Centurion Asset Management Income, Stability & Growth

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1 Centurion Asset Management Income, Stability & Growth

2 Who We Are Based in Toronto, Centurion Asset Management Inc. is a Canadian company that owns and manages approximately $1B in total assets. Multi-Residential Apartments & Student Housing Mortgage investments and growth oriented real estate investments Property management 2

3 Private vs. Public REIT The two categories of REITs in Canada are publicly traded REITs and private REITs. Differences between Public and Private REITs Publicly-Traded REIT: Trade on a public stock exchange (provide daily liquidity) Trading daily also means investors can potentially push price up or down, reflecting current market sentiment, regardless of actual market value of the asset Increased reporting costs due to requirements of a public listing History of more volatile pricing Tend to be more highly correlated to equity markets. Example during 2008 financial crisis: S&P/TSX Capped REIT Index TR*: -38.3% S&P/TSX*: -33.0% Private REIT: Not traded on a public stock exchange (generally offer 30-day liquidity) Value is based on the value of underlying real estate or equity / lending rate (not a market-traded price) No additional reporting costs related to a public listing Rational pricing with lower volatility Tend to be far less correlated to major equity markets 2008: Non Listed Property Ownership**: +3.7% Non Listed Apartment Property**: +6.4% * Source: Bloomberg ** Source IPD (2008 Edition); Note: Non listed property ownership is similar to a Private REIT 3

4 Investors Needs and Challenges Important considerations for many investors Diversification Steady monthly distributions Moderate growth Tax-advantaged income Capital preservation 4

5 Investment Strategy Centurion Apartment REIT always looks for opportunities using a strict due diligence process concentrates on communities with low vacancy levels and growing population demographics. There are three primary strategies employed by Centurion: Purchase undervalued properties with untapped potential, low vacancy and stable tenant base. Invests in newer, stabilized buildings, in desirable neighbourhoods. Centurion Apartment REIT leverages its strategic relationship with Centurion Real Estate Opportunities Trust to proactively create a pipeline of new investment opportunities. 5

6 Performance: Centurion Apartment REIT Growth of $10,000 invested in Centurion REIT (since inception of REIT August 31, 2009) 9 20,000 $18,640 June 30, ,000 16,000 14,000 12,000 $10,000 Invested 10,000 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Calendar Returns (%) 2009 (10) Compounded Returns (%) YTD Year 3-Year 5-Year Since Inception Centurion REIT TR Centurion REIT (%) TR (%) REITs are not guaranteed, their values can change frequently and past performance is no guarantee of future results. PAST PERFORMANCE MAY NOT BE REPEATED. 6

7 Centurion Real Estate Opportunities Trust The Centurion Real Estate Opportunities Trust (Centurion REOT) is an income & capital growth oriented investment trust that invests in a diversified portfolio of mortgages and opportunistic real estate developments. Mortgages (Income) Goal: Portfolio Balance Growth Oriented Investments (Capital Growth) 1) Income: Mortgage Investments 2) Capital Growth: Growth Oriented Real Estate Opportunities a) Multi-residential apartment developments b) Student housing developments 7

8 Delivering Value to Investors Transaction Project Details 100 Units in Western Canada Single 6 Storey Apartment Building with Ground Floor Retail Surface & Underground Parking Loan Structure $21.7M construction cost 1 st Mortgage: $16.3M funded by a third party lender 2 nd Mortgage: $2.5M funded by Centurion Equity Financing: $3M in total, (2/3 or $2M funded by Centurion) Mortgage Loan Interest Rate: 11% Preferred Return to Centurion REOT: 10% with a 50/50 split of profits beyond the 10% between the developer and Centurion REOT. Right of First Refusal to acquire the development project upon completion. 8

9 Summary REIT Generates monthly income Has a potential for growth Has a focus on capital preservation Is tax efficient 1 Diversifies investor s portfolio Provides re-investment options REOT Generates monthly income Potential for growth Has a focus on capital preservation Diversifies investor s portfolio Centurion s experience, expertise, infrastructure and financial resources leads to an End-to-End Real Estate Solution 9

10 Thank You 10