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Request ccg nareit november 2011 investor presentation Request ccg nareit november 2011 investor presentation Presentation Transcript

  • Investor Presentation NAREIT Investor Presentation September 2011 November 2011 August 20100
  • Forward Looking Statements This presentation contains certain forward-looking statements that are subject to risks and uncertainties. These forward-looking statements are based on certain assumptions, discuss future expectations, describe future plans and strategies, contain financial and operating projections or state other forward- looking information. The Company’s ability to predict results or the actual effect of future events, actions, plans or strategies is inherently uncertain. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company’s actual results and performance could differ materially from those set forth in, or implied by, the forward-looking statements. You are cautioned not to place undue reliance on any of these forward-looking statements, which reflect the Company’s views on this date. Furthermore, except as required by law, the Company is under no duty to, and does not intend to, update any of our forward-looking statements after this date, whether as a result of new information, future events or otherwise. This presentation does not constitute, and may not be used in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not permitted by law or in which the person making the offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.1
  • Investment Highlights ® The Grove at Troy, AL Strengthening Operations Standardized Brand and Building Design Vertically Integrated Enterprise ® The Grove at Mobile—Phase I, AL Conservative Capital Structure Attractive Valuation Experienced Management Team2 View slide
  • National Footprint of High-Quality Assets Operating Portfolio Highlights Properties (1) 33 Total Units / Beds (1) 6,324 / 17,064 Weighted Average Age (1) 2.7 years Average Distance to Campus (1) 0.7 miles Occupancy for 2011/12 (2) 91.2% (1) As of September 30, 2011. Includes 21 wholly-owned, 6 joint venture and 6 new development properties that opened in August 2011 (2) As of September 30, 2011. Includes 21 wholly-owned and 6 joint venture properties, but excludes 6 new developments delivered in August 20113 View slide
  • Accomplishments Since IPO  Achieved 91.2% occupancy(1) for 2011/2012 AY, a 260bp improvement from 2010/2011Focus on Leasing  Reported 3.2% rental rate growth(1) for 2011/2012 leasing  Developed an updated comprehensive leasing incentive and tracking program  Added new senior management and instituted central purchasing and other cost controls,Operational Initiatives which drive margin expansion  Established a roving management team to ensure continuity at the property-level  Completed 6 new developments on time and on budget for 2011/2012 AY  Expect average initial development yield of greater than 7.25%Development Pipeline  Launched 6 new projects for delivery in August 2012  Expect average initial development yield of 7.50% - 8.00%  Accessed multiple capital sources to preserve financial flexibility and liquidityFinancing &  Expanded and converted revolver to an unsecured facilityCapital Structure  Secured $48.5 million 7-year Freddie Mac financing  Maintained conservative leverage (1) As of September 30, 2011. Includes 21 wholly-owned and 6 joint venture properties, but excludes 6 new developments delivered in August 20114
  • All Properties are Attractive and Amenity-Rich Apartment Features:  Private bedrooms with keyed locks  En suite bathrooms  Full furnishings and full kitchens  Modern appliances and washers/dryers  State-of-the-art technology  Ample parking  Gated entrances On-Site Amenities:  Resort-style swimming pools  Basketball and volleyball courts  Game rooms and coffee bars  Fitness centers  Community clubhouses All of our apartment communities offer bed-bath parity, attractively furnished units and a variety of on-site amenities designed to appeal to the college lifestyle5
  • Property Management – Refining and Improving the Process  Standardized product allows for: HQ  Systematic management Area Area Sales Manager Manager  Strength in centralized purchasing Roving General Roving Sales Managers that improves margins Managers General Manager  Area management with formulaic Sales Manager allocation of responsibilities based on Maintenance Manager property scoring MITs Community  Proprietary standardized operating Assistants (9) programs and procedures combined with local market adaptations  Management “career ladder" approach  Maximizes leasing & operational to talent development creates efficiencies framework for organic internal sourcing of talent6
  • Consistent and Efficient Branding & Marketing Our properties are universally branded The Grove® At The Grove ®, we offer a ―fully-loaded college living‖ experience through our consistent branding and operating philosophy7
  • Leasing and Rate Improvement for Academic Year 2011/2012 Portfolio Leasing and Rate Status for 2011/2012 Academic Year Number of 2011-2012 Leases 2010-2011 Leases Rental Rate Property Properties Units Beds Signed(1) % Signed(1) % % Increase(2) Wholly-Owned 21 3,920 10,528 9,605 91.2% 9,317 88.5% 2.8% Joint Venture Properties 6 1,128 3,052 2,781 91.1% 2,719 89.1% 4.9% Sub Total All Operating Properties 27 5,048 13,580 12,386 91.2% 12,036 88.6% 3.2% New Developments (2011 Deliveries) 6 1,276 3,484 2,770 79.5% n/a n/a n/a Total Portfolio 33 6,324 17,064 15,156 88.8% 12,036 88.6% 3.2% Increased operating portfolio occupancy by 260 basis points and rental rate by 3.2% year-over-year (1) As of September 30, 2011 and September 30, 2010, respectively (2) Average effective rate for 2011/2012 compared to average rate achieved in 2010/20118
  • Strengthening Fundamentals at the Company Portfolio 9-Months Results of Same-Store Wholly-Owned Operations(1) September 30, 2011 September 30, 2010 % Change Total RevPOB (rental and service) $480 $480 0.0% Average Occupancy 88.8% 88.2% 0.6% NOI ($000s) $19,917 $18,425 8.1% NOI Margin 51.8% 48.2% 3.6% Continued focus on rate, expense management and occupancy growth will drive NOI growth (1) Represents 20 properties, as detailed in the Third Quarter 2011 Supplemental Information package9
  • Further Operational Opportunities ® The Grove at San Angelo, TX  Tiered pricing within projects based upon desirability of rooms/ units  Cross branding  Strategic alliance  Increased wallet share  Convenience  Leading Resident Life program ® The Grove at Jacksonville, AL10
  • Compelling Market Dynamics • Echo Boom drives enrollment growth • Increasing percentage of high-school graduates College Enrollments (1957-2012) attending collegeDemand • Increasing foreign enrollments (millions) Echo Boom Enrolling in CollegeDrivers • Increasing percentage of full-time vs. part-time 22 students 20 18 Baby Boom • Students taking longer to graduate Enrolling in College 16 14 12 • Budgets constrain on-campus housing investment 10 • 38 states cut their educational budgets 8 6 during the recessionSupply • Existing on-campus housing stock becoming 4 2Factors increasingly obsolete 0 • Lack of construction financing is restricting new 1950 1963 1973 1983 1993 2003 2013 entrants Source: Dept. of Education, National Center for Educational Statistics Enrollment expected to increase by ~1.5 million students over the next 8 years11
  • Why Our MarketsStronger Enrollment • Our markets benefit from higher enrollment growth than primary marketsGrowth • 9.5% enrollment growth in our markets over four academic years • On-campus atmosphere with advantages of off-campus economicsUnique Relationships • Benefits from symbiotic relationships with universitieswith Universities • Greater impact from marketing dollars • Well-established university markets with protective community councilsHigher Barriers to Entry • Superior land acquisition and entitlement capabilities • Lack of available financing for local operatorsConstruction Cost • We are able to build a superior product at a lower cost because of our captiveAdvantage general contractor and wholesale purchaser12
  • The Evolution of Student Housing – The Dormitory Era Traditional on-campus, ―dormitory-style‖ housing alternatives have generally consisted of shared rooms, communal bathroom facilities and extremely limited (if any) amenities and parking13
  • The Evolution of Student Housing – Our Student Housing Purpose-built student housing is specifically designed to appeal to modern-day college students with broad on-site amenities, enhanced privacy and a focus on the overall lifestyle experience14
  • Disciplined Development Process  Site acquisition based upon on-the- ground diligence and solid research  Majority not actually for sale  Development site selection criteria:  High enrollment growth colleges/ universities  Limited competing product  Proximity to campus  Track record of 33 projects, equating to over $620 million of investment  Solid pipeline for growth We utilize a proprietary underwriting model with over 60 inputs to evaluate the relative attractiveness of each market, which we then use to prioritize development opportunities15
  • 2012/2013 Academic Year Development Projects($ in thousands) 2012/2013 Academic Year Developments Distance to Total Campus Est. Cost Project University Served Enrollment(1) (miles) Units Beds ($mm) Wholly-Owned The Grove at Auburn Auburn University 25,469 0.1 216 600 $26.3 The Grove at Flagstaff Northern Arizona Univ. 17,529 0.3 216 584 33.1 The Grove at Orono University of Maine 11,168 0.5 188 620 25.3 (2) Average/Sub Total 18,055 0.3 620 1,804 $84.7 Joint Venture The Grove at Fayetteville University of Arkansas 23,199 0.5 232 632 $26.5 The Grove at Laramie University of Wyoming 10,568 0.3 224 612 24.8 (3) The Grove at Stillwater Oklahoma State Univ. 22,411 0.8 206 612 20.7 Average/Sub Total(2) 18,726 0.5 662 1,856 $72.1 (2) Average/ Total 18,391 0.4 1,282 3,660 $156.8 In addition to those listed above, we have identified 200+ potential markets and are conducting due diligence on 80 sites (1) All data is as of fall 2011 except for Northern Arizona University, which is as of fall 2010; from school websites (2) Total Enrollment and Distance to Campus are averages (3) Acquisition of existing community with 138 units and 384 beds. New development adds 68 units and 228 beds 16
  • Integrated Construction & Supply Structure  We have built the same prototypical building over 500 times  Continually refining design  Captive general contractor  Control cost, quality, timing  Captive wholesale supply  Volume purchasing  Cost is ~$43 per sq. ft. We benefit from the experience and efficiencies of our standardized building design17
  • Prudent Capital Structure Capital Structure (Including Pro Rata Share of Joint Enhanced Capital Structure Venture Debt) ($ in millions)  Extended average term to maturity of debt from 4.6 to $700 5.4 years while decreasing the average cost of debt from $579.5 4.8% to 4.5%(1) $600  Refinanced credit facility in 3Q 2011 $500  Converted to unsecured facility  Increased size to $150mm $400  Decreased spread over LIBOR by 100 bps $300  Lengthened term by approximately a year $200  More attractive covenant package 41.5%  Demonstrated access to agency financing with inaugural $100 Freddie Mac $48.5mm financing -  Obtained construction loans for all new development 9/30/2011 projects  Refinanced three joint venture construction loans with a Debt Pro Rata Share of JV Debt Equity term loan and received an additional commitment on three others (1) From December 31, 2010 to September 30, 2011; excludes construction loans18
  • Well-Managed Debt Maturities ($ in millions, except per share data) $160.0 100.0% 100.0% $150.0 90.0% $140.0 $109.0 78.7% 80.0% $120.0 72.5% 70.0% $100.0 60.0% 53.2% $80.0 50.0% 40.0% $60.0 $51.1 36.1% $46.0 $2.6 $41.5 30.5% $41.0 30.0% $40.0 $31.5 20.0% $5.1 17.3% $48.5 $20.0 $13.4 $14.8 10.0% $26.4 0.0% $0.0 $0.0 0.0% (1) 2011 2012 2013 2014 2015 2016 2017 Thereafter (2) Mortgage Debt Construction Loans ProRata Share of JV Debt Senior Unsecured Revolver Note: $2.6mm of debt classified as construction debt above represents other debt that matures in 2031 (1) Assumes extension option is exercised (2) Pro forma for a $38.5 million term loan that closed in October 2011; proceeds were used to pay down three construction loans due in 2011 and 2012. The Company has a commitment for an additional term loan to take out three other construction loans19 due in 2012
  • Attractive Valuation Price/2011E FFO(1) Implied Cap Rate(2) 30.0x 10.0% 24.5x 25.0x 7.8% 20.8x 8.0% 20.0x 6.0% 6.0% 5.3% 15.0x 13.4x 4.0% 10.0x 2.0% 5.0x 0.0x 0.0% EDR ACC CCG CCG EDR ACC Enterprise Value/Bed(3) Dividend Yield ($ in thousands) 8.0% $75.0 6.6% $66.4 $65.0 6.0% $55.0 $50.0 4.0% 3.3% 3.1% $45.0 $36.6 2.0% $35.0 $25.0 0.0% ACC EDR CCG CCG EDR ACC Source: Public filings and research reports Note: Closing price as of 11/10/2011 (1) SNL consensus estimates (2) Green Street Research nominal cap rate estimates (3) CCG includes pro rata share of Joint Venture beds – 14,601 beds; ACC excludes beds from On-Campus Participating Properties – 57,968 beds; EDR excludes20 announced acquisitions of GrandMarc at Westberry Place and Irish Row as these have not closed – 19,774 beds
  • Experienced Leadership Team*Ted W. Rollins • 25 years of real estate experience developing and operating service-enriched housing propertiesCo-Founder, Co-Chairman ofthe Board & Chief Executive • Founded Campus Crest in 2004Officer*Michael S. Hartnett • 25 years of real estate experience developing and operating service-enriched housing propertiesCo-Founder, Co-Chairman ofthe Board & Chief Investment • Founded Campus Crest in 2004OfficerEarl C. Howell • Over 33 years of experience in service driven businesses; Colonel in U.S. Army Special ForcesPresident & Chief OperatingOfficer • Joined Campus Crest as a consultant in 2009*Donnie L. Bobbitt • Over 20 years in corporate accounting and senior financial positions at both private and publicExecutive Vice President & companies and Deloitte & Touche LLPChief Financial Officer • Joined Campus Crest in 2008Robert M. Dann • 25-year industry veteran with significant experience in strategic planning, portfolio and asset management andExecutive Vice President & operational executionPresident of CCREM & CCD • Joined Campus Crest in 2011Brian L. Sharpe • Over 30 years of construction experience including acting as the driving force behind company’s productExecutive Vice President & development and development of the General Contractor unit that delivers one of the lowest costs in the industry,President of CCC combined with high quality • Joined Campus Crest in 2005 * Denotes present at NAREIT21
  • Investment Highlights ® The Grove at Troy, AL Strengthening Operations Standardized Brand and Building Design Vertically Integrated Enterprise Conservative Capital Structure Attractive Valuation Experienced Management Team22