Safehold Inc. New · NYSE:SAFE
Safehold Inc. New — Safety, Income & Growth — Q2 2017 Earnings Presentation
22 slides from Safehold Inc. New's earnings presentation, Jul 27, 2017
Slide 1: Safety, Income & Growth Inc. Q2'17 Earnings Results
Safety, Income & Growth Inc. The Ground Lease Company Q2’17 Earnings Results July 27, 2017 (NYSE: SAFE)
Slide 2: Forward-Looking Statements and Other Matters
Forward-Looking Statements and Other Matters This release may contain forward-looking statements. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements can be identified by the use of words such as “illustrative,” “representative,” “
Slide 3: Q2'17 Highlights
Q2’17 Highlights Completed initial public offering and concurrent private placement of 12.5MM shares of common stock at a price of $20.00 per share, resulting in gross proceeds of $250MM Acquired two ground leases totaling $142MM in prime Los Angeles location with stabilized Ground Rent Coverage
Slide 4: Quarterly Spotlight
Quarterly Spotlight Successful launch of first publicly traded company focused on ground leases with goal of becoming dominant player in the sector Fundamental belief that ground leases can provide more efficient capital structure for owners and developers and the use of ground leases can be sig
Slide 5: Q2'17 Earnings Overview
Section 1 – Earnings Q2’17 Earnings Overview SAFE, initially capitalized on April 14, 2017 with investments by iStar and two institutional investors, completed its initial public offering on June 27, 2017. The quarterly results presented throughout this presentation represent the stub period April 1
Slide 6: Income Statement
Section 1 – Earnings Income Statement Predecessor: April 1, 2017 - April 14, 2017 - Three Months Ended April 13, 2017 June 30, 2017 June 30, 2017 Revenues: Operating lease income $672 $4,201 $4,873 Other income 19 3 22 Total revenues $691 $4,204 $4,895 Costs and expenses: Interest expense $332 $1,86
Slide 7: FFO / AFFO
Section 1 – Earnings FFO / AFFO Predecessor: April 1, 2017 - April 14, 2017 - Three Months Ended April 13, 2017 June 30, 2017 June 30, 2017 Net income $54 ($1,604) ($1,550) Add: Real estate related depreciation and amortization 114 1,873 1,987 Less: Income from sales of real estate FFO $168 $269 $43
Slide 8: Portfolio Roll Forward
Section 2 – Portfolio Portfolio Roll Forward # of Assets Gross Book Value Total Assets 3/31/2017 12 $340 Acquisitions: 6200 Hollywood Blvd 1 $74 6201 Hollywood Blvd 1 $68 Total Assets 6/30/2017 14 $482 7 Note: $ in millions.
Slide 9: New Investments
Section 2 – Portfolio New Investments 6201 Hollywood Blvd., Los Angeles 6200 Hollywood Blvd., Los Angeles Newly constructed multi-family building with 535 units, Expected 1H’18 delivery of multi-family building with Asset Description 71K SF ground floor retail space, and 1,300 below grade ~507 units
Slide 10: Geographic Diversification
Section 2 – Portfolio Geographic Diversification Seattle-Tacoma-Bellevue 19% Detroit-Warren-Dearborn Milwaukee-Waukesha-West Allis 15% Salt Lake City 2% San Francisco-San 12% Durango Washington-Arlington-Alexandria Jose-Oakland 4% 2% 5% San Diego-Carlsbad Atlanta-Sandy Springs-Marietta 7% Dallas-For
Slide 11: Portfolio Stratification
Section 2 - Portfolio Portfolio Stratification Medical 3% 40-60 yrs 20-40 yrs 1% 1% Office 17% Property Type Lease Term >80 yrs 41% Hotel Remaining (1) 49% 4.0-5.0x $482MM 17% <20 yrs W.A. 63 yrs 57% Multi-family 31% Property NOI to 5.0x+ 46% (5) Ground Rent W.A. 4.7x 3.0-4.0x Fixed 37% 23% <30% 1.5
Slide 12: Pipeline
Section 2 – Portfolio Pipeline SAFE is currently evaluating a well diversified pipeline of opportunities totaling $1.1B Seattle- San Jose- Los Angeles- Tacoma- Sunnyvale- Long Beach- Bellevue 3% Santa Clara Hotel Anaheim 3% 13% 4% Other Boston- Cambridge- 3% Newton 5% Washington- Property Location
Slide 13: Value Bank of $887MM
Section 2 – Portfolio Value Bank of $887MM Value Bank represents management’s estimate of today’s value of the (i) properties that support payment of the ground leases and (ii) residual real estate that SAFE will inherit at the end of the lease term above and beyond the ground lease $1.37B Total CPV
Slide 14: Investment Capacity
Section 3 – Capital Structure Investment Capacity $1,077MM Portfolio ~$600MM of investment capacity ~$100MM of cash ~$500MM of debt capacity (1) $718MM Debt 2.0x D/E Target $482MM Portfolio (<25% of CPV) $227MM Debt $359MM $255MM Equity Invested Equity (2) Portfolio Today Current Investment Capaci
Slide 15: Credit Metrics
Section 3 – Capital Structure Credit Metrics As of June 30, 2017 Target leverage of (i) 25% of CPV and (ii) 2x debt to equity, with a term of or hedge for at least 10 years Leverage FCCR (1) Book Debt $227 Adjusted EBITDA (B) $21 Book Equity $359 Interest Expense (cash) (C) $9.5 Leverage (Debt to Eq
Slide 16: Debt Overview
Section 3 – Capital Structure Debt Overview Debt Profile Debt Maturity Profile 2022 W.A. Maturity is 10 years Jun.(1) $300 L+135 $300(1) 2027 Revolver $227(2) Apr. (2) $227 3.77% (3) Capacity (Undrawn) Total $527 3.09% (4) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Hedge Profile Amount E
Slide 17: Balance Sheet
Section 3 – Capital Structure Balance Sheet As of June 30, 2017 Assets Liabilities and Equity Liabilities: Real estate Debt obligations, net $227,406 Real estate, gross $406,844 Accounts payable and other liabilities 5,945 Accumulated depreciation (1,251) Total liabilities $233,351 Real estate, net
Slide 18: Appendix
Appendix 17
Slide 19: Glossary
Appendix Glossary Ground Lease Basis Ground Lease Basis is the purchase price paid by SAFE to acquire or originate a ground lease. The current combined value of the land, buildings and improvements relating to a commercial property, as if there Combined Property Value (CPV) was no GL on the land at
Slide 20: Asset Summary
Appendix Asset Summary Underlying In Place Property NOI to Lease Expiration Contractual Rent Base Rent TTM Total Income Ground Rent Property Location Property Type / As Extended Escalations (Annualized) (1) % Rent (2) Cash / GAAP (3) Coverage (4) Doubletree Seattle Airport (5)(6) Seattle, WA Hotel 2
Slide 21: End Notes
Appendix End Notes (1) Annualized cash base rental income in place as of June 30, 2017. (2) Total percentage cash rental income during the 12 months ended June 30, 2017. (3) Total GAAP Income reflects total cash rent adjusted for non-cash income, primarily consisting of straight-line rent, to confor
Slide 22: End Notes – (cont'd)
Appendix End Notes – (cont’d) (11) Base rent is subject to increase every 4 years based on a percentage of growth in the CPI for the greater Los Angeles area, California in that time span. Rent increase capped at 12.0% from one rent period to the next. The next potential base increase is February 20
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