campus crest group - nareit reit week 2011 investor presentation
TRANSCRIPT
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August 2010
2011 NAREIT Investor Presentation
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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 Companys 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 reflectedin such forward-looking statements are based on reasonable assumptions, the Companys actual resultsand performance could differ materially from those set forth in, or implied by, the forward-lookingstatements. You are cautioned not to place undue reliance on any of these forward-looking statements,
which reflect the Companys views on this date. Furthermore, except as required by law, the Company isunder 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 byanyone in any jurisdiction in which such offer or solicitation is not permitted by law or in which the personmaking the offer or solicitation is not qualified to do so or to any person to whom it is unlawful to makesuch 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 in
Solid Growth Markets
Proven Track Record with
Significant 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 (1957College Enrollments (1957--2012)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
DemandDrivers
SupplyFactors
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
Enrollment expected to increase by ~1.5 million students over the next 8 years
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Attractive Portfolio and Growth Platform
Portfolio HighlightsPortfolio Highlights
Properties (1)
Total Units / Beds (1)
Weighted Average Age (2)
Average Distance to Campus
Occupancy (2)
27
5,048 / 13,580
2.5 years
0.6 miles
89%
(1) Includes 6 joint venture properties in which Campus Crest owns a 49.9% member interest(2) As of 6/6/2011
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
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 Relationships
with Universities
Unique Relationships
with Universities
We are able to build a superior product at a lower cost because of our captive
general contractor and wholesale purchaser
Construction CostAdvantage
Construction CostAdvantage
Our markets benefit from higher enrollment growth than primary marketsStronger EnrollmentGrowth
Stronger 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
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
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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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 unitsand a variety of on-site amenities designed to appeal to the college lifestyle
All of our apartment communities offer bed-bath parity, attractively furnished unitsand a variety of on-site amenities designed to appeal to the college lifestyle
Our Properties are Attractive and Amenity-Rich
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At The Grove, we offer a fully-loaded college living experience through our consistentbranding and operating philosophy
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 organizationIntensive asset management philosophy employed throughout our organization
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 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 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)
ProjectProject EnrollmentEnrollment Distance toDistance to CampusCampus UnitsUnits / Beds/ Beds EstimatedEstimated CostCost
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, IAIowa 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)($ 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
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)Total Number of Beds (All Properties)
Number of Properties (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
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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Increasing Occupancy and RevPOB
Campus Crest has delivered occupancy and RevPOB growth while significantlyexpanding its portfolio
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 (or portion being reported); RevPOB is
defined as average total revenue per occupied bed (includes student housing leasing and student housing services revenue)
Historical Weighted Average RevPOBHistorical Weighted Average RevPOB (2)(2)Historical Weighted Average OccupancyHistorical Weighted Average Occupancy (1)(1)
$448 $472 $473$482 $476
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
CY2007 CY2008 CY2009 CY2010 Q1 2011
88% 87%83%
86% 89%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
CY2007 CY2008 CY2009 CY 2010 Q1 2011
66
1010
99
1919
55
2424
33
2727
n/an/a
2727
OpeningsOpenings
TotalTotal
OpeningsOpenings
TotalTotal
66
1010
99
1919
55
2424
33
2727
n/an/a
2727
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Academic Year 2011/2012 Leasing Update
(1) As of June 6, 2010 and 2011(2) As of September 30, 2010
(3) As of June 6, 2011
Portfolio Leasing Status for 2011/2012 Academic Year and Current Year OccupancyPortfolio 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 7,447 70.7% 6,139 58.3% 88.5% 88.6%
Joint Venture Properties 1,128 3,052 2,185 71.6% 2,100 68.8% 89.1% 90.8%
Sub Total - All Operating Properties 5,048 13,580 9,632 70.9% 8,239 60.7% 88.6% 89.1%
New Developments (2011 Deliveries) 1,276 3,484 1,855 53.2% n/a n/a n/a n/a
Total Portfolio 6,324 17,064 11,487 67.3% 8,239 60.7% 88.6% 89.1%
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$100
$200
$300
$400
$500
$600
At 3/31/2011
Capitalized for growth with no maturities until 2014 (3)Capitalized for growth with no maturities until 2014 (3)
Capital Structure (Including Pro Rata Share of JointCapital Structure (Including Pro Rata Share of Joint
Venture Debt)Venture Debt)
Capital Structure (Including Pro Rata Share of JointCapital Structure (Including Pro Rata Share of Joint
Venture Debt)Venture Debt)
($ in millions)
Prudent Capital Structure With Fully-Financed Growth
EquityPro Rata Share of JV DebtDebt
$529.1
(1) Revolving credit line for up to $125 million; As of 3/31/2011 the Company had drawn $57.0 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
30.4%
InIn--Place Financing for DevelopmentsPlace Financing for DevelopmentsInIn--Place Financing for DevelopmentsPlace Financing for Developments
Amount
Revolving Credit Facility $38(1)
Construction Facilities $70
HSRE Equity Commitment $50
JV Construction Financing $31
Potential Leverage on Unencumbered Assets(2) $80
Total Potential Liquidity $269
($ in millions)
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Over 20 years in corporate accounting and senior financial positions at both private
and 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. Rollins
Co-Founder, Co-Chairmanof the Board & ChiefExecutive 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 MobilePhase II, AL
Experienced Team withValue-Maximizing Platform
Compelling Market Dynamics
Modern, Well-Located Portfolio in
Solid Growth Markets
Proven Track Record with
Significant Growth Potential
Conservative Capital Structure