T owerhouse Capital Management, LLC Guardian Group of Funds Due Diligence Conference “ Real Estate Equities and the Modern...
T owerhouse Capital Management, LLC <ul><li>John T. Hyland, CFA </li></ul><ul><li>Portfolio Manager -  Towerhouse Capital ...
T owerhouse Capital Management, LLC <ul><li>Scope and Scale: Global and North American Overview </li></ul><ul><li>US REIT ...
T owerhouse Capital Management, LLC <ul><li>Commercial Real Estate Investments As the Fourth Major Investment Class </li><...
T owerhouse Capital Management, LLC <ul><li>Worldwide, Commercial Real Estate is a $7 Trillion Asset Class </li></ul><ul><...
T owerhouse Capital Management, LLC REITs: The Growing Global Pure Play C-Corps  (Brookfield, St. Joes) or… REITs  (LPTs, ...
T owerhouse Capital Management, LLC USA REIT & CANADIAN REITs Scope and Scale <ul><li>Canada US </li></ul><ul><li>Vintage ...
T owerhouse Capital Management, LLC USA REIT & CANADIAN REITs Scope and Scale Type/Sub-Type  Canada US Apartments 11% 14% ...
T owerhouse Capital Management, LLC USA REIT & CANADIAN REITs Scope and Scale Type/Sub-Type  Canada US Apartments 11% 14% ...
T owerhouse Capital Management, LLC US REIT Portfolio and Performance Metrics Long Term Returns:  11% - 13% over last 10/1...
T owerhouse Capital Management, LLC US REIT Portfolio and Performance Metrics Long Term Correlation with US equities: 0.27...
T owerhouse Capital Management, LLC Current Outlooks Sector Operational Outlook: Hotel Retail Office/Industrial Apartment ...
T owerhouse Capital Management, LLC Current Outlooks FFO per share Growth:  Above trend, 8% - 9% next 3 years Dividend Gro...
T owerhouse Capital Management, LLC <ul><li>  Topical Issues </li></ul><ul><li>Interest Rates </li></ul><ul><li>Single Fam...
T owerhouse Capital Management, LLC Fund Name Dropping GGOF US Diversified Monthly Income Fund Goal:  “The Fund’s goal is ...
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Towerhouse Capital Management, LLC Guardian Group of Funds

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Towerhouse Capital Management, LLC Guardian Group of Funds

  1. 1. T owerhouse Capital Management, LLC Guardian Group of Funds Due Diligence Conference “ Real Estate Equities and the Modern Portfolio: The US Experience” San Francisco June 16, 2005
  2. 2. T owerhouse Capital Management, LLC <ul><li>John T. Hyland, CFA </li></ul><ul><li>Portfolio Manager - Towerhouse Capital Management, LLC </li></ul><ul><li>Background: </li></ul><ul><li>Investment Industry (since 1986) </li></ul><ul><li>REITs, CMBS, and other real estate securities (since 1996) </li></ul><ul><li>GGOF US Diversified Monthly Income Fund (since 2004) </li></ul>
  3. 3. T owerhouse Capital Management, LLC <ul><li>Scope and Scale: Global and North American Overview </li></ul><ul><li>US REIT Portfolio and Performance Metrics </li></ul><ul><li>Current Outlook </li></ul><ul><li>Topical Issues </li></ul><ul><li>Fund Name Dropping </li></ul>“ Real Estate Equities and the Modern Portfolio: The US Experience”
  4. 4. T owerhouse Capital Management, LLC <ul><li>Commercial Real Estate Investments As the Fourth Major Investment Class </li></ul><ul><li>Equities </li></ul><ul><li>Bonds/Debt </li></ul><ul><li>Cash </li></ul><ul><li>Commercial Real Estate </li></ul><ul><li>Direct - “Bricks n Sticks” and Mortgages </li></ul><ul><li>In-Direct - Securitized Equity and Debt </li></ul>Global Real Estate Securities Scope and Scale
  5. 5. T owerhouse Capital Management, LLC <ul><li>Worldwide, Commercial Real Estate is a $7 Trillion Asset Class </li></ul><ul><li>Represents 8% - 12% Of Developed Countries GDP </li></ul><ul><li>$700 Billion Market Cap of Listed Real Estate Companies </li></ul><ul><li>650 Listed Real Estate Companies Worldwide: </li></ul><ul><li>Owners - “C-Corps” </li></ul><ul><li>Owners - REITs or LPTs </li></ul><ul><li>Developers </li></ul><ul><li>Homebuilders </li></ul>Global Real Estate Securities Scope and Scale
  6. 6. T owerhouse Capital Management, LLC REITs: The Growing Global Pure Play C-Corps (Brookfield, St. Joes) or… REITs (LPTs, FBIs, J-REITs, et al) ?? Early Adopters: USA 1960 Australia 1971 Netherlands 1972 Canada 1993 Recent Adopters: Belgium 1995 Japan 2000 Singapore 2002 France 2003 Hong Kong 2004 Future Adopters: UK 2006 Germany 2006
  7. 7. T owerhouse Capital Management, LLC USA REIT & CANADIAN REITs Scope and Scale <ul><li>Canada US </li></ul><ul><li>Vintage 1993 1961 </li></ul><ul><li>Number 24+ 190+ </li></ul><ul><li>Market Cap Size $16 billion $300 billion </li></ul><ul><li>Average Cap $680 m $1.6 b </li></ul><ul><li>Leverage 45%-55% 35%-45% </li></ul>
  8. 8. T owerhouse Capital Management, LLC USA REIT & CANADIAN REITs Scope and Scale Type/Sub-Type Canada US Apartments 11% 14% Retail 32% 21% Industrial 6% 7% Office 8% 18% Hotel 10% 5% Retirement/Health Care 9% 5% Diversified 24% 8%
  9. 9. T owerhouse Capital Management, LLC USA REIT & CANADIAN REITs Scope and Scale Type/Sub-Type Canada US Apartments 11% 14% Retail 32% 21% Industrial 6% 7% Office 8% 18% Hotel 10% 5% Retirement/Health Care 9% 5% Diversified 24% 8% Self-Storage Mortgage REITs Manf. Homes 22% Finance REITs Specialty REITS
  10. 10. T owerhouse Capital Management, LLC US REIT Portfolio and Performance Metrics Long Term Returns: 11% - 13% over last 10/15/20 Years Long Term Earnings Growth (“FFO”): 6% a year Long Term Dividend Growth: 5.5% a year Long Term Average Dividend Yield: 6% - 8% average
  11. 11. T owerhouse Capital Management, LLC US REIT Portfolio and Performance Metrics Long Term Correlation with US equities: 0.27 to S&P 500 0.07 to ML Govt/Corp Bonds Long Term Volatility: < S&P 500 average long term Low Correlation + Low Volatility + Competitive Total Returns = VERY Useful Addition to Portfolios * [* Typically 10% - 15% Weighting Based on Mean Variance Portfolio Optimization]
  12. 12. T owerhouse Capital Management, LLC Current Outlooks Sector Operational Outlook: Hotel Retail Office/Industrial Apartment Other sub-types
  13. 13. T owerhouse Capital Management, LLC Current Outlooks FFO per share Growth: Above trend, 8% - 9% next 3 years Dividend Growth Rates: Above trend, 6%+ next 3 years NAV Premium/(Discount): 103%, In-line with long term trends BUT Current FFO Multiples/Yield: 14.3x / 7% Above Trend Current Dividend Yield: Below trend, <5% So……...Expectation of Below Trend Total Returns, 7% - 9%, Next 3 Years
  14. 14. T owerhouse Capital Management, LLC <ul><li> Topical Issues </li></ul><ul><li>Interest Rates </li></ul><ul><li>Single Family Home Prices in the US </li></ul><ul><li>REIT Size: Is Bigger Better? </li></ul><ul><li>Cross-Border Investing by R.E. Companies </li></ul><ul><li>Listings versus Investing </li></ul><ul><li>Hotels versus Apartments </li></ul><ul><li>Checkbook versus Expertise </li></ul><ul><li>Canada or US? </li></ul>
  15. 15. T owerhouse Capital Management, LLC Fund Name Dropping GGOF US Diversified Monthly Income Fund Goal: “The Fund’s goal is to generate a reasonable level of US dollar income with moderate volatility…” Five Asset Class Allocations 20% Income Stocks 20% GNMA Securities Lazard Asset Management 20% High Yield Bonds 20% Preferred Stocks 20% REITs Towerhouse Capital Management

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