Attached files
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| 8-K - 8-K - Steadfast Apartment REIT, Inc. | a8kestvaluepersharepresent.htm |
Steadfast Apartment REIT, Inc.
Valuation
and Portfolio Update
As of
December 31, 2016
Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
The information contained herein should be read in conjunction with, and is qualified by, the information in the Steadfast
Apartment REIT, Inc. ("Steadfast Apartment REIT” or the “Company”) Annual Report on Form 10-K for the year ended
December 31, 2016, filed with the Securities and Commission Exchange (the "SEC") on March 17, 2017 (the "Annual Report"),
including the "Risk Factors” section contained in the Annual Report.
Forward-Looking Statements
Certain statements contained herein may be deemed to be forward-looking statements within the meaning of the Federal
Private Securities Litigation Reform Act of 1995. Steadfast Apartment REIT intends that such forward-looking statements be
subject to the sale harbors created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These statements include statements regarding the intent, belief or current expectations of
Steadfast Apartment REIT and members of its management team. as well as the assumptions on which such statements are
based, and generally are identified by the use of words such as "may," "will," "seeks," "anticipates, " "believes," "estimates,"
"expects," "plans," "intends," "should," or similar expressions. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date they are made. Steadfast Apartment REIT undertakes no
obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated
events or changes to future operating results over time, unless required by law. Such statements are subject to known and
unknown risks and uncertainties which could cause actual results to differ materially from those contemplated by such forward-
looking statements. Steadfast Apartment REIT makes no representation or warranty (express or implied) about the accuracy of
any such forward-looking statements. These statements are based on a number of assumptions involving the judgment of
management. The appraisal methodology for Steadfast Apartment REIT's real estate properties was performed by CBRE
Capital Advisors, Inc., an independent, third-party real estate valuation firm (“CBRE"). Even small changes to the assumptions
used to determine the estimated value per share could result in significant differences in the appraised values of Steadfast
Apartment REIT's real estate properties and the estimated value per share. Actual events may cause the value and returns on
Steadfast Apartment REIT's investments to be less than that used for purposes of Steadfast Apartment REIT's estimated value
per share.
Forward-Looking Statements
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Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
Portfolio Overview
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As of December 31, 2016
Total Capital Raised (including DRP): $742.5 Million
Total Acquisitions (Purchase Price): $1.499 Billion
Total Number of Assets: 34 Assets
Total Rental Units: 11,601
States: 11
Total Leverage (loan to value): 58%
Occupancy: 92%
Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
Third-Party Valuation
• Steadfast Apartment REIT engaged CBRE to perform appraisals of the Company’s real estate
properties and, through an affiliate, to provide a range of the estimated value per share of the
Company’s common stock (the "EVPS Range''). CBRE utilized its appraisals of Steadfast Apartment
REIT's real estate properties and valuations performed by Steadfast Apartment REIT’s external
advisor, Steadfast Apartment Advisor, LLC (the “Advisor”) of the REIT's cash, other assets, mortgage
debt and other liabilities, which are disclosed in the Annual Report, to determine the EVPS Range.
• The estimated value per share is based on the estimated value of the REIT's assets less the estimated
value of the REIT's liabilities divided by the number of shares outstanding, all as of December 31,
2016. The estimated value per share approximates the mid-range value of the EVPS range as
indicated in CBRE's valuation report, was recommended by the Advisor and is based on CBRE's
appraisals and the Advisor's valuations.
• CBRE primarily relied on the discounted cash flow analysis to appraise the real estate properties, but
used and considered other methods, including a direct capitalization method and a sales comparison
approach.
• Steadfast Apartment REIT expects to continue updating the estimated value per share annually,
utilizing an independent valuation firm.
Valuation Information
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Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
Valuation Summary
$1,314,950,000
$31,386,377
$20,223,062
$1,366,559,439
$827,207,564
$25,960,229
$853,167,793
$513,391,646
Estimated Values as of December 31, 2016 and December 31, 2015
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A
sset
s
Lia
b
ilitie
s
Real Estate
Cash
Other Assets
Total Assets
Mortgage Debt
Other Liabilities
Total Liabilities
Net Equity
Estimated Value
As of 12/31/2016
$1,690,995,000
$26,768,318
$16,947,745
$1,734,711,063
$961,382,904
$35,342,299
$996,725,203
$737,985,860
As of 12/31/2015
Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
2016 Change in Net Assets
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Beginning Net Assets December 31, 2015
Real Estate
Acquisitions2
Capital Expenditures
Real Estate Appreciation3
Debt
New Mortgage Debt from Acquisitions
Increase in Line of Credit Balance
Debt Mark-to-Market
Other
Other Net Assets & Liabilities
Ending Net Assets December 31, 2016
1 During 2016 shares outstanding increased by 14.2 million shares from 35.5 million shares to 49.7 million shares.
2 Based on contract price & appraised value.
3 Based on change in real estate less acquisitions and capital expenditures.
2016 Change in Net Assets1
(all $ values in millions)
$513.4 M
$261.5 M
$52.9 M
$61.6 M
($89.0 M)
($35.0 M)
($10.2 M)
($17.2 M)
$738.0 M
Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
Valuation History
• Primary initial public offering price: $15.00 per share (proceeds before
expenses assuming full commissions and fees are paid: $13.22)
• The REIT ceased offering shares on March 24, 2016
• Estimated value per share as of December 31, 2015: $14.46
• Estimated value per share as of December 31, 2016: $14.85
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Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
• Distribution History:
• Average annual distributions per share from April 2014 when distribution
began to accrue through December 31, 2016:
$0.90/share on an annualized basis
• Cumulative distributions per share range from $0.78/share for late
investors to $2.48/share for early investors1
• Current annualized distribution amount of $0.90/share or an annual yield
of 6.00% on shares purchased at $15.00
Distribution History & Current Yield
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1 Early investor investment date is as of the beginning of the first month of distributions in April 2014 and late investor investment date is as of the beginning of the
last month of the public offering in March 2016.
Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
Steadfast Apartment REIT provides an estimated value per share to assist broker-dealers that participated in its public offerings in
meeting their customer account statement reporting obligations. This valuation was performed in accordance with the provisions of and
comply with the IPA Valuation Guidelines. As with any valuation methodology, the methodologies used are based upon a number of
estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive
a different estimated value per share of Steadfast Apartment REIT's common stock, and this difference could be significant. The
estimated value per share is not audited and does not represent the fair value of the REIT's assets less the fair value of the REIT's
liabilities according to GAAP.
Accordingly, with respect to the estimated value per share, Steadfast Apartment REIT can give no assurance that:
• a stockholder would be able to resell shares at this estimated value;
• a stockholder would ultimately realize distributions per share equal to the Company’s estimated value per share upon
liquidation of the Company’s assets and settlement of its liabilities or a sale of the Company;
• the Company’s shares of common stock would trade at the estimated value per share on a national securities exchange;
• another independent third-party appraiser or third-party valuation firm would agree with the Company’s estimated value per
share; or
• the methodology used to determine the Company’s estimated value per share would be acceptable to FINRA or for
compliance with ERISA reporting requirements.
The estimated value per share as of December 31, 2016 is based on the estimated value of Steadfast Apartment REIT's assets less the
estimated value of the REIT's liabilities divided by the number of shares outstanding, all as of December 31, 2016. The value of Steadfast
Apartment REIT's shares will fluctuate over time in response to developments related to individual assets in its portfolio and the
management of those assets, in response to the real estate and finance markets and due to other factors. The estimated value per share
does not reflect a discount for the fact that Steadfast Apartment REIT is externally managed, nor does it reflect a real estate portfolio
premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account
estimated disposition costs and fees for real estate properties, debt prepayment penalties that could apply upon the prepayment of
certain of the REIT's debt obligations or the impact of restrictions on the assumption of debt. Steadfast Apartment REIT currently expects
to utilize an independent valuation firm to update the estimated value per share as of December 31, 2017.
Stockholder Performance
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Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
Stockholder Performance
Hypothetical Performance of Early and Late Investors
Estimated Value Per Share Plus Cumulative Distributions Per Share
Estimated Value Per Share As of
December 31, 2016
Cumulative Distributions Per Share
Received through December 31, 2016
Sum of Estimated Value Per Share
and Cumulative Distributions Per Share
Received through December 31, 2016
Early Investor: Invested When Distributions Began to Accrue
(April, 2014)
$14.85 $2.48 $17.33
Late Investor: Invested at Close of Public Offering
(March 2016)
$14.85 $0.75 $15.60
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Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
Stockholder Performance
Hypothetical Performance of Early and Late Investors1
Estimated Value Per Share Plus Cumulative Distributions Per Share
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1 Total return is defined as share value reported in accordance with IPA Guidelines as a going concern (before sales transaction costs, disposition fees and loan
prepayment penalties) plus cumulative distributions per share assuming all distributions were paid in cash (i.e., no dividend reinvestment). Steadfast Apartment
REIT, Inc. was externally valued as of calendar year end 2015 and 2016. Prior to valuation the reported share value is the offering price. Early investor investment
date is as of the beginning of the first month of distributions in April 2014 and late investor investment date is as of the beginning of the last month of the public
offering in March 2016.
$0.68 $1.58
$2.48
$15.00
$14.46
$14.85
$15.68 $16.04
$17.33
2014 2015 2016
Early Investor
Cumulative Distributions Per Share Estimated Value Per Share
$0.75
$14.85
$15.60
2016
Late Investor
Cumulative Distributions Per Share Estimated Value Per Share
Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
2017 Goals & Objective
• Undertake renovations at certain assets to create additional
stockholder value
• Maintain portfolio occupancy
• Increase portfolio net cash flow
• Grow portfolio NAV
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Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
Stockholder Communication
• 1099’s sent on January 26, 2017 showing 2.5% taxable distribution
• Account statements will reflect new estimated value per share of $14.85 beginning
with March 2017 statements mailed in April 2017
• Stockholder letter included with Annual Report will be mailed in April
explaining new estimated value per share
• Estimated value per share visible through DST will be updated to show new
estimated value
• While Steadfast cannot control reporting of custodians, we believe (based on
inquiries) they will report the new estimated value per share.
- It's possible that some custodians will take longer to report the estimated value per
share than others and also that some may first require reporting of the estimated
value per share from a third-party data provider.
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Securities Distributed by Steadfast Capital Markets Group, LLC Member FINRA & SIPC
Thank you!
If you have any questions,
contact your financial advisor
or contact us at:
Steadfast Capital Markets Group, LLC
18100 Von Karman, Suite 500
Irvine, CA 92612
(877) 525-7264
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