Preserving Capital while Creating Wealth

Transcription

1

2 ABOUT THE BANYANTREE GROUP BanyanTree Group is a nimble private real estate investment company focused on investing in well located income producing multi family and commercial real estate properties in California, Nevada, Arizona, Texas and Florida. The investments we pursue offer attractive inplace cash flow and the ability to create additional value through renovation, repositioning and re branding. BanyanTree Group invests its own equity alongside both institutional and private equity investors who are aligned with our goal of through carefully selected investments with superior risk adjusted returns

3 COMPANY VISION COMPANY CORE VALUES Achieve the highest possible standards and be the preferred choice for all stake holders in our business and within our market area Ethical Ethical and transparent business dealings Diligent Diligence, hard work and utmost care Innovative Innovative and creative solutions Committed Commitment to performance and quality Trustworthy Trust amongst all stakeholders COMPANY MISSION C

4 INVESTMENT PHILOSOPHY BanyanTree Group s investment philosophy is driven by its goal of achieved through disciplined investments in assets with superior risk adjusted returns Our approach is founded on the following convictions: Real Estate markets are inherently inefficient price does not necessarily equal value this allows skilled and patient investors to acquire assets at prices below inherent value and monetize assets at a prices above value Adverse and favourable market conditions occur with increasing regularity. Appropriate use of flexible leverage and maintaining adequate liquidity provides the ability to withstand market shocks, and to take advantage of associated market opportunities A well defined investment plan that contemplates possible courses of action under adverse circumstances with disciplined and pro active asset management that evolves to reflect changing circumstances is key to managing and mitigating risks Risks that can result in significant loss of capital must be completely avoided

5 COMPETITIVE ADVANTAGES Niche Market Focus: Late recovery markets Markets dependent on energy Existing Relationships & Off-market Deal Sourcing Ability: Extensive and deep rooted network of relationships across the industry developed over 25 years Enabled the team to participate in negotiated offmarket situations On-ground Local Presence: Offices in San Francisco, Houston and New York Technology Savvy: Tech savvy team experienced in intelligent revenue management, use of social media etc Proven Investment Credentials: Continuation of existing successful and proven investment strategy Motivated Team with no Legacy Assets: Meaningful co investment from the team that is not burdened by legacy assets allowing it to fully focus on future investments Experienced Management Team: Acquired or overseen acquisition of $2.7 billion of real estate assets 84 properties (21,471 multifamily units, 5.0 M SFT commercial space)

6 STRATEGY BanyanTree Group employs a data driven approach to understand economic conditions, monetary & fiscal policy, analyse forecasts, demographic trends, rental rates, vacancy/occupancy data, absorption trends, replacement costs and supply/demand conditions, to select markets that exhibit superior growth potential. We combine this information with intimate local knowledge and local operational experience to select carefully, underwrite realistically, structure conservatively, and opportunistically acquire well located underperforming and undervalued assets. Upon acquisition the team implements a well defined investment plan with disciplined and proactive asset management that evolves to reflect changing circumstances by finding creative solutions to unforeseen or unanticipated challenges

7 INVESTMENT CRITERIA Multi-family BanyanTree Group will focus on well located garden style multi family properties comprising more than 250 units that provide an opportunity to increase NOI at a rate faster than the overall market in the initial two to three year period of ownership. We will focus on markets with strong near term demand and limited near term supply. More specifically we will acquire properties that meet the following criteria: Geographic Focus Size $10 million + Age: 10 to 30 years Class: B or better Dated physical plant, amenities and unit interiors that do not meet the standard and requirements of today s renters Are inferior or are of lesser quality then the overall sub market With rents that are lower than comparable properties and materially lower than competing or better quality properties Price significantly below today s replacement costs Where rents can be increased higher than inflation in the first three years of ownership through renovation and repositioning of the property

8 EXPERIENCE DIRECT 8,682 Units Multi Family 2.7 Million SF Office $1.3 Billion Equity Invested OVERSIGHT 12,799 Units Multi Family 2.3 Million SF Commercial $1.4 Billion Equity Invested

9 ELEMENTS OF SUCCESS Experienced team focused on risk management for Preserving Capital while Creating long-term Wealth Management of risk to preserve capital remains BanyanTree Group s guiding principal Deal flow pipeline that generates proprietary opportunities Extensive real estate relationships developed over 25 years Local presence in all markets we operate in Proven hands-on entrepreneurial operating ability Twenty five years of disciplined and conservative underwriting tested and refined in all cycles of the market Integrated in house team approach (acquisitions, management, construction and marketing) provides the ability to expeditiously and thoroughly evaluate assets and develop and implement value enhancing business plans. Maximizing potential through diligent asset oversight and control of day to day operations Superior Risk Adjusted Returns

10 NORTH CALIFORNIA PORTFOLIO SAN FRANCISCO Equity Investment: $86.7million Investment Date: June 2005 Realized Proceeds: $314.5 million Realized IRR: 80.8% Multiple on Invested Equity: 3.63x Investment Period: 26 months VALUE ADDED TRANSACTION SUMMARY In June 2005, a $331million ($231/SF) and a development parcel zoned for an additional 230,000 SF, was acquired in the San Francisco Bay area. Each asset was well positioned and was considered Class A to B+ quality. Two of the properties, 301 Howard Street and Foundry Square II, were located in the heart of San Francisco central business district. San Rafael Corporate Center was located in San Rafael and Parkside Towers was located in Foster City OPPORTUNITY Significant upside through lease up of vacant space. At acquisition occupancy 55% in a market that was 80% occupied. High barrier to entry on the upswing. Current rents were 50% to 60% below the five year rental high. Re position with $48 million investment, primarily for tenant improvements, leasing costs, coupled with an aggressive marketing program. Enhance and realize the value of the four acre development parcel. Acquisition at 60% ($231/SF) of its $384/SF replacement cost provides significant upside potential. The Bay area is one of the preeminent financial and commercial centers in the world, providing attractive long term prospects and liquidity at disposition Leased more than 700,000 SF in 26 months, increasing occupancy from 55% at acquisition to 96% at disposition utilizing an intensive in house, hands on leasing strategy. Increased net operating income from $7.4 million at acquisition to $24.3milion at disposition The portfolio was financed by placing $323 million of flexible financing at acquisition and hedged the interest rate risk with a cap on LIBOR Enhance value of four acre development parcel by mitigating environmental issues, generating build to suit interest and developing detailed feasibility studies for alternative uses including hotel, retail and residential INVESTMENT RESULTS Sold four assets for $641 million ($470/SF) between March 2007 and January 2008 that were purchased in June 2005 for $331 million ($231/SF) Achieved an 80.8% IRR Achieved a 3.63x Multiple on invested equity of $86.7 million

11 THE PACIFIC PROPERTIES PORTFOLIO LAS VEGAS Equity Investment: $41.6 million Investment Date: August 2000 Realized Proceeds: $79.6 million Realized IRR: 19.1% Multiple on Invested Equity: 1.91x Investment Period: 48 months TRANSACTION SUMMARY In August 2000, a portfolio of six multifamily apartment complexes consisting of 1,728 units was acquired in Las Vegas, NV. The properties were built between 1986 and 1992 and purchased directly from the developer for $104.5 million ($60,500/unit). Average rent at acquisition was approximately $812/unit withan assumed loan of $66 million. OPPORTUNITY Las Vegas experienced a large increase in population because of job growth. These properties were centrally located, had below market rents and were geographically concentrated, providing operational efficiencies. Improve management by curing deferred maintenance issues, providing new amenities and rebranding to reduce turnover, enhance occupancy, command higher rents, reduce operating costs and ultimately improve cash flow VALUE ADDED Within six months of acquisition, 90% of the $4.5 million capital program was completed, including renovation to the clubhouses, business centers, landscaping, signage and security. All deferred maintenance issues including drainage, chimney and roof work were addressed. Upgrades and repairs produced a significant increase in tenant satisfaction and retention, which led to an increase in cash flow. New revenue sources were identified including utility billing of water sewer to residents adding $295,000 of additional revenues. Repositioned the properties from B to B+ by implementing a comprehensive marketing program that included name changes, advertising and tenant retention programs. After the sale of one property in 2003, the five remaining properties were refinanced for an additional $16 million while reducing annual interest costs by $60,000, and postponing $0.5 million of annual amortization for two years INVESTMENT RESULTS Distributed $15 million of the $16 million refinancing proceeds within 36 months of acquisition. Purchased for $104.5 million ($60,500/unit) and sold for $142 million ($82,175/unit) Generated over $79 million in proceeds from operations and sales proceeds. Achieved a 19.1% IRR Achieved a 1.91x Multiple on invested equity of $41.6million.

12 TEAM Tarak Patolia Founder Manish Shah Partner Capital Markets Tarak Patolia is founder and managing principal of BanyanTree Group. Tarak is responsible for the firm s overall strategy, finances, operations and culture. Prior to starting BanyanTree Group, from 1994 to 2016, Tarak served as Chief Investment Officer at Sterling Equities, Inc., the family office of the Wilpon and Katz families the owners of the NY Mets. At Sterling, Tarak was involved in the formation, capitalization and administration of five real estate investment funds. He spearheaded the negotiation, acquisition, asset management and disposition of over $4 billion of real estate and real estate related assets. Prior to Sterling, he was a technical analyst in New York and a practicing architect and a real estate developer for companies he founded in his native India. Tarak serves on the Board of Directors for National Multi Housing Council and is an active member of National Association of Industrial and Office Properties serving on the Capital Markets Forum. He has been a frequent speaker at the International Management Network's Opportunity Fund Conferences, National Multi Housing Council conferencesaswellasseveral other industry events. TarakreceivedaMasterinBusinessAdministrationdegreeinFinancefromPace University and a Bachelor of Science degree in Architecture from the Centre for Environmental Planning and Technology University in Ahmedabad, India. Paula Newton Partner Asset Management Paula Newton is a partner of BanyanTree Group, prior to joining BanyanTree, Paula was Chief Operating Officer of Sterling s Southwest office in Houston, Texas. She was responsible for the asset management of over 4,000 multifamily apartments for the Sterling American Funds. Prior to her affiliation with Sterling, she was the co owner and manager of a residential and commercial real estate company and a regional vice president of a large national management company. Paula earned a Bachelor s and Master s degree from North eastern Illinois University. Manish Shah is a partner of BanyanTree Group. Prior to joining BanyanTree, Manish served as principal and manager of numerous real estate assets including controlling equity, mezzanine and senior debt investments. His prior experience includes executing a turnaround of a publicly traded company, where he was responsible for business and real estate acquisitions and divestitures. He has executed private equity transactions for Morgan Stanley and has advised on numerous M&A and financing transactions for public and private companies while at Bear Stearns and Morgan Stanley. Manish graduated with honours from Harvard Law School,and graduated with honours and distinction in two majors from Yale University James M. Schwartz Managing Director Jim serves BanyanTree Group as Managing Director and is responsible for sourcing, analyzing and acquiring multifamily properties in Florida. He brings more than 30 years experience in real estate to the firm. Prior to joining BanyanTree, Jim was the Principal of JMS Consulting Associates, Inc., and arranged for the purchase and financing of more than 10,000 apartment units nationwide, including more than 2,000 units in Florida. He was previously employed by Waterston Associates, LLC, where he served as Executive Vice President specializing in multifamily acquisitions and financing. Earlier in his career, he worked at the Balcor Company, a subsidiary of Merrill Lynch specializing in real estate investments on behalf of large corporate and public pension funds, and with the New York State Common Retirement Fund. Jim holds a Bachelor s Degree with Honors from New York University and a J.D. Degree from the University of Michigan Law School.

13 TEAM Maria Guevara Research Analyst Sriram Parthsarthy Financial Analyst Maria Guevara is a Research Analyst for BanyanTree Group. She joined BanyanTree Group at its inception in 2016 as Executive Assistant to Tarak Patolia, supporting the company in its initial development. She is responsible for market research for underwriting of selected potential investments and preparation of investment recommendations memorandums. She is also responsible for coordinating functions of various participants for due diligence purposes. Prior to BanyanTree Group, Maria worked for different companies gaining experience in areas of customer service and support, social networking, logistics operations and bookkeeping. Sriram Parthasarathy works as a financial analyst for BanyanTree Group. Sriram has over 10 year experience of underwriting of real estate and investment properties across all product types as well as underwriting mortgage loans and debt instruments. Prior to joining BanyanTree, he worked as an analyst for Fitch Ratings and was involved in rating debt instruments of infrastructure and project finance transactions. His prior experience includes work as a financial consultant at a software company to provide mobile solutions for financial institutions. Sriram received a Bachelor in Business degree from St. Xavier s College in Tamil Nadu, India. Maria studied Psychology at Universidad Jose Matias Delgado in El Salvador. Michael Katz Advisor Mark Kasson Advisor Michael Katz is a Senior Partner of Sterling Equities and the Co Chief Executive Officer of Sterling American Funds, with responsibility for the day to day management of its real estate investments. He is a director on the board of the New York Mets and serves as a trustee of the Northwell Health System, Inc. and the Jewish Child Care Association. Mr. Katz is a Certified Public AccountantandreceivedaMaster sdegree in Business Administration from BernardM.Baruch College. Mr. Kasson is a Co founder of SIG Management, a real estate private equity investor which owns and operates multifamily and commercial properties, as well as 20,000 acres of land in Pennsylvania and Bonaire (in the Caribbean). He is also a Co founder of Docsmit.com, an internet based print and mail service which serves a variety of sectors. He earned an MBA in Finance from the Stern School of NYU and a B.S. in Computer Science from Lehigh University..

14 STRATEGIC PARTNERS Sterling Equities is a diversified family run group of companies guided by the values of partnership and civic responsibility. Its portfolio is focused on holdings in real estate, sports and media. Highlights include the New York Mets, SportsNet New York, Real Estate Investment Portfolios, related real estate services businesses and venture investing. Sterling Equities was founded by Fred Wilpon and Saul Katz as a vehicle to develop and invest in real estate. Sterling Equities has evolved over more than 35 years into a fully integrated real estate operating company focused on the preservation of capital and the creation of wealth. Since 1972, Sterling Equities and its affiliates have purchased or developed over 23.3 million SF of commercial property, 57,800 residential units, 8.7 million SF of retail property and three major sports complexes. Since 1991, Sterling has successfully launched and operated five valueadded real estate funds, acquiring approximately 29,000 residential units, 9.2 million square feet of commercial space, and over $1 billion in distressed debt. In addition to its real estate interests, Sterling has ownership interests in Major League Baseball (New YorkMets),Media (SportsNet New York) and Venture Capital (including Sterling VC and Sterling Select). Westdale Real Estate Investment and Management has a solid reputation in all disciplines of the multifamily and commercial real estate sectors. The company is well represented in the multifamily industry at the national, regional and local levels with affiliations in NMHC, TAA and many other related associations. With a proven track record of over twenty years, Westdale has demonstrated the ability to find opportunities, create effective marketing programs, undertake strategic capital improvements and achieve operational efficiencies with multiple classes.real estate. Based in Dallas, Westdale and its 1200 employees operate from six regional offices located in Houston, Austin, San Antonio, Atlanta, Charlotte, and Chicago. Controlling a capital base in excess of $4 billion. Westdale has consummated over 300 acquisitions while creating a nationwide real estate investment, property management, leasing, and construction firm. Westdale currently manages or has previously managed equity investments committed by a broad base of institutional investors, including many leading global fund sponsors, such as GE Capital, CarVal, and Sterling Equities, along with a variety of family offices.

15 Tarak Patolia 101 California Street, Ste 2710, San Francisco, CA D: F: C: