Attached files
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| EX-99.1 - EX-99.1 - EQUITY ONE, INC. | d350767dex991.htm |
| 8-K - FORM 8-K - EQUITY ONE, INC. | d350767d8k.htm |
 INVESTOR
PRESENTATION MAY 2012
Exhibit 99.2 |
 Certain matters discussed by Equity One in this presentation constitute
forward-looking statements within the meaning of the federal
securities laws. Although Equity One believes that the expectations reflected in such forward-looking
statements
are
based
upon
reasonable
assumptions,
it
can
give
no
assurance
that
these
expectations
will
be
achieved.
Factors that could cause actual results to differ materially from current
expectations include changes in macro-economic conditions and the
demand for retail space in the states in which Equity One owns properties; the continuing financial
success
of
Equity
One’s
current
and
prospective
tenants;
the
risks
that
Equity
One
may
not
be
able
to
proceed
with
or
obtain necessary approvals for development or redevelopment projects or that it
may take more time to complete such projects or incur costs greater than
anticipated; the availability of properties for acquisition; the extent to which continuing
supply constraints occur in geographic markets where Equity One owns properties;
the success of its efforts to lease up vacant space; the effects of
natural and other disasters; the ability of Equity One to successfully integrate the operations
and systems of acquired companies and properties; changes in Equity One’s
credit ratings; and other risks, which are described in Equity One’s
filings with the Securities and Exchange Commission. This presentation
also contains non-GAAP financial measures, including Funds from Operations, or FFO.
Reconciliations of these non-GAAP financial measures to the most directly
comparable GAAP measures can be found in
Equity
One’s
quarterly
supplemental
information
package
and
in
filings
made
with
the
SEC
which
are
available
on
its website at www.equityone.net.
Forward Looking Statements
1 |
 Mission Statement
2
Improving retail real estate in urban communities
|
 Corporate Overview
3
•
Equity One specializes in the acquisition, asset management, development and
redevelopment of quality retail properties primarily located in the
coastal markets across the United States •
We
own
157
properties
in
13
states
(1)
•
Our largest markets as measured by approximate fair market values are: South
Florida (29%), California (22%), Northeast (22%)
,
North
Florida
(11%),
and
Atlanta
(8%)
(2)
•
Total equity capitalization / total enterprise value as of 03/31/12: $2.5
billion / $3.9 billion •
Investment
grade
credit
ratings
of
Baa3
(positive)
from
Moody’s
and
BBB -
(stable)
from
S&P
•
Management and board have substantial ownership stake and experience:
–
Beneficial ownership: 52.2%
(3)
–
Management team has over 80 years of collective experience
(1)
As of 3/31/12; includes acquisitions & dispositions under contract.
Excludes land and non-core assets not associated with retail centers. Additionally, we had joint venture interests in seventeen
shopping centers and two office buildings totaling approximately 2.8
million square feet. (2)
Ranked by percentage of total estimated fair value as of 03/31/12
inclusive of all acquisitions and dispositions currently under contract and excluding land. Does not include unconsolidated JV
properties.
(3)
Beneficial ownership of current executive officers and directors as of
3/31/12 in accordance with rules of the SEC and including options exercisable within 60 days. Beneficial ownership: Chaim
Katzman 47.6%, Jeff Olson 2.1% and Nathan Hetz 1.4% on a
fully diluted basis including shares issuable to Liberty. |
 As of Mar 31, 2012
As of Dec 31, 2008
Fair Value ($M)
% FV
Fair Value ($M)
% FV
South Florida
$977
29%
$1,007
43%
California
$732
22%
$0
0%
Northeast
$736
22%
$168
7%
Central/North Florida
$374
11%
$525
22%
Atlanta
$271
8%
$297
13%
Other
$258
8%
$368
15%
Total
$3,348
100%
$2,365
100%
Equity One is on the move…
Then vs. Now
4
As of Mar 31, 2012
As of Dec 31, 2008
3-mile population
153,550
82,368
3-mile household income
$92,794
$72,878
Grocery sales per sq.ft
$526
$406
(1)
Data includes acquisitions & dispositions under contract as of 03/31/12 .
Excludes land and non-core assets not associated with retail centers.
(2)
Demographic data weighted on estimated fair market value of assets
Asset Composition by Region
(1)
Demographic Quality of Assets
(2)
|
 Significant Investment Activity is Transforming the Portfolio
5
•
Approximately
$1.7B
of
acquisitions
completed
since
2009
in
our
target
markets
(1)
–
Approximately $760M of assets in West Coast markets
–
Approximately $730M of premium quality assets in Northeast portfolio
–
Added $154M of assets in West Coast and Northeast markets since January
2012 –
Acquired
rights
to
develop
the
Broadway
Plaza
site
in
the
Bronx,
New
York
•
Sold approximately over $800M of non-strategic/non-core assets since
2009, the most prominent being –
$473M sale of 36 non-strategic retail assets to Blackstone closed in
December 2011 –
$191M asset dispositions related to non-retail CapCo assets
–
$62M of asset dispositions executed in first quarter 2012
•
Seeded new joint venture with New York Common Retirement Fund
–
Institutional
JV
partner
seeking
to
acquire
high
quality
grocery
anchored
centers
–
Provides attractive source of capital that can help us leverage our
platform As of Mar 31, 2012. - includes assets under contract as
of Mar 31, 2012 and joint venture properties. Figures are computed based on weighted average estimated fair values.
(1) |
 2012 Strategic Goals
6
Operating
Fundamentals
Increase same property occupancy by 50 basis points
Generate same property NOI growth of 1.5% to 2.5%
Maximize value of assets via cost containment measures and prudent tenanting
Focused on Execution
Balance Sheet
Management
Portfolio
Quality
Value
Creation
Acquire $200M -
$300M of shopping centers in target markets
Sell $50M -
$75M of assets located in secondary markets
Recycle capital from dispositions into major urban markets
Execute plans to launch redevelopment at Serramonte and the Bronx site
Build pipeline of urban infill development and redevelopment properties that
represents 10% of total asset value
Increase ownership concentration in targeted markets through accretive
development projects Maintain quality balance sheet / financial
discipline Keep targeted leverage ratio of 40-45%
Net Debt to EBITDA goal of 6.5X
Extend debt maturity profile
Maintain access to multiple sources of capital |
 Operating Fundamentals
7
•
2012 goal to increase same property NOI by 1.5% to 2.5% focused on the
following –
Increase occupancy with an emphasis on small shop space
–
Increase rent spreads particularly on lease renewals
–
Continue implementation of cost containment initiatives within property
operations –
Reduce concentration of assets in secondary markets
–
Expand tenant relations and marketing efforts with national and regional
retailers |
 Portfolio Quality
8
•
We plan to further diversify our portfolio into supply constrained, urban
markets •
Recent acquisitions in California and Connecticut highlight our focused approach
on properties which meet the following key criteria aimed at enhancing
the quality and performance of our overall portfolio: –
Strong
demographics
–
average
3-mile
populations
of
nearly
200,000
as
compared
to
EQY’s
historical
portfolio
average of approximately 80,000
–
Strong barriers to entry due to scarcity of land and strict zoning
restrictions –
Highly productive anchor sales volumes
–
Below market anchor rents
–
Redevelopment and densification opportunities
•
These acquisitions have enabled us to diversify our portfolio into higher
quality centers in major MSAs which will ultimately result in greater
stability and higher internal growth |
 Disposition
Plans for Secondary Market Centers
9
•
We plan to sell at least $50-$75 million of our existing assets located in
secondary markets annually •
The average three mile population density of most centers targeted for
disposition is 40-70K people •
Ultimate
size
of
disposition
pool
for
2012
dependent
on
expected
pricing
–
we
would
be
more
aggressive
if pricing is attractive |
 Development / Redevelopment Update
10
•
The Gallery at Westbury Plaza
•
Executed leases at Westbury now include The Container Store, Trader Joe’s,
Nordstrom Rack, Bloomindales Outlet, Saks OFF 5TH, Ulta, SA Elite, Old
Navy, Verizon and Shake Shack. Nordstrom Rack, Trader Joe’s
and The Container Store have accepted possession.
•
Construction is in progress with targeted opening by Fall of 2012
•
2012
CAPEX
expected
to
be
$55M
-
$65M
•
Serramonte
•
Feasibility / architectural review underway
•
Actively
discussing
tenanting
options
–
big
box
retail,
entertainment,
value/convenience
retail
•
No significant redevelopment CAPEX expected in 2012
•
Boca Village / Pine Ridge
•
Addresses layout / structural design weakness
•
Reduces shop tenant exposure
•
Target stabilization late 2013 / early 2014
•
2012 expected CAPEX is approximately $4.5M-$5.0M for Boca Village and less
than $2.5M for Pine Ridge •
Boynton Plaza
•
Public expansion (from 39K sq ft to 54K sq ft)
•
Reduce small shop exposure
•
Expected to increase occupancy from 86% to more than 96%
•
2012 expected CAPEX is approximately $3.0M |
 Pro-forma Concentration of Assets As of Mar 31, 2012
Estimated FMV:
$736M
% of FV: 22%
Estimated FMV:
$29M
% of FV: 1%
Estimated FMV:
$271M
% of FV: 8%
Estimated FMV:
$977M
% of FV: 29%
Estimated FMV:
$374M
% of FV: 11%
11
Estimated FMV:
$537M
% of FV: 16%
Estimated FMV:
$194M
% of FV: 6%
* Estimated fair market values are as of 3/31/12. Excludes land and non-core
assets not associated with retail centers. Includes acquisitions and dispositions currently under contract.
Region
$ (M)
%
South Florida
977
29%
North Florida
374
11%
San Francisco
537
16%
Los Angeles
194
6%
Atlanta
271
8%
Charlotte/Raleigh/Durham
29
1%
Washington DC to Boston
736
22%
Other
229
7%
TOTAL
$3,348
100% |
 Benefits of EQY’s Portfolio Concentration
12
•
Increase in our overall portfolio value through strategic acquisitions in key,
high value markets and disposition of our non-core assets in
secondary markets •
“Fewer
but
better
assets”
–
14%
of
our
assets
(22/157)
account
for
approximately
50%
of
our
value
•
71% of these 22 assets have been acquired since November 2009 signifying
execution of our stated vision •
These
assets
are
concentrated
in
8
important
retail
markets
with
an
average
value
of
$76M+
and
97%
occupancy
•
Generally the acquired assets are the most dominant assets in their respective
markets and provide significant future redevelopment potential
•
Concentration of fewer, higher value assets provides opportunities to streamline
and increase efficiencies in operations and management. For example,
these 22 assets account for 23% of our leases yet 50% of our asset
value.
* Estimated fair market values are as of 3/31/12. Excludes land and non-core
assets not associated with retail centers. Includes acquisitions and dispositions currently under contract. |
 Balance
Sheet
Discipline
–
Maintained
During
Portfolio
Transformation
13
•
Key leverage ratios:
–
Net Debt to Total Market Cap as of 3/31/12: 35.3%
–
Net Debt to Gross Real Estate as of 3/31/12: 42.4%
–
Net Debt to Adjusted EBITDA of 6.8X as of 3/31/12
–
Adjusted EBITDA to interest expense coverage of 2.8X as of 3/31/12
–
Adjusted EBITDA to fixed charges of 2.5X as of 3/31/12
–
Weighted average term to maturity for our total debt of 4.7 years as of
3/31/12 Source: Company filings and SNL financial. Credit ratings from
S&P and Moody's as of 12/31/11 30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
60.0%
EQY (BBB-/Baa3)
KIM (BBB+/Baa1)
FRT (BBB+/Baa1)
REG (BBB/NR)
WRI (BBB/Baa2)
Q1 2012 Leverage (Total Debt + Preferred / Gross Assets)
(1)
Based on net debt as of 3/31/12 and Adjusted EBITDA (excluding gains/losses on
property sales, debt extinguishment, impairments, and other non-recurring items) calculated by
annualizing 1Q12 numbers as reported in the 3/31/12 supplement.
(1)
(1) |
 Current Liquidity Position
14
•
Cash and cash equivalents amounted to $17.3M as of March 31, 2012
•
Total available undrawn capacity on our various lines of credit of $443M at
March 31, 2012 •
We maintain a manageable debt maturity schedule with maturities through
2017: Note: Cash includes $1.7M in Escrow account
Debt maturity schedule as of 3/31/12. Includes scheduled principal
amortization. Credit facilities are shown as due on the initial maturity dates, though certain extension options may be
available.
•
Increased unencumbered Cash NOI to approximately 71.6% at 3/31/12 (versus 63.1%
at Q1 2011) •
Strong lending relationships with both traditional banks and life insurance
companies •
Demonstrated access to the public markets
$0
$50
$100
$150
$200
$250
$300
$350
2012
2013
2014
2015
2016
2017
Debt Maturity Schedule |
 Investment Thesis
15
A
management
team
who
has
proven
to
execute
a
stated
strategy
of
significant
portfolio
improvement
while
maintaining
financial
discipline
A
management
team
who
has
proven
to
execute
a
stated
strategy
of
significant
portfolio
improvement
while
maintaining
financial
discipline
Well-located, high quality, and productive grocery-anchored shopping
centers with an intensive focus on asset management
Investment strategy focused on identified core markets leading to an upgrade in
portfolio quality and further geographic diversity
A healthy financial structure including a strong balance sheet, modest leverage
and ample liquidity We are a premier operator positioned for growth
We are a premier operator positioned for growth |
 Appendix
16
•Broadway Plaza
•Potrero Center
•Culver Center
•Gateway of Aventura/ Aventura
Square
•Loehmann’s-
107 Seventh Avenue
•90-30 Metropolitan (Queens, NY)
•Westbury Properties
Aerial •The Gallery
at Westbury Plaza
•Serramonte Shopping
Center •Plaza
Escuela •Sub-market Portfolio Metrics |
 Broadway Plaza, Bronx, NY
17 |
 Potrero Center, San Francisco, CA
18 |
 Culver Center, Los Angeles, CA
19 |
 Gateway of Aventura and Aventura Square
20 |
 21
Property Overview
•
56,870 sf retail property in the
heart of the Chelsea
neighborhood in New York City.
•
Loehmann’s currently occupies
the entire space.
•
Prime Manhattan location
which attracts heavy foot traffic
from surrounding Meat Packing
District, Chelsea Market and The
High Line Park.
•
Google’s New York
Headquarters is one block west
of the site.
•
Significantly below market rent.
Loehmann’s-
107 Seventh Avenue |
 22
90-30 Metropolitan , Queens, NY
Acquisition Overview
•
60,000 sf two-level retail
building located in Forest Hills,
NY.
•
94% occupied and anchored by
Trader Joe’s, Staples and
Michaels.
•
Situated in one of the most
affluent and dense
neighborhoods in Queens, NY
with nearly 1 million people living
within a 3-Mile radius.
•
Queens is one of the most
under-retailed areas in the
country (estimated at 9 sf of retail
space per capita or 1/3 average
for the U.S.
(1)
).
(1)
Source –
Eastdil Secured |
 23
Westbury Properties |
 24
The Gallery at Westbury Plaza
Property Overview
•
The Gallery at Westbury Plaza
sits at the center of Nassau
County, one of the most affluent
and densely populated regions in
the nation.
•
Development site is located in
one of the strongest retail
corridors between Roosevelt
Field Mall and Westbury Plaza.
•
Current plan anticipates
330,000 sf of retail GLA.
•
Anchor leases now signed with
The Container Store, Trader
Joe’s, ULTA, Saks OFF 5TH,
Nordstroms Rack and Shake
Shack.
•
Targeted opening date –
Fall
2012. |
 25
Property Profile
GLA (sf)
818,177
Year Built
1968
Site Area (acres)
80
Occupancy (as of 3/31/12)
97%
Population (3 miles)
186,810
Average HH income (3 miles)
$88,882
Serramonte Shopping Center -
Ideally Positioned for Further Development
|
  26
GLA (SF)
152,452
Year Built
2002
Site Area (acres)
5.2
Occupancy (as of 3/31/12)
99%
Population (3 miles)
93,841
Average HH income (3 miles)
$119,406
Property Profile
Plaza
Escuela
–
Centrally
Located
in
a
Prime,
High-End
Retail
Market |
 27
Sub-market Portfolio Metrics
(1)
GLA, Occupancy and Base Rent data exclude the Gallery at Westbury, which is in
development status. (2)
Excludes land and non-core assets not associated with retail centers.
Includes acquisitions and dispositions currently under contract. |