SPIRE US LIMITED PARTNERSHIP
D E C E M B E R 31, 2014
SPIRE US LIMITED PARTNERSHIP Performance
Key Statistics YTD
1 Year
3 Year
Since June 2010
Total Return+
11.2%
11.2%
10.9%
9.4%
12 Month Trailing Distribution Yield
5.6%
Investment Activity - Fourth Quarter Acquisitions
1
$22.68 million
Dispositions
1
$10.10 million
Acquisitions Under Contract
-
-
Dispositions Under Contract
-
-
Office 19%
Tennessee 1%
Other 13%
Inception Date
July 2007
NAV Per Unit*
$122.46 1,983,316 54%
Number of Assets
50
Total Square Feet
3,575,006
Portfolio Occupancy
95%
Average Cap Rate
6.3%
Average Cost of Debt
4.4%
Portfolio Occupancy by SF 350,000
Industrial 3%
Retail 4%
Washington 19%
Limited Partnership
Debt Leverage Ratio
Gross Asset Value by Type
8%
$242.9 million
300,000 250,000 200,000 150,000
Georgia 19%
100,000 50,000 ‐ Office
Texas 34%
Industrial
Retail
. . . . . . . . . . . . . . . . . . . . . . . . . . .
GROSS PURCHASE PRICE
Other 13%
Net Asset Value
Number of Units
NUMBER OF PROPERTIES
California 6% Florida
$536.3 million
Structure
Past performance is not indicative of future results.
Gross Asset Value by Location
Total Asset Value
Multi‐Family 61%
2,400,000 2,000,000
200,000 180,000
1,600,000 1,200,000
160,000
800,000
140,000
400,000
120,000
‐ Unoccupied Unoccupied
Multi‐ 100,000 family 80,000
Occupied Occupied
60,000 40,000
SPIRE US LP Overview The SPIRE US LP (SPIRE US) portfolio is focused on acquiring, through direct investment, com-
2,800,000
20,000 Commercial
mercial properties primarily in major markets on the West Coast and multi-family properties in the South and South Eastern US. Through its diversified portfolio, SPIRE US aims to provide consistent long-term wealth creation based on property rental income, debt amortization, valueadd and market appreciation. In 2010, SPIRE US was opened to individual investors with units denominated in US currency. SPIRE US offers the clients of Nicola Wealth Management (NWM) an opportunity to invest in direct real estate with an experienced management team. Since the inception of SPIRE US, the management of Nicola Crosby have invested a significant amount of their own capital alongside NWM clients.
N I C O L A C R O S B Y R E A L E S TAT E
Contact Information Wayman Crosby, Managing Partner Nicola Crosby Real Estate Asset Management Ltd. SPIRE General Partner Ltd. 420-1508 West Broadway Vancouver, BC V6J 1W8 T: + 1-778-383-6941 E: [email protected] W W W. N I C O L A C R O S B Y. C O M
S O U T H H I L L V I L L A G E , P U YA L L U P, WA
D E C E M B E R 31, 2014
Quarter Highlights
Investment Criteria
• The previously reported acquisition of Zang Triangle in Dallas, Texas closed in November. The
• Clear focus on hard asset, cash flowing real
260-unit apartment complex completed in 2012 was acquired in partnership with Venterra
estate where the primary revenue source comes
Realty. Located just one mile outside Downtown Dallas, the property is one of the few newly
from tenant rents.
built apartment complexes in the immediate vicinity and was acquired at a price well below replacement cost. Acquisition Price: $32.4 Million (of which SPIRE US LP owns a 70% interest)
• Our
investment
strategy
has
expanded
to concentrate on identifying acquisition
• In October, we listed for sale the King County Building at 2124 4th Avenue, a single-tenant office
opportunities in new major markets such as
building located in Downtown Seattle. Major development in the immediate area including
Chicago, Houston, Denver and Los Angeles to
the recently announced Amazon campus, coupled with cap rate compression in the Seattle
complement our existing commercial portfolio
investment market presented an excellent opportunity to realize full potential for this older asset.
in Seattle and San Francisco.
The property was originally acquired for $6.6 Million in June of 2012 and was listed for sale at
targeting newer, high quality multi-family assets
$9.7 Million. The deal closed in December and strong competition amongst buyers drove the final
in major US growth markets with our strategic
price above the asking. Sale Price: $10.1 Million for an IRR to investors, pre-fees, of 44.47%
partner (Venterra Realty).
• Strong market conditions in Downtown Seattle have also positively contributed to the valuation of the Reedo Building. As a result of a lease renewal completed for the ground floor retail space and a lower cap rate/interest rate environment, the property’s value at year end increased 11.9% from the previous year (based on an independent, third-party appraisal). • In 2015, we anticipate demand for well-located quality assets to remain fiercely competitive, especially in Seattle and San Francisco where pricing has already touched levels that no longer offers accretion. While we carefully monitor opportunities in those markets, our growth strategy
We also are
• Leverage on assets is dependent on asset type with a tolerance for higher leverage on multi-family assets in the 60-70% range. For commercial assets, we seek a lower debt ratio of 60-65% leverage. • Return on equity targeted at 8% - 10% over a minimum 5-10 year hold.
is focused on acquiring assets in other major markets including Chicago, Houston, Denver and Los
• Focus on capital preservation while underwriting
Angeles. In addition to providing greater geographic diversity to the portfolio, these markets offer
potential risks to minimize possible loss of
a greater value proposition on both a yield and price per square foot basis.
capital and/or income through property, tenant
• With our partner, Venterra Realty, we now have an ownership interest in 42 multi-family properties with over 12,000 units in the south and southeast United States. Through this partnership, we have amassed an impressive multi-family portfolio at metrics that would be difficult to replicate in Canada for similar product. In 2014, our multi-family acquisitions equated to over $97 Million (our portion for six properties) and we plan to continue building on this portfolio in 2015 and beyond with our valued partner.
$156,580
$160,000 $150,000 $140,000 $130,000 $120,000 $110,000 $100,000 2011
• Investment opportunities are sourced through third party vendors ensuring no conflicts of interest, and all properties are appraised on an annual basis by independent appraisers, confirming accurate market based valuations.
Disclaimer
s
$100,000 Invested Since Inception
2010
covenant, cap rate and interest rate fluctuations.
2012
2013
sSPIRE US was set up in July 2007 but opened to investors in June 2010. All returns are calculated from June 2010. N I C O L A C R O S B Y R E A L E S TAT E
2014
• Nicola Crosby is a subsidiary of Nicola Wealth Management • Past performance is not indicative of future results. • Returns are net of LP expenses. • This investment is only available for sale to residents of Canada who are accredited investors. Please read the Limited Partnership Agreement and subscription documents for additional details and important disclosure information. • This does not constitute an offer of sale. • Please speak with a Nicola Wealth Management advisor to discuss if this investment is right for you. • *NAV per unit is effective January 31, 2015. • +Returns are calculated on a monthly basis and may differ from client returns which are updated with a 1 month lag.
W W W. N I C O L A C R O S B Y. C O M
SPIRE US LIMITED PARTNERSHIP Performance
Key Statistics YTD
1 Year
3 Year
Since June 2010
Total Return+
11.2%
11.2%
10.9%
9.4%
12 Month Trailing Distribution Yield
5.6%
Investment Activity - Fourth Quarter Acquisitions
1
$22.68 million
Dispositions
1
$10.10 million
Acquisitions Under Contract
-
-
Dispositions Under Contract
-
-
Office 19%
Tennessee 1%
Other 13%
Inception Date
July 2007
NAV Per Unit*
$122.46 1,983,316 54%
Number of Assets
50
Total Square Feet
3,575,006
Portfolio Occupancy
95%
Average Cap Rate
6.3%
Average Cost of Debt
4.4%
Portfolio Occupancy by SF 350,000
Industrial 3%
Retail 4%
Washington 19%
Limited Partnership
Debt Leverage Ratio
Gross Asset Value by Type
8%
$242.9 million
300,000 250,000 200,000 150,000
Georgia 19%
100,000 50,000 ‐ Office
Texas 34%
Industrial
Retail
. . . . . . . . . . . . . . . . . . . . . . . . . . .
GROSS PURCHASE PRICE
Other 13%
Net Asset Value
Number of Units
NUMBER OF PROPERTIES
California 6% Florida
$536.3 million
Structure
Past performance is not indicative of future results.
Gross Asset Value by Location
Total Asset Value
Multi‐Family 61%
2,400,000 2,000,000
200,000 180,000
1,600,000 1,200,000
160,000
800,000
140,000
400,000
120,000
‐ Unoccupied Unoccupied
Multi‐ 100,000 family 80,000
Occupied Occupied
60,000 40,000
SPIRE US LP Overview The SPIRE US LP (SPIRE US) portfolio is focused on acquiring, through direct investment, com-
2,800,000
20,000 Commercial
mercial properties primarily in major markets on the West Coast and multi-family properties in the South and South Eastern US. Through its diversified portfolio, SPIRE US aims to provide consistent long-term wealth creation based on property rental income, debt amortization, valueadd and market appreciation. In 2010, SPIRE US was opened to individual investors with units denominated in US currency. SPIRE US offers the clients of Nicola Wealth Management (NWM) an opportunity to invest in direct real estate with an experienced management team. Since the inception of SPIRE US, the management of Nicola Crosby have invested a significant amount of their own capital alongside NWM clients.
N I C O L A C R O S B Y R E A L E S TAT E
Contact Information Wayman Crosby, Managing Partner Nicola Crosby Real Estate Asset Management Ltd. SPIRE General Partner Ltd. 420-1508 West Broadway Vancouver, BC V6J 1W8 T: + 1-778-383-6941 E: [email protected] W W W. N I C O L A C R O S B Y. C O M
S O U T H H I L L V I L L A G E , P U YA L L U P, WA
D E C E M B E R 31, 2014
Quarter Highlights
Investment Criteria
• The previously reported acquisition of Zang Triangle in Dallas, Texas closed in November. The
• Clear focus on hard asset, cash flowing real
260-unit apartment complex completed in 2012 was acquired in partnership with Venterra
estate where the primary revenue source comes
Realty. Located just one mile outside Downtown Dallas, the property is one of the few newly
from tenant rents.
built apartment complexes in the immediate vicinity and was acquired at a price well below replacement cost. Acquisition Price: $32.4 Million (of which SPIRE US LP owns a 70% interest)
• Our
investment
strategy
has
expanded
to concentrate on identifying acquisition
• In October, we listed for sale the King County Building at 2124 4th Avenue, a single-tenant office
opportunities in new major markets such as
building located in Downtown Seattle. Major development in the immediate area including
Chicago, Houston, Denver and Los Angeles to
the recently announced Amazon campus, coupled with cap rate compression in the Seattle
complement our existing commercial portfolio
investment market presented an excellent opportunity to realize full potential for this older asset.
in Seattle and San Francisco.
The property was originally acquired for $6.6 Million in June of 2012 and was listed for sale at
targeting newer, high quality multi-family assets
$9.7 Million. The deal closed in December and strong competition amongst buyers drove the final
in major US growth markets with our strategic
price above the asking. Sale Price: $10.1 Million for an IRR to investors, pre-fees, of 44.47%
partner (Venterra Realty).
• Strong market conditions in Downtown Seattle have also positively contributed to the valuation of the Reedo Building. As a result of a lease renewal completed for the ground floor retail space and a lower cap rate/interest rate environment, the property’s value at year end increased 11.9% from the previous year (based on an independent, third-party appraisal). • In 2015, we anticipate demand for well-located quality assets to remain fiercely competitive, especially in Seattle and San Francisco where pricing has already touched levels that no longer offers accretion. While we carefully monitor opportunities in those markets, our growth strategy
We also are
• Leverage on assets is dependent on asset type with a tolerance for higher leverage on multi-family assets in the 60-70% range. For commercial assets, we seek a lower debt ratio of 60-65% leverage. • Return on equity targeted at 8% - 10% over a minimum 5-10 year hold.
is focused on acquiring assets in other major markets including Chicago, Houston, Denver and Los
• Focus on capital preservation while underwriting
Angeles. In addition to providing greater geographic diversity to the portfolio, these markets offer
potential risks to minimize possible loss of
a greater value proposition on both a yield and price per square foot basis.
capital and/or income through property, tenant
• With our partner, Venterra Realty, we now have an ownership interest in 42 multi-family properties with over 12,000 units in the south and southeast United States. Through this partnership, we have amassed an impressive multi-family portfolio at metrics that would be difficult to replicate in Canada for similar product. In 2014, our multi-family acquisitions equated to over $97 Million (our portion for six properties) and we plan to continue building on this portfolio in 2015 and beyond with our valued partner.
$156,580
$160,000 $150,000 $140,000 $130,000 $120,000 $110,000 $100,000 2011
• Investment opportunities are sourced through third party vendors ensuring no conflicts of interest, and all properties are appraised on an annual basis by independent appraisers, confirming accurate market based valuations.
Disclaimer
s
$100,000 Invested Since Inception
2010
covenant, cap rate and interest rate fluctuations.
2012
2013
sSPIRE US was set up in July 2007 but opened to investors in June 2010. All returns are calculated from June 2010. N I C O L A C R O S B Y R E A L E S TAT E
2014
• Nicola Crosby is a subsidiary of Nicola Wealth Management • Past performance is not indicative of future results. • Returns are net of LP expenses. • This investment is only available for sale to residents of Canada who are accredited investors. Please read the Limited Partnership Agreement and subscription documents for additional details and important disclosure information. • This does not constitute an offer of sale. • Please speak with a Nicola Wealth Management advisor to discuss if this investment is right for you. • *NAV per unit is effective January 31, 2015. • +Returns are calculated on a monthly basis and may differ from client returns which are updated with a 1 month lag.
W W W. N I C O L A C R O S B Y. C O M
