campus crest group investor presentation- baml
TRANSCRIPT
8/3/2019 Campus Crest Group Investor Presentation- BAML
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August 2010
September 2011 Investor Presentation
8/3/2019 Campus Crest Group Investor Presentation- BAML
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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.
Forward Looking Statements
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Investment Highlights
The Grove ® at Greeley, CO
Experienced Team with
Value-Maximizing Platform
Compelling Market Dynamics
Modern, Well-Located Portfolio inSolid Growth Markets
Proven Track Record withSignificant Growth Potential
Conservative Capital Structure
The Grove ® at Nacogdoches, TX
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Echo Boom drives enrollment growth
Increasing percentage of high-schoolgraduates attending college
Increasing foreign enrollments
Increasing percentage of full-time vs.part-time students
Students taking longer to graduate
College Enrollments (1957-2012)
Budgets constrain on-campushousing investment
38 states cut their educationalbudgets during the recession
Existing on-campus housing stockbecoming increasingly obsolete
Lack of construction financing isrestricting new entrants
Compelling Market Dynamics
DemandDrivers
SupplyFactors
Echo BoomEnrolling in College
Baby BoomEnrolling in College
Source: Dept. of Education, National Center for Educational Statistics
(millions)
Enrollment expected to increase by ~1.5 million students over the next 8 years
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Attractive Portfolio and Growth Platform
Operating Portfolio Highlights
Properties (1)
Total Units / Beds (1)
Weighted Average Age (2)
Average Distance to Campus (2)
Occupancy (1), (2)
27
5,048 / 13,580
3.0 years
0.6 miles
90%
(1) Includes 6 joint venture properties in which Campus Crest owns a 49.9% member interest(2) As of 6/30/2011
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
Proactive focus on medium-sized, high-growth markets
Markets have strong enrollment growth – 9.5%
average growth(3)
Less institutional competition & comparable product
Stronger tuition value proposition
(3) Source: Reported enrollment statistics from university websites;Represents enrollment growth from the academic year 2006/2007 tothe academic year 2010/2011
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Why Our Markets
Well-established university markets with protective community councils
Superior land acquisition and entitlement capabilities
Lack of available financing for local operators
Higher Barriers to Entry
On-campus atmosphere with advantages of off-campus economics
Benefits from symbiotic relationships with universities
Greater impact from marketing dollars
Unique Relationshipswith Universities
We are able to build a superior product at a lower cost because of our captivegeneral contractor and wholesale purchaser
Construction CostAdvantage
Our markets benefit from higher enrollment growth than primary marketsStronger EnrollmentGrowth
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Traditional on- campus, ―dormitory -style‖ housing alternatives have generallyconsisted of shared rooms, communal bathroom facilities and extremely limited
(if any) amenities and parking
The Evolution of Student Housing – The Dormitory Era
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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 experience
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The Evolution of Student Housing – State of the Art Prototype
The Grove ® at Ellensburg, WA
The Grove ® at Mobile, AL
The Grove ® at Moscow, ID
The Grove ® atNacogdoches, TX
The Grove ® atNacogdoches, TX
The Grove ® at Ellensburg, WA
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At The Grove ® , we offer a ―fully -loaded college living‖ experience through our consistentbranding and operating philosophy
Our Properties are Universally Branded The Grove ®
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Intensive asset management philosophy employed throughout our organization
Intensive Asset Management Philosophy
Regular property inspections and audits performed by assetmanagement team using 800 point check list
Field-focused executive management team
Vertical integration and overlap of construction management andfacilities 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 focusand unmatched residence life experiences
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Identified 200+ potential markets & conducting due diligence on 80 sites aspotential development opportunities
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 ofstudent housing properties
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2011 Development Projects (2011/2012 Academic Year Occupancy)
Project Enrollment Distance to Campus Units / Beds Estimated Cost
Wholly-Owned Developments
Ft. Wayne, INIndiana University / Purdue University
13,675 1.1 miles 204 / 540 $19,926
Clarksville, TNAustin Peay State University
10,188 1.3 miles 208 / 560 $21,203
Ames, IA
Iowa State University
27,945 0.3 miles 216 / 584 $21,411
Columbia, MOUniversity of Missouri
32,415 0.9 miles 216 / 632 $24,931
Joint Venture Developments
Denton, TX
University of North Texas
36,123 0.8 miles 216 / 584 $24,953
Valdosta, GAValdosta State University
12,391 1.9 miles 216 / 584 $21,150
($ in thousands)
We utilize a proprietary underwriting model with over 60 inputs to evaluate the relativeattractiveness of each market, which we then use to prioritize development opportunities
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Total Number of Beds (All Properties)
Number of Properties (All Properties)
Campus Crest has grown to over 13,500 beds over the last five years by leveraging itsplatform and brand to deliver a uniform student housing product across multiple markets
Proven and Scalable Business Model
(1)
(1) 2011E includes 4 wholly-owned developments and 2 joint venture developments
(1)
Existing Properties New Openings
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Historical Weighted Average Occupancy (1) Historical Weighted Average RevPOB (2)
88% 87%83%
87% 89%
0%
20%
40%
60%
80%
100%
CY07 CY08 CY09 CY10 1H11
$448$472 $473 $488 $477
$0
$100
$200
$300
$400
$500
CY07 CY08 CY09 CY10 1H11
Increasing Occupancy and RevPOB
Campus Crest has delivered occupancy and RevPOB growth while significantlyexpanding 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 revenueper occupied bed (includes student housing leasing and student housing services revenue)
610
919
524
327
n/a27
OpeningsTotal
OpeningsTotal
610
919
524
327
n/a27
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Academic Year 2011/2012 Leasing Update
(1) As of August 1, 2010 and 2011(2) As of September 30, 2010(3) As of July 31, 2011
Portfolio Leasing Status for 2011/2012 Academic Year and Current Year Occupancy
2011-2012 Leases 2010-2011 Leases Fall 2010 Current
Property Units Beds Signed (1) % Signed (1) % Occupancy (2) 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%
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-
$100
$200
$300
$400
$500
$600
$700
At 6/30/2011
Capitalized for growth with no maturities until 2014 (3)
Capital Structure (Including Pro Rata Share of JointVenture Debt)
($ in millions)
Prudent Capital Structure With Fully-Financed Growth
EquityPro Rata Share of JV DebtDebt
$596.4
(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 Greeley(3) Assumes 1-year extension option on line of credit is exercised; excludes JV maturities and routine construction loan maturities
32.4%
Ample Liquidity
In-place financing for developments
Received commitments to expand and convert credit
facility (1) from secured to an unsecured facility
Potential leverage on unencumbered assets of ~$80
million (2)
Low leverage (32.4% debt/total market capitalization)
Capacity with existing joint venture partner
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FFO per diluted share of $0.17
Adjusted FFO (elimination of change in fair value of interest ratederivatives) per diluted share of $0.16
FFO
Q2 2011 Performance
RevPOB of $482 compared to $482 the prior year, with increased rentalrates being offset by lower service revenue
Total RevPOB (wholly-owned)
88.4% for the 6-months ended June 30, 2011 compared to 88.3% thesame period a year ago
Average Same-storeOccupancy
Operating portfolio was 87.0% leased versus 81.2% leased at August 1,2010
Development properties were 70.0% leased at August 1, 2011
2011/2012 Pre-leasing(wholly-owned and JV)
Increased 12.1%, from $6.0mm in Q2 2010 to $6.7mm in Q2 2011Same-store NOI
Reiterated FFO per fully diluted share guidance of $0.72 to $0.78
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• Over 20 years in corporate accounting and senior financial positions at both privateand public companies and Deloitte & Touche LLP
• Over 33 years of experience in service driven businesses; Colonel in U.S. Army Special Forces
• Joined Campus Crest as a consultant in 2009
Experienced And Proven Leadership
Ted W. RollinsCo-Founder, Co-Chairmanof the Board & Chief
Executive Officer
• 25 years of real estate experience developing and operating service-enriched housing properties
• Founded Campus Crest in 2004
Michael S. HartnettCo-Founder, Co-Chairmanof the Board &Chief Investment Officer
• 25 years of real estate experience developing and operating service-enriched housing properties
• Founded Campus Crest in 2004
Earl C. HowellPresident & ChiefOperating Officer
Donnie L. BobbittExecutive Vice President &
Chief Financial Officer
Robert M. DannExecutive Vice President &President of CCREM &CCD
• 25-year industry veteran with significant experience in strategic planning, portfolio and assetmanagement and operational execution
• Joined Campus Crest in 2011
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Investment Highlights
The Grove ® at San Angelo, TX
The Grove ® at Mobile —Phase II, AL
Experienced Team with
Value-Maximizing Platform
Compelling Market Dynamics
Modern, Well-Located Portfolio inSolid Growth Markets
Proven Track Record with
Significant Growth Potential
Conservative Capital Structure