Quarters Rochester Investor Update | Q4 2020 Michael Sather, CFO Tailwind Group
Good News
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New Property Manager helping to stabilize the site
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RCTC affording students the right to attend in-person classes
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Focused on improving property reputation. PM circling lot every night, breaking up bad behavior.
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Considering leasing to more families to help fill
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PM working on adding Resident Assistants.
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Working on adding Police to residency for added security.
Challenges
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Q4 2020 Current Occupancy below expectations (90%)
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Delinquency (19% as of January 2021)
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Bed bugs and cockroaches
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COVID-19 has had a big impact larger due to lack of sports.
Property Updates
90 Percent Current Occupancy
Metrics and KPIs
Executive Summary Quarters at Rochester
Refinance Completed Q2 2020
Continue to navigate the challenges presented by COVID-19
New site staff to help stabilize property
Dollars in thousands Q4 2020 Q3 2020 Q2 2020 Q1 2020 YTD Avg 2019** OOP*** NOI
$ 111 $
Operating Cash Flow $ Profit Margin YOC* Occupancy
*Yield Over Cost Annualized **Quarterly Average
56 $
13 $ (80) $
103 $ 143 $ 30 $
83 $
92 $ 100 $ 145 22 $
28 $
56
42%
6%
38%
43%
32%
33%
53%
8.45%
0.98%
7.85%
10.96%
7.06%
7.65%
11.09%
90%
86%
80%
95%
87%
95%
90%
Metrics and KPIs Recap Q4 Net Operating Income (NOI) 28% growth compared to 2020 YTD average Positives:
August 1st, 2020 academic leasing year increased occupancy NOI is in line with Q1 & Q2. Q3 outlier due to rental losses reducing revenue by roughly $50K
Full Year 2020 NOI (36%) decline compared to Original Operating Plan Positives:
Rental income is inline with original plan
Negatives:
$90K Higher property taxes, these are currently in dispute $30K higher maintenance costs $50K higher payroll costs
Metrics and KPIs Recap cont..
Operating Cash Flow is significantly higher than 2020 YTD average Mainly due to Q3 rental losses No capital expenditures in Q4 2020
Yield Over Cost (YOC) Increase from 2019 due to stronger NOI mainly due to occupancy Lower than the plan mainly due to higher payroll and property taxes
Balance Sheet Recap Current Assets: $201K
0.85X Current Ratio
• $153K cash • $28K AR • $20K prepaids
Current Liabilities: $237K • $49K accounts payable • $15K accrued interest • $165K security deposits & prepaid rent
Current Ratio declined from 2019 due to the mortgage no longer requiring Escrow balances ($277K in 2019) Current Ratio is calculated by dividing Current Assets over Current Liabilities. Our goal is to maintain a liquidity position of 1X.
Refinance Completed 4/7/2020 Greenstate Credit Union Loan Amount: $4,850,000 Rate: 3.90% Term: 5 Years Amortization: 30 Years Monthly P&I Savings: $5,600
Whats Next
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Commence pre-leasing velocity initiatives
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Communicate to tenants as COVID-19 information is available
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Appealing property tax
Michael Sather, CFO Tailwind Group msather@thetailwindgroup.com investors@thetailwindgroup.com