28 slides from Safehold Inc. New's investor presentation, March 2021
Slide 1: Investor Presentation March 2021
INVESTOR PRESENTATION March 2021
Slide 2: Forward-Looking Statements and Other Matters
Forward-Looking Statements and Other Matters This presentation 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”, “representativ
Slide 3: Executive Summary
Executive Summary Strong Revenue and EPS Growth Strong Financial #1 Performing Nareit Member Stock in 2019 and in 2020 Performance 100% Ground Lease Rent Paid During Covid Creating New Mainstream Capital Solution for $7 Trillion CRE Market Strong Customer Continuing Innovation with Multiple Engines
Slide 4: Strong Financial Performance
STRONG FINANCIAL PERFORMANCE 4
Slide 5: Strong Financial Growth
Strong Financial Growth Revenue EPS 80% $39.9m 35% Revenue EPS CAGR CAGR $1.17 $29.6m $0.89 $0.64 $14.8m $6.8m Q4 '17 Q4 '18 Q4 '19 Q4 '20 FY '18 FY '19 FY '20 5
Slide 6: Strong Stock Performance
Strong Stock Performance $73.94 42% Share Price $61.00 CAGR $46.88 #1 Performing Nareit Member Stock in 2019 & 2020 $34.00 $28.00 $20.00 IPO FO FO FO FO Current (6/22/17) (8/7/19) (11/19/19) (3/18/20) (11/10/20) (3/10/21) Dates of Equity Offerings 6
Slide 7: Safety During Turbulent Times
Safety During Turbulent Times Safehold typically has a residual right to regain possession of land and take ownership of the building upon a tenant default, which provides strong incentive for its customers and its customers’ lenders to pay rent. In addition, typical Combined Property Value (CPV) si
Slide 8: Strong Customer Growth
STRONG CUSTOMER GROWTH 8
Slide 9: Strong Portfolio Growth
Strong Portfolio Growth Safehold Portfolio A Better CRE (Aggregate Gross Book Value) Customer Solution $3.2b Improved 10x $2.7b Capital Efficiency Growth Since IPO Improved Cost Efficiency $0.9b Significant $0.5b Risk Reduction $0.3b IPO Q4 '17 Q4 '18 Q4 '19 Q4 '20 (6/22/2017) Note: Please see the “
Slide 10: Better Capital Solution
Better Capital Solution Making ground leases modern, efficient, and value-enhancing for building owners Improved Improved Significant Capital Efficiency Cost Efficiency Risk Reduction $65m Near-term maturity risk $100m Transfer Tax Mortgage Recording Tax $35m The Building Title Insurance Oth
Slide 11: High Quality Assets Across Top Markets
High Quality Assets Across Top 30 Markets Seattle - Multifamily Washington, D.C. - Office Phoenix – Student Housing Atlanta – Office Philadelphia – Multifamily Los Angeles - Multifamily 11
Slide 12: The Growth Opportunity Ahead
The Growth Opportunity Ahead Innovative Platform Positioned for Growth in 2021 $7 Trillion Market Opportunity Baa1 Moody’s Awards Investment BBB+ Fitch Awards Investment Grade Credit Rating Grade Credit Rating Nationally-scaled Platform Focus on Top 30 MSAs Innovative New $700m (1) $600m Total Upsiz
Slide 13: Significant Value Potential
SIGNIFICANT VALUE POTENTIAL 13
Slide 14: Attractive Returns vs. Bond Comparison
Attractive Returns vs. Bond Comparison Portfolio with contractual rent increases creates long-term compounding cash flows that generate superior returns versus similar risk and similar maturity fixed income securities Target Modern Ground Lease Portfolio vs. 100-Year MIT Bond 22.6% Target GL Portfol
Slide 15: Unrealized Capital Appreciation (UCA)
Unrealized Capital Appreciation (UCA) Under the terms of a typical Safehold ground lease, at the end of the lease term, SAFE will own whatever is on top of the land Since SAFE will eventually own it, we track the estimated value of whatever is on top of our basis across our whole portfolio and repor
Slide 16: UCA: The Simple Math
UCA: The Simple Math All assets can be valued if you know the starting value, the growth rate and the discount rate starting value x (1 + growth rate) # of years NPV = (1 + discount rate) # of years Starting Value = Portfolio Appraisal or Actual Cost Portfolio Growth Rate = Internal Growth Rate + Ex
Slide 17: UCA: The Simple Math
UCA: The Simple Math Starting Value UCA as of 12/31/20 $5.5b Note: These values represent # of Years Typical Safehold™ Ground Lease Term 99 years estimated inputs to the NPV Estimated Internal Growth Rate Assumed growth in-line with long-term inflation 2% formula. Changing these assumptions will res
Slide 18: How Much Do We Need to Grow?
How Much Do We Need to Grow? Assuming a discount rate of 6%: If UCA grows at 2% per year(1), it would be growing slower than the assumed discount rate and so its NPV would be well below today’s value If UCA grows at 6% per year(1), it would be growing at the same rate as the assumed discount rate an
Slide 19: UCA: Historical Perspective (2017 – 2020)
UCA: Historical Perspective (2017 – 2020) 6% Growth Model vs. Actual Growth Achieved $5,500m $4,800m $1,800m $950m $440m$440m $466m $494m $524m $555m IPO Q4 '17 Q4' 18 Q4 '19 Q4' 20 19
Slide 20: Current UCA Portfolio
Current UCA Portfolio 104% UCA Portfolio CAGR IPO Q2 ‘19 Current $0.4b $2.2b $5.5b Note: Images show current pictures of certain buildings on land owned by SAFE that is leased to tenants. Under the terms of a typical Ground Lease, title to any then-existing improvements on the land reverts to SAFE a
Slide 21: Appendix
APPENDIX yo Safehold | | 21
Slide 22: Geographic Breakdown
Appendix Geographic Breakdown (Current Portfolio Gross Book Value: $3,201m) Seattle Portland Northeast Minneapolis 40% West Milwaukee 22% New Haven San Francisco Central Detroit New York 3% Denver Philadelphia San Jose Salt Lake City Washington, D.C. Mid-Atlantic Los Angeles Nashville 18% San Diego
Slide 23: Capital Structure
Appendix Capital Structure $4.3b $1.4b $1.7b Equity Book Equity Total Debt(2) Market Cap (1) $233m cash and revolving credit facility availability ~140 bps accretive spread – 5.4% w.a. Annualized Yield of portfolio $700m purchasing power (assuming 2x leverage) – 4.0% w.a. Effective Interest Rate 3.1
Slide 24: Income Statements
Appendix Income Statements For the three months ended Dec 31, For the twelve months ended Dec 31, 2020 2019 2020 2019 Revenues: Operating lease income $17,252 $17,227 $72,340 $72,071 Interest income from sales-type leases 22,529 11,697 81,844 18,531 Other income 128 662 1,243 2,794 Total revenues $3
Slide 25: Balance Sheets
Appendix Balance Sheets December 31, 2020 December 31, 2019 Assets: Real estate: Real estate, at cost $752,420 $687,902 Less: accumulated depreciation (22,314) (16,286) Real estate, net $730,106 $671,616 Real estate-related intangibles assets, net 242,166 242,837 Total real estate, net and real esta
Slide 26: Portfolio Reconciliation
Appendix Portfolio Reconciliation IPO (6/22/17) 12/31/17 12/31/18 12/31/19 12/31/20 Net investment in Sales-Type Leases - - - $985 $1,306 Ground Lease receivables, net - - - $397 $577 Pro-rata interest in Sales-Type Leases held as equity method investments - - - $340 $345 Real estate, net (Operating
Slide 27: Unrealized Capital Appreciation Details
Appendix Unrealized Capital Appreciation Details Refer to the Glossary in the Appendix for a definition of Owned Residual Portfolio, Unrealized Capital Appreciation (“UCA”), and “Combined Property Value” (“CPV”). SAFE relies in part on CBRE’s appraisals of the CPV of our portfolio in calculating UCA
Slide 28: Glossary
Appendix Glossary Aggregate Cost Basis Represents Cost Basis plus unfunded commitments. For unfunded commitments, it represents the aggregate future amount to be paid under the commitments. Represents the Current Portfolio plus unfunded commitments. For unfunded commitments, it represents the aggreg