Attached files
| file | filename |
|---|---|
| EX-99.3 - EXHIBIT 99.3 - Steadfast Income REIT, Inc. | ex993sirvideoscript.htm |
| EX-99.2 - EXHIBIT 99.2 - Steadfast Income REIT, Inc. | ex992stockholderletter.htm |
| EX-99.1 - EXHIBIT 99.1 - Steadfast Income REIT, Inc. | ex-991quarterlyxsir1231201.htm |
| 8-K - 8-K - Steadfast Income REIT, Inc. | a20180329form8-kreearnings.htm |
Steadfast Income REIT, Inc.
Valuation
and Portfolio Update
as of December 31, 2017
The information contained herein should be read in conjunction with, and is qualified by, the information in the Steadfast Income REIT, Inc.
(“Steadfast Income REIT”, “SIR” or the “Company”) Annual Report on Form 10-K for the year ended December 31, 2017, filed with the
Securities and Commission Exchange (the "SEC") on March 29, 2018 (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 Income REIT intends that such forward-looking statements be subject to the safe harbors created
by Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements regarding the intent, belief or
current expectations of Steadfast Income 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 Income 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 Income 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 Income REIT's real estate properties was performed by
CBRE Capital Advisors, Inc., an independent, third-party real estate valuation firm (“CBRE") according to the appraisal methodology
approved by the Company’s Board of Directors to assist the Company’s Board of Directors in establishing an estimated value of the
Company’s common stock. Such appraisal methodology was addressed solely to the Company’s Board of Directors and is based on
certain assumptions and limitations. 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 Income REIT's real estate properties and the estimated value per share.
Actual events may cause the value and returns on Steadfast Income REIT's investments to be less than that used for purposes of
Steadfast Income REIT's estimated value per share.
Forward-Looking Statements
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As of December 31, 2017
Total Acquisitions (Purchase Price): $1.21 Billion
Wholly-Owned Assets: 48 Assets
Number of Homes: 12,156
States: 10
Total Leverage (loan to value): 58%
Occupancy: 94%
Portfolio Overview
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Third-Party Valuation
• Steadfast Income REIT engaged CBRE to provide property-level and aggregate valuation analysis on the Company’s
real estate properties and 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 Income REIT 's real estate properties and valuations
performed by Steadfast Income REIT’s external advisor, Steadfast Income Advisor, LLC (the “Advisor”), of the
Company'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 Company's assets less the estimated value of the
Company's liabilities divided by the number of shares outstanding, all as of December 31, 2017. 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 and/or its affiliates primarily relied on a discounted cash flow analysis method to appraise the real estate
properties, but used and considered other methods, including a direct capitalization and a sales comparison approach.
• Steadfast Income REIT expects to continue updating the estimated value per share annually, utilizing an independent
valuation firm.
• CBRE and its affiliates are not responsible for the determination of the estimated value per share of the Company.
CBRE made numerous assumptions and its valuation materials were not addressed to the public and should not be
relied upon by any other person. CBRE’s valuation report does not constitute a recommendation by CBRE to purchase
or sell any shares in the Company and should not be represented as such.
Valuation Information
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Estimated $ Values as of December 31, 2017 December 31, 2016
Valuation Summary
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A
sset
s
Lia
b
ilitie
s
$2,014,340,000
$66,224,027
$65,175,883
$2,145,739,910
$1,197,015,105
$54,790,262
$6,540,119
$1,258,345,486
$887,394,424
Real Estate1
Cash
Other Assets
Total Assets
Mortgage Debt
Other Liabilities
Incentive fee2
Total Liabilities
Net Equity
$1,527,895,815
$171,228,485
$39,863,907
$1,738,988,207
$878,382,692
$39,507,167
$2,429,119
$920,318,978
$818,669,229
1 Real estate value at year end 2017 includes the value of SIR’s 10% interest in a joint venture reported under the equity accounting method.
2 Consistent with IPA guidelines, the reported incentive fee is a hypothetical estimate of the fee that would be paid to the Advisor if the portfolio was
liquidated at year end. Payment would only occur if the portfolio was actually liquidated as defined in the Company’s operating documents.
Beginning Net Assets December 31, 2016
Real Estate2
Mortgage Debt3
Other Changes, Net4
Ending Net Assets December 31, 2017
2017 Change in Net Assets
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1 During 2017, shares outstanding decreased by 0.7 million shares from 76.2 million shares to 75.5 million shares.
2 Change in real estate includes reduction from the sale of assets, increase in value of assets and $16.4 million of capital expenditures. SIR sold a 90% interest in
12 assets and contributed the remaining 10% to the joint venture with Blackstone Real Estate Income Trust, Inc. in November 2017 in exchange for a 10% interest
in the joint venture..
3 Change in mortgage debt includes pay off of debt related to asset sales, principal payments, proceeds from refinancing and debt mark-to-market.
4 Other changes are primarily attributable to the increase in cash from sale of assets during 2017.
2017 Change in Net Assets1
(all $ values in millions)
$887.4 M
($486.5) M
$318.6 M
$99.2 M
$818.7 M
$11.65
($6.20)
$4.08
$1.31
$10.84
NAV Per Share
Offering Price History
Estimated value per share as of December 31, 2017:
$10.84
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Time Period
Public Offering
Price Per Share
Distribution Reinvestment Plan
Price Per Share
July 13, 2010 –
September 9, 2012
$10.00 $9.50
September 10, 2012 –
December 20, 20132
$10.24 $9.73
Steadfast Income REIT’s estimated value per share has consistently been above
the offering prices in the public offering.1
1 SIR’s estimated value per share was first determined as of December 31, 2014. The estimated value per share is
determined in accordance with IPA Guidelines. See “Stockholder Performance.”
2 Distribution reinvestment plan price per share was available until October 31, 2014.
• Distribution History:
• Cumulative distributions per share range from $2.93/share for late investors to
$5.29/share for early investors1
• As of April 1, 2018, the annualized distribution is $0.61/share or an annual
yield of: 2
• 6.00% on shares purchased at $10.24
• 6.14% on shares purchased at $10.00
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 August 2010 and late investor investment date is as of the beginning of
the last month of the public offering in December 2013.
2 In March 2018, the board approved a daily distribution rate equal to 6.00% annualized, based on a purchase price of $10.24 per share, to be effective April 1,
2018. Prior to that date the distribution rate was 7.00% annualized, based on a purchase price of $10.24 per share.
Steadfast Income 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 Income 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 Company's assets less the fair value of the Company's liabilities according
to GAAP.
Accordingly, with respect to the estimated value per share, Steadfast Income REIT can give no assurance that:
• a stockholder would be able to resell his or her shares at the estimated value per share;
• 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, 2017, is based on the estimated value of Steadfast Income REIT's assets less the
estimated value of SIR’s liabilities divided by the number of shares outstanding, all as of December 31, 2017. The value of Steadfast Income
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 Income 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 Company's debt obligations or the
impact of restrictions on the assumption of debt. Steadfast Income REIT currently expects to utilize an independent valuation firm to update
the estimated value per share as of December 31, 2018.
Stockholder Performance
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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, 2017
Cumulative Distributions Per Share
Received through December 31, 2017
Sum of Estimated Value Per Share
and Cumulative Distributions Per Share
Received through December 31, 2017
Early Investor: Invested When Distributions Began to Accrue
(August 2010)
$10.84 $5.29 $16.13
Late Investor: Invested at Close of Public Offering
(December 2013)
$10.84 $2.93 $13.77
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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 Income REIT
determined an estimated value per share as of September 10, 2012, and as of each calendar year end from 2014 through 2017. 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 August 2010 and late investor investment
date is as of the beginning of the last month of the public offering in December 2013.
$0.29 $0.99 $1.70
$2.42 $3.13
$3.85 $4.57
$5.29
$10.00
$10.00
$10.24
$10.24
$10.35
$11.44
$11.65 $10.84
$10.29
$10.99
$11.94
$12.66
$13.48
$15.29
$16.22 $16.13
2010 2011 2012 2013 2014 2015 2016 2017
Early Investor
Cumulative Distributions Per Share Estimated Value Per Share
$0.06 $0.78 $1.49 $2.21
$2.93
$10.24
$10.35
$11.44
$11.65 $10.84
$10.30
$11.13
$12.93
$13.86 $13.77
2013 2014 2015 2016 2017
Late Investor
Cumulative Distributions Per Share Estimated Value Per Share
2018 Goals & Objectives
• Maintain portfolio occupancy
• Actively manage portfolio to increase net cash flow and NAV
• Invest cash on hand to reposition SIR in stronger markets and
assets, pay down debt or make capital improvements
• $100 million tender offer at $9.00 per share
• Pursue incremental capital markets transactions to offer periodic
monetization events for investors and growth capital for SIR
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Stockholder Communication
• 1099’s sent in January 2018
• Account statements will reflect new estimated value per share of $10.84 beginning
with March 2018 statements mailed in April 2018
• 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 Income REIT 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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Thank you!
If you have any questions,
contact your financial advisor
or contact us at:
STIRA Capital Markets Group, LLC
18100 Von Karman, Suite 500
Irvine, CA 92612
(877) 525-7264
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