Avenue Living Real Estate Core Trust |
Location: Medicine Hat, AB (700+ units)
Avenue Living Real Estate Core Trust | Disclaimer and Notice of - - PowerPoint PPT Presentation
Location: Medicine Hat, AB (700+ units) Avenue Living Real Estate Core Trust | Disclaimer and Notice of Confidentiality The information in this Confidential Investor Presentation (the Presentation ) is intended solely It is important for
Avenue Living Real Estate Core Trust |
Location: Medicine Hat, AB (700+ units)
The information in this Confidential Investor Presentation (the “Presentation”) is intended solely for use by parties who have executed and delivered a confidentiality agreement (the “Confidentiality Agreement”) in a form acceptable to Avenue Living Real Estate Core Trust (the “Core Trust”) and distribution to any other party is unauthorized, unless permitted under the terms
Confidentiality Agreement and any person in possession of this Presentation should familiarize themselves with the Confidentiality Agreement before reading, circulating or using this
than evaluating a potential investment in the Core Trust by a person permitted to do so pursuant to the Confidentiality Agreement. By accepting this Presentation, the recipient agrees that it is bound by the provisions of the Confidentiality Agreement and will cause its directors, officers, employees and representatives to use this Presentation and such information only to evaluate their interest in entering into a potential investment with the Core Trust and for no other purpose. The information set forth in this Presentation is the property of the Core Trust and is not intended for distribution. This Presentation and the information contained herein is confidential and is being provided to you solely for your information and may not be reproduced, in whole or in part, in any form or forwarded or further distributed to any other person, unless permitted under the terms of the Confidentiality Agreement. Any forwarding, distribution or reproduction of this Presentation in whole or in part is unauthorized, unless permitted under the terms of the Confidentiality
maintain the confidentiality of this Presentation, the information contained herein and all other information received in connection with the Core Trust, (ii) to protect such information in the same manner you protect your own confidential information, which shall be at least a reasonable standard of care and (iii) to not utilize any of the information contained herein or otherwise received except to assist with your evaluation of the Core Trust. You will be liable for any damage caused by or resulting from any unauthorized disclosure or use of the information contained
Core Trust (including this Presentation) without retaining any copies thereof. All references to currency in this document are to Canadian dollars unless otherwise indicated. Statements in this Presentation are made as of the date hereof unless stated otherwise, is subject to change without notice and the delivery of this Presentation shall not under any circumstances create an implication that the information contained herein is correct as of any time subsequent to its date. This communication is for information purposes only and is not, and under no circumstances is to be construed as, an invitation to make an investment in the Core Trust. This is not a formal
formal Offering Memorandum upon request and will need to be qualified for investment prior to making any investment in the Core Trust. No person has been authorized to give any information
regulatory authority or regulator has assessed the merits of the proposed offering or reviewed the formal Offering Memorandum. This investment opportunity is speculative and involves a high degree of risk. There is a risk that any investment made will be lost entirely or in part. Only prospective investors who do not require immediate liquidity of their investment and who can afford the loss of their entire investment should consider this investment. It is important for an investor to consider the particular risk factors that may affect the industry in which it is investing and therefore the stability of the distributions that it receives. The risks involved in this type of investment may be greater than those normally associated with other types of
investing in the Core Trust. Investing in the securities of the Core Trust involves risks. Recipients of this document who are considering investing in the Core Trust are reminded that any such purchase must not be made on the basis of the information contained in this document but are referred to the Offering Memorandum
attention of the Core Trust or Invico Capital Corporation. All information contained herein, while
may be sold and there can be no assurance that any such market will develop. A return on an investment in the securities of the Core Trust is not comparable to the return on an investment in a fixed-income security. The recovery of an initial investment is at risk, and the anticipated return on such an investment is based on many performance assumptions. Although the Core Trust intends to make distributions of its cash to unitholders, such distributions may be reduced or suspended. The actual amount distributed will depend on numerous factors, including the financial performance, debt covenants and obligations, interest rates, working capital requirements and future capital requirements of the Core Trust. The market value of the securities of the Core Trust may decline if the Core Trust is unable to meet its cash distribution targets in the future, and that decline may be material. There can be no assurance that income tax laws and the treatment of mutual fund trusts will not be changed in a manner which adversely affects the Core Trust. Past performance may not be repeated. Investing in the securities of the Core Trust can involve significant risks and the value of an investment may go down as well as up. There is no guarantee of
should only be made after consultation with independent investment and tax advisors. Only investors who do not require immediate liquidity of their investment should consider a potential purchase of units of the Core Trust. This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any state of the United States. These securities may not be offered or sold in the United States except pursuant to exemptions from registration under the U.S. Securities Act and all applicable states securities laws. The term "United States" is as defined in Rule 902 of Regulation S under the U.S. Securities Act. This document and its contents are confidential. It is being supplied to you solely for your information and may not be reproduced or forwarded to any other person, or published (in whole or in part) for any purpose.
Disclaimer and Notice of Confidentiality
for informational and illustrative purposes only as of the date hereof, is not complete, and may not contain certain material information about the Core Trust, including important disclosures and risk factors associated with an investment in the Core Trust. This information does not take into account the particular investment objectives or financial circumstances of any specific person who may receive it. Before making any investment, prospective investors should consult their financial, legal and tax advisors to determine whether an investment is suitable for them. No person has been authorized to give any information or to make any representations other than as contained in this presentation. Statements in this presentation are made as of the date hereof unless stated otherwise herein, and the delivery of this presentation at any time shall not under any circumstances create an implication that the information contained herein is correct as of any time subsequent to such date.
which this presentation relates. The Core Trust retains the right, at any time, to terminate any discussions or negotiations with prospective investors. In the event of such termination the Core Trust will not be under any obligation to disclose the reasons for such termination nor will they have any liability to any recipient hereof for any costs whatsoever incurred in the consideration of the information contained in this presentation.
be lawfully offered for sale. The offering of securities by the Core Trust constitutes a private offering of these securities only in those jurisdictions and to those persons where and to whom they may be lawfully sold and therein only by those entities permitted to sell such securities. This presentation is not, and under no circumstances is it to be construed as, a prospectus, advertisement or public offering of the securities referred to herein. No securities commission or similar regulatory authority has passed on the merits of the securities offered nor has it reviewed this presentation and any representation to the contrary is an offence. The securities offered hereunder will be issued under exemptions from the prospectus requirements of the applicable securities laws of certain of the Provinces of Canada and the rules, regulations and policies thereunder and will be subject to resale restrictions.
memorandum”. If an offering memorandum contains a misrepresentation (which includes a misstatement of a material fact), you may have statutory rights to sue for damages or rescission of your investment depending on the law of your province or territory. These rights can be lost if your do not commence your claim within certain limitation periods. For more information regarding your rights, refer to the offering memorandum available from the Trust and securities legislation and consult with a lawyer.
Cautionary Statements
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presentation, the use of any of the words "plan", "expect", "project", “target”, "intend", "believe", "anticipate", "estimate" or other similar words, or statements that certain events or conditions "may" or "will" occur are intended to identify forward-looking statements. All statements, other than statements of historical fact, included herein are forward-looking statements, including, without limitation, future plans and objectives of the Core Trust; future revenue of the Core Trust; initial and ongoing costs and expenses of the Core Trust; future returns of the Core Trust; terms of the
Trust's expectations or intentions. These statements reflect the current internal projections, expectations or beliefs of the Core Trust and are based
guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Core Trust's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Core Trust. Forward-looking statements are subject to known and unknown risks and uncertainties, including, but not limited to, changes in general economic conditions; competition; the timing and nature of equity offerings to be completed by the Core Trust; the Core Trust's potential revenue; the ability of the Core Trust to successfully complete acquisitions; reliance on industry partners; reliance on operators and key personnel; and other factors, many of which are beyond the control of the Core Trust.
expected developments in the Canadian real estate industry; the ability to synergize cost savings with other affiliate entities of the Core Trust; availability of real estate suitable for investment by the Core Trust; conditions in economic and financial markets; and future costs and expenses. The Core Trust has included the above summary of risks and assumptions related to forward-looking statements provided in this presentation in order to provide potential investors with a more complete perspective on the Core Trust's future operations and such information may not be appropriate for
qualified in their entirety by this cautionary statement and are made as of the date of this presentation. The Core Trust disclaims any intent or
as required by applicable securities laws.
Forward Looking Statements
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Table of Contents
Avenue Living Real Estate Core Trust | avenueliving.ca
5 1. Invico Capital / Avenue Living Partnership 2. Avenue Living Overview
3. Investment Opportunity Summary 4. Avenue Living Management Advantage 5. Core Trust
6. Summary 7. Key Contacts 8. APPENDIX
Invico Capital & Avenue Living – Strategic Partnership
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Combined asset base in excess of $1 Billion Enhanced execution capacity and scale Back Office Synergy Strong collective governance structure Cultural Compatibility Expanded distribution network >15 Channels
COMBINED BENEFITS
Invico Capital Corporation and Avenue Living have joined forces in a strategic partnership to become one of Canada’s preeminent Alternative Asset Managers. Avenue Living Real Estate Core Trust is the first offering that will expand to two additional real estate products by 2018:
Avenue Living Asset Management – Background
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management platforms
Integrated real estate asset manager with investments in multi-residential, commercial, and agricultural land assets
Name Position Biography
Anthony Giuffre Founder, Chief Executive Officer
experience with involvement in more than $1 billion of real estate transactions. In 2006, he co-founded Avenue Living with Carl Diodati and Dr. Michael Giuffre. Mr. Giuffre sits on the Patrons Council for UNICEF Alberta, and serves as a Board member for the Calgary Public Library Foundation. He has also completed 15 Ironman Triathlons. Mr. Giuffre graduated from University of Calgary with a Bachelor of Arts degree.
Zora Roberts
Chief Operating Officer
has over 20 years of finance and operations experience across various industries including real estate, consumer products, and services. Prior to joining Avenue Living, Ms. Roberts was a controller of several national corporations spanning the consumer retail and services
Humber College, and holds a Chartered Professional Accountant (CPA, CMA) designation.
Jason Jogia
Chief Investment Officer
recently he led the management of a $1.5 billion real estate lending portfolio at a major Canadian bank. He has extensive experience in both interim construction and long term financing on various real estate asset classes, with publicly traded investment grade clients and top tier developers. He has originated and structured over $10 billion in real estate
Corporate Finance at SDA Bocconi in Milan, Italy.
Avenue Living Asset Management – Senior Leadership Team
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Avenue Living has an experienced team comprised of real estate asset managers, securities lawyers, due diligence specialists, engineers, accountants, and marketing professionals.
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Investment Opportunity Summary
*Note: Avenue Living Real Estate Core Trust invests in Class A LP Units of “Avenue Living (2014) LP”, which is the owner of the underlying real estate assets / portfolio
Core Trust Highlights
Corporation)
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Investment Opportunity Summary (Continued)
*Note: Avenue Living Real Estate Core Trust invests in Class A LP Units of “Avenue Living (2014) LP”, which is the owner of the underlying real estate assets / portfolio
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Investment Opportunity Summary (Continued)
Reasons to Invest
priorities:
Investment Opportunity Summary
Avenue Living Real Estate Core Trust provides qualified investors with a diversified portfolio of income producing, multi-residential apartments, and participation in the resulting profits.
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*“Tax Efficient Income” means that due to the ability of real estate owners (such as the Core Trust) to deduct capital cost allowance against income, taxes can often be reduced and/or deferred.
The Core Trust is managed by Avenue Living Asset Management, one of the largest private real estate asset managers in Western Canada.
Opportunity to invest in an established, stabilized portfolio with proven returns Portfolio Diversification Multi-Residential in 14 markets Balance of income stability and growth potential Monthly Income
Target Distribution: Class A and J: $0.60/unit Class F: $0.70/unit
Tax Efficient Income* Avenue Living Management Advantage
INVESTOR BENEFITS
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Why We Invest in Multi-Residential Real Estate Properties
Avenue Living Management Advantage
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land - one of the largest private asset managers in Western Canada (Oct 2017)
and construction capabilities
nearly $1 billion in AUM
(without brokers)
$85 million in equity, has ownership of the assets, and has consistently produced an annual total return
shoulder to shoulder alignment with investors
investment trusts
Established, Vertically Integrated Management Platform
Track Record
Aligned Interest with Investors
*Includes predecessor corporations
What Makes Us Unique: Our Platform is Your Competitive Advantage
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X X √
Large | Institutional Assets
Mid Size| Sub-Institutional Assets
Small | Mom and Pop Assets
Mid Size Alternative Investments in Real Estate
Most real estate investment companies are large institutions benefiting from low cost of capital and focus on a small number of large assets each
less competitive and offers the potential for higher than average returns. Small real estate investments require large sums of capital, a significant amount of time and knowledge to manage and do not enable the owner to diversify
debt markets are still limited to the owners’ individual capacity.
Avenue Living Core Trust Portfolio
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Province # of Buildings # of Suites % of Total Suites Alberta 159 3,151 51.7% Saskatchewan 120 2,692 44.1% Manitoba 1 256 4.2% Total 280 6,099 100.0% Province # of Buildings Commercial
% of Total Sq. Ft Alberta 1 19,615 40.5% Saskatchewan 4 19,244 39.8% Manitoba 1 9,554 19.7% Total 6 48,413 100.0%
Property Summary by Province*
*As of October 2017
Multi-Residential Commercial
compared to markets in Eastern Canada
reliant on oil & gas
government, education, retail, and agriculture
primary markets, while rental rates are much lower
estate markets
5.13%2 Avenue Living’s extensive management platform enables us to achieve better returns in markets that are typically challenging to access or manage
Why We Invest in Our Markets
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1October 2016 Canada Mortgage and Housing Corporation (“CMHC”) 2Q4-16 CBRE Cap Rate Survey. Low Rise BCore Trust Portfolio Performance
The Avenue Living Real Estate Core Trust portfolio has achieved success in rapidly growing its asset base while simultaneously enhancing value through capex, and increased rental and occupancy rates.
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2,000 3,000 4,000 5,000 6,000 7,000
Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16
Unit Count
2,234 6,099
Portfolio expanded at a CAGR of ~40% for 3 years until the latest acquisition in Jun-15 Our $85 million capital program renovated all suites and buildings to the new quality standard In 2014, management chose to forgo growth in new units to focus
economic life of its properties. Short term operating performance sacrificed as units were vacated to permit renovations. Occupancy has since stabilized at levels greater than market averages. The program was a significant investment in the future results of the portfolio, which is now positioned to benefit from recovering economies.
50% 55% 60% 65% 70% 75% 80% 85% 90% 95% $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000 2012 2013 2014 2015 2016 2017 (F) 2018 (F)
Portfolio Capital Investment and Occupancy
Capital Investment Occupancy
Core Trust Portfolio Performance
$792 $1,008 $837 $926 $750 $800 $850 $900 $950 $1,000 $1,050 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
Average Monthly Rent
Portfolio Rent vs. CMHC Rent
Source: Canada Mortgage and Housing Corporation (“CMHC”)
The Trust CMHC
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~27% growth in average monthly rental rate since Q1/13 Stable performance throughout Alberta downturn 2014-2017
As of Q3 2017, the Trust’s portfolio had 88.2% occupancy at average rents of $1,008 per unit. The Avenue Living Real Estate Core Trust portfolio has achieved success in rapidly growing its asset base while simultaneously enhancing value through capex, and increased rental and occupancy rates.
Summary
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Avenue Living Real Estate Core Trust is an attractive investment opportunity for investors seeking:
Proven Track Record
Diversification
Professional Management Platform Attractive Entry Point Transparency, Governance & Alignment
AUM (Nov 2017)
consistent distributions paid
flow
fundamentals in portfolio markets
across 280 buildings (Oct 2017)
Canada
that have low correlation with energy
across Asset Manager and Property Manager functions
management capabilities
compliance (Invico Capital Corporation)
Target Monthly Income
target return
Key Contacts
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Subscription & Closing Matters
Christi Hayes Investment Services Coordinator 403-450-8690 chayes@invicocapital.com
Marketing Materials
Amber Gehring Sales and Marketing Coordinator 403-215-1894 agehring@invicocapital.com
Avenue Living
Crystal Li Director, Investor Relations 403-984-9363 x125 cli@avenueliving.ca
Sales and Marketing Support Team Product Training and Client Seminars
Randy Beaudoin Calgary, Alberta Vice President of National Sales 403-470-1643 rbeaudoin@invicocapital.com Peter Figura Toronto, Ontario Director of National Sales 647-224-8840 pfigura@invicocapital.com
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Name Position Biography Anthony Giuffre Founder, Chief Executive Officer
experience with involvement in more than $1 billion of real estate transactions. In 2006, he co-founded Avenue Living with Carl Diodati and Dr. Michael Giuffre. Mr. Giuffre sits on the Patrons Council for UNICEF Alberta, and serves as a Board member for the Calgary Public Library Foundation. He has also completed 15 Ironman Triathlons. Mr. Giuffre graduated from University of Calgary with a Bachelor of Arts degree.
Zora Roberts
Chief Operating Officer
has over 20 years of finance and operations experience across various industries including real estate, consumer products, and services. Prior to joining Avenue Living, Ms. Roberts was a controller of several national corporations spanning the consumer retail and services
Humber College, and holds a Chartered Professional Accountant (CPA, CMA) designation.
Shelley Allchurch
Chief Legal Officer
focused on the purchase, sale, and financing of multi-residential and commercial properties, commercial and residential leasing and corporate governance. She has held the role of in-house General Counsel for Avenue Living since 2010. Ms. Allchurch obtained her Bachelor of Law degree from the University of Alberta, and a Bachelor of Management degree from the University of Lethbridge.
Jason Jogia
Chief Investment Officer
recently he led the management of a $1.5 billion real estate lending portfolio at a major Canadian bank. He has extensive experience in both interim construction and long term financing on various real estate asset classes, with publicly traded investment grade clients and top tier developers. He has originated and structured over $10 billion in real estate
Corporate Finance at SDA Bocconi in Milan, Italy.
Avenue Living Asset Management Team
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Name Position Biography Andrew Searby Managing Director, Chief Financial Officer, Trusts
private and publicly listed companies across North America. Prior to joining Avenue, Mr. Searby was the CFO of the largest audio/visual equipment integrator in Western Canada. Prior, Mr. Searby was the EVP & CFO of a global consumer retailer, where he oversaw accounting, finance, IT, internal audit and investor relations. Mr. Searby obtained a Bachelor of Commerce degree from the University of Lethbridge, and holds a Chartered Professional Accountant (CPA, CA) designation.
Alfred Han Managing Director, Chief Financial Officer
a variety of industries. After graduating with a Bachelor of Commerce at the University of Calgary, Mr. Han obtained his Chartered Accountant designation with a major public accounting firm. Through his career, Mr. Han has progressed into increasingly senior finance roles, with his last 10 years being at an Executive/VP level. Mr. Han’s experience includes having worked at Canada's largest energy-focused private equity firm, a diversified global conglomerate with total assets of $20 billion and most recently at Canada's leading tax preparation firm.
David Smith Managing Director, Investments & Asset Management
private equity firms. His focus has included multi-residential, office, retail and industrial asset classes having completed large portfolio acquisitions, REIT privatization and structured debt investments. Mr. Smith most recently worked for an institutional real estate investment and asset management firm. Prior, Mr. Smith worked for a global real estate asset manager in Toronto and helped in the investment of over $2 billion in direct acquisitions and debt financing across Canada, the United States and the United Kingdom.
Avenue Living Asset Management Team
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Avenue Living has established real estate investment trusts across core, value add and agricultural land strategies
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Note: The predecessor corporations of Avenue Living (2014) LP and the Core Trust were founded in 2006.
Avenue Living Real Estate Core Trust |