Timbercreek. U.S. Multi-Residential Opportunity Fund #1. Semi-Annual Investor Update

Transcription

1 Timbercreek U.S. Multi-Residential Opportunity Fund #1 Semi-Annual Investor Update

2 FORWARD LOOKING STATEMENT Certain statements in this presentation about Timbercreek U.S. Multi-Residential Opportunity Fund #1 (the Fund ) and its business operations and strategy, and financial performance and condition may constitute forward-looking information, future oriented financial information, or financial outlooks (collectively, forwardlooking statements ). The forward-looking statements may be found in this presentation, among other places, under Fund Overview and Market Overview. The forward-looking statements are stated as of the date of this presentation and are based on estimates and assumptions made by the management of the Fund in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors that management of the Fund believes are appropriate and reasonable in the circumstances. There can be no assurance that such forward-looking statements will prove to be accurate, as actual results, performance and future events could differ materially from those anticipated in such statements. Management of the Fund refers you to the Amended and Restated Prospectus of the Fund, dated May 15, 2013 (the Prospectus ), for information regarding these forwardlooking statements, including the assumptions made in preparing forward-looking statements and management s expectations, and the risk factors that could cause the Fund s actual results, yields, levels of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements. In particular, the management of the Fund refers you to the Fund s Prospectus for information regarding the details of the internal rate of return of the Fund that Timbercreek Asset Management Inc. (the Manager ) is targeting, the nature of the Fund and its affairs described in the Prospectus, and the strategic partners of the Fund going forward. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Prospectus. TIMBERCREEK ASSET MANAGEMENT 2

3 AGENDA Fund Overview Sector Update Portfolio Update Financial Highlights Q & A TIMBERCREEK ASSET MANAGEMENT 3

4 2013 HIGHLIGHTS $58 million in acquisitions across 4 properties $217 million in total assets across 8 properties 1,316 new suites added $11.4 million in capital expenditures 7.4% average rent growth * Distributed $0.50 in 2013 = 5% yield *Average of rent growth rates since acquisition, per building, as at December 31, 2013, for assets held longer than six months. TIMBERCREEK ASSET MANAGEMENT 4

5 INVESTMENT THESIS Established for the primary purpose of acquiring multi-residential properties that are mispriced and/or undermanaged Targeting southeastern United States The Fund s investment objectives are to: enhance value through active management and a stabilization and improvement program Targets a 15% net IRR Inclusive of a 4%-5% pre-tax quarterly distribution make quarterly cash distributions to Unitholders from distributable cash flow ultimately sell properties to generate significant gain TIMBERCREEK ASSET MANAGEMENT 5

6 KEY PERFORMANCE DRIVERS TIMBERCREEK ASSET MANAGEMENT 6

7 Sector Update

8 FAVORABLE RENTER DEMOGRAPHICS TIMBERCREEK ASSET MANAGEMENT 8

9 STABLE GROWING DEMAND Source: Green Street Advisors, U.S. Apartment Outlook, January 17, 2014 TIMBERCREEK ASSET MANAGEMENT 9

10 PACED SUPPLY TIMBERCREEK ASSET MANAGEMENT 10

11 Portfolio Update

12 PORTFOLIO SUMMARY By State Florida 18.5% By Property Alexander Pointe 8.5% Lynden Square 15.5% North Carolina 55.0% Lake Ellenor 10.0% Chelsea Commons 9.5% Virginia 17.3% Watercrest 16.2% Saratoga Ridge 9.2% Texas 9.2% Eagle Landing 13.8% Granite Park 17.3% Portfolio Summary As at December 31, 2013 Total Units 2,696 Portfolio Leverage 65.1% Portfolio Occupancy 93.3% TIMBERCREEK ASSET MANAGEMENT 12

13 2013 ACQUISITIONS Acquisition Location Acquisition Date Units Landmark at Watercrest Cary, NC May 6, Landmark at Eagle Landing Cary, NC May 6, Landmark at Lake Ellenor Orlando, FL November 26, Landmark at Alexander Pointe Jacksonvil le, FL December 10, TIMBERCREEK ASSET MANAGEMENT 13

14 REPOSITIONING PROGRAM Renovations completed on 4 properties in 2013, resulting in increased occupancy and enhanced value of the assets Before Before Before Before After After After After Brand/Signage Upgrades Exterior Upgrades Common Area Upgrades Individual Suite Upgrades * Typical representation of the assets upon acquisition and after the repositioning program. TIMBERCREEK ASSET MANAGEMENT 14

15 MARKET OVERVIEW Austin, TX (population 845,000) Timbercreek Asset Units Acquisition Date Landmark at Saratoga Ridge 229 December 2012 Market Metrics Current U.S. Average Average Overall Asking Rent $ 947 $ 1,000 Occupancy 96.0% 95.0% Unemployment Rate 4.5% 6.7% Home Ownership Rates 60.1% 65.3% Metro Households (000) ,000 Total Inventory (000) ,244 Ratio Households: Inventory 24.4% 15.9% TIMBERCREEK ASSET MANAGEMENT 15

16 MARKET OVERVIEW Charlotte, NC (population 775,202) Timbercreek Asset Units Acquisition Date Landmark at Lynden Square 476 December 2012 Market Metrics Current U.S. Average Average Overall Asking Rent $ 852 $ 1,000 Occupancy 95.1% 95.0% Unemployment Rate 6.6% 6.7% Home Ownership Rates 58.3% 65.3% Metro Households (000) ,000 Total Inventory (000) ,244 Ratio Households: Inventory 14.0% 15.9% TIMBERCREEK ASSET MANAGEMENT 16

17 MARKET OVERVIEW Raleigh-Durham-Chapel Hill, NC (population 2 million) Timbercreek Asset Units Acquisition Date Landmark at Chelsea Commons 250 December 2012 Landmark at Watercrest 344 May 2012 Landmark at Eagle Landing 444 May 2012 Total Units 1,038 Market Metrics Current U.S. Average Average Overall Asking Rent $ 860 $ 1,000 Occupancy 96.2% 95.0% Unemployment Rate 5.2% 6.7% Home Ownership Rates 67.7% 65.3% Metro Households (000) ,000 Total Inventory (000) ,244 Ratio Households: Inventory 15.5% 15.9% TIMBERCREEK ASSET MANAGEMENT 17

18 MARKET OVERVIEW Charlottesville, VA (population 210,000) Timbercreek Asset Units Acquisition Date Landmark at Granite Park 425 December 2012 Market Metrics Current U.S. Average Average Overall Asking Rent $ 867 $ 1,000 Occupancy 93.9% 95.0% Unemployment Rate 4.0% 6.7% Home Ownership Rates N/A 65.3% Metro Households (000) N/A 115,000 Total Inventory (000) N/A 18,244 Ratio Households: Inventory N/A 15.9% TIMBERCREEK ASSET MANAGEMENT 18

19 MARKET OVERVIEW Jacksonville, FL (population 836,507) Timbercreek Asset Units Acquisition Date Landmark at Alexander Pointe 232 December 2013 Market Metrics Current U.S. Average Average Overall Asking Rent $ 823 $ 1,000 Occupancy 93.0% 95.0% Unemployment Rate 5.6% 6.7% Home Ownership Rates 66.6% 65.3% Metro Households (000) ,000 Total Inventory (000) 71 18,244 Ratio Households: Inventory 12.9% 15.9% TIMBERCREEK ASSET MANAGEMENT 19

20 MARKET OVERVIEW Orlando, FL (population 249,562) Timbercreek Asset Units Acquisition Date Landmark at Lake Ellenor 296 November 2013 Market Metrics Current U.S. Average Average Overall Asking Rent $ 910 $ 1,000 Occupancy 94.7% 95.0% Unemployment Rate 5.5% 6.7% Home Ownership Rates 68.0% 65.3% Metro Households (000) ,000 Total Inventory (000) ,244 Ratio Households: Inventory 14.5% 15.9% TIMBERCREEK ASSET MANAGEMENT 20

21 Financial Highlights

22 INCOME STATEMENT Year ended December 31 (in 000 s) Operating Revenues $18,087 $332 Net Operating Income $8,768 $(66) Net Income (loss) $4,742 $(514) Fair Value Adjustment of Investment Properties $3,049 - Fund From Operations ( FFO ) $3,489 $(139) FFO Payout Ratio 79.5% - Distributable Cash Flow $3,099 $(137) Distributable Cash Flow Payout Ratio 89.6% - Three months ended December 31 (in 000 s) Operating Revenues $5,731 $332 Net Operating Income $2,661 $(66) Net Income (loss) $1,591 $(514)

23 EQUITY OFFERINGS AND NET ASSET VALUE In 2013, the Fund raised $27.5 million ( $39.7 million) Pricing Net Asset Value at December 31, 2013 (CAD): Class NAV A $10.69 B $10.67 C $11.20 TIMBERCREEK ASSET MANAGEMENT 23

24 FINANCIAL POSITION & RATIOS As at December Total Debt to Fair Value of Investment Properties 66.9% 67.0% Total Debt to Assets 65.1% 63.7% Weighted Average Interest Rate 4.0% 3.8% Weighted Average Mortgage Terms 8.8 yrs yrs.

25 2014 PLANS Continue to pursue acquisition opportunities Targeting attractive markets with above average job growth and strong multi-residential fundamentals Complete repositioning on assets purchased in 2013 Resulting in rental income growth Stabilize and grow rents on assets that have completed the repositioning program Assess opportunities to crystalize returns and prepare for first set of dispositions TIMBERCREEK ASSET MANAGEMENT 25

26 Q&A

27 For more information on how to invest, please contact: Blair Tamblyn Managing Director/CEO Carrie Morris, MBA Managing Director, Capital Markets & Corporate Communications TORONTO 1000 Yonge Street Suite 500 Toronto, Ontario M4W 2K2 NEW YORK 320 Park Avenue th 17 Floor New York, NY ZURICH Feldeggstrasse Zurich Switzerland LONDON 96 Kensington High Street London, UK W8 4SG

28 Appendix: 2013 Acquisition Details

29 LANDMARK AT WATERCREST Investment Update Date of acquisition May 6, 2013 Number of suites 344 Purchase price $25,706,000 Current occupancy as at December 31, % The asset contains one, two and three bedroom apartment suites situated in a garden-style complex. The property amenities include: two leasing offices/clubhouses two swimming pools tennis courts children s playground fitness center two laundry rooms Repositioning Update: Upgrades nearly complete to: amenity area, club-house, leasing center, landscaping, signage and interior finishes Rehabilitation program to be completed by the end of Q in accordance with the initial underwriting budget Average in-place rent on acquisition $736 Average in-place rent as at December 31, 2013 $805 Market rent on acquisition $801 Renovation and Repositioning Program Since Inception Total Budget Insuite upgrades $1,174 $1,580 Exterior upgrades $41 $83 Common area upgrades $213 $249 Building systems upgrades $14 $14 Structural upgrades $261 $344 Total $1,703 $2,270 TIMBERCREEK ASSET MANAGEMENT 29

30 LANDMARK AT WATERCREST Project Occupancy 100% Budget Actual 95% 90% 85% 80% May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 Year 2 Year 3 Targeted Rental Rates $850 In-Place at Acquisition Budget Actual $800 $750 $700 $650 $600 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 TIMBERCREEK ASSET MANAGEMENT 30

31 LANDMARK AT EAGLE LANDING Investment Update Date of acquisition May 6, 2013 Number of suites 444 Purchase price $30,219,000 Current occupancy as at December 31, % Average in-place rent on acquisition $677 The asset contains one, two and three bedroom apartment suites situated in a garden-style complex. The property amenities include: two leasing offices/clubhouses two swimming pools tennis courts children s playground fitness center two laundry rooms Repositioning Update: Upgrades completed to amenity areas, club-house, leasing center, landscaping and signage Upgrades to interior finishes are approximately 65% complete Rehabilitation program to be completed by end of 2014 in accordance with the initial underwriting budget Average in-place rent as at December 31, 2013 $718 Market rent on acquisition $737 Renovation and Repositioning Program Since Inception Total Budget Insuite upgrades $1,198 $2,055 Exterior upgrades $105 $124 Common area upgrades $171 $191 Building systems upgrades $84 $120 Structural upgrades $90 $90 Total $ 1,648 $2,580 TIMBERCREEK ASSET MANAGEMENT 31

32 LANDMARK AT EAGLE LANDING Project Occupancy 100% Budget Actual 95% 90% 85% 80% May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 Year 2 Year 3 Targeted Rental Rates $710 $690 $670 $650 $630 In-Place at Acquisition Budget Actual May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 TIMBERCREEK ASSET MANAGEMENT 32

33 LANDMARK AT LAKE ELLENOR Investment Update Date of acquisition Nov 26, 2013 Number of suites 296 Purchase price $18,658,000 Current occupancy as at December 31, % Average in-place rent on acquisition $728 The asset contains one, two and three bedroom apartment suites situated in a garden-style complex. The property amenities include: clubhouse two swimming pools fitness center BBQ area Repositioning Update: Program is underway, including replacement of signage and exterior painting Targeted capital investments include: renovations to the clubhouse and leasing centers addition of fitness center, tenant amenities, BBQ areas and dog park improved pool areas Insuite renovations are expected to be completed during the first two quarters of 2014 Average in-place rent as at December 31, 2013 $728 Market rent on acquisition $751 Renovation and Repositioning Program Since Inception Total Budget Insuite upgrades $57 $646 Exterior upgrades $11 $360 Common area upgrades $75 $344 Building systems upgrades $50 Structural upgrades Total $143 $1,400 TIMBERCREEK ASSET MANAGEMENT 33

34 LANDMARK AT ALEXANDER POINTE Investment Update Date of acquisition Dec 10, 2013 Number of suites 232 Purchase price $15,949,000 Current occupancy as at December 31, % Average in-place rent on acquisition $741 The asset contains one, two and three bedroom apartment suites situated in a garden-style complex. The property amenities include: clubhouse two swimming pools fitness center BBQ area Repositioning Update: Program is underway, including replacement of signage and exterior painting Targeted capital investments include: renovations to the clubhouse and leasing centers addition of fitness center, tenant amenities, BBQ areas and dog park improved pool areas Insuite renovations are expected to be completed during the first two quarters of 2014 Average in-place rent as at December 31, 2013 $741 Market rent on acquisition $881 Renovation and Repositioning Program Since Inception Total Budget Insuite upgrades $680 Exterior upgrades $55 Common area upgrades $237 Building systems upgrades $52 Structural upgrades $26 Total $1,050 TIMBERCREEK ASSET MANAGEMENT 34