Ted Rollins - Campus Crest Investor Presentation

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Ted Rollins - Please enjoy this Investor Presentation from September of 2011. Thank You!

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Ted Rollins - Campus Crest Investor Presentation

  1. 1. September 2011 Investor Presentation August 20100
  2. 2. 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
  3. 3. Investment Highlights ® The Grove at Greeley, CO Compelling Market Dynamics Modern, Well-Located Portfolio in Solid Growth Markets Proven Track Record with Significant Growth Potential ® The Grove at Nacogdoches, TX Experienced Team with Value-Maximizing Platform Conservative Capital Structure2
  4. 4. Compelling Market Dynamics  Echo Boom drives enrollment growth  Increasing percentage of high-school College Enrollments (1957-2012) graduates attending collegeDemand  Increasing foreign enrollments (millions) Echo Boom Enrolling in CollegeDrivers  Increasing percentage of full-time vs. part-time students  Students taking longer to graduate Baby Boom Enrolling in College  Budgets constrain on-campus housing investment  38 states cut their educationalSupply budgets during the recessionFactors  Existing on-campus housing stock becoming increasingly obsolete  Lack of construction financing is restricting new entrants Source: Dept. of Education, National Center for Educational Statistics Enrollment expected to increase by ~1.5 million students over the next 8 years3
  5. 5. Attractive Portfolio and Growth Platform  Newest portfolio of student housing assets  Amenity rich – bed/bath parity, resort-style activities  Close proximity to campus  Barriers to entry  Lower cap-ex requirements Operating Portfolio Highlights  Proactive focus on medium-sized, high-growth markets Properties (1) 27  Markets have strong enrollment growth – 9.5% average growth (3) Total Units / Beds (1) 5,048 / 13,580  Less institutional competition & comparable product Weighted Average Age (2) 3.0 years  Stronger tuition value proposition Average Distance to Campus (2) 0.6 miles (3) Source: Reported enrollment statistics from university websites; Represents enrollment growth from the academic year 2006/2007 to the academic year 2010/2011 Occupancy (1), (2) 90%4 (1) Includes 6 joint venture properties in which Campus Crest owns a 49.9% member interest (2) As of 6/30/2011
  6. 6. Why Our MarketsStronger Enrollment  Our markets benefit from higher enrollment growth than primary marketsGrowth  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 purchaser5
  7. 7. 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 parking6
  8. 8. 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 experience7
  9. 9. The Evolution of Student Housing – State of the Art Prototype ® The Grove at Ellensburg, WA ® The Grove at Moscow, ID ® ® ® The Grove at Mobile, AL The Grove at The Grove at Nacogdoches, TX Nacogdoches, TX ® The Grove at Ellensburg, WA8
  10. 10. Our 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 lifestyle9
  11. 11. Our Properties are Universally Branded The Grove® At The Grove®, we offer a ―fully-loaded college living‖ experience through our consistent branding and operating philosophy10
  12. 12. Intensive Asset Management Philosophy  Regular property inspections and audits performed by asset management team using 800 point check list  Field-focused executive management team  Vertical integration and overlap of construction management and facilities management leads to superior asset performance  Proprietary Residence Life Programming through SCORES:  S – social  C – cultural  O – outreach  R – recreational  E – educational  S – spiritual  “The Grove Nation” culture drives excitement, customer focus and unmatched residence life experiences Intensive asset management philosophy employed throughout our organization11
  13. 13. Identified Pipeline of Future Development Opportunities  Development site selection criteria  High enrollment growth colleges / universities  Limited competing product  Proximity to campus  Vertically integrated, highly scalable operating platform  Property & asset management  Development & construction  Wholesale supply  Prototypical roll-out  Reduces costs and shortens development period  Proven track record – developed ~$500 million of student housing properties Identified 200+ potential markets & conducting due diligence on 80 sites as potential development opportunities12
  14. 14. 2011 Development Projects (2011/2012 Academic Year Occupancy)($ in thousands) Project Enrollment Distance to Campus Units / Beds Estimated Cost Wholly-Owned Developments Ft. Wayne, IN  13,675  1.1 miles  204 / 540  $19,926 Indiana University / Purdue University Clarksville, TN  10,188  1.3 miles  208 / 560  $21,203 Austin Peay State University Ames, IA  27,945  0.3 miles  216 / 584  $21,411 Iowa State University Columbia, MO  32,415  0.9 miles  216 / 632  $24,931 University of Missouri Joint Venture Developments Denton, TX  36,123  0.8 miles  216 / 584  $24,953 University of North Texas Valdosta, GA  12,391  1.9 miles  216 / 584  $21,150 Valdosta State University 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 opportunities 13
  15. 15. Proven and Scalable Business Model Total Number of Beds (All Properties) (1) Number of Properties (All Properties) (1) Existing Properties New Openings Campus Crest has grown to over 13,500 beds over the last five years by leveraging its platform and brand to deliver a uniform student housing product across multiple markets14 (1) 2011E includes 4 wholly-owned developments and 2 joint venture developments
  16. 16. Increasing Occupancy and RevPOB Historical Weighted Average Occupancy (1) Historical Weighted Average RevPOB (2)Openings 6 9 5 3 n/a Openings 6 9 5 3 n/a Total 10 19 24 27 27 Total 10 19 24 27 27 $473 $488 $477 100% $500 $472 88% 87% 87% 89% $448 83% 80% $400 60% $300 40% $200 20% $100 0% $0 CY07 CY08 CY09 CY10 1H11 CY07 CY08 CY09 CY10 1H11 Campus Crest has delivered occupancy and RevPOB growth while significantly expanding its portfolio (1) Weighted average occupancy applies to properties that are open for the full calendar year (2) Weighted average RevPOB applies to properties that are open for the full calendar year; RevPOB is defined as average total revenue15 per occupied bed (includes student housing leasing and student housing services revenue)
  17. 17. Academic Year 2011/2012 Leasing Update Portfolio Leasing Status for 2011/2012 Academic Year and Current Year Occupancy 2011-2012 Leases 2010-2011 Leases Fall 2010 Current (1) (1) (2) Property Units Beds Signed % Signed % Occupancy Occupancy(3) Wholly-Owned 3,920 10,528 9,161 87.0% 8,440 80.2% 88.5% 89.5% Joint Venture Properties 1,128 3,052 2,653 86.9% 2,591 84.9% 89.1% 91.8% Sub Total All Operating Properties 5,048 13,580 11,814 87.0% 11,031 81.2% 88.6% 90.0% New Developments (2011 Deliveries) 1,276 3,484 2,439 70.0% n/a n/a n/a n/a Total Portfolio 6,324 17,064 14,253 83.5% 11,031 81.2% 88.6% 90.0% (1) As of August 1, 2010 and 2011 (2) As of September 30, 201016 (3) As of July 31, 2011
  18. 18. Prudent Capital Structure With Fully-Financed Growth Capital Structure (Including Pro Rata Share of Joint Ample Liquidity Venture Debt) ($ in millions)  In-place financing for developments $700 $596.4 $600  Received commitments to expand and convert credit $500 facility (1) from secured to an unsecured facility $400  Potential leverage on unencumbered assets of ~$80 $300 million (2) $200 $100 32.4%  Low leverage (32.4% debt/total market capitalization) - At 6/30/2011  Capacity with existing joint venture partner Debt Pro Rata Share of JV Debt Equity Capitalized for growth with no maturities until 2014 (3) (1) Existing revolving credit line for up to $125 million; as of 6/30//2011 the Company had drawn $74.5 million (2) CCG estimate for Ellensburg, Mobile-Phase I & II, Nacogdoches and Greeley17 (3) Assumes 1-year extension option on line of credit is exercised; excludes JV maturities and routine construction loan maturities
  19. 19. Q2 2011 Performance Same-store NOI  Increased 12.1%, from $6.0mm in Q2 2010 to $6.7mm in Q2 2011 Average Same-store  88.4% for the 6-months ended June 30, 2011 compared to 88.3% the Occupancy same period a year ago Total RevPOB (wholly-  RevPOB of $482 compared to $482 the prior year, with increased rental owned) rates being offset by lower service revenue  Operating portfolio was 87.0% leased versus 81.2% leased at August 1, 2011/2012 Pre-leasing 2010 (wholly-owned and JV)  Development properties were 70.0% leased at August 1, 2011  FFO per diluted share of $0.17 FFO  Adjusted FFO (elimination of change in fair value of interest rate derivatives) per diluted share of $0.16 Reiterated FFO per fully diluted share guidance of $0.72 to $0.7818
  20. 20. Experienced And Proven LeadershipTed W. RollinsCo-Founder, Co-Chairman • 25 years of real estate experience developing and operating service-enriched housing propertiesof the Board & ChiefExecutive Officer • Founded Campus Crest in 2004Michael S. HartnettCo-Founder, Co-Chairman • 25 years of real estate experience developing and operating service-enriched housing propertiesof the Board &Chief Investment Officer • Founded Campus Crest in 2004Earl C. HowellPresident & Chief • Over 33 years of experience in service driven businesses; Colonel in U.S. Army Special ForcesOperating Officer • Joined Campus Crest as a consultant in 2009Donnie L. BobbittExecutive Vice President & • Over 20 years in corporate accounting and senior financial positions at both privateChief Financial Officer and public companies and Deloitte & Touche LLPRobert M. Dann • 25-year industry veteran with significant experience in strategic planning, portfolio and assetExecutive Vice President & management and operational executionPresident of CCREM &CCD • Joined Campus Crest in 201119
  21. 21. Investment Highlights ® The Grove at San Angelo, TX Experienced Team with Value-Maximizing Platform Compelling Market Dynamics Modern, Well-Located Portfolio in Solid Growth Markets ® The Grove at Mobile—Phase II, AL Proven Track Record with Significant Growth Potential Conservative Capital Structure20

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