EX-99.1 2 d517306dex991.htm EXHIBIT 99.1 Exhibit 99.1
Exhibit 99.1
COMPANY PRESENTATION
COMPANY PRESENTATION
APRIL 2013
APRIL 2013


JEFFREY FISHER, CEO
JEFFREY FISHER, CEO
COMPANY OVERVIEW & BUSINESS UPDATE
COMPANY OVERVIEW & BUSINESS UPDATE


Chatham Management Team
Chatham Management Team
Founder,
CEO
and
Chairman
of
Innkeepers
USA
Trust
(1994
2007)
Grew company from seven hotels at 1994 IPO to 74 hotels at sale in 2007
318% return (11.8% CAGR) versus 209% return for FTSE NAREIT Equity Lodging /
Resorts Index
Extensive lodging industry relationships
Significant ownership (3.4%) and investment (over $10 million) in Chatham Lodging Trust
Jeffrey Fisher (Chief Executive Officer and Chairman)
Partner of Addison Capital Advisors, a venture capital firm based in Memphis, TN
(2005 –
2006)
Vice
President
and
Chief
Accounting
Officer
of
RFS
Hotel
Investors
(2000
2004)
Dennis Craven (Chief Financial Officer and EVP)
Senior Vice President of The Kor Group, a leading owner and operator of luxury hotels
(2006 –
2009)
Oversaw $500 million of investments in 18 hotels
Peter Willis (Chief Investment Officer and EVP)
1
Chief Financial Officer and Executive Vice President of Innkeepers USA Trust (2006 – 2010)
Vice President of Acquisitions and Development for Innkeepers USA Trust (2001 – 2006)


Key Investment Highlights
Key Investment Highlights
Superior Select Service Operating Model
High Quality Hotel Portfolio in Attractive MSAs
Significant Embedded Growth and Attractive Acquisition Opportunities
Upside From Recently Completed Renovation / Upgrade Investments
Innkeepers Acquisition in 2011 Generating Strong Returns
Generating Strong Financial Results
Leading Common Dividend Yield
2


Successfully Executing Business Plan
Successfully Executing Business Plan
Acquired
20
hotels
for
over
$465
(1)
million
since
IPO
and
a
10.3%
interest
in
$1.1
billion
Innkeepers joint venture with Cerberus Capital Management
Premium brands (Residence Inn, Homewood Suites, Courtyard, Hampton)
58%
of
assets
in
major
markets
(New
York,
D.C.,
Boston,
and
Southern
California)
(1)
Attractive valuations with upside potential (estimated high-single to low-double digit cap rates)
Substantial pipeline of additional acquisition opportunities
Operating performance of hotels and joint venture exceeding expectations
Increased RevPAR 8.0% year-over-year for the year ended Dec. 31, 2012
RevPAR up approx. 7.6% year-over-year for the quarter ended Dec. 31, 2012
Significant
upside
potential
from
recently
completed
renovations
across
~70%
of
the
portfolio
Accessed capital markets to maintain financial flexibility and fund growth initiatives
Completed $53 million follow-on offering in January 2013
Upsized,
reduced
costs
and
extended
revolving
credit
facility
to
$105
million
(matures
Nov.
2015)
Delivering leading returns to shareholders
One
of
top
performing
lodging
REIT
stocks
in
2012
with
43%
increase
in
share
price
(2)
Announced
5%
increase
in
common
dividend
to
$0.84
per
share
in
FY
2013
(4.8%
yield)
(3)
Annual dividend has grown 20% since IPO in 2010
1.
Pro
forma
for
Houston,
TX
hotel
acquisition
on
February
6,
2013.
Based
on
percentage
of
total
acquisition
cost.
2.
Based on year-end closing stock price of $15.38 on December 31, 2012.
3.
Based on closing stock price of $17.56 as of March 27, 2013.
3


COMPANY STRATEGY & ACQUISITIONS
COMPANY STRATEGY & ACQUISITIONS
JEFFREY FISHER, CEO
JEFFREY FISHER, CEO


Chatham Strategy
Chatham Strategy
Focused on premium branded select service hotels
Strong brands in high barrier to entry markets delivers higher RevPAR and
market share than other select service hotels
Only four public lodging REITs focused on select service hotel sector
Favorable select service operating margins
Targeting acquisitions at high-single to low-double digit cap rates
Meaningful floor on returns even if recovery is slower than expected
Attractive cash-on-cash returns and cap rates vs. upper upscale full service hotels
Significant upside potential from RevPAR growth, high margins and flow-through
Projected
lodging
industry
RevPAR
growth
of
over
20.0%
over
the
next
four
years
(1)
Target high growth markets within the 25 largest MSAs
Leverage existing platform / corporate overhead through future acquisitions
Limited incremental overhead from future acquisitions (favorable
operating leverage)
Maintain balanced leverage
Continue
to
grow
common
dividend
(current
annualized
dividend
yield
of
~4.8%)
(2)
1.
Green Street Advisors, 2013-2016E.
2.
Based on closing stock price of March 27, 2013.
4


On December 27, 2012, Chatham acquired the
122-room Hampton Inn Portland Downtown
Waterfront in Portland, Maine for $28 million
Purchase price includes adjacent lot that can
be developed or sold
Accretive off-market acquisition
Ideally located in Old Port district on the
downtown Portland peninsula offering ready
access to the waterfront, historical attractions,
boutiques, many restaurants and bars
Trip Advisor #1 rated hotel in the Portland
market
Portland was voted “Best Destination for U.S.
Travel”
by AARP and the “Foodiest Small
Town in America”
by Bon Appetit Magazine
Ground floor includes separately-owned and
operated Sebago Brewing Company
The property is managed by Island Hospitality
Management, which is 90% owned by Mr. Fisher
5
Hampton Inn, Portland
Downtown Waterfront
Acquisition Overview
New Hotel Acquisition – Portland, Maine


On February 6, 2013, Chatham acquired the 197-
room Courtyard by Marriott at the Houston Medical
Center in Houston, TX for $34.75 million
Accretive off-market acquisition
Opened in February 2010, the hotel features
Marriott's new lobby concept and three meeting
rooms comprising approximately 2,000 square feet
Adjacent to the world's largest medical complex,
the Texas Medical Center, which hosts over 50
medical organizations and will continue its
expansion with $7.1 billion of capital investment
planned by 2014
Houston is the nation's fifth largest metropolitan
area and home to 26 Fortune 500 companies. The
city has seen the highest employment gains in the
U. S. for the last six years
Property is located within close proximity to
Chatham’s Hampton Inn Medical Center hotel
The property is managed by Island Hospitality
Management, which is 90% owned by Mr. Fisher
6
Acquisition Overview
Courtyard by Marriott
Houston Medical Center
New Hotel Acquisition – Houston, Texas


Innkeepers JV Investment
Innkeepers JV Investment
In October 2011, Chatham invested $37 million for a 10.3% interest in a JV with Cerberus that
acquired 64 hotels from the bankruptcy estate of Innkeepers USA Trust
Net purchase price ~$118,000 per key
~34% discount to Apollo’s 2007 investment in portfolio
$21.2 million of invested capital returned to the Company as of Dec. 31, 2012 with net proceeds
from incremental new mortgage financing, the sale of eight non-core hotels and distributions of cash
flow generated from operations
Represents 57% of the Company’s initial investment returned within 12 months
Attractive return profile
Upside from completed / prefunded capital expenditures with RevPAR performance exceeding
original expectations
Received over $4 million cash dividends from joint venture operations for the year ended Dec. 31,
2012
Allows Chatham to leverage corporate infrastructure / overhead of JV
7


HOTEL
HOTEL
PORTFOLIO
PORTFOLIO
DENNIS CRAVEN, CFO
DENNIS CRAVEN, CFO


High Quality Hotel Portfolio in Attractive MSAs
High Quality Hotel Portfolio in Attractive MSAs
8
Boston (3%):
Homewood Suites Billerica
Hartford (2%):
Homewood Suites Farmington
Minnesota (4%):
Homewood Suites Bloomington
Pennsylvania (5%):
Courtyard Altoona
Springhill Suites Washington
Nashville (2%):
Homewood Suites Brentwood
Orlando (2%):
Homewood Suites Maitland
Houston (11%)
(1)
: :
Courtyard Houston Medical Center
Hampton Inn & Suites Houston Medical
Center
Dallas (2%):
Homewood Suites Dallas
San Diego (18%):
Homewood Suites Carlsbad
Residence Inn San Diego
Los Angeles (9%):
Residence Inn Anaheim
San Antonio (7%):
Homewood Suites San Antonio
Note: MSA / State (% of Total Acquisition Cost)
1. Acquisition closed February 6, 2013.
Washington D.C. (14%):
DoubleTree Washington D.C.
Residence Inn Tysons Corner
New York (14%):
Residence Inn Holtsville
Residence Inn White Plains
Residence Inn New Rochelle
58% of Chatham’s portfolio is located in New York, Washington DC, Boston and Southern
California markets
Portland, ME (6%)
Hampton Inn, Portland Downtown
Waterfront


Market Leading RevPAR Growth
___________________________
Source: Company filings and earnings announcements.
Chatham is delivering strong RevPAR growth versus peers
RevPAR
increased
approximately
8.0%
year-over-year
for
the
twelve
months
ended
Dec.
31,
2012
9.7%
8.8%
8.1%
8.0%
6.4%
6.1%
5.8%
5.3%
5.1%
4.6%
6.9%
7.4%
5.6%
$97
$103
$160
$134
$139
$99
$119
$181
$107
$147
$65
$175
$142
0%
2%
4%
6%
8%
10%
12%
Summit
Chesapeake
Pebblebrook
Chatham
RLJ
Strategic
Host
Hersha
Ashford
Sunstone
DiamondRock
FelCor
LaSalle
RevPAR Growth
$0
$50
$100
$150
$200
$250
$300
$ RevPAR
9
RevPAR Growth (Twelve months ended Dec. 31, 2012)


Market Leading EBITDA Margins
Market Leading EBITDA Margins
Chatham is delivering market leading EBITDA margins
Hotel EBITDA Margin (Twelve months ended Dec. 31, 2012)
Source: Company filings and earnings announcements.
Chatham’s premium branded select service hotels generate high RevPAR levels and have low
operating costs
10
37.4%
35.9%
34.1%
33.9%
32.1%
32.1%
31.1%
28.9%
27.4%
27.2%
24.9%
24.0%
22.4%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Chatham
Hersha
Chesapeake
RLJ
LaSalle
Ashford
Summit
Sunstone
Pebblebrook
DiamondRock
FelCor
Host
Strategic


Market Leading Flow-Through Performance
Hotel EBITDA Margin Improvement (Twelve months ended Dec. 31, 2012)
Renovations helping deliver increased penetration and margin improvement
Source: Company filings and earnings announcements.
263bps
249bps
230bps
165bps
160bps
140bps
130bps
120bps
113bps
110bps
87bps
78bps
50bps
0bps
50bps
100bps
150bps
200bps
250bps
300bps
Pebblebrook
Summit
Chesapeake
Ashford
Chatham
Host
Strategic
Hersha
LaSalle
Sunstone
DiamondRock
RLJ
FelCor
growth (bps)
11


Attractive Relative Valuation
Attractive Relative Valuation
Chatham trades at an attractive relative valuation versus lodging REIT peers
Price to 2013E FFO Multiple
Note: Based on closing stock prices as of March 27, 2013.
Source:
FactSet,
SNL
and
Company
Filings.
FFO
or
“Funds
from
Operations”
per
FYE
2013
Consensus
estimates.
12
22.1x
17.0x
15.7x
13.8x
13.8x
13.4x
13.0x
12.4x
11.9x
11.7x
11.0x
10.8x
7.4x
0.0x
5.0x
10.0x
15.0x
20.0x
25.0x
BEE
PEB
FCH
CHSP
HST
SHO
HT
DRH
INN
LHO
CLDT
RLJ
AHT
P / FFO


Market Leading Common Dividend Yield
Market Leading Common Dividend Yield
Chatham delivers a market leading dividend yield of 4.8%
On
December
4
th
,
2012,
Chatham
announced
a
5%
increase
to
its
common
dividend
to
$0.84
per
share
in
calendar 2013 (4.8% yield)
The Company converted from a quarterly to a monthly dividend payment beginning in January 2013
Represents the Company’s second dividend increase since IPO and a 20% total increase from its original
annual dividend rate of $0.70 per share
13
4.8%
4.4%
4.2%
3.8%
3.7%
3.1%
0.0%
0.0%
0.0%
2.5%
4.1%
3.7%
2.3%
52%
52%
32%
42%
37%
46%
28%
54%
58%
39%
0%
1%
2%
3%
4%
5%
6%
Chatham
Summit
Chesapeake
Hersha
Ashford
DiamondRock
RLJ
LaSalle
Pebblebrook
Host
Strategic
FelCor
Sunstone
Dividend Yield
0%
20%
40%
60%
80%
100%
120%
FFO Payout Ratio
Cash Dividend Yield / Payout Ratio
Note: Based on closing stock prices as of March 27, 2013.
Source:
FactSet,
SNL
and
Company
Filings.
FFO
or
“Funds
from
Operations”
per
FYE
2013
Consensus
estimates.


FINANCIAL UPDATE
FINANCIAL UPDATE
DENNIS CRAVEN, CFO
DENNIS CRAVEN, CFO


2012 Financial Update
2012 Financial Update
Comparable
Hotel
RevPAR
Increased
7.6
percent
year-over-year
to
$102
in
Q4
2012;
RevPAR
up
8.0
percent
year-over-year
to
$107
for
twelve
months
ended
Dec.
31,
2012
Adjusted
EBITDA
Increased
81.0
percent
year-over-year
to
$40.9
million
for
twelve
months
ended Dec. 31, 2012
Comparable
Hotel
EBITDA
Margins
Advanced
160
basis
points
year-over-year
to
37.4 percent for the twelve months ended Dec. 31, 2012, among the highest in the industry
Adjusted
FFO –
Increased adjusted FFO per diluted share 46 percent year-over-year to $1.30 for
the twelve months ended Dec. 31, 2012
Joint
Venture
Portfolio
Continued
to
exceed
internal
budget
expectations
for
RevPAR
and
EBITDA. Received total distributions of $21.2 million or 57.3 percent of Chatham’s initial
investment in the joint venture since making the investment in 2011
Exercised
accordion
feature
to
extend
facility
capacity
to
$105
million
in
Jan.
2013
Refinanced
Mortgage
Debt
Refinanced
approx.
$80
million
in
mortgage
loans
on
three
assets
in Q1 2013 with new 10-year mortgages at a fixed rate of approximately 4.6 percent
Increased
Common
Dividend
Announced
a
5
percent
increase
to
common
dividend
to
$0.84
per
share
in
calendar
2013
(4.8
percent
yield)
(1)
1.
Based on closing stock price of $17.56 as of March 27, 2013.
14
to $95 million (maturing Nov. 2015) and lowered costs by approx. 250 basis points
Upsized and extended revolving credit facility
Renewed Revolving Credit Facility in Nov. 2012


$5
$120
$16
$83
$84
$89
$0
$20
$40
$60
$80
$100
$120
$140
$160
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
($ in millions)
Mortgage Debt (5)
JV Mortgage Debt
Drawn Revolver
Pro Forma Debt Maturities
Summary Capitalization
Summary Capitalization
Sources: Company filings and announcements.
1.
Pro forma for January 2013 follow-on offering (3.6 million shares).
2.
Pro forma for $35 million acquisition of Courtyard by Marriott at the Houston Medical Center, $50 million net proceeds from equity offering, and $19.8 million mortgage repayment of the Doubletree
Suites by Hilton Washington, DC.
3.
Pro
forma
for
$19.8
million
mortgage
repayment
of
the
Doubletree
Suites
by
Hilton
Washington,
DC.
4.
Reflects the Company’s share of Joint Venture debt.
5.
Not pro forma for $80 million refinancing in Q1 2013 of the Residence Inn by Marriott San Diego, CA, the Residence Inn by Marriott Tysons Corner, VA and the Homewood Suites by Hilton on the
Riverwalk in San Antonio, TX.
Pro Forma Capitalization
15
($
in
millions,
except
per
share
data)
12/31/2012
Pro
(As Reported)
Adj.
Forma
Share Price (as of 3/27/13)
$17.56
$17.56
Diluted Shares & Units O/S
(1)
14.0
3.6
17.6
Market Capitalization
$246.1
$309.1
Revolving Credit Facility
(1) (2)
$79.5
$4.6
$84.1
Mortgage Debt
(3)
159.7
(19.8)
139.9
JV Mortgage Debt
(4)
82.9
82.9
Total Debt
$322.2
$307.0
Less: Unrestricted Cash
(2)
(4.5)
0.0
(4.5)
Net Debt
$317.7
$302.5
Enterprise Value
$563.7
$611.6


Chatham Returns vs. Peers (LTM)
Chatham Returns vs. Peers (LTM)
Chatham has been among  the best performing lodging stocks over the past year and is
paying a market-leading dividend
Source: FactSet.
Full Service Index is a composite index of PEB, HST, LHO, SHO, DRH, and CHSP.
LTD Service Index is a composite index of RLJ, HT, and INN.
16
Share Price Performance
Total Returns
18%
4%
31%
24%
7%
40%


Safe Harbor Disclosure
Safe Harbor Disclosure
We make forward-looking statements in this presentation that are subject to risks and uncertainties. These
forward-looking
statements
include
information
about
possible
or
assumed
future
results
of
its
business,
financial
condition,
liquidity,
results
of
operations,
cash
flow
and
plans
and
objectives.
When
we
use
the
words
“believe,”
“expect,”
“anticipate,”
“estimate,”
“plan,”
“continue,”
“intend,”
“should,”
“may”
or similar expressions, we intend to
identify forward-looking statements.
Statements regarding the following subjects, among others, may be forward-looking: use of the proceeds of this
offering; market trends in its industry, interest rates, real estate values, the debt financing markets or the general
economy or the demand for commercial real estate loans; its business and investment strategy; its projected
operating
results;
actions
and
initiatives
of
the
U.S.
government
and
changes
to
U.S.
government
policies
and
the
execution
and
impact
of
these
actions,
initiatives
and
policies;
the
state
of
the
U.S.
economy
generally
or
in
specific geographic regions; economic trends and economic recoveries; its ability to obtain and maintain financing
arrangements; changes in the value of its hotel portfolio; the degree to which its hedging strategies may or may
not protect us from interest rate volatility; impact of and changes in governmental regulations, tax law and rates,
accounting guidance and similar matters; its ability to satisfy the REIT qualification requirements for U.S. federal
income tax purposes; availability of qualified personnel; estimates relating to its ability to make distributions to its
shareholders in the future; general volatility of the capital markets and the market price of its common shares;
and degree and nature of its competition.
The forward-looking statements are based on its beliefs, assumptions and expectations of its future performance,
taking into account all information currently available to us. Forward-looking statements are not predictions of
future events. These beliefs, assumptions and expectations can change as a result of many possible events or
factors, not all of which are known to us. If a change occurs, its business, financial condition, liquidity and results
of operations may vary materially from those expressed in its forward-looking statements. Any forward-looking
statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is
not possible for us to predict those events or how they may affect us. Except as required by law, we are not
obligated to, and do not intend to, update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
17