The Q uarters at Verm illio n Investo r Up d ate | Q 4 2020 Michael Sather, CFO - Tailwind Group
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Debt refinance completed in October. Achieving a 1.5% interest rate savings, resulting in a loan payment reduction of $19K monthly
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Although pre-lease is behind last year, new Leasing Manager is gaining traction. Has signed 96 leases since Jan. 1 with prime leasing weeks still in front of him. Momentum is building.
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Delinquency has been running around 4%, which is good considering the current environment.
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Google rating remains strong at 4.7/5. Resident engagement and satisfaction remains high.
Good News
Challenges
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Pre-lease is 21% behind last year
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Covid has significantly impacted leasing decisions as students wait to hear school plans for the fall.
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Transition to new Regional Mgr., Property Mgr., and Leasing Mgr. this past fall. It has taken some time for them to hit their stride but are now gaining ground.
Property Up d ates
93 Percent Current Occupancy
Pre-Lease Percentag e For the 2021-2022 AY
39% Pre-Leased February 2021
Pre-leasing is off to a slow start compared to last year's pace
Metrics and KPIs
Executive Summary The Quarters at Vermillion
Operating Cash Flow* Q4 2020: $213K Q3 2020: $116
* One time costs are removed from operating cash flows Dollars in thousands (000s)
NOI
Occupancy
Q4 2020: $473
Q4 2020: 96%
Q3 2020: $507
Q3 2020: 97%
OOP: $455
Dollars in thousands Q4 2020 Q3 2020 Q2 2020 Q1 2020 YTD Avg 2019** OOP*** NOI
$ 473 $ 507 $ 419 $ 382 $ 445 $ 141 $ 455
Operating Cash Flow $ 213 $ 116 $ 105 $ Profit Margin
73 $ 127 $
(63) $
79
73%
79%
72%
66%
73%
-200%
69%
6.52%
6.99%
5.77%
5.27%
6.14%
1.94%
6.27%
Occupancy
96%
97%
93%
93%
95%
93%
95%
Pre-Leasing
21%
0%
72%
42%
n/a
n/a
n/a
YOC*
*Yield Over Cost Annualized **Four Quarter Average ***Original Operating Plan for the 2020 Academic Year
Metrics and KPIs Recap Q4 Net Operating Income (NOI) 8% growth compared to 2020 YTD average Positives:
Lower vacancy starting with new academic year
Full Year 2020 NOI (2%) decline compared to Original Operating Plan Positives:
Expenses are being managed very well, $143K below the original plan
Negatives:
6% of market rent increases have not been realized Vacancy is higher than planned
Metrics and KPIs Recap Operating Cash Flow
Q4 operating cash flow benefited from the refinance of the mortgage ($19K less in payments monthly) $378K excluded from operating cash flow calculation, this was used to refinance the loan and will reduce future cash flow burden
Yield Over Cost (YOC) Cost control has resulted in an increased YOC
NOTE: Cost can be calculated in various ways. For the purpose of this calculation, Tailwind inputted 'Total Project Cost'
Investment Performance
Capital Balance: $6,545,000 Total Monthly Distribution: $49,500 Total Investment Distributions: $742,500 Distributions will be evaluated on a month-to-month basis due to the effects of COVID-19
Bank Financing
nada
Bank
Loan Amount
Interest Rate
Monthly P&I Pmt
Current
Pactola Lending
23,000,000
3.8%
107,000
Previous
American National
22,560,000
5.3%
126,000
Variance
440,000
1.5%
19,000
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Corporate Leasing Specialist will be on-site assisting staff to gain pre-lease momentum
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Maintain and grow occupancy
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Steadily increase rents annually
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Monitor Real Estate tax amount as property stabilizes
What's Next
Michael Sather, CFO Tailwind Group msather@thetailwindgroup.com investors@thetailwindgroup.com