DEBT & EQUITY INVESTING IN U.S. REAL ESTATE INVESTOR PRESENTATION Q3 2018 ● CAPITAL PRESERVATION DISCIPLINED INVESTING
Table of Contents • Investment Highlights • Business Overview • Investment Strategy • Market Opportunity • Investment Profile • Experienced Team • Shareholder Value Creation • Appendix – Investment Overviews Note: All figures in US$, unless otherwise indicated 2 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
INVESTMENT HIGHLIGHTS 3 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
Investment Highlights • Unique Status as Canada’s Only Exchange Traded Debt & Equity Investor in U.S. Real Estate • The Company provides investors with exposure to debt and equity investments in U.S. real estate in major markets and primarily involving multi-family residential properties • Innovative Capital Partnership Investment Model for U.S. Real Estate • Focus on capital partnership investing in U.S. real estate, enabling the Company to benefit from multiple partnerships with local industry expert owners/operators in major markets • Balanced Growth & Income Investment Model Well Suited to Rising Rate Environment in U.S. • Full capital stack investment model targets balanced growth and income returns to the Company, including mix of common equity returns (+20%), preferred equity returns (+8%), and bridge lending returns (+12%) 4 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
Investment Highlights • Experienced Manager with a Strong Track Record of Creating Value • The Firm Capital organization has a 30-year track record of delivering superior investment returns to institutional and retail investors across all parts of the real estate capital structure • Firm Capital manages two other successful publicly traded companies: Firm Capital Mortgage Investment Corporation (TSX: FC) and Firm Capital Property Trust (TSXV: FCD.UN), with a combined 23-year track record • Current Portfolio Provides a Platform for Further External Growth Opportunities • Currently owns, co-owns, and manages 1,442 residential units across 34 apartment properties in 6 U.S. states, which provides a broad platform for further external growth opportunities 5 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
Investment Highlights • Compelling Multi-Family Residential Sector Fundamentals • Tenant demand remains strong as a result of the continued expansion of the U.S. economy and low vacancy is expected to support continued rent growth for apartments • Recently Raised Attractive Growth-Oriented Yield • Quarterly cash dividends of US$0.05625 per share are paid, equivalent to a cash-on-cash yield of 2 . 8 % based on the Company’s most recent public offering price of US$ 8 . 1 0 per share • Raised to US$0.059 per share commencing in 2019 6 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
BUSINESS OVERVIEW 7 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
Business Overview • Firm Capital American Realty Partners Corp. (“FCA” or the “Company”), based in Toronto, Ontario, is a Canadian public reporting issuer with U.S. dollar and Canadian dollar denominated shares that trade on the TSXV under the symbols FCA.U and FCA, respectively • The predecessor Company, while historically focused on multi-family and single-family residential real estate in the U.S., was transformed in 2016 through a series of restructuring initiatives sponsored by Firm Capital Realty Partners Advisors Inc. (“Firm Capital”) • Firm Capital assumed control of asset management and corporate governance and embarked on a complete financial restructuring and repositioning of the Company • The Company is currently highly tax efficient, with approximately $3 6 million of non-capital tax loss carry forwards available to be applied against future taxable operating income 8 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
homes in Atlanta, GA US$6,550,000 single-family rental homes FLORIDA, GEORGIA, NEW JERSEY DEBT FINANCING US$10,300,000 Brentwood, MD Joint Venture NEW FINANCING EQUITY FINANCING Common shares US$8,325,000 & warrants PRIVATE PLACEMENT DEBT REPAYMENT US$4,100,000 FULL REPAYMENT Brentwood, MD Joint Venture FULL REPAYMENT 120 single family Disposition of 74 DISPOSITION 120 single family DEBT REPAYMENT DEBT FINANCING US$4,100,000 Refinancing of US$7,800,000 ATLANTA, GA homes US$8,373,000 Convertible Unsecured Debentures PARTIAL REPAYMENT DEBT REPAYMENT 2018 Highlights Equity Financing Debt Debt Financings Dispositions Repayments & Investments 9 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
2017 Highlights Debt Equity Raises Investments Dispositions Repayments 10 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
INVESTMENT STRATEGY 11 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
Investment Strategy The Company’s investment strategy is The Company is positioned to participate in all executed through the following investment levels of the capital stack for investing in U.S. platforms: real estate: • Income Producing Real Estate Investments: • Acquisition of income producing real Targeted Capital Stack for Investing estate in major cities across the U.S., primarily in joint venture partnerships Senior Debt First Lien Mortgages with local industry expert owners/ operators who retain property Shorter- Subordinated Debt Second Lien Mortgages management responsibility; and Term • Mortgage Debt Investments: Mezzanine Debt Gap Financing • Real estate debt and equity lending Preferred Equity Preferred Equity Repaid With Set platform in major cities across the Terms Longer- U.S., focused on providing all forms of Term shorter-term bridge mortgage loans Common Equity Investment Ownership and joint venture capital 12 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
INVESTMENT PROFILE 13 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
1 Properties 1 Properties Properties 3 14 Properties Properties 7 Properties Properties Investment Profile NEW YORK Units Loan Value NEW YORK 3 130 $ 9 . 5 Units Asset Value 8 129 $3 8.3 CONNECTICUT Asset Value Units 462 $3 5.4 NEW JERSEY Units Asset Value 189 $1 8 . 7 MARYLAND Units Asset Value 116 $ 13.7 TEXAS FLORIDA Units Asset Value 393 $34. 9 Units Asset Value 153 $2 5.0 Real Estate Investments Mortgage Investments Note: All figures are shown at 100% share 14 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
Investment Profile • The Company’s portfolio of investment properties is comprised of 1,442 residential units across 34 apartment properties in 6 U.S. states and provides a broad platform for further external growth opportunities • In addition, the Company’s mortgage investments include a preferred capital loan secured by New York City apartment properties, providing high current income and enhancing the overall portfolio yield (1) All figures are shown at 100% share, except under columns for “FCA Share of Asset Value” and “FCA Share of Investment” (2) For New Jersey and New York, unit count includes 5 and 2 retail units, respectively (3) Total occupancy based on weighted average occupancy by number of units 15 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
EXPERIENCED TEAM 16 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
Experienced Team • The Company benefits from a management team and a Board of Directors that provide: • An exceptional network of real estate and finance contacts across the U.S.; • Significant public market governance experience, including with Firm Capital’s other publicly traded companies; • Extensive real estate, finance, accounting, capital markets, and private equity experience; and • Strong alignment with shareholders, with an ownership interest in the Company of approximately 3 4 % Management • Eli Dadouch Founder, President & CEO of Firm Capital organization • President & CEO of Firm Capital Mortgage Investment Corporation (TSX:FC) Vice Chairman ,President • Vice Chairman, Co-CIO & Trustee of Firm Capital Property Trust (TSXV: FCD.UN) & CEO (1) • Sandy Poklar, CPA, CA Currently has multiple roles with Firm Capital: • CFO (1) COO and Managing Director, Capital Markets & Strategic Developments of Firm Capital Corporation • CFO and Trustee of Firm Capital Property Trust (TSXV: FCD.UN) • EVP of Firm Capital Mortgage Investment Corporation (TSX: FC) • Trustee of True North Commercial REIT (TSX: TNT.UN) • Previous investment banking roles with Macquarie Capital Markets Canada (Toronto) and TD Securities (Toronto) (1) Also a member of the Company’s Board of Directors 17 DISCIPLINED INVESTING ● CAPITAL PRESERVATION
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