28 slides from Safehold Inc. New's earnings presentation, Feb 14, 2019
Slide 1: Q4 & FY '18 Earnings Results
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: Welcome to Safehold
At 2arety, Income & Growth we've been changing the way high quality real estate is owned. Today, we are changing our name to better communicate to our customers what makes us so different. Welcome to Safehold™
Slide 4: Safehold: Reimagining real estate capital from the ground up
Safehold Reimagining real estate capital from the ground up Our mission is to revolutionize real estate ownership by providing a new and better way for owners to unlock the value of the land beneath their buildings.
Slide 5: Earnings
Earnings | _ A Safehold yy VA
Slide 6: Q4 '18 Highlights
Q4 ‘18 Highlights Earnings Q4°18 2018 $ in Per $ in Per 000's share 000's share Net Income $4,308 $0.24 $11,740 $0.64 FFO $6,615 $0.36 $20,882 $1.15 AFFO $1,709 $0.09 $11,401 $0.63 ys Safehold || Growth 23% Note: Please refer to Appendix for reconciliation of FFO and AFFO non-GAAP metrics used throu
Slide 7: Q4 '18 Investment Activity
Q4 ‘18 Investment Activity Q3 18 +$178M Q4 ‘18 of new investment activity => +23% quarter-over-quarter growth +79% year-over-year growth Nearly tripled portfolio since IPO ($706M ($64M Fwd. ($884M ($64M Fwd. Cost Basis] Commits.) Cost Basis} Commits.} Q4 ‘18 Deals W.A. Ground Rent W.A. Cost Basis as
Slide 8: New Investments
New Investments (— 1111 Penn > / Novel Music Row Washington, D.C. Nashville, TN A Safehold™ on a Class-A 14- A Safehold™ on a recently story trophy office building built 275-unit Class-A mid- centrally-located directly rise multifamily building in the between the White House and Music Row submarket
Slide 9: "SAFE/STAR" One-Stop Capital Program
“SAFE/STAR” One-Stop Capital Program In Q1 ‘19, SAFE and iStar introduced the SAFE/STAR Capital Program which combines iStar’s creative financing capabilities with SAFE’s innovative Safehold™ offering to provide a one-stop capital solution that delivers a better, more efficient capital structure to
Slide 10: $250M Equity Capital Raise at $20/Share
$250M Equity Capital Raise at $20/Share On January 2, 2019, iStar and Safehold expanded their relationship through a $250M iStar equity investment into SAFE at a price equivalent to $20 per share ys Safehold || iStar’s aggregate equity ownership increased to approximately 65.5% iStar’s voting power
Slide 11: Portfolio Statistics
fol tistics — Safehold LAA 11
Slide 12: Geographic Diversification
Geographic Diversification (Current Portfolio at Cost Basis: $884M) San Francisco Los Angeles ys Safehold || » Seattle San Diego Minneapolis Salt Lake City Colorado a) A Milwaukee Nashville (NEW LOCATION) Phoenix @ Atlanta Dallas Detroit Washington, D.C. ) a Raleigh-Durham 12
Slide 13: Portfolio Stratification
Portfolio Stratification (Current Portfolio at Cost Basis: $884M) 20-60 yrs Office 5% 39% <20 yrs Multifamily Medical Office 25% Lease Term 26% P T ga 3% Fixed w/ Future ini roperty Type may Remaining Industrial cPl (w/ Extensions] 2% Adjustments. >60 yrs 49% 70% Hotel 30% Percentage Rent Escalator
Slide 14: Underlying Property Statistics
Underlying Property Statistics (Aggregate Portfolio: $948M) Safehold owns the ground leases underlying properties with an aggregate combined property value of $2.7B. In total, these properties encompassed 7.2M square feet of real estate. Sq. Ft. by Property Type 31% 2.7M 2,806 Square Feet Hotel Room
Slide 15: Portfolio Metrics
Portfolio Metrics (Current Portfolio at Cost Basis: $884M) GAAP Yield Credit Term Cash Yield ys Safehold || 1) Total Annualized GAAP Rent lincl. % rent] = $70.6M Less: Annualized Depreciation & Amortization $9.3M Cost Basis as a % of CPV 35.3% W.A. Lease Term Rent Coverage 4.52x W.A. Lease Term Net
Slide 16: Value Bank of $1.8B
Value Bank of $1.8B (Aggregate Portfolio of $948M) Value Bank Growth +65% Year-over-year growth Cost Basis m Value Bank $1,576 $621 $770 Q4'17 Q1'18 218 a3 18 Note: Please refer to the Glossary in the Appendix for a definition of Value Bank. $ in millions. SAFE uses Value Bank to track the capital a
Slide 17: Financials
Financials 4. Safehold A_| 17
Slide 18: Debt Overview
Debt Overview (As of December 31, 2018) Debt Profile 2022 (Principal Amt) (Effective Rate) Jun!) $170 L+135 2023 Und indrawn Jan 2) $71 3.04% Revolver 2027 $180 Apr.) $227 3.77% 2028 ewe Dec. $79 4.25% $170 Total $547 2019 2020 2021 C SAFE closed ona bespoke $79.2M term loan - The facility features
Slide 19: Interest Rate Protection $920M
Interest Rate Protection $920M (As of December 31, 2018) Aggregate Portfolio $64M Fwd. Commits. [ The Company seeks to mitigate the impact of interest rate fluctuations by entering into hedges $735M C The Company's interest rate protection consists of: - $306M of long-term fixed-rate debt - $429M of
Slide 20: Impact of New Accounting Standards
Impact of New Accounting Standards (As of December 31, 2018) Current Method (Applied in Q4 '18) All of SAFE’s ground leases qualified as operating leases. Lease Classification Recorded as “Ground Lease Income” based on straight-line rent. Purchase price is recorded as “Real Estate” and “Lease Intang
Slide 21: Appendix
Appendix yo Safehold 21
Slide 22: Income Statements
Income Statements Q4 ‘18 Q4'17 FY ‘18 Revenues: Ground lease and other lease income $14,692 $6,579 $47,400 Other income 121 171 2,324 Total revenues $14,813 $6,750 $49,724 Costs and expenses: Interest expense $5,011 $3,172 $15,389 Real estate expense 392 364 1,600 Depreciation and amortization 2,307
Slide 23: EPS, FFO & AFFO Reconciliation
EPS, FFO & AFFO Reconciliation Q4 ‘18 FY ‘18 Net income allocable to Safehold Inc. common shareholders $4,308 $11,740 Add: Real estate related depreciation and amortization 2,307 9,142 FFO allocable to Safehold Inc. common shareholders $6,615 $20,882 FFO allocable to Safehold Inc. common shareholder
Slide 24: Balance Sheets
Balance Sheets Q4 ‘18 Q4 ‘17 Assets Real estate Real estate, gross $669,923 $413,145 Accumulated depreciation (10,257) (4,253) Real estate, net $659,666 408,892 Real estate-related intangibles, net!’) 204,911 80,766 Ground lease assets, net $864,577 489,658 Cash and cash equivalents 16,418 168,214 O
Slide 25: Portfolio Basis Reconciliation
Portfolio Basis Reconciliation ys Safehold |__| Q4 ‘18 Real estate, net $659,666 Add: Accumulated depreciation 10,257 Real estate, gross $669,923 Add: Lease intangible assets, net 262,531 Add: Leasing costs, net 481 Add: Accumulated amortization 8,986 Less: Lease intangible liabilities, net (57,620)
Slide 26: Asset Summary
Appendix Asset Summary Location Lease Expiration / Rent Escalation Property (MSA) Property Type As Extended Structure 6201 Hollywood {North} Los Angeles, CA Multifamily 2104 / 2104 CPl-Linked 6200 Hollywood {South} Los Angeles, CA Multifamily 2104 / 2104 CPl-Linked Onyx on First Washington, D.C. Mul
Slide 27: Glossary
Appendix Glossary Adjusted Funds from Operations (AFFO) Aggregate Portfolio Annualized Cash Rent Cash Rent Cost Basis Cost Basis as % of CPV Combined Property Value (CPV) Current Portfolio Effective Yield Estimated Underlying Property NOI Calculated by adding (or subtracting) to FFO the following it
Slide 28: Glossary
Appendix Glossary Forward Commitments Funds from Operations (FFO) Ground Rent Coverage Leverage Percentage Rent Quarterly Cash Rent Safehold Total Annualized GAAP Rent Underlying Property NOI Value Bank Represents contractual commitment to purchase a ground lease on a future date, typically related