Attached files
| file | filename |
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| 8-K - FORM 8-K - Griffin Capital Essential Asset REIT, Inc. | d396064d8k.htm |
| EX-99.2 - PRESENTATION SCRIPT - Griffin Capital Essential Asset REIT, Inc. | d396064dex992.htm |
| EX-99.3 - SECOND QUARTER 2012 INVESTOR UPDATE LETTER - Griffin Capital Essential Asset REIT, Inc. | d396064dex993.htm |
 Second Quarter
2012 Update August 15, 2012
GRIFFIN CAPITAL CORPORATION
GRIFFIN CAPITAL NET LEASE REIT
THIS
PRESENTATION
IS
NEITHER
AN
OFFER
TO
SELL
NOR
A
SOLICITATION
OF
AN
OFFER
TO
BUY
THE
SECURITIES
DESCRIBED
HEREIN.
ONLY
THE PROSPECTUS
MAKES SUCH AN OFFER. THIS LITERATURE MUST BE PRECEDED OR ACCOMPANIED BY AND READ IN
CONJUNCTION WITH THE PROSPECTUS IN ORDER TO FULLY UNDERSTAND ALL OF THE IMPLICATIONS AND
RISKS OF THE OFFERING OF SECURITIES TO WHICH IT RELATES. A COPY OF THE PROSPECTUS MUST BE
MADE AVAILABLE TO YOU IN CONNECTION WITH THIS OFFERING. NO OFFERING IS MADE TO NEW YORK
RESIDENTS EXCEPT BY A PROSPECTUS FILED WITH THE DEPARTMENT OF LAW OF THE STATE OF NEW
YORK. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING.
GRIFFIN CAPITAL SECURITIES
Jeffrey S. Schwaber I
President
Joseph Miller
I
Chief Financial Officer
Exhibit 99.1
David Rupert I
President
Securities offered through Griffin Capital Securities, Inc. Member FINRA/SIPC
|
 Risk
Factors GRIFFIN CAPITAL
2
•
We
have
limited
operating
history
and,
as
of
June
30,
2012,
we
owned
11
properties.
We
are
a
“blind
pool”
because
we
have
not
identified
any
additional
investments
we
will
make
with
proceeds
from
this
offering.
•
We have no employees and must depend on our advisor to conduct our operations, and there is no
guarantee that our advisor will devote adequate time or resources to us.
•
Payment of substantial fees to our advisor and its affiliates will reduce cash available for
investment and distribution. •
There are substantial conflicts among us and our sponsor, advisor, dealer manager and property
manager. •
If
distributions
are
paid
from
sources
other
than
cash
flow
from
operations,
we
may
have
less
money
for
acquisitions.
Additionally, the overall return to our stockholders may be lower.
•
Distributions are dependent upon our ability to collect rental income. Many of our properties
will depend upon a single tenant for a majority
of
their
rental
income
and
their
ability
to
pay
their
rent
may
be
affected
by
adverse
economic
conditions,
a
downturn
in
their business, bankruptcy or insolvency.
•
Future distribution declarations are at the sole discretion of the Board and are not
guaranteed. •
We
may
borrow
funds,
issue
new
securities
or
sell
assets
to
make
distributions,
some
of
which
may
constitute
a
return
of
capital,
and there are no current limits on the amount of distributions to be paid from such
funds. •
Distributions of current or accumulated earnings and profits will be taxable to stockholders
as ordinary income, but to the extent distributions exceed current or accumulated
earnings and profits, a stockholder’s basis in our stock will be reduced, and, a
stockholder may recognize a capital gain to the extent distributions exceed the
stockholder’s basis. •
We may fail to qualify as a REIT, which could adversely affect our operations and our ability
to make distributions. •
We may use substantial debt to acquire our properties, especially in the early years, which
could hinder our ability to pay distributions
to
our
stockholders
or
could
decrease
the
value
of
your
investment.
•
If we breach covenants under our loans with KeyBank National Association, we could be held in
default under such loans, which could
accelerate
our
repayment
date
and
materially
adversely
affect
the
value
of
our
stockholders’
investment
in
us. |
 Any such
forward-looking statements are subject to risks, uncertainties, and other factors and are
based on a number of assumptions involving judgments with respect to, among other things:
Certain statements contained in this material, other than historical facts, may be
considered forward-looking
statements
within
the
meaning
of
Section
27A
of
the
Securities
Act
of
1933,
as
amended (the “Securities Act”) and Section
21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). We intend for all such forward-looking statements to be
covered by the applicable
safe
harbor
provisions
for
forward-looking
statements
contained
in
Section
27A
of
the
Securities
Act
and
Section
21E
of
the
Exchange
Act,
as
applicable.
Such
statements
include,
in
particular, statements about our plans, strategies, and prospects and are subject to certain
risks and uncertainties, including known and unknown risks, which could cause actual
results to differ materially from those projected or anticipated. Therefore, such
statements are not intended to be a guarantee of our performance in future periods.
Such forward-looking statements can generally be
identified
by
our
use
of
forward-looking
terminology
such
as
“may,”
“will,”
“expect,”
“intend,”
“anticipate,”
“estimate,”
“believe,”
“continue,”
or other similar words. Readers are cautioned not
to place undue reliance on these forward-looking statements, which speak only as of the
date this report is filed with the Securities and Exchange Commission. We cannot
guarantee the accuracy of any such forward-looking statements contained in this
material, and we do not intend to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, or otherwise.
GRIFFIN CAPITAL
3
Disclaimers
Cautionary Note Regarding Forward-Looking Statements |
 Webinar Technical
Support GRIFFIN CAPITAL
4
If you are having any
difficulties, please call us at
949.270.9309 |
 Agenda
GRIFFIN CAPITAL
5
TOPIC
SPEAKER
Summary of Recent Events & Acquisitions
David Rupert | President
Review Financial Results
Joseph Miller | Chief Financial Officer
Griffin Capital Securities Update
Jeffrey S. Schwaber | President,
Griffin
Capital Securities
Questions & Answers
David Rupert, Joseph Miller,
Jeffrey S. Schwaber, and
Michael Escalante | Chief Investment Officer |
 Summary of
Recent Events & Acquisitions David Rupert | President
|
 Tenant Business
Diversity (2)
Griffin Capital Net Lease REIT:
Portfolio Characteristics(1)
GRIFFIN CAPITAL
7
Portfolio Purchase Price
$269,975,000
Size of portfolio:
2.8 million square feet
Occupancy:
100%
Percentage of Investment
Grade Tenants:
68%
Remaining weighted
average lease term:
Approximately 9.7 yrs.
Weighted average purchase
cap rate:
8.1%
(3)
Current average debt rate:
4.3%
Cap rate spread
(4)
:
3.8% (380 bps)
Education
Biotechnology
Consumer Products
Wireless Telecom.
Apparel
Engineering
Kitchenware
Printing
Nuclear Energy
Aerospace
Property & Casualty
Insurance
(1) As of June 30, 2012
(2) As of June 30, 2012 our five largest tenants, based on rental income, were
Life Technologies Corporation (approximately 18.3%), AT&T Services, Inc.
(approximately 13.6%), Westinghouse Electric Company (approximately 12.8%), Chicago Bridge
& Iron Company (Delaware) (approximately 11.5%), and World (3) The estimated going-in capitalization rate is determined by dividing the
projected net rental payment for the first fiscal year we own the property by the
acquisition price (exclusive of closing and offering costs). Generally, pursuant to each
lease, if the tenant is directly responsible for the payment of all property
(4) The cap rate spread is the difference between the weighted average purchase cap rate and
the current average debt rate on the outstanding loans within Kitchen, LLC (approximately 10.3%).
the portfolio. However, bear in mind a positive cap rate spread does not ensure a positive
investment result.
operating expenses, insurance and taxes, the net rental payment by the tenant to the landlord
is equivalent to the base
rental payment. The projected net rental payment includes assumptions that may not be
indicative of the actual future performance of a property, including the assumption that the tenant will perform its obligations under its lease agreement during
the next 12 months. |
 Griffin Capital
Net Lease REIT: Portfolio Characteristics
(cont’d)
GRIFFIN CAPITAL
8
2.31%
Total Capitalization
$303 million
Debt to Total Capitalization
Approximately 53%
Total Equity
$140 million
Sponsor Equity Commitment
(3)
$26 million
(3) The principals and certain affiliates of Griffin Capital Corporation have invested over
$26 million of capital into the REIT Average annual rental increase:
|
 Diversified
National Portfolio* GRIFFIN CAPITAL
9
* 26.5% and 24.4% of our assets are located in California and Illinois, respectively, as
measured by purchase price. |
 AT&T
Wireless Network Operations Campus Redmond, Washington
GRIFFIN CAPITAL
10 |
 Westinghouse
Electric Global HQ Office Property Cranberry Township, Pennsylvania
11
GRIFFIN CAPITAL |
 GRIFFIN
CAPITAL GE Aviation Systems Manufacturing Facility
Whippany, New Jersey
12 |
 The Travelers
Indemnity Company Regional HQ Denver, Colorado
GRIFFIN CAPITAL
13 |
 Financial
Results Joseph Miller | Chief Financial Officer |
 2012
Acquisitions Through June 30, 2012
Purchase Price
(in millions)
Square Feet
AT&T
$40.0
157,000
Westinghouse
$36.2
118,000
GE Aviation
$13.0
114,000
Travelers
$16.1
131,000
Total
$105.3
520,000
GRIFFIN CAPITAL
15 |
 Operating
Results GRIFFIN CAPITAL
16
June 30, 2011
June 30, 2012
% Change
MFFO
$0.5 million
$1.9 million
262%
Distributions:
Cash Distributions
$0.9 million
$1.4 million
Dividend Reinvestment Plan
$0.2 million
$0.6 million
Total Distributions
$1.1 million
$2.0 million
* -
See
full
modified
funds
from
operations
(MFFO)
disclosure
in
our
Form
10-Qs
filed
with
the
SEC
on
www.sec.gov. |
 Credit
Facility GRIFFIN CAPITAL
17
Commitment
Key Bank
$35 million
Bank of America
$35 million
North Shore Bank & Trust
$10 million
Regions Bank
$35 million
Fifth/Third Bank
$35 million
TOTAL
$150 million |
 Credit Facility
Timeline GRIFFIN CAPITAL
18
June 2010
•
Key Bank originates a $150 million facility
•
Key Bank commits $35 million
•
Interest Rate: 375 bps plus LIBOR, with a 200 bps LIBOR floor
November 2011
•
Bank of America commits $35 million
•
Interest rate amended to 275 bps plus LIBOR, no floor!
•
Maturity extended to November 2013, with a one year extension
option
January 2012
•
North Shore Bank & Trust commits $10 million
March 2012
•
Regions Bank commits $35 million
July 2012
•
Fifth/Third Bank commits $35 million |
 Leverage
Ratio GRIFFIN CAPITAL
19
June 30, 2011
June 30, 2012
Leverage Ratio
(on total REIT Capitalization)
58%
53%
Down 5% from Second Quarter 2011 |
 Griffin
Capital Securities Update Jeffrey S. Schwaber | President, Griffin Capital
Securities |
 Questions
& Answers David Rupert | President
Joseph Miller | Chief Financial Officer
Michael Escalante | Chief Investment Officer
Jeffrey S. Schwaber | President, Griffin Capital Securities
GRIFFIN CAPITAL
21 |
 Second Quarter
2012 Update Thank you for participating
Sales Desk: 866.606.5901
Griffin Capital Headquarters: 310.469.6100
www.griffincapital.com
GRIFFIN CAPITAL NET LEASE REIT
Securities offered through Griffin Capital Securities, Inc. Member FINRA/SIPC
|