Attached files
| file | filename |
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| 8-K - FORM 8-K - Global Income Trust, Inc. | d854870d8k.htm |
| EX-99.2 - FORM OF LETTER TO THE STOCKHOLDERS - Global Income Trust, Inc. | d854870dex992.htm |
| EX-99.4 - SCRIPT RELATING TO THE VALUATION WEBINAR - Global Income Trust, Inc. | d854870dex994.htm |
| EX-99.1 - CORRESPONDENCE WITH FINANCIAL ADVISORS OF STOCKHOLDERS - Global Income Trust, Inc. | d854870dex991.htm |
 Net Asset Valuation Presentation
January 2015
Exhibit 99.3 |
 General Notices
Global Income Trust filed a registration statement on Form S-11 (including a
prospectus) with the Securities and Exchange Commission (“SEC”) on
Apr. 8, 2009, and the registration statement became effective on Apr. 23,
2010 for the offering to which this communication relates. You should read the
prospectus in the registration statement, as supplemented, and other documents the
REIT has filed with the SEC for more complete information about the REIT and
this offering. You may get these documents for
free
by
visiting
EDGAR
on
the
SEC
website
at
SEC.gov
or
at
IncomeTrust.com. The information herein does not supplement or revise any information in the REIT's public filings made
with the U.S. Securities & Exchange Commission. To the extent information herein conflicts
with the prospectus, as supplemented, the information in the public filings shall govern. This piece is for general information purposes only and does not constitute legal, tax, investment or
other professional advice on any subject matter. Information provided is not all-inclusive
and should not be relied upon as being all-inclusive.
This presentation may include forward-looking statements. Forward-looking statements are based
on current expectations and may be identified by words such as “believes,”
“expects,” “may,” “could” and terms of similar substance, and
speak only as of the date made. Actual results could differ materially from those expressed or
implied in the REIT’s forward-looking statements. Important factors, among others,
that could cause the REIT's actual results to differ materially from those in its forward-looking
statements include those identified in the Risk Factors described below. Investors should not
place undue reliance on forward-looking statements. The REIT is under no obligation to, and
expressly disclaims any obligation to, update or alter its forward-looking statements,
whether as a result of new information, subsequent events or otherwise. An investment in the REIT is subject to significant risks, some of which are summarized below in the
“Risk Factors” section of this piece. See also, “Risk Factors”, in the
REIT’s prospectus for a more detailed description.
|
 Risk
Factors Investing in a non-traded REIT is a higher-risk, longer term investment and is not suitable
for all investors. Due to the risks involved in the ownership of real estate, there is no
guarantee of any return on investment. The shares may lose value or investors could lose their
entire investment. The shares are not FDIC-insured, nor bank guaranteed. Non-traded REITs are illiquid, there is no public trading market for the shares. The REIT has no
obligation to list on any public securities market and does not expect to list the shares in
the near future. The REIT is obligated to pay substantial fees to its advisor, managing dealer, property manager and
their respective affiliates based upon agreements which have not been negotiated at arm’s
length, and some of which are payable based upon factors other than the quality of services.
These fees could influence their advice and judgment in performing services. In addition,
certain officers and directors of the advisor also serve as the REIT’s officers and
directors, as well as officers and directors of competing programs, resulting in conflicts of
interest. Those persons could take actions more favorable to other entities.
The REIT has made and it may continue to make distributions to its stockholders in the form of cash.
Cash distributions will cause the interests of later investors to be diluted as a result of the
distributions made to earlier investors. The REIT may make, or have made distributions to
investors from sources other than from its cash flows or funds from operations, such as from
borrowings and/or the proceeds of its public offering. To the extent the REIT pays cash
distributions from such sources, it will reduce the cash available for investment in properties
and other real estate-related assets, and lower investors’ overall return on investment. The REIT
has not established a limit on the extent to which it may use borrowings, or the proceeds of this
offering to pay distributions. There is no assurance that the REIT’s current distribution
rate will not change, or that it can be sustained at any level. The amount or basis of
distributions will be determined by and at the discretion of the REIT’s board of directors
and is dependent upon a number of factors, including but not limited, to expected and actual
net cash flow from operations, funds from operations, the REIT’s financial condition,
capital requirements, and avoidance of volatility of distributions.
|
 Risk
Factors If the REIT fails to maintain its qualification as a REIT for any taxable year, it will be subject to
federal income tax on taxable income at regular corporate rates. In such event, net earnings
available for investment or distributions would be reduced. The REIT has invested primarily in income-oriented commercial real estate and real
estate-related assets on a global basis with properties located in the United States and
Germany. An investment in the REIT’s shares may be subject to greater risk to the extent
that the REIT has limited diversification in its portfolio of investments. |
 Valuation Disclosures
Our share price is primarily based on the estimated net asset value per share value of our shares, but
is also based upon subjective judgments, assumptions and opinions which may or may not turn out
to be correct. Therefore, our share price may not reflect the amount that might be paid to you
for your shares in a market transaction. In determining our estimated net asset value per share, we primarily relied upon a valuation of our
portfolio of properties as of Dec. 31, 2014. Valuations and appraisals of our properties are
estimates of fair value and may not necessarily correspond to realizable value upon the sale of
such properties, therefore our estimated net asset value per share may not reflect the amount
that would be realized upon a sale of each of our properties. We may not perform a subsequent calculation of our net asset value per share for our shares,
therefore, you may not be able to determine the net asset value of your shares on an ongoing
basis. This valuation represents the estimated net asset value per share at a snapshot in time and will
likely change over the Company's lifecycle. The estimated net asset value per share does not
necessarily represent the amount an investor could expect to receive if the Company were to
list its shares or liquidate its assets, now or in the future. The estimated net asset value
per share is only an estimate and is based on a number of assumptions and estimates which may
not be complete. CBRE Cap, the independent valuation firm, made numerous assumptions with
respect to industry, business, economic and regulatory conditions, all of which are subject to
changes beyond the control of CBRE Cap or the Company. CBRE Cap is not responsible for our
estimated net asset value per share as of Dec. 31, 2014, and did not participate in the determination of
the offering price of our shares. Throughout the valuation process, the valuation committee, our
advisor and senior members of management reviewed, confirmed and approved the processes and
methodologies and their consistency with real estate industry standards and best practices. |
 Global Income Trust
Global Income Trust is a non-traded real estate investment trust (REIT)
strategically designed to acquire and operate a diverse portfolio of
income-oriented commercial real estate and commercial real estate-
related assets.
1
1
There is no assurance these objectives will be met.
6 |
 Highlights
Commenced public offering April 2010
Commenced operations October 2010
Closed offering April 23, 2013
Raised approximately $83.7 million in equity since initial offering
Invested in nine assets
Four properties in the United States
Five properties in Germany
Assets Held-for-Sale
Five German assets
Distribution Policy, Distribution Reinvestment Plan, Redemption Plan
Distribution Policy –
cash only distributions beginning May 2013
Distribution Reinvestment Plan (DRP) terminated as of April 2013
Redemption Plan suspended as of April 2013
Completed independent valuation of portfolio as of December 31, 2014
7 |
 Potential Sale of German Portfolio
Entered Share Purchase Agreement December 29, 2014
Five Properties Located in Germany
94.9% of equity interests being sold
Acquisition price: €18.3 million before acquisition costs
Includes equity and approximately €10.9 million third party debt
Proceeds to Global Income Trust €
7.7 million before transaction costs
Global Income Trust retains 5.1% equity interest in the portfolio
Expected Closing: January 30, 2015
Purchaser: German Retail Income 4 S.á.r.l., and
German Retail Income 2 S.á.r.l.
8 |
 Estimated Net Asset Value (“NAV”)
Consistent with methodologies prescribed by IPA
Valuation
Guidelines
1
Individual MAI property appraisals on U.S. properties (no
enterprise/portfolio adjustments)
Use of independent investment banking firm
Engaged CBRE Capital Advisors, Inc. (“CBRE Cap”), an independent
investment banking firm as valuation expert
Disclosure of key assumptions & methodology
Utilized discounted cash flow method for wholly owned U.S.
properties
Range provided by stressing key assumptions
Discount rates, terminal capitalization (“terminal cap”) rates
Provided estimate of value as of December 31, 2014
1
There is no assurance that the IPA Guidelines are acceptable to FINRA or under
ERISA for compliance with reporting requirements.
9 |
 Methodology
The Company’s real estate properties were categorized into two
classes:
1) Wholly owned U.S. Assets (4 properties)
2) Wholly owned German Assets (5 properties)
10
Valuation based on unlevered, ten year (expected holding period)
discounted cash flow analysis for each property from actual cash
flow analysis for each property, deducting lease-up discounts and
deferred maintenance, where applicable
Terminal capitalization rate was used to calculate terminal value
(stabilized NOI/terminal capitalization rate) of the assets at
stabilization
Terminal capitalization rate sourced from MAI appraisals and vary by
location, asset quality and supply/demand metrics
Utilized purchase price within Share Purchase Agreement as the
portfolio’s asset value translated at Dec. 31, 2014 FX rate
|
 Valuation Summary
CBRE Cap created a valuation range by varying the discount rate
utilized and the terminal cap rate of each wholly owned U.S. real
estate asset
The range was set at 80bps on the discount rate and 80bps on
the terminal capitalization rate of each asset
Represents an approximate +/-
5% sensitivity on the discount
rate and terminal cap rate ranges as directed by the IPA
guidelines
CBRE Cap utilized a December 31, 2014, share count of 8,257,410
CBRE Cap Valuation (discount and terminal cap rates based on
CBRE Appraisals)
Weighted avg. discount rate: 8.47%
Weighted avg. terminal capitalization rate: 8.07%
11 |
 Estimated NAV Per Share Build-Up
Table of Value Estimates for Components of Net Asset Value
(as of Dec. 31, 2014)
Value
($ in 000’s)
Per Share
Present Value of U.S. Assets
$103,887
$12.58
Purchase
Price
from
SPA
for
German
Assets
1
$ 22,502
$2.73
Cash
and
Other
Assets
2
10,108
$1.22
Fair
Market
Value
of
Debt
3
(72,168)
($8.74)
Accounts Payable and Other Liabilities and
Accrued Expenses
(2,957)
($0.36)
Estimated
NAV
4
$ 61,373
$7.43
12
1
Based on purchase price from SPA for Germany assets of €18.6 million converted
to $22.5 million based on 1.21x EURO/US exchange rate as of Dec.31,
2014. 2
Based on the Company’s preliminary balance sheet as of Dec. 31, 2014.
3
4
The estimated NAV per share is a snapshot in time and is not necessarily indicative of the value the
company or stockholders may receive if the company were to list its shares or liquidate its
assets, now or in the future. Debt amount based on management’s estimate of the fair market value of mortgages and other notes
payable under GAAP as of Dec. 31, 2014. |
 Re-pricing of Shares
On January 13, 2015, the Board determined an estimated NAV per
share of $7.43 as of December 31, 2014
Distribution Policy
There is no anticipated change in the distribution policy at this time.
Annualized distribution rate per share of common stock of 6.5%, based
on a 365 days calendar year, and a $10.00 per share offering price.
13 |
 Looking Ahead
Continue to engage SunTrust Robinson
Humphrey, Inc. as financial advisor on possible
strategic alternatives
14 |
 For
More Information Investors
To obtain additional information about Global Income Trust,
please consult your Financial Advisor or visit IncomeTrust.com.
Financial Professionals
For more information about Global Income Trust, please contact
our managing dealer, CNL Securities, Member FINRA/SIPC at
866-650-0650 or CNLSecurities.com.
15
This is not an offer. Dissemination to investors is prohibited. Investments in
non-traded real estate investment trusts (REITs) are subject to significant risks. These
risks include limited operating histories, reliance on the advisors, conflicts of interests, use of leverage, payment of
substantial fees to the advisors and their affiliates, illiquidity and liquidations at less than the
original amounts invested. © 2015 CNL Global Growth Advisor, LLC. All Rights Reserved. CNL® and the Squares Within
Squares design trademarks are used under license from CNL Intellectual Properties, Inc. |
 Questions & Answers
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