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184 0 92 102 0 70 0 152 195 99 206 202 201 221 3 0 103 120 0 115 99 0 171 146
March 2017
184 0 92 102 0 70 0 152 195 99 206 202 201 221 3 0 103 120 0 115 99 0 171 146
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect Blackstone Mortgage Trust, Inc. (“BXMT”) current views with respect to, among other things, BXMT’s operations and financial performance. You can identify these forward-looking statements by the use of words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. BXMT believes these factors include but are not limited to those described under the section entitled “Risk Factors” in its Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as such factors may be updated from time to time in its periodic filings with the Securities and Exchange Commission (“SEC”) which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this presentation and in the filings. BXMT assumes no obligation to update or supplement forward‐looking statements that become untrue because of subsequent events or circumstances.
We refer to “Core Earnings”, which is a non-GAAP financial measure, in this presentation. A reconciliation of core earnings to net income, the most directly comparable GAAP measure, is included in this presentation and in our most recent Quarterly Report on Form 10-Q, and is available on our website at www.bxmt.com.
Slide 3 of this presentation references numerical data relating to Blackstone that includes activities of Blackstone Real Estate’s public and private portfolio companies unless otherwise noted.
Slide 17 of this presentation includes a reference to imputed core return on equity (“Imputed Core ROE”) and other economic terms relating to an illustrative BXMT loan transaction that are presented solely for purposes of illustrating the impact of using floating rate financing to finance the origination of a floating rate loan and should not be viewed as indicative of the results that will be achieved for any particular loan in BXMT’s portfolio or of BXMT’s results as a whole. The loan economics presented are hypothetical and based upon a number of assumptions, including no defaults on the loan, and are subject to various risks and uncertainties. Accordingly, there are or will be important factors, including those referred to above, that could cause the actual economics that are achieved on any loan in BXMT’s loan portfolio to differ materially from those indicated in this illustration. In particular, it should be noted that as a result of such factors the net spread between whole loan yields and the cost of related leverage, the leverage multiple applicable to any particular loan and allocable overhead may vary materially from period to period and across BXMT’s loan portfolio. Imputed Core ROE also excludes potential incentive management fees and is presented before any tax effects.
Information included in this presentation is as of or for the period ended December 31, 2016, unless otherwise indicated.
Forward-Looking Statements and Other Matters
1
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201 221 3 102 0 70 0 152 195 184 0 92 0 103 120 99 206 202
Large-Scale Portfolio
Institutional quality real estate located in major markets
Superior Sponsorship
Affiliation with BX, largest real estate private equity business in the world
BXMT Overview
Senior Lending Focused
Floating Rate Business
Returns increase with rising short-term USD interest rates
Attractive current income, conservative credit and efficient leverage to drive returns
Blackstone Mortgage Trust, Inc. (NYSE: BXMT) is a REIT that originates senior commercial mortgage loans in North America and Europe
2
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Superior Real Estate Platform
3
Blackstone Real Estate has proprietary insight, long standing expertise and superior access to deal flow
Office 146M Square Feet
One of the largest owners in the U.S.
Multifamily Major investor across the U.S.
142k Units
Retail Active investor
since 2011 80M
Square Feet
Hotel 290k Keys
One of the largest global investors
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Superior Real Estate Platform
4
Blackstone Real Estate is a premier debt and equity investment and asset management platform
Investor Capital Under Management
________________________________________________
Note: There can be no assurance that any Blackstone Fund or investment will be able to implement its investment strategy, achieve its objectives or avoid losses (a) Includes $1.0 billion of non-consolidated senior interests
107 professionals
$14 billion AUM
• Senior loans
• $9.8B(a) of assets
• $2.9B equity market capitalization
• Mezzanine debt
• Over $9B strategy
$102B • CMBS strategy
• Over $2.0B equity under management
BlackstoneBREDS
Drawdown BREDSLiquid
Mortgage Trust Funds Funds
BREP Global 46%
BREP Europe 20%
BREP Asia 6% BPP
14%
BREDS 14%
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Blackstone Advantage
Global Business
• 44% of RE partners have international experience
Scale Capital
• $102 billion RE AUM
• $15 billion raised in last twelve months
Long View
• Long term capital commitments
• Never a forced seller
Regular Meetings
Superior Real Estate Platform
Single Perspective
1 Global Real Estate
Platform
27 Partners average 12 years
at Blackstone
Weekly
• Partners’ Meeting
• Global ICMs
• Investment Review Committees
Quarterly
• Board Meetings
• Portfolio Asset Review
Annual
• Global Asset Reviews
• Strategy Sessions
420+ people, 12 offices, 3 business units but one fully integrated real estate platform
5
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Superior Real Estate Platform
Blackstone’s unique investment process is complemented by fully-integrated corporate infrastructure
6
BREDS Investment Committee
Jonathan Gray Global Head of Real Estate
Member of Blackstone Board of Directors
Jonathan Pollack Global Head of BREDS
Senior Managing Director of BREDS
Stephen Plavin CEO & President of BXMT
Senior Managing Director of BREDS
Michael Nash Executive Chairman of BXMT
Global Chairman of BREDS
Kathleen McCarthy Global COO of Real Estate
Senior Managing Director of Blackstone Real Estate
Kenneth Caplan Global CIO of Real Estate
Senior Managing Director of Blackstone Real Estate
Tim Johnson Head of North American Originations Senior Managing Director of BREDS
Rob Harper Head of US Asset Management
Senior Managing Director of Blackstone Real Estate
Joshua Mason PM Liquid Funds
Senior Managing Director of BREDS
Originations (US. & Europe) 33 professionals
Michael Zerda Managing Director of BREDS (Europe)
Michael Eglit Managing Director of BREDS (U.S.)
Katie Keenan Managing Director of BREDS (U.S.)
Asset Management 14 professionals
Thomas Ruffing Managing Director of BREDS
Leon Volchyok Principal of BREDS
Capital Markets / IR / Finance 15 professionals
Douglas Armer Managing Director of BREDS
Weston Tucker Managing Director of Blackstone External Relations
Anthony Marone CFO of BREDS
Managing Director of BREDS
Legal / Compliance 4 professionals
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Commercial Real Estate Fundamentals
Real estate continues to benefit from limited supply and moderate growth
U.S. Construction Completions(a)
Office, Retail, and Industrial Sectors
U.S. Public REIT NOI(b)
Same Store NOI Growth
________________________________________________
(a) CBRE Econometric Advisors, REIS, as of December 31, 2016 (b) Evercore ISI, as of September 30, 2016 7
0%
1%
2%
3%
2000 2003 2006 2009 2012 2015
New
Co
mp
leti
on
s a
s %
of
Inv
ento
ry
3Q’16 4.0%
-2%
0%
2%
4%
6%
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
25 Consecutive
Quarters
Down 56%
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$1,817
$559
$259
$398
$600
U.S. CRE Debt Holders(a)
($ in billions)
(Office, Industrial, and Retail Sectors)
Commercial Real Estate Debt Market
8
CMBS and bank lenders are reducing CRE lending activity under regulatory pressure
U.S. CMBS Issuance(b)
($ in billions)
(Office, Industrial, and Retail Sectors)
Life Companies
Other
U.S Depository Institutions
CMBS Issuers
GSEs
CMBS Volatility
BBB- Spreads(1) (bps)
Down 67%
________________________________________________
(a) Flow of Funds Accounts, Federal Reserve Board of Governors, as of 3Q 2016 (b) Commercial Mortgage Alert, as of 4Q 2016 and BAML 2017 CMBS Outlook report as of November 21, 2016
$229B
$75B
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Target Investments
9
$50 million to $500 million Loan Size
First mortgages on stabilized or transitional assets Collateral
All commercial property types Property Type
North America and Europe Geographies
LIBOR + 3.50% and higher, scaled to risk Rate
Last dollar 50% to 80% Loan to Value
3 to 5 years Term
Typically interest only Amortization
Typically 1.0% origination fee and 0.25% to 0.50% extension fees Fees
12 to 24 months of spread maintenance Prepayment
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Sample Transaction: SFO Airport Hotels
$130 million floating rate, first mortgage loan secured by the Westin and aLoft SFO Airport hotels
• 72% LTV; $200k per key
• Diverse demand drivers including airport traffic and SF/Silicon Valley business overflow
Loan upsized by $30 million 15 months after origination and refi call protection extended by 6 months
Blackstone office and hotel investments in California enabled definitive, efficient execution
10
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Sample Transaction: 401 North Michigan Avenue
$190 million floating rate, first mortgage loan secured by 401 North Michigan Avenue in Chicago
• Well located class A office building undergoing value-enhancing repositioning; 70% LTV
• Initial funding of $145 million with $45 million future funding commitment for building improvements and leasing
Transaction sourced through existing Blackstone relationship with experienced regional owner
Located in a core U.S. market where Blackstone has been an active investor
401 N. Michigan
401 N. Michigan
Wrigley Bldg.
Sheraton NBC
Tribune
11
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Sample Transaction: Woolworth Building
$320 million floating rate, first mortgage loan secured by the Woolworth Building, an iconic office tower located in Downtown Manhattan
• Adjacent to City Hall with convenient access to transportation hubs
• 789k sf, including 12k sf of retail; 68% LTV
Blackstone offered a one-stop solution for a repeat borrower in a major transaction
12
Westminster UES
Woolworth Building
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Sample Transaction: Aldwych House
£78 million floating rate, first mortgage loan secured by Aldwych House in central London
• Well located 162k sf prime office building undergoing £28.0 million, value-enhancing, refurbishment
• 50% LTV
Transaction sourced through existing Blackstone relationship with local operating partner paired with a well capitalized institutional sponsor
13
Aldwych House
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Portfolio Diversification
$9.8 billion portfolio comprising 107 senior loans secured by institutional quality real estate in North America (83%) and Europe (17%)
$3.0 billion of the $4.9 billion of loans acquired from GE have repaid and a further $817 million have been upsized or modified. Loans acquired from GE comprise 17% of the total portfolio, down from 44%(a)
Collateral Diversification
(Total Loan Exposure, % of Total)
Geographic Diversification
(Total Loan Exposure, % of Total)
Origination LTV (b)
(Total Loan Exposure, Weighted Average)
61%
________________________________________________
(a) As of June 30, 2015 (b) Reflects LTV as of the date loans were originated or acquired by BXMT 14
States that comprise less than 1% of total loan portfolio
CAN 5%
CA 17%
WA 2%
HI 2%
DC 2%
TX 2%
VA 2%
GA 4%
IL 7%
FL 10% UK
13%
DEU 3%
OR 1%
AZ 1%
CO 1% MD
1%
NC 1%
NL 1%
NY 25%
50%
20%
12%
5%
3% 7% Office
Multifamily
Hotel
Condo
Other
Retail
Manufactured Housing (MHC) 3%
50%
20%
12%
5%
3%
3% 7%
Office Multifamily
Hotel
Condo
Other
Retail
Manufactured Housing
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$ -
$500
$1,000
$1,500
$2,000
$2,500
$3,000
0% -50%
50% -55%
55% -60%
60% -65%
65% -70%
70% -75%
75% -80%
80% -85%
85% -100%
-
1,000
2,000
3,000
4,000
5,000
6,000
1 2 3 4 5
$0
$500
$1,000
$1,500
$2,000
$2,500
Portfolio Credit Quality
BXMT’s senior loan portfolio is 100% performing, with no defaulted or impaired loans
15
Origination Loan-to-Value(a)
(Total Loan Exposure, Dollars in Millions)
Weighted Avg 61%
Risk Rating Distribution(b)
(Total Loan Exposure, Dollars in Millions)
8 52 46 1 0 Loan Count:
Weighted Avg 2.5
________________________________________________ (a) Reflects LTV as of the date loans were originated or acquired by BXMT (b) Risk rating is assigned based on a variety of factors, including, without limitation, LTV, debt yield, property type, geographic and local market dynamics, physical condition, cash flow
volatility, leasing and tenant profile, loan structure and exit plan, and project sponsorship. Based on a 5-point scale, our loans are rated “1” through “5,” from less risk to greater risk, which ratings are defined as follows: 1 – very low risk, 2 – low risk, 3 – medium risk, 4 – high risk/potential for loss, 5 – impaired/loss likely.
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Financing
16
BXMT has developed $9.5 billion of market leading financing capacity with an emphasis on stability through its long-term, matched funding, non-MTM strategy
Outstanding asset-level financing is long term with an average all-in cost of L+2.04%
$10.0 Total Financing Capacity
$4.8
• Seven cross collateralized, bilateral credit agreements
• Revolving credit facilities provide for efficient liquidity management and all-in pricing of L+1.70% to L+2.00%
• Term, currency and index matched
• No capital markets mark-to-market
Revolving Credit Facilities
$2.0
• Non-revolving; non-cross collateralized; generally non-recourse with limited margin call provisions
• Pricing directly related to underlying collateral assets
• 9 transactions with seven counterparties
• Non-debt structures: participations sold and non-consolidated senior interests
Asset-Specific Financings
$3.2
• Term and currency matched facility to finance GE portfolio acquisition
• Pro rata repayment for first 80% of repayments and sequential thereafter
• Floating rate index + 1.83%; 5bps rate increase in years 4 and 5
GE Portfolio Financing
Financing Capacity ($ in billions)
Leverage
2.3x Debt-to-Equity Ratio(b)
2.9x Total Leverage(c)
Credit Facilities
All-in cost of L+2.02%
Asset-Specific Financings
All-in cost of L+2.06%
Corporate Debt
Convertible Notes: 5.87%
Secured Facility: L+2.75%
Total Debt
Senior Loan Interests(a)
Pricing directly related to underlying collateral assets
Total Leverage
$3.6
$1.4
$2.2
$0.2
$6.0
$7.4
________________________________________________ (a) In addition to $350 million of loan participations sold, includes $1.0 billion of Non-Consolidated Senior Interests, which result from non-recourse sales of senior loan interests in loans
BXMT originates. BXMT’s net investments in these loans are reflected in the form of mezzanine or other subordinate loans on BXMT’s balance sheet. (b) Represents (i) total outstanding secured debt agreements, convertible notes, less cash, to (ii) total stockholders’ equity (c) Represents (i) total outstanding secured debt agreements, convertible notes, loan participations sold, and non-consolidated senior interests, less cash, to (ii) total stockholders’ equity
$5.5
$1.5
$0.6
Credit Facilities
GE Acquisition Facility
Asset-Specific Financing
Senior Loan Interests
$1.7
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Overhead
Leverage
Whole Loan Yield(b) L + 4.00%
Leverage:
Advance Rate 80.0%
All-in Cost(b) L + 2.00%
Net Spread 2.00%
Leverage Multiple 4.0 X
Levered Spread 8.00%
Base Return L + 4.00%
Gross ROI L + 12.00%
Less Overhead Allocations(c):
Management Fee 1.50%
General & Administrative 0.40%
Working Capital/
Equity Deployment 1.60% - 0.60%
Incentive Fee 0.30% - 0.50%
Imputed Core ROE L + 8.20% - 9.00%
Illustrative Loan Economics(a)
17
BXMT’s senior loans are supported by significant owner’s equity
Prudent use of balance sheet leverage drives attractive risk adjusted returns for BXMT stockholders
________________________________________________ (a) This illustration is presented solely for demonstrating our business model and should not be viewed as indicative of the results that will be achieved for any particular loan in BXMT’s
portfolio or of BXMT’s aggregate results. The loan economics presented are hypothetical and are subject to various risks and uncertainties. See “Forward‐Looking Statements and Other Matters” at the beginning of the presentation for further discussion of such risks and uncertainties.
(b) Whole loan yield and all-in cost of leverage include amortization of fees and expenses pursuant to GAAP in addition to current pay rates, and assume no defaults (c) Overhead allocations are illustrative, actual allocations vary materially and depend on expenses incurred, working capital and defensive liquidity needs, overall capital deployment and
performance among other factors
1.5% management fee
L+12.0% Gross ROI
LTV Capital Structure $ Cum.
Credit Facility Advance
$80.0 million
53.3% $80.0 million
BXMT Equity
$20.0 million
66.7% $100.0 million
Owner Equity
$50.0 million
100.0% $150.0 million
L+4.0% Return on Assets(b)
80% Advance Rate
L+2.0% All-In Cost(b)
3.0% - 3.8% Overhead Allocations(c)
L+8.2% - 9.0% Imputed Core ROE
4x Leverage Multiple
8.0% Levered Spread
L+12.0% Gross ROI
L+8.7% Imputed Core ROE
0.4% G&A
1.5% Management Fee(b)
1.6%-0.6% Working Capital
0.3%-0.5% Incentive Fee
Leverage Leverage:
L+2.0% All-in Cost(b)
80% Advance Rate
4x Leverage Multiple
2.0% Spread
1.5% Management Fee
0.4% G&A
1.0% Working Capital
0.4% Incentive Fee
Overhead(c)
Leverage
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Interest Rates
Core Earnings are positively correlated to changes in USD and GBP LIBOR, the benchmark indices for 85% of BXMT’s loan portfolio and related secured financings(a)
A 1.0% increase in USD LIBOR would increase net interest income per share by $0.19 per annum
________________________________________________
(a) Core Earnings are inversely correlated to EURIBOR and CDOR such that an increase of 50bps in either would decrease net interest income per share by less than $0.01 per year (b) As of December 31, 2016, $216 million of floating rate loans earned interest based on floors that were above the applicable index, with an average floor of 1.27%, based on total loan exposure
18
Portfolio Income Sensitivity to USD LIBOR
(Annual Dollars of Net Interest Income Per Share)
Net
In
tere
st I
nco
me
Per
Sh
are
USD LIBOR
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
0.77% 1.27% 1.77% 2.27% 2.77% 3.27%
Portfolio Fixed vs. Floating
(% of Total Loan Exposure)
Floating(b)
89%
Fixed
11%
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-10%
0%
10%
20%
30%
40%
50%
60%
Book Value Total Return
BXMT Total Return
19
BXMT's simple net interest margin business model and capital markets discipline has delivered strong current yield and book value growth to shareholders
BXMT Performance
$7.46
Dividends Paid
$1.75
BVPS Accretion
Accretive growth
Strong, stable dividend
Non-MTM portfolio
Preservation of capital
2013 2014 2015 2016
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69%
23%
8%
Re-IPO 22-May-13 $660 $25.50
Follow-on 9-Jan-14 261 26.75
Follow-on 2-Apr-14 259 28.15
Follow-on 19-Sep-14 256 27.85
Follow-on 14-Apr-15 702 30.50
ATM Program 14-May-15 11 30.04
Follow-on 1-Jun-15 341 29.65
BXMT Investor Base
Blackstone and Blackstone employees combined are BXMT’s largest shareholder
20
BXMT Ownership
________________________________________________
(a) Includes investments by BX employees and associates (b) Includes Citigroup, J.P. Morgan, Deutsche Bank, JMP, FBR, KBW, BAML, Credit Suisse and Wells Fargo latest estimates. (c) Based on TTM data as of December 31, 2016
Equity Research Coverage
591k shares | $16 million
Average Daily Trading Volume(c)
(a)
Re-IPO 22-May-13 $660 $25.50
Follow-on 9-Jan-14 261 26.75
Follow-on 2-Apr-14 259 28.15
Follow-on 19-Sep-14 256 27.85
Follow-on 14-Apr-15 702 30.50
ATM Program 14-May-15 11 30.04
Follow-on 1-Jun-15 341 29.65
Gross Offer
Offering Date Proceeds Price
Re-IPO 22-May-13 $660 $25.50
Follow-on 9-Jan-14 261 26.75
Follow-on 2-Apr-14 259 28.15
Follow-on 19-Sep-14 256 27.85
Follow-on 14-Apr-15 702 30.50
ATM Program 14-May-15 11 30.04
Follow-on 1-Jun-15 341 29.65
Offering Date Proceeds Price
Date Proceeds Price
Buy ratings from 6 of 9 research analysts(b)
$31.89 consensus stock price target
7.8% dividend yield and 1.21x price to book at price target
Retail
Institutional
BX
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BXMT Relative Value
Blackstone provides compelling relative value compared to other listed real estate products
Resi
mREITs Other Comm
mREITs Equity REITs
Yield
Sr. Strategy
Dividend Yield
Senior Loans
Floating Rate
Low Earnings Volatility
________________________________________________
Note: The composition of the various categories of REITs being compared with BXMT, as well as the characteristics compared, reflect our current views as of the date appearing in this material only and are not based on any index or other established categorization
21
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