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Ted Rollins - March Investor Presentation


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Ted Rollins - Here is a recent Investor Presentation for Campus Crest.

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Ted Rollins - March Investor Presentation

  1. 1. March 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 Milledgeville, GA 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 Structure and Attractive Valuation2
  4. 4. Compelling Market Dynamics § Echo Boom drives enrollment growth § Increasing percentage of high-school College Enrollments (1957-2012) (1957- graduates attending collegeDemand § Increasing foreign enrollments (millions) Echo Boom Enrolling in CollegeDrivers § Increasing percentage of full-time vs. 22 part-time students 20 § Students taking longer to graduate 18 Baby Boom Enrolling in College 16 14 12 § Budgets constrain on-campus housing 10 investment 8 § 38 states cut their educational 6Supply budgets during the recession 4 2Factors § Existing on-campus housing stock becoming increasingly obsolete 0 1950 1963 1973 1983 1993 2003 2013 § 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 Ø Newest portfolio of student housing assets Ø Amenity rich – bed/bath parity, resort-style activities Ø Close proximity to campus Ø Barriers to entry Ø Lower cap-ex requirements Portfolio Highlights Ø Proactive focus on medium-sized, high-growth markets Properties (1) 27 Ø Markets have strong enrollment growth – 7.2% average growth (3) Total Units / Beds (1) 5,048 / 13,580 Ø Less institutional competition & comparable product Weighted Average Age (2) 2.5 years Ø Stronger tuition value proposition Average Distance to Campus 0.6 miles (3) Source: Reported enrollment statistics from university websites; Represents enrollment growth from the academic year 2006/2007 to the academic year 2009/2010 Occupancy (2) 89%4 (1) Includes 6 joint venture properties in which Campus Crest owns a 49.9% member interest (2) As of 2/23/2011
  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 San Marcos, TX ® The Grove at Statesboro, GA ® ® ® The Grove at Huntsville, TX The Grove at The Grove at Nacogdoches, TX Nacogdoches, TX ® The Grove at Huntsville, TX8
  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 Ø Regular property inspections and audits performed by asset management team using 800 point check list Ø Field-focused executive management team Ø Vertical integration and overlap of construction management and facilities management leads to superior asset performance Ø Proprietary Residence Life Programming through SCORES: Ø S – social Ø C – cultural Ø O – outreach Ø R – recreational Ø E – educational Ø S – spiritual Ø “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 Ø Development site selection criteria Ø High enrollment growth colleges / universities Ø Limited competing product Ø Proximity to campus Ø Vertically integrated, highly scalable operating platform Ø Property & asset management Ø Development & construction Ø Wholesale supply Ø Prototypical roll-out Ø Reduces costs and shortens development period Ø 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) Proposed Units / Project Enrollment Distance to Campus Estimated Cost Beds Wholly-Owned Developments Ft. Wayne, IN Ø 13,675 Ø 1.1 miles Ø 204 / 540 Ø $19,926 Indiana University / Purdue University Clarksville, TN Ø 10,188 Ø 1.3 miles Ø 208 / 560 Ø $21,203 Austin Peay State University Ames, IA Ø 27,945 Ø 0.3 miles Ø 216 / 584 Ø $21,411 Iowa State University Columbia, MO Ø 32,415 Ø 0.9 miles Ø 216 / 632 Ø $24,931 University of Missouri Joint Venture Developments Denton, TX Ø 36,123 Ø 0.8 miles Ø 216 / 584 Ø $24,953 University of North Texas Valdosta, GA Ø 12,391 Ø 1.9 miles Ø 216 / 584 Ø $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) 20,000 17,064 Number of Beds 15,000 13,580 12,036 9,520 10,000 4,966 5,000 1,924 448 0 (1) 2005 2006 2007 2008 2009 2010 2011E Number of Properties (All Properties) 40 6 30 3 Properties 5 20 9 6 24 27 10 3 19 4 1 1 10 0 (1) 2005 2006 2007 2008 2009 2010 2011E 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 5 3 Openings 6 9 5 3 Total 10 19 24 24 27 Total 10 19 24 27 $490 $486 100.0% 88.0% 87.0% 88.0% 89.0% 90.0% 83.0% $480 $472 $473 80.0% $470 70.0% 60.0% $460 50.0% $448 $450 40.0% 30.0% $440 20.0% $430 10.0% 0.0% $420 CY2007 CY2008 CY2009 CY 2010 As of (3) CY2007 CY2008 CY2009 CY2010 2/23/2011 Campus Crest has delivered occupancy and RevPOB growth while significantly expanding its portfolio (1) Weighted average occupancy applies to properties that are open for the full calendar year (2) Weighted average RevPOB applies to properties that are open for the full calendar year; RevPOB is defined as average total revenue15 per occupied bed (includes student housing leasing and student housing services revenue)
  17. 17. Prudent Capital Structure With Fully-Financed Growth Capital Structure (Including Pro Rata Share of Joint In- In-Place Financing for Developments Venture Debt) Debt) ($ in millions) ($ in millions) $700 Amount $573.1 Revolving Credit Facility: $54(1) $600 Construction Facilities: $53(2) $500 HSRE Equity Commitment $50 $400 JV Construction Financing $31 $300 7.7% Potential Leverage on Unencumbered Assets(3): $70 $200 Total Potential Liquidity $258 $100 28.4% 25.1% 15.6% - At 12/31/2010 Debt Pro Rata Share of JV Debt Equity Capitalized for growth with no maturities until 2014 (1) Revolving credit line for up to $125 million; As of 12/31/2010 the Company had drawn $42.5 million. (2) Does not include construction financing for Columbia development16 (3) Assumes 70% LTV using the undepreciated cost of Ellensburg, Mobile-Phase I, Nacogdoches, Abilene and Greeley
  18. 18. 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 LLP17
  19. 19. Investment Highlights ® The Grove at Milledgeville, GA 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 Structure and Attractive Valuation18