CWS Capital Partners would like to thank all of our investors and guests who attended our 2019 Annual Partners Meeting held on April 16, 2019 at the Irvine Marriott located in Irvine, CA. On this special evening there were over 600 guests in attendance. For those of you who attended, we hope you enjoyed the celebration, new venue, and location.
To view a video recording of the 2019 CWS Annual Partner Meeting presentations, please click here and use the password "cws2019" to gain access.
This year CWS celebrates its 50th anniversary! Guests began their evening by taking a walk down memory lane as there were three reception rooms filled with a timeline of CWS’ history and included vintage photographs, artifacts, maps, and annual reports of the past. Many investors spent time catching up with old friends, while others reminisced about their past experiences with CWS.
The first presentation of the evening began with Co-Founder Bill Williams who laid the foundation in 1969 for how the company would be built and in what ways it would operate successfully. He spoke about the very first investment the company made located in Huntington Beach, California and described the highs and lows of running a real estate business. Back in 1985, CWS operated the largest mobile home portfolio in the nation but by the next decade, and specifically in 1998, they sold 60 mobile home parks for $250 million and made the “great exchange” into apartments. Today, the portfolio is valued at over $5 billion.
The next presenter was Partner Mike Engels who spoke about the operational performance of CWS’ stabilized properties and compared year-over-year results for 2017 and 2018. He charted and analyzed the results, and indicated that recent revenues reflected positive movement while he described the challenges with tighter labor markets, increased property taxes, and higher insurance expenses. Interest rates increased in 2018 compared to the average in 2017, which tightened interest rate spreads. CWS was able to take advantage of this in 2018 by refinancing 10 properties with variable-rate loans into new loans with tighter spreads, increased interest-only payments, and longer terms. Mike closed his presentation by looking at the CWS platform, which benefits the organization by having depth, experience, proficiency, information technology advancements, good insurance, and “preferred” relationships with lenders.
Partner Gary Carmell started his presentation with a heartfelt tribute to his wife, Roneet, who unexpectedly passed away in 2018. He described his personal philanthropic work and all the meaningful contributions these organizations and individuals are doing for other people in her honor. After a brief moment, he transitioned to discussing the low probabilities of a company lasting for 50+ years. For CWS, a big factor to its success has been focusing on the preservation of capital by making a conscious decision to understand the downside risk before looking at the upside. One of the ways CWS has been able to manage risk is by focusing on the right business; to not only be proficient in one’s core strength but also to be in a business that has compelling long-term fundamentals. In addition, choosing the right markets, especially those that are growing and with high paying jobs, is pivotal. In terms of structuring investments, one should have the right financing in place to not be constrained by onerous prepayment penalties. To have the right investors that have the patience to know that real estate is a get rich slowly type of investment. Further, having the right teams in place can increase the odds substantially to make it through the downturns and difficult times. Finally, having capital when it is in short supply allows one to aggressively make purchases while others are playing defense.
To close, Co-Founder and Chairman Steve Sherwood began his presentation by asking the question, “What does it take to have a successful company celebrate a 50th anniversary?” His response was that it is all about the people of an organization. After an overview of the company, including the number of communities owned and managed as well as the CWS organization chart, Steve took the audience back in time to when the company first started in 1969. He described specific events that were pivotal to the success of CWS, including when Gary and Mike joined the company. Steve listed attributes that make a successful investment company while highlighting those specifically that he felt were of the utmost importance. It is these attributes, along with our people, that drive CWS to be successful. When one hears CWS’ purpose statement, “Enhancing Lives, the CWS Way” it is a culmination of all these characteristics mentioned tonight.
Thank you for your trust over the past 50 years in allowing CWS to represent you in owning, managing, and building apartments. We feel a great sense of honor and responsibility to preserve your hard-earned capital, to provide timely and relevant communication, and to deliver exceptional returns.
Below are additional photos from the 2019 Annual Partner Meeting held on April 16, 2019.