Exhibit 99.2
| SILVER BAY REALTY TRUST CORP. Fourth Quarter 2012 Earnings Presentation |
| FORWARD-LOOKING STATEMENTS This presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “target,” “assume,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results. Factors that could cause actual results to differ include: adverse economic or real estate developments in Silver Bay’s target markets; defaults on, early terminations of or non-renewal of leases by residents; difficulties in identifying properties to acquire and completing acquisitions; increased time and/or expense to gain possession and renovate properties; Silver Bay’s failure to successfully operate acquired properties; the Company’s ability to obtain financing arrangements; general volatility of the markets in which we participate; interest rates and the market value of Silver Bay’s target assets; the impact of changes in governmental regulations, tax law and rates, and similar matters. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Silver Bay does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these and other risk factors is contained in Silver Bay’s most recent filings with the Securities and Exchange Commission. All subsequent written and oral forward looking statements concerning Silver Bay or matters attributable to Silver Bay or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above. |
| 3 IPO MARKED MILESTONE FOR SILVER BAY Completed IPO of 15.2 million common shares for net proceeds of $263 million, inclusive of over-allotment Simultaneously, combined portfolios of single-family homes owned by Two Harbors(1) and Provident(2) Launched with diverse portfolio Trading on NYSE provides investors liquidity and exposure to the Single-Family (1) Silver Bay acquired Silver Bay Property Investment LLC (formerly Two Harbors Property Investment LLC), a wholly owned subsidiary of Two Harbors Investment Corp. We refer to Silver Bay Property Investment LLC as our Predecessor. (2) Silver Bay acquired five limited liability companies managed by Provident Real Estate Advisors LLC that we refer to as the Provident Entities. |
| 4 CORE STRATEGY Provide high quality rental homes with best-in-class customer service to create a long-term sustainable business Achieve attractive total return profile combining capital appreciation with rental cash flow yields Properties acquired at significant discounts to replacement cost Estimate mid- to high single digit annual capital appreciation over the next five to seven years for most of our markets Inflation protection Institutionalize a highly fragmented industry SFR market is large Institutional operators estimated to be 2-3% of the SFR market Large opportunity to gain market share through better scale, service and cost of capital Capture efficiencies of scale as business grows Expand operating platform and generate efficiencies Establish a brand as the preferred manager within the single-family rental community Leverage G & A, reduce per unit operating expenses and lower cost of capital |
| 5 CURRENT HOUSING MARKET ENVIRONMENT Silver Bay target markets remain attractive for acquisition and rental Housing prices remain cheap to replacement cost and affordability metrics 2012 housing prices increased across all Silver Bay target markets Fourth quarter 2012 housing price indices roughly flat to low single digit appreciation Relative strength in the distressed/REO segment Housing supply is large and shadow inventory remains elevated Demographic factors highly favorable to demand; household formations increased to ~1 million(6) on an annualized basis New building activity increased in recent months, but is still historically low Anticipate upward pressure on housing prices as demand exceeds supply Price reversion to replacement cost favorable to total return profile (1) or county equivalents that have at least one urban core area of at least a 50,000-person population, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties. (2) Peak refers to highest historical home prices in a particular market. Trough refers to lowest home prices in a particular market since the peak. (3) MSA used for Northern California is Fairfield-Vallejo, which most closely approximates the geographic area in which we purchase homes in Northern California. This MSA is comprised of Solano County and the most populous cities in the MSA are Vallejo, Fairfield, Vacaville, Suisun and Benicia. (4) MSA used for Southern California is Riverside-San Bernardino-Ontario. This MSA is comprised of Riverside and San Bernardino Counties and the most populous cities in the MSA are Riverside, San Bernardino, Fontana and Moreno. (5) MSA used for Southeast FL is Fort Lauderdale-Pompano Beach-Deerfield Beach, FL. (6) Source: U.S. Census Bureau as of January 29, 2013. MSA HOME PRICE APPRECIATION (1) SOURCE: CORELOGIC AS OF DECEMBER 31, 2012 MARKET HPA (Peak to Trough)(2) HPA (Peak to Current) HPA (Prior 12 months) HPA (Prior 3 months) Phoenix, AZ -53% -41% 23% 3% Tucson, AZ -43% -37% 9% -1% Northern CA(3) -61% -55% 14% 5% Southern CA(4) -54% -48% 11% 4% Jacksonville, FL -41% -34% 8% 4% Orlando, FL -56% -47% 11% 2% Southeast FL(5) -54% -47% 9% 1% Tampa, FL -49% -44% 6% 1% Atlanta, GA -34% -27% 6% -1% Charlotte, NC -17% -12% 5% -1% Las Vegas, NV -60% -54% 15% 3% Columbus, OH -19% -13% 5% -1% Dallas, TX -15% -9% 4% -% Houston, TX -14% -6% 4% 1% NATIONAL -33% -27% 8% -% |
| 6 2013 BUSINESS PRIORITIES Growth through continued acquisitions in current markets, expansion into new markets and acquiring portfolios $40-50 million per month, or ~300-400 properties monthly Over 4,000 properties in portfolio or under contract as of February 15, 2013 Phoenix, Atlanta, Tampa and Northern California comprise ~77% of acquisitions for fourth quarter 2012 Recently expanded into Jacksonville, Southeast Florida, Houston and Columbus Expand operational capacity and efficiency in stabilizing properties Stabilized 542 properties in fourth quarter 2012 Stabilized additional 300 properties since the first of the year(1) Establish credit facility and pursue other financing alternatives Anticipate securing financing agreement in the near future Plan to prudently apply leverage as portfolio grows QUARTERLY ACQUISITIONS PACE The above chart shows the pace of quarterly acquisitions by source of Predecessor and the Company for 2012 and does not reflect accepted purchase agreements that have not yet closed. Fourth quarter acquisition numbers exclude the acquisition of the 881 properties owned by the Provident Entities. "Broker" refers to a purchase of a single property directly from the owner, including REO, short sales and properties listed on a multiple listing service. "Auction" refers to properties purchased at trustee or judicial auctions. "Bulk" refers to purchases of more than one property in a single sale directly from the owner, often an investor group, bank, financial institution or governmental agency, and may include future acquisitions of entire legal entities holding single-family properties. (1) Number of stabilized properties in the completed during the period between January 1, 2013 and February 15, 2013. 0 200 400 600 800 1,000 1,200 Q1-2012 Q2-2012 Q3-2012 Q4-2012 Bulk Auction Broker |
| 7 OPERATIONAL VISION Develop a national Silver Bay brand by creating standardized product across all markets Establish an efficient infrastructure leveraging economies of scale Standardized, high quality product begins with renovation process Expanded and restructured project management team to accommodate rapid pace of acquisitions Adopted four point renovation methodology |
| 8 PORTFOLIO OVERVIEW AS OF DECEMBER 31, 2012 Phoenix 29% Tampa 24% Atlanta 18% Northern CA 8% Las Vegas 6% Tucson 5% Southern CA 4% Orlando 3% Charlotte(1) 2% Dallas(1) 1% AGGREGATE PORTFOLIO Total Number of Properties(2) 3,405 Properties Leased 1,705 Occupancy Rate 50% STABILIZED PROPERTIES Number of Stabilized Properties(3) 1,779 Properties Leased 1,705 Occupancy Rate 96% PROPERTIES OWNED AT LEAST SIX MONTHS Number of Properties Owned Six Months or Longer 1,583 Properties Leased 1,312 Occupancy Rate 83% PROPERTIES BY MARKET (1) As of December 31, 2012, there were no properties owned six months or longer in these markets. (2) A significant portion of the properties were purchased within the last six months and are still undergoing stabilization. Total number of vacant properties includes properties in the process of stabilization as well as those available for lease. (3) Silver Bay defines stabilized properties as those that the Company has acquired, renovated, marketed and leased for the first time. Properties acquired with in-place leases are considered stabilized. |
| 9 FOURTH QUARTER 2012 FINANCIAL PRESENTATION Formation transactions combined singlefamily residential portfolios of Provident and Two Harbors Two Harbors(1) considered the predecessor Balance sheet recorded at carryover basis Operations recorded since February 2012 Provident assets deemed to be acquired by Silver Bay Assets and liabilities recorded at fair value Operations after formation on December 19, 2012 Therefore, results only include 12 days of Provident and a full year of the Predecessor, which was in ramp-up mode (1) Silver Bay acquired Silver Bay Property Investment LLC (formerly Two Harbors Property Investment LLC), a wholly owned subsidiary of Two Harbors Investment Corp. We refer to Silver Bay Property Investment LLC as our Predecessor. |
| 10 FOURTH QUARTER 2012 FINANCIAL RESULTS Reported $2.8 million in revenue, driven primarily by properties in Phoenix, Tampa and Atlanta Net loss of $3.2 million or ($0.04) per diluted share First quarter 2013 will provide more meaningful results Cash and cash equivalents totaled $228.1 million, plus $19.7 million in escrow deposits and proceeds of $34.8 million from over-allotment |
| 11 INVESTOR RELATIONS CONTACTS ANH HUYNH | Director of Investor Relations ahuynh@silverbaymgmt.com MARIA COZINE | Investor Relations Associate mcozine@silverbaymgmt.com SILVER BAY REALTY TRUST CORP. 601 Carlson Parkway | Suite 250 Minnetonka | MN | 55305 952.358.4400 Investors@silverbaymgmt.com CORPORATE HEADQUARTERS |
| 12 APPENDIX |
| 13 PORTFOLIO OF SINGLE-FAMILY PROPERTIES The following table provides a summary of of single-family properties as of December 31, 2012. Market Number of Properties Aggregate Cost Basis(1) (thousands) Average Cost Basis Per Property (thousands) Average Age(2) (in years) Average Square Footage Number of Leased Properties Number of Vacant Properties(3) Average Monthly Rent for Leased Properties(4) Phoenix 1,002 $ 127,308 $ 127 17.9 1,717 592 410 $ 1,041 Tampa 816 99,779 122 21.9 1,675 401 415 1,261 Atlanta 607 67,674 111 14.9 2,089 313 294 1,191 Northern CA(5) 256 43,323 169 40.6 1,418 113 143 1,457 Las Vegas 213 27,255 128 13.4 1,742 77 136 1,151 Tucson 186 14,334 77 38.8 1,343 112 74 828 Southern CA(6) 149 18,161 122 38.6 1,364 13 136 1,208 Orlando 90 13,001 144 18.0 1,889 71 19 1,318 Charlotte 60 7,181 120 9.7 2,035 12 48 1,058 Dallas 26 2,546 98 17.8 1,784 1 25 1,250 Totals 3,405 $ 420,562 $ 124 21.7 1,727 1,705 1,700 $ 1,148 (1) Aggregate cost includes all capitalized costs, determined in accordance with GAAP, incurred through December 31, 2012 for the acquisition, stabilization, and significant post-stabilization renovations of properties, including land, building, possession costs and renovation costs. Aggregate cost does not include accumulated depreciation. At completion of the Formation Transactions, were recorded at an aggregated carryover net book value cost basis because Silver Bay Property rkesition subject to purchase accounting for accounting purposes. (2) As of December 31, 2012, approximately 29% of the properties in the combined portfolio were less than 10 years old, 27% were between 10 and 20 years old, 16% were between 20 and 30 years old, 15% were between 30 and 40 years old, 5% were between 40 and 50 years old, and 8% were more than 50 years old. (3) A significant portion of the properties were purchased within the last six months and are still undergoing stabilization. Total number of vacant properties includes properties in the process of stabilization as well as those available for lease. (4) Average monthly rent for leased properties was calculated as the average of the contracted monthly rent for all leased properties as of December 31, 2012. To date, rent concessions have been utilized on a limited basis and have not had a significant impact on ay have a greater impact by reducing the average monthly rent we receive from leased properties. (5) Northern California market currently consists of Contra Costa, Napa, Sacramento and Solano Counties. (6) Southern California market currently consists of Colton, Riverside and San Bernardino Counties. |
| 14 PORTFOLIO SUMMARY OF STABILIZED PROPERTIES AND THOSE OWNED SIX MONTHS OR LONGER The following table summarizes properties and those owned six months or longer as of December 31, 2012. STABILIZED PROPERTIES PROPERTIES OWNED AT LEAST SIX MONTHS Market Number of Stabilized Properties(1) Properties Leased Properties Vacant Occupancy Rate Average Monthly Rent for Leased Stabilized Properties(2) Properties Owned 6 Months or Longer Properties Leased Properties Vacant Occupancy Rate Average Monthly Rent for Properties Owned at Least 6 Months(3) Phoenix 648 592 56 91% $ 1,041 551 481 70 87% $ 1,030 Tampa 409 401 8 98% 1,261 426 359 67 84% 1,258 Atlanta 318 313 5 98% 1,191 302 243 59 80% 1,185 Northern CA 113 113 - 100% 1,457 52 35 17 67% 1,554 Las Vegas 81 77 4 95% 1,151 101 57 44 56% 1,155 Tucson 112 112 - 100% 828 78 76 2 97% 828 Southern CA 13 13 - 100% 1,208 21 10 11 48% 1,209 Orlando 72 71 1 99% 1,318 52 51 1 98% 1,357 Charlotte(4) 12 12 - 100% 1,058 - - - - - Dallas(4) 1 1 - 100% 1,250 - - - - - Totals 1,779 1,705 74 96% $ 1,148 1,583 1,312 271 83% $ 1,143 (1) We define stabilized properties as those that we have acquired, renovated, marketed and leased for the first time. Properties acquired with in-place leases are considered stabilized. (2) Average monthly rent for leased stabilized properties was calculated as the average of the contracted monthly rent for all stabilized properties as of December 31, 2012. To date, rent concessions have been utilized on a limited basis and have not had a significant impact monthly rent. If the use of rent concessions or other leasing incentives increases in the future, they may have a greater impact by reducing the average monthly rent we receive from leased properties. (3) Average monthly rent for properties owned at least six months was calculated as the average of the contracted monthly rent for all properties owned at least six months as of December 31, 2012. To date, rent concessions have been utilized on a limited basis and have not had a significant impact on monthly rent. If the use of rent concessions or other leasing incentives increases in the future, they may have a greater impact by reducing the average monthly rent we receive from leased properties. (4) As of December 31, 2012, there were no properties owned six months or longer in these markets. |
