G REYSTAR Rocky Mountain Commercial Real Estate Expo & DU Fall Forecast November 12, 2004.

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Presentation transcript:

G REYSTAR Rocky Mountain Commercial Real Estate Expo & DU Fall Forecast November 12, 2004

Regional Offices Regional in Practice National in Presence Greystar Offices Regional Offices Greystar Presence (Management, Construction or Investment) Charleston, SC (Headquarters) Jacksonville, FL Tampa, FL Ft. Lauderdale, FLHouston, TX Dallas, TX Austin, TX Phoenix, AZ Denver, CO

Four Lines of Business Greystar G REYSTAR Development Investment Construction Property Management

G REYSTAR DEVELOPMENT Develop with a national perspective and local expertise Over $800 million of real estate developed over the last ten years Product types include multifamily housing, office, industrial, retail and hotels

G REYSTAR INVESTMENT Greystar sponsored investments approaching $2 Billion One-stop shopping for investors, bypassing traditional investment advisors Opportunistic. Create value at all stages of investment cycle and execute with in-house capabilities Investment partners include Crow Holdings, JMI, Oregon Pension Fund, Goldman Sachs, Prudential, Recap, FNMA and Morgan Stanley

G REYSTAR PROPERTY MANAGEMENT Manage over 60,000 units 12th largest property manager in nation (Source: NMHC) 3rd largest third-party multifamily manager 1,850 team members in 30 markets 5 largest clients: Sendera, Invesco, Fannie Mae, Investment Associates, and Merrill Lynch

G REYSTAR CONSTRUCTION Construction Volume: $150M 90% 3 rd party business 10 % construction services for Greystar projects Diverse product types: multifamily, senior living, hotels, and retail $100 million in Bonding Capacity

G REYSTAR Growth of the Real Estate Investment Market Amount of Money in the Market Stability of the Market Historical Real Estate Returns

G REYSTAR Cap Rate and Interest Rate Relationship National Denver

G REYSTAR Investment Analysis Case Study Yesterday’s Investment Today’s Reality Tomorrow’s Bet

G REYSTAR The Future The Rising Tide

G REYSTAR Growth of the Real Estate Investment Market Amount of Money in the Market Stability of the Market Historical Real Estate Returns

G REYSTAR May 17, 1993June 7, 2004 NAREIT Equity Total Return Index 1,4935,030 Morgan Stanley IndexNot yet invented; would have been REIT Industry Total Equity Market Cap $16 Billion$240 Billion Largest Equity REIT (Market Cap) New Plan Realty Trust - $1.1 Billion SimonPropertyGroup - $14.0 Billion Dedicated REIT Securities Managers Cohen & Steers - $500 Million Fidelity RE - $417 Million Cohen & Steers - $15 Billion Fidelity RE - $3 Billion Standard & Poor’s IndicesREITs not included22 RE Companies Included REITS – 1993 Vs Source: ULI’s Real Estate Capital Markets Update

G REYSTAR +63.2% Since January 97, the money supply has risen from $3.8 to $6.2 Trillion. Billions Capital Chasing Deals Source: Federal Reserve Board – M2

G REYSTAR Public Securities And Real Estate Performance S&P 500 Stock Index NASDAQ Comp. Index NAREIT REIT Index NCREIF Property Index 19941%-3%3%6% %40%15%8% % 35%10% %22%20%14% %40%-18%16% %86%-5%11% Source: ULI’s Real Estate Capital Markets Update

G REYSTAR Public Securities And Real Estate Performance S&P 500 Stock Index NASDAQ Comp. Index NAREIT REIT Index NCREIF Property Index %-39%26%11% %-21%14%10% %-28%5%7% %50%39%9% %-2%13%10% Source: ULI’s Real Estate Capital Markets Update

G REYSTAR Source: ULI’s Real Estate Capital Markets Update $100 Investment Performance

G REYSTAR 10 – Year Treasury Yield Source: Federal Reserve

G REYSTAR Total U.S Sales Volume By Property Type (Billions) Source: Real Capital Analytics

G REYSTAR Source: CoStar Group and Apartment Appraisers Metro Denver Historical Real Estate Investment (millions)

G REYSTAR Source: CoStar Group and Apartment Appraisers Metro Denver Historical Price per Square Foot

G REYSTAR Source: Federal Reserve Historical Commercial Mortgage Flow

G REYSTAR Cap Rate and Interest Rate Relationship National

G REYSTAR National Cap Rates By Property Type Source: ULI’s Real Estate Capital Markets Update

G REYSTAR National Multifamily Cap Rate Vs. 10-Year Treasury Yield Source: ULI’s Real Estate Capital Markets Update and Federal Reserve

G REYSTAR National Multifamily Cap Rate Vs. 10-Year Treasury Yield Source: ULI’s Real Estate Capital Markets Update and Federal Reserve Spread

G REYSTAR National Office - CBD Cap Rate Vs. 10-Year Treasury Yield Source: ULI’s Real Estate Capital Markets Update and Federal Reserve

G REYSTAR National Office - CBD Cap Rate Vs. 10-Year Treasury Yield Source: ULI’s Real Estate Capital Markets Update and Federal Reserve Spread

G REYSTAR National Industrial Cap Rate Vs. 10-Year Treasury Yield Source: ULI’s Real Estate Capital Markets Update and Federal Reserve

G REYSTAR National Industrial Cap Rate Vs. 10-Year Treasury Yield Source: ULI’s Real Estate Capital Markets Update and Federal Reserve Spread

G REYSTAR Cap Rate and Interest Rate Relationship National Denver

G REYSTAR Source: CoStar Group and Apartment Appraisers Metro Denver Historical Cap Rates

G REYSTAR Investment Analysis Case Study Yesterday’s Investment Today’s Reality Tomorrow’s Bet

G REYSTAR The Summit at Flatirons Total Projected Costs: $61,500,000 Debt at 75%:$46,125,000 Equity:$15,375, Units 481,569 Total Square Feet Average Unit: 963 Sq.Ft.

G REYSTAR 2000 Proforma Gross Potential Rent$8,032,571 $1.39 PSF Vacancy($401,629) 5.0% Effective Gross Rent$7,630,942 Expenses($2,056,500) $4,113 NOI$5,574,442 Debt Service (8.25%)($3,805,313) Net Cash flow$1,769,130 Yield9.06% IRR26.35% Yield to Equity11.51% Reversion Cap Rate8.0%

G REYSTAR Today’s Reality Gross Potential Rent$6,934,594 $1.20 PSF Vacancy($1,386,919) 20% Effective Gross Rent$5,547,675 Expenses($2,095,500) $4,191 NOI$3,452,175 Debt Service (4.25%)($1,960,313) Net Cash flow$1,491,862 Yield5.61% IRR6.68% Yield to Equity9.7% Reversion Cap Rate5.75%

G REYSTAR Tomorrow’s projection Gross Potential Rent$6,934,594 $1.20 PSF Vacancy($693,459) 10% Effective Gross Rent$6,241,134 Expenses($2,158,365) $4,317 NOI$4,082,769 Debt Service (6.00%)($2,767,500) Net Cash flow$1,315,269 Yield6.64% IRR14.2% Yield to Equity8.55% Reversion Cap Rate6.25%

G REYSTAR Rising Tide Interest Rates Delinquency Rates Cap Rates Employment

G REYSTAR Rising Tide Interest Rates

G REYSTAR One Month LIBOR Forecast Source: Morgan Stanley

G REYSTAR Rising Tide Interest Rates Delinquency Rates

G REYSTAR Mortgage Delinquency Rates Source: Freddie Mac

G REYSTAR Rising Tide Interest Rates Delinquency Rates Cap Rates

G REYSTAR Rising Tide Interest Rates Delinquency Rates Cap Rates Employment

G REYSTAR Metro Denver Employment Growth Source: Metro Denver EDC

G REYSTAR Rocky Mountain Commercial Real Estate Expo & DU Fall Forecast November 12, 2004