Thoughts on InvenTrust & Remaining Challenges Announced two significant transactions, need to complete execution on both New sustainable distribution will correlate to the cash generated from the remaining portfolio of assets New estimated share value will be lower immediately following the Hi
Slide 28: InvenTrust Properties
Inventrust Properties
Slide 29: Appendix
Inventrust Properties Appendix
Slide 30: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations For the three months ended For the nine months ended September 30, September 30, 2015 2014 2015 2014 Net income (loss) attributable to Company $ (95,647) $ 52,552 $ (27,757) $ 192,523 Add: Depreciation and amortization related to investment properties 37,333 86,138 1
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