Upload
others
View
12
Download
0
Embed Size (px)
Citation preview
www.centurionreit.com
Centurion Asset Management Inc.
Investing in Apartments for Income & Stability
FOR ADVISOR USE ONLY
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Asset Management Inc.
A Real Estate Investment Solution Provider with a Strategic Approach to Investment Management
� Investment, Asset, and Property Management� Largest REIT owner of student housing in Canada� Experienced at managing rental properties and student housing� Offers customized solutions for mortgage financing needs
Centurion Asset Management Inc.
www.centurionreit.com2
Table of Contents
� Investor Needs, Suitability and Challenges
� Centurion Apartment REIT� Introduction� Private REIT vs. Public REIT� Objectives� Performance� Unique Advantage� Investment Process� Portfolio
� Centurion REOT� Introduction� Objectives� Why Invest� Investment Strategy� Portfolio� Performance
� Investing with Centurion
� Advisor Summary
� The Executive & Operational Teams
� Questions
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Investors Needs and Suitability
Needs
Income-oriented investors that are looking for:
� Monthly distributions
� Capital Preservation
� Growth potential
� Diversifying their portfolio
� Re-investment options
� Tax advantage income
Suitability
• Qualified, long-term Investors who are looking to generateincome and capital growth from their Investments.
• Moderate risk tolerance: There are certain risks inherentin an investment in Private Real Estate including risksrelated to real estate development, liquidity, debtfinancing and others.
• Please refer to the Offering Memorandum.
www.centurionreit.com3
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Challenge: Volatile Markets / Low Interest Rates
� Riskier asset classes volatile / GIC rates barely cover inflation
S&P/TSX Composite Index / 5-year Personal Fixed Term Rates (as at September, 30 2014)
Sources: Standard & Poor’s (S&P/TSX Index as December 31, 2013); Bank of Canada (5-year Personal Fixed Term Rates – “posted rates” at Chartered Banks as at December 31 of each year)
5.35% 4.60% 3.30% 3.80% 2.80% 2.53% 2.53% 2.68% 3.10% 2.23% 1.63% 1.85% 1.60% 1.80% 1.45%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
www.centurionreit.com4
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Apartment REIT
Objectives
� Provide investors with stable cash distributions, payable monthly, where reasonably possible,tax deferred, with the opportunity for long-term growth and a focus on preservation of capital.
� Investment assets make up a diversified portfolio of income-producing multi-unit residentialapartments and student housing properties in Canada.
� Maximize Unit value through the active management of the Portfolio and through futureacquisition of additional properties.
� Leverage the strategic relationships within Centurion Asset Management Inc.’s network toincrease investment opportunities and manage risk.
www.centurionreit.com5
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Private vs. Public REIT
Differences between Public and Private REITs
Publicly-Traded REIT:
� Trade on a public stock exchange (provide daily liquidity)
� Trading daily also means investors can potentially push price up or down, reflecting current market sentiment, regardless of actual market value of the asset
� Increased reporting costs due to requirements of a public listing
� History of more volatile pricing
� Tend to be more highly correlated to equity markets. Example during recent financial crisis:
2008: Public REIT Market*: -34.0% S&P/TSX*: -33.0%
Private REIT:
� Not traded on a public stock exchange (generally offer 30-day liquidity)
� Value is based on the value of underlying real estate or equity / lending rate (not a “market-traded” price)
� No additional reporting costs related to a public listing
� Rational pricing with lower volatility
� Tend to be far less correlated to major equity markets
2008: Non Listed Property Ownership**: +3.7%Non Listed Apartment Property**: +6.4%
The two main categories of REITs in Canada are publicly traded REITs and private REITs.
* Source: Morningstar Research Inc.
** Source IPD (2008 Edition); Note: Non listed property ownership is similar to a Private REIT
www.centurionreit.com6
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Apartment REIT always looks for opportunities with a strict due diligence process to ensure investments are responsible and beneficial for its valued investors. We concentrate on communities with low vacancy levels and strong population demographics.
The primary strategies employed by Centurion:
� Purchasing undervalued properties with untapped potential, low vacancy and stable tenant base.
� Investing in newer, stabilized buildings, in desirable neighbourhoods, that do not require upgrades allows the REIT to realize maximum income quickly.
� Centurion Apartment REIT leverages its strategic relationship with Centurion Real Estate Opportunities Trust to proactively create a pipeline of new investment opportunities.
.
Investment Process
www.centurionreit.com7
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Apartment REIT
Value Opportunity
� Rents significantly under market
� Building was poorly runand under maintained
� Purchase Price:
� $2.115 million (March 2006)
Upgrade Program
� Renovation & repositioning program(Lighting retro-fits, new windows, elevator cab upgrades,improved security, common area renovations and in-suiteupgrades) 4 month period, investment cost of $350,000
Income:
Increased from $160,000 per annum to $250,000 (+56%)
Refinanced:
Refinanced after 4 months at $3.2 million
Value at December 31, 2013:
$5.03 million9
47 Suite Apartment Building
Oshawa, Ontario
176 Bed Student Housing Building
Waterloo, Ontario
Property Background
� Centurion funded the 2nd mortgage on this property with the option to purchase.
� The developer approached Centurion to exercise our purchase option.
� After due diligence Centurion Apartment REIT chose to exercise the purchase option.
www.centurionreit.com8
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Student Housing
Student Housing properties are consistent with ourphilosophy of seizing upon strategic opportunities.
� Steady, predictable cash flows with low vacancyrates.
� Large, untapped market with no dominant player –Centurion Apartment REIT is striving to be theleader in this space.
� Centurion Apartment REIT is the only REIT inCanada engaged in the student residence businessand the only investment grade vehicle available toinvestors wanting to participate in student housing.
� Centurion Apartment REIT is the second largest(non-university) owner of student housing inCanada.
� Acquisition of 386 unit student residence in Waterloo, ON (July 18, 2013)
� Purpose built new construction student residence serving Wilfred Laurier University in Waterloo, Ontario.
� In close proximity to Wilfred Laurier University Campus, transportation, services, shopping, dining and entertainment venues.
Property at a glance:
www.centurionreit.com9
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
$10,000
$12,000
$14,000
$16,000
$18,000
30-Sep 31-Dec31-Mar 30-Jun 30-Sep 31-Dec31-Mar 30-Jun 30-Sep 31-Dec31-Mar 30-Jun 30-Sep 31-Dec31-Mar 30-Jun 30-Sep 31-Dec31-Mar 30-Jun 30-Sep
Va
lue
of
$1
0,0
00
Performance: Centurion Apartment REIT
Growth of $10,000 invested (since inception of REIT August 31, 2009)
REITs are not guaranteed, their values can change frequently and past performance is no guarantee of future results. PAST PERFORMANCE MAY NOT BE REPEATED.
$10,000Invested
$17,433 September 30-14
Calendar Returns (%) 2009(10) 2010 2011 2012 2013YTD-2014
Compounded Returns (%) 1-Year 2-Year 3-Year 5-Year
Since Inception
Centurion REIT TR
(%) 2.8 8.5 10.2 20.0 11.0 6.4 Centurion REITTR (%) 8.5 10.1 13.2 11.6 11.6
www.centurionreit.com10
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Comparing Asset Class Performance
Private Apartment Property Index exhibits steady growth
Growth of $10,000 invested: past 28-year period as at December 31, 2013 (annual update)
REITs are not guaranteed, their values can change frequently and past performance is no guarantee of future results. Above ICREAM / IPD Index only available with annual data points versus indices on previous slide shown with quarterly data. It is an unleveraged index. PAST PERFORMANCE MAY NOT BE REPEATED.
1997
Asian Financial
Crisis
* Annualized return over the 28-year period of above ICREIM / IPD Index
“Positive calendar year Total Returnsevery year over past 28 years”
“Consistently positive growth over the past 28 years”ICREIM / IPD Canada Residential
"Apartment" Property Index (TR)
$219,074
2008/09
Global Financial
Crisis
1987
Black Monday Crash
1998
Russian& LTCM bailout
2000/02
Internet Bubble Bursts& 9/11
$10,000 invested (Dec 31-1984)
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
www.centurionreit.com11
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Apartment REIT Portfolio
Centurion Apartment REIT owns and operates 42 multi-residential rental properties in 16Canadian communities.
Gravenhurst
Barrie
Brighton
Montreal
Oshawa
Whitby
Toronto
Hamilton
Huntsville
Acton
Mississauga
Cambridge
Kitchener
Waterloo
London
Tillsonburg
www.centurionreit.com12
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Real Estate Opportunities Trust
The Centurion Real Estate Opportunities Trust (Centurion REOT)is an income & capital growth oriented investment trust that allowsqualified investors to invest in a diversified portfolio of mortgagesand opportunistic real estate developments and investments.
Simply put, investors pool their money together to invest inmortgage and growth oriented real estate opportunities. The netprofits are distributed back to investors.
Highlights
� Expected Total Return:
7% - 12% � Expected Mortgages Returns of 7%-12%,
and Real Estate Development Returns of 15%-25% 1
� Monthly Distributions
� Growth Potential
� RRSP, RESP, TFSA Eligible
� Diversified Portfolio
� Qualified Investors Only
Investor
Mortgages(income)
Investment Investments
Income & Capital Growth
Distributions & Capital Growth Centurion
REOT
Growth Oriented
Investments(capital growth)
www.centurionreit.com13
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion REOT
Objectives
� Provide investors with cash distributions, payable monthly with the opportunity for long-termgrowth and a focus on preservation of capital.
� Investment assets make up a diversified portfolio of mortgage investments, growth orientedreal estate investments and ancillary real estate ventures.
� Maximize Unit value through the active management of the Portfolio.
� Leverage the strategic relationships within Centurion Asset Management Inc.’s network toincrease investment opportunities and manage risk.
www.centurionreit.com14
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion REOT Investment Strategy
Centurion REOT intends to use a barbell strategy composed of mortgages for income on oneside and other growth oriented real estate investments for capital growth on the other.
The following targeted investments categories are where Centurion sees growth
opportunities in the real estate market:
1) Income: Mortgage Investments� Construction loans for purpose built rental apartments & student housing buildings� Multi-family residential, investment properties & commercial mortgages� Developer and builder pre-construction loans� Mezzanine and subordinated debt financing� Residential mortgages
Growth Oriented Investments
(Capital Growth)
Goal: Portfolio Balance
Mortgages(Income)
www.centurionreit.com15
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion REOT Portfolio
Summary of Portfolio
Committed# of
InvestmentsFunded
# of Investments
Loans $70,402,416 20 $57,648,656 19
Jointarrangements
$12,783,655 5 $1,471,687 1
Total $83,186,071 25 $59,120,342 20
Loans # of Investments
Funded
Non- Participating 10 $25,712,748
Participating 9 $31,935,907
Total 19 $57,648,656
Participating and Non-Participating Investments2
www.centurionreit.com16
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion REOT Portfolio
Loans Funded by Geographical Allocation
Loans by Mortgage Type
Loan Maturity by Year
Alberta13%
Ontario87%
Residential70%
Commercial30%
201429%
201522%
201642%
20177%
www.centurionreit.com17
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion REOT Portfolio
* As of August 31, 2014
Year At End of Quarter
Committed ($M)
Advanced ($M)
Number of Investments
Int.Rate
WtdAvgLTV
Wtd AvgTerm to Maturity(Years)
2013 Q2 $22.34 $13.13 5 10.66% 74.1% 2.10
Q3 $48.03 $37.66 8 10.17% 56.7% 1.87
Q4 $48.77 $38.88 10 10.12% 56.3% 1.93
2014 Q1 $66.97 $55.44 16 9.76% 56.0% 1.83
Q2 $62.54 $51.97 18 9.97% 64.1% 1.84
Historical Loan Information
www.centurionreit.com18
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Example 1
Transaction
Project Details� 100 Units in Western Canada � Single 6 Storey Apartment Building with
Ground Floor Retail� Surface & Underground Parking
Loan Structure� $21.7M construction cost� 1st Mortgage: $16.3M funded by a third party lender � 2nd Mortgage: $2.5M funded by Centurion � Equity Financing: $3M in total, (2/3 or $2M funded by Centurion)� Mortgage Loan Interest Rate: 11%� Preferred Return to Centurion REOT: 10% with a 50/50 split of profits beyond the 10%
between the developer and Centurion REOT. � Right of First Refusal to acquire the development project upon completion.
www.centurionreit.com19
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Example 2
Transaction
South Western Ontario
Background:� Centurion funded the 2nd mortgage on this
property with the option to purchase.
� The borrower approached Centurion to exercise our purchase option. After due diligence Centurion chose to exercise its option to purchase the property.
Loan & Purchase Details:� Purchase Price of the Property: $15M� 2nd Mortgage Amount: $1M� Additional Funds used for Purchase: $3M
www.centurionreit.com20
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Executives & Board of Trustees - REIT
Depth of experience & expertise
A Board of Trustees is responsible for the general control and direction of Centurion Apartment REIT:
Wayne TuckVP of Operations, COO & Trustee *
Ross AmosIndependent Trustee
Martin BernholtzIndependent Trustee***
Greg RomundtPresident & Trustee *
John MillsIndependent Trustee
Robert OrrCFO/CCO **
*Responsible for the day-to-day Executive Management of Centurion Apartment REIT. Please see Appendix for detailed biographies of the Executives & Trustees ** Not a member of the Board of Trustees
*** Independent Board Member on both Centurion REOT and Centurion Apartment REIT Board of Trustees
Chairmen of the Board of Trustees: Ross Amos
www.centurionreit.com21
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Executives & Board of Trustees - REOT
Depth of experience & expertise
A Board of Trustees is responsible for the general control and direction of Centurion REOT:
Wayne TuckVP of Operations, COO & Trustee *
Charles DillinghamIndependent Trustee
Martin BernholtzIndependent Trustee***
Greg RomundtPresident & Trustee *
Ken MillerIndependent Trustee
Robert OrrCFO/CCO **
*Responsible for the day-to-day Executive Management of Centurion REOT. Please see Appendix for detailed biographies of the Executives & Trustees ** Not a member of the Board of Trustees
*** Independent Board Member on both Centurion REOT and Centurion Apartment REIT Board of Trustees
Stephen StewartDirector of Mortgage Investments & Trustee *
Peter SmithIndependent Trustee
Chairmen of the Board of Trustees: Martin BernholtzChairmen of the Investment Committee: Ken Miller
www.centurionreit.com22
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Properties - Apartments
www.centurionreit.com23
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Properties – Student Housing
www.centurionreit.com24
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Summary
The Investment Solution
� Two separate trusts that allows qualified investorsto invest into real estate opportunities.� Mortgage Lending & Financing� A diversified portfolio of apartments and student
housing properties
Centurion Strength
Experience, Expertise, Infrastructure & Financial Resources to deliver an:
End-to-End Real Estate Solution� Sourcing / Attracting Development Deals� Offering Financing� Real Estate Investment Opportunities� Property Management
Centurion has the:
People� Experienced & dedicated team
Processes� Value-oriented strategy� A majority independent Board of Trustees provides
oversight
Performance� Track record of strong total returns since 2006
Portfolio� Helps to diversify portfolios overweight in equities
with its low correlation4 to major asset classes andlower volatility3
Benefits for Investors
� Generates monthly income� Potential for growth� Has a focus on capital preservation� Is tax efficient1
� Diversifies investor’s portfolio� Provides re-investment options
www.centurionreit.com25
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Apartment REIT
Advisor SummaryCenturion Apartment Real Estate Investment Trust
Terms &Conditions
Investment Minimum $5,000 (qualified investor)
Purchases: Monthly (any day of the month)
Redemptions: Monthly (30 days notice before redemption date)
Valuations: Monthly
FeesManagement Fees: Class A: 2.5% Class F: 1.5%
Performance Fees: 5% Carried Interest*
Advisor Compensation
UpfrontCommission Fee:
(annual rate %)
Deferred Sales Charge (DSC)
5%Low Load (LL)
3%
Front-end (FE)0-5%
(negotiated with client)
F Class (F)n/a
Trailer Fee:(annual rate %)
50 bps 75 bps 100 bps n/a
Redemption Schedule:
In year 1: 6.0%2: 5.5%3: 5.0%4: 4.0%5: 3.0%
After year 5: 0%
First 18 months: 3.5%
Second 18 months: 3.0%
After 36 months: 0%
Short-termtrading fee: 3.0%
if redeemed within 6 months
Short-term trading fee: 3.0%
if redeemed within 6 months
FundSERV Codes Fund Company Code: CEN100 CEN101 CEN102 CEN105
* Please refer to the Offering Memorandum
www.centurionreit.com26
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Real Estate Opportunities Trust
Advisor SummaryCenturion Real Estate Opportunities Trust
Terms &Conditions
Investment Minimum $5,000 (qualified investor)
Purchases: Monthly (any day of the month)
Redemptions: Monthly (30 days notice before redemption date)
Valuations: Monthly
FeesManagement Fees: Class A: 2.0% Class F: 1.0%
Performance Fees: 5% Carried Interest*
Advisor Compensation
UpfrontCommission Fee:
(annual rate %)
Deferred Sales Charge (DSC)
5%Low Load (LL)
3%
Front-end (FE)0-5%
(negotiated with client)
F Class (F)n/a
Trailer Fee:(annual rate %)
50 bps 75 bps 100 bps n/a
Redemption Schedule:
In year 1: 6.0%2: 5.5%3: 5.0%4: 4.0%5: 3.0%
After year 5: 0%
First 18 months: 3.5%
Second 18 months: 3.0%
After 36 months: 0%
Short-termtrading fee: 3.0%
if redeemed within 6 months
Short-term trading fee: 3.0%
if redeemed within 6 months
FundSERV Codes Fund Company Code: CEN200 CEN201 CEN202 CEN205
* Please refer to the Offering Memorandum
www.centurionreit.com27
RESPECT INTEGRITY SIMPLICITY EXCELLENCE
Centurion Asset Management Inc.
Questions?
www.centurionreit.com28