Safehold Inc. New · NYSE:SAFE
Safehold Inc. New — Safety, Income & Growth — Q4 2017 Earnings Presentation
27 slides from Safehold Inc. New's earnings presentation, Feb 15, 2018
Slide 1: Q4'17 and Fiscal Year 2017 Earnings Results
Safety, Income & Growth Inc. The Ground Lease Company (NYSE: SAFE) Q4’17 and Fiscal Year 2017 Earnings Results February 15, 2018
Slide 2: Forward-Looking Statements and Other Matters
1 Safety, Income & Growth Inc. The Ground Lease Company 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
Slide 3: Earnings Highlights: Q4 2017 Results
2 Safety, Income & Growth Inc. The Ground Lease Company Section 1 – Earnings Highlights Q4 2017 Results: Investing Activity: $34.0MM Great Oaks Ground Lease: Executed previously announced 3-year forward commitment to purchase a ground lease on a luxury 301-unit multi-family project, which is cur
Slide 4: 2017 Earnings Overview
3 Safety, Income & Growth Inc. The Ground Lease Company Section 1 – Earnings 2017 Earnings Overview SAFE, formed on April 14, 2017 (inception), completed its initial public offering on June 27, 2017. Inception - 12/31/17 Aggregated Impact of Certain Material Items(2) Net Income (Loss) ($3,669) +$6,2
Slide 5: Income Statement
4 Safety, Income & Growth Inc. The Ground Lease Company Section 1 – Earnings Income Statement Q4’17 Inception – 12/31/17 Revenues: Ground lease and other lease income $6,579 $16,952 Other income 171 258 Total revenues $6,750 $17,210 Costs and expenses: Interest expense $3,172 $7,485 Real estate expe
Slide 6: FFO / AFFO
5 Safety, Income & Growth Inc. The Ground Lease Company Section 1 – Earnings FFO / AFFO Note: $ in thousands. See the Appendix for an explanation of FFO and AFFO. Q4‘17 Inception – 12/31/17 Net income (loss) ($1,342) ($3,669) Add: Real estate related depreciation and amortization 2,267 6,406 FFO $92
Slide 7: Impact of Certain Material Items
6 Safety, Income & Growth Inc. The Ground Lease Company Section 1 – Earnings Impact of Certain Material Items Note: $ in thousands. (1) See Asset Summary for description of Park Hotels Portfolio. Effected Net Income Items Q4’17 Per Share Inception – 12/31/17 Per Share Description Park Hotel Revenue
Slide 8: General & Administrative Breakdown
7 Safety, Income & Growth Inc. The Ground Lease Company Section 1 – Earnings General & Administrative Breakdown SAFE’s management contract waives 100% of the management fee and reimbursables through June 30, 2018 Management fee and reimbursables are recorded as GAAP expenses during the waiver pe
Slide 9: Dividends
8 Safety, Income & Growth Inc. The Ground Lease Company $0.0066 $0.1566 June 27 - June 30 Q3 Q4 Section 1 – Earnings Dividends $0.15 dividend was declared in the fourth quarter representing an annualized rate of $0.60 per share. Note: $ given per share. $0.0066 in Q3 was paid for a four day Q2 stu
Slide 10: Forward Commitment: Great Oaks
9 Safety, Income & Growth Inc. The Ground Lease Company Section 2 – Portfolio Forward Commitment: Great Oaks Raleigh Road & Via del Oro – San Jose, CA Date Closed 10/17/17 Asset Description A luxury multi-family project containing 301 units currently under construction in San Jose, CA with an expect
Slide 11: Onyx on First
10 Safety, Income & Growth Inc. The Ground Lease Company Section 2 – Portfolio Onyx on First 1100 First St. SE – Washington, D.C. Date Closed 1/25/18 Asset Description A luxury 14-story multi-family property containing 266 units in Washington, D.C. The property, constructed in 2008, is well- located
Slide 12: Geographic Diversification by MSA
11 Safety, Income & Growth Inc. The Ground Lease Company Section 2 – Portfolio Geographic Diversification by MSA Note: Percentages based on 12/31/17 portfolio which do not yet include the Great Oaks and Onyx ground leases. Seattle 14.6% 11.3% 18.3% Detroit Salt Lake City 6.5% San Diego 4.4% San Fran
Slide 13: Portfolio Stratification
12 Safety, Income & Growth Inc. The Ground Lease Company 2.0-3.0x 2% 4.0-5.0x 2% 3.0-4.0x 39% 5.0x+ 57% >60 yrs 49% <20 yrs 50% 20-60 yrs 1% Property NOI to Ground Rent 50-60% 29% 40-50% 14% 30-40% 24% <30% 33% Hospitality 47% Multi-Family 30% Office 22% Industrial 1% Section 2 - Portfolio Portfolio
Slide 14: Portfolio Breakdown
13 Safety, Income & Growth Inc. The Ground Lease Company Section 2 - Portfolio Portfolio Breakdown Annualized Base Rent $20.2MM Prior Year % rent $3.2MM Total cash rent $23.4MM Total GAAP rent (including TTM % rent) $29.5MM Total cash rent as % of total ground leases 4.7% Total GAAP rent as % of tot
Slide 15: Pipeline
14 Safety, Income & Growth Inc. The Ground Lease Company Office 46% Multifamily 35% Mixed Use 8% Hotel 7% Industrial 4% Create 93% Acquire 7% New York 34% Washington D.C. 16% Atlanta 13% Chicago 9% Phoenix 6% San Francisco 4% Orlando 2% Miami 2% Various 14% Section 2 – Portfolio Pipeline (as of Feb
Slide 16: Value Bank of $989MM or $54 per Share
15 Safety, Income & Growth Inc. The Ground Lease Company Section 2 – Portfolio Value Bank of $989MM or $54 per Share At the end of the lease, the building returns to SAFE, creating additional potential value to stockholders Value Bank is calculated as today’s estimated Combined Property Value (C
Slide 17: Credit Metrics
16 Safety, Income & Growth Inc. The Ground Lease Company Note: $ in millions. (1) Percentage rent for Park Hotels portfolio represents 2016 figures as 2017 percentage rent will only be recorded in Q1’18. See Asset Summary in Appendix for a description of the Park Hotels Portfolio. (2) Adjusted EBITD
Slide 18: Debt Overview
17 Safety, Income & Growth Inc. The Ground Lease Company 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Drawn Revolver $10 Section 3 –Capital Structure Debt Overview Note: $ in millions. For additional information on our debt please see the 10-K. (1) Initial maturity is June 2020 with two 1-year
Slide 19: Interest Rate Hedges
18 Safety, Income & Growth Inc. The Ground Lease Company Section 3 –Capital Structure Interest Rate Hedges As of December 31, 2017 Short-Term Hedges Start Date Term Notional ($MM) Blended Hedge Rate Total 8/1/17 3Y $105 1.69% Long-Term Hedges Start Date Term Notional ($MM) Blended Hedge Rate Total 1
Slide 20: GLs Offer Interest Rate Protection
19 Safety, Income & Growth Inc. The Ground Lease Company Section 3 –Capital Structure GLs Offer Interest Rate Protection Note: Charts reflect an illustrative example with the following assumptions: ROA of 4.0%, annual bumps of 2.0%, leverage of 2.0x debt to equity and fixed-rate liabilities of 3.5%.
Slide 21: GLs Offer Inflation Protection
20 Safety, Income & Growth Inc. The Ground Lease Company Section 3 –Capital Structure GLs Offer Inflation Protection Note: Assumes a $100MM building is bifurcated into a $35MM ground lease and $65MM leasehold. Assumes real estate values (CPV) grow over long periods of time with inflation. In conjunc
Slide 22: Balance Sheet
21 Safety, Income & Growth Inc. The Ground Lease Company Section 3 –Capital Structure Balance Sheet Note: $ in thousands. (1) “Real estate-related intangibles, net” represents real estate-related intangible assets of $139MM and $140MM for the periods ended December 31 and September 30, 2017, respect
Slide 23: Appendix
22 Safety, Income & Growth Inc. The Ground Lease Company Appendix
Slide 24: Asset Summary
23 Safety, Income & Growth Inc. The Ground Lease Company Appendix Asset Summary Note: Ranked by Total GAAP Income. See Glossary for definitions. †Park Hotels Portfolio Asset which is on a single master lease. (1) A majority of the land underlying this property is owned by a third party and is ground
Slide 25: Glossary
24 Safety, Income & Growth Inc. The Ground Lease Company Appendix Glossary Ground Lease Basis Ground Lease Basis is the historical purchase price paid by SAFE to acquire or originate a ground lease. Combined Property Value (CPV) The current combined value of the land, buildings and improvements rela
Slide 26: Glossary (cont'd)
25 Safety, Income & Growth Inc. The Ground Lease Company Appendix Glossary – (cont’d) Underlying Property NOI With respect to a property, the net operating income of the commercial real estate being operated at the property without giving effect to any rent paid or payable under our ground lease. Ne
Slide 27: Explanation of FFO and AFFO
26 Safety, Income & Growth Inc. The Ground Lease Company Appendix Explanation of FFO and AFFO We present FFO and AFFO because we consider them to be important supplemental measures of our operating performance and believe that they are frequently used by securities analysts, investors and other inte
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