First Quarter 2015 › 499711848 › files › doc-presentaion › Q1-201… · First Quarter 2015....
Transcript of First Quarter 2015 › 499711848 › files › doc-presentaion › Q1-201… · First Quarter 2015....
1
INVESTOR PRESENTATIONFirst Quarter 2015
2
Certain statements in this presentation may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of WPT Industrial Real Estate Investment Trust (“WPT REIT” or the “REIT"), or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this presentation, such statements use such words as "may", "would", "could", "will", "intend", "expect", "believe", "plan", "anticipate", "estimate" and other similar terminology. These statements reflect the REIT's current expectations regarding future events and operating performance including the REIT’s future growth potential, results of operations, future prospects and opportunities, demographic and industry trends and future legislative and regulatory approaches with respect to matters affecting the REIT and speak only as of the date of this presentation. Forward-looking statements involve significant risks and uncertainties, which include, but are not limited to the factors discussed under “Forward-Looking Statements” and "Risk Factors" in the REIT’s annual information form for the year ended December 31, 2014, the “AIF” and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. Forward looking statements are necessarily broad on a number of estimates and assumptions that, while considered reasonable by management of the REIT as of the date of this presentation, are inherently subject to significant business, economic and competitive uncertainties and contingencies; therefore, the REIT cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this presentation and are expressly qualified in their entirety by this cautionary statement. Subject to applicable securities laws, the REIT assumes no obligation to update or revise them to reflect new events or circumstances.
This presentation does not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever. The information contained in this presentation concerning the REIT and its affiliates does not purport to be all-inclusive or to contain all the information that a prospective purchaser or investor may desire to have in evaluating whether or not to make an investment in the REIT. The information is qualified entirely by reference to the AIF.
This presentation includes certain financial measures such as funds from operations (“FFO”), adjusted funds from operations (“AFFO”) and net operating income (“NOI”) that are not measures recognized under International Financial Reporting Standards (“IFRS”) and do not have standardized meanings prescribed by IFRS. FFO, AFFO and NOI are supplemental measures of a Canadian real estate investment trust’s performance and the REIT believes they are relevant measures of the ability of the REIT to earn and distribute cash returns to investors in the Units and to evaluate the REIT’s performance. The IFRS measurement most directly comparable to FFO, AFFO and NOI is net income. Tables reconciling such non-IFRS financial measures are available in this presentation and in the AIF.
Forward-Looking Statements
All currency in U.S. dollars
3Targeting Disciplined but Aggressive Growth
ONLY Canadian REIT focused exclusively on U.S. industrial real estate
48 institutional-quality properties benefiting from US economic recovery
Distributions in US funds• Current $0.70/Unit annualized• Strong yield as US$ strengthens
Listed on TSX (WIR.U) and OTCQX (WPTIF)• 18.5 million Units outstanding
4
Focused on distribution sub-segment of U.S. industrial real estate market
High-quality, stabilized and geographically diverse portfolio in major distribution markets
Aligned and experienced management and majority-independent board of trustees
Platform for accretive growth in a fragmented market
Investment Highlights
4
3003 Reeves RoadIndianapolis, Indiana
GLA: 741,100 sq. ft.Ceiling height: 36 feet
2
3
4
1
5Proven Experienced Management Team
Well-Aligned Manager
Retained Interest
47.3 %
Path to internalization
§ Automatic at $750 million in equity market capitalization
1105 Northfield DriveIndianapolis, Indiana
GLA: 526,200 sq. ft.Ceiling height: 32 feet
66
600 Hartman Industrial Crt.Atlanta, Georgia
GLA: 525,600 sq. ft.Ceiling height: 32 feet
Strong and StableUnited StatesIndustrial Market
7Increasing Demand for Warehouse and Distribution Space
Strong Market Fundamentals
Substantial E-commerce supply chain growth is driving significant demand for state-of-the-art distribution buildings
Non-discretionary household goods
Sector is benefiting from US economic recovery
Build-to-suit & speculative development activity is occurring
Significant tenant investment in properties
1
2
3
4
5100 West
Thomas P Echols DriveLouisville, KY
GLA: 936,000 sq. ft.Ceiling height: 32 feet
8Strategically Located in Key Distribution Markets
Properties
15.1Msq. ft. of GLA
48Current Portfolio
9State-of-the-Art Warehouse and Distribution Properties
Institutional-Quality Portfolio1
1. As of March 31, 20152. Industrial assets only
Average Clear Ceiling Heights2
Average Asset Age
Average Tenant Size2
31 feet
13 Years
195,000 Sq. Ft.
Average Building Size2 321,000 Sq. Ft.
10Stable and Diversified Tenant Mix
High-Quality Tenant BaseTop 10 Industrial Tenants*
*As of March 31, 2015
Tenant GLA Occupied(%) of Total
Portfolio GLARemaining Lease
Term (Years) Sector
General Mills 1,512,552 10.02% 5.17 Consumer Products
Unilever 1,262,648 8.36% 8.25 Consumer Products
Honeywell 754,000 4.99% 3.76 Consumer Products
OSP Group 741,092 4.91% 1.42 Online Retailer
Zulily 737,471 4.88% 2.17 Online Retailer
United Stationers 654,080 4.33% 2.34 Consumer Products
CEVA Logistics 648,750 4.30% 1.17 Logistics
Amazon.com 572,000 3.79% 4.34 Online Retailer
Ebay 543,512 3.60% 2.08 Online Retailer
Life Science Logistics 394,200 2.61% 5.25 Healthcare
7,820,305 51.80% 4.05
11
Financial Overview
6766 Pontius Rd.Cincinnati, Ohio
GLA: 754,000 sq. ft.Ceiling height: 35 feet
12
Consistent Growth Since IPO
(US$,000 except per Unit amounts)Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015
Investment properties revenue
12,847 13,846 15,227 15,431 16,386
NOI 9,432 10,480 11,610 11,796 12,452
FFO 5,928 6,541 7,431 7,623 7,990
AFFO 4,816 5,155 6,234 6,363 6,697
AFFO per Unit $ 0.202 $ 0.188 $0.212 $0.216 $0.207
Property acquisitions make significant contribution
13
Strong Balance Sheet & Liquidity Position
As of March 31, 2015
Total Debt to GBV 50.8%
Weighted Average Effective Interest Rate 3.8%
Weighted Average Mortgage Term-to-Maturity 5.7 yrs
Interest Coverage Ratio 3.3 times
Fixed Charge Coverage Ratio 2.9 times
AFFO Payout Ratio – Q1 2015* 88.1%
$46.6 Million bought deal equity offering in Q1 2015
* AFFO Payout Ratio would have been 81.3% if Memphis acquisition was included as of January 1, 2015
14Capitalizing on Low Interest Rate Environment
Well-Balanced Mortgage Portfolio
Mortgage Maturities by Year
Weighted Average Mortgage Term-to-Maturity
5.7 years1,590
23,161
1,913
33,295 31,481
87,111
50,011
25,762
52,498
8,863
- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000
100,000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Mat
uri
ties
($
in t
hou
san
ds)
15
Staggered Lease Maturity Profile
Limited Near-Term Tenant Turnover
Weighted Average Remaining Lease Term
4.2 years
Leases expiring 5 19 14 16 10 11 6 3 7
2.2%
16.3%
20.3%
17.2%
6.7%
17.8%
3.5%2.4%
13.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 +
Lease Expiration (% of GLA) by Year
16
Growth Strategies
6579 West 350 NorthIndianapolis, Indiana
GLA: 629,200 sq. ft.Ceiling height: 32 feet
17
Proven Growth Strategies
Internal Growth:
• Contractual rent increases
• Rolling rents to market upon renewals
• Increased occupancies
• Effective asset & property management
• Strategic debt placement & refinancing
External Growth:
• Strong acquisition pipeline
• Institutional relationships
• Proven track record of sourcing, completing and integrating acquisitions
18
Focused on distribution sub-segment of U.S. industrial real estate market
High-quality, stabilized and geographically diverse portfolio in major distribution markets
Aligned and experienced management and majority-independent board of trustees
Platform for accretive growth in a fragmented market
Summary
18
3003 Reeves RoadIndianapolis, Indiana
GLA: 741,100 sq. ft.Ceiling height: 36 feet
2
3
4
1
19
APPENDIX
20Majority-Independent Board with Extensive Real Estate & Financial Experience
Board of Trustees
Trustee Real Estate/Board Experience Independent Trustee
Audit Committee
CG&N1
Committee
Robert WolfLead Trustee
§ Principal, RTW Capital Corporation§ Former CFO, RioCan REIT � �
Milo Arkema § Independent Consultant§ Former Accountant, Baker Tilly Virchow Krause, LLP � �
Sarah Kavanagh§ Commissioner, Ontario Securities Commission§ Former Vice Chair, Co-Head, Diversified Industry Group,
Scotia Capital� �
Charles Swanson § Former VP, Real Estate, bcIMC§ Former Director, SilverBirch Hotels & Resorts � �
Harry Rosenbaum § Founding Principal, Great Gulf Group of Companies§ Partner, Ashton Wood Homes � �
Andrew Silberstein § Partner, Almanac Realty Investors LLC§ Former CIO and COO of Stoltz Real Estate �
Scott FrederiksenChair of the Board
§ CEO, Welsh Property Trust LLC§ 26 years with Welsh organization
(CHAIR)
(CHAIR)
1.Compensation, Governance and Nominating
21Aligned Fee Structure
Asset Management § 0.25% of GBV
Acquisition§ 1.0% on first $100M§ 0.75% on next $100M § 0.5% over $200M
No Performance Incentives§ No AFFO hurdle
Property Management (% of revenue)
§ 2% on single-tenant industrial§ 3% on multi-tenant industrial§ 4% on office
Construction Management§ 5% on non-maintenance capital projects >$100,000
Term§ Initial term of 5 years plus 5 year renewal option§ Automatic internalization at $750 million equity
market capitalization
Asset and Property Management
No disposition, financing, leasing or development feesNo employees directly billed to REIT