24 slides from Safehold Inc. New's investor presentation, June 2020
Slide 1: Investor Presentation
INVESTOR PRESENTATION June 2020
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: Executive Summary
Executive Summary First and only publicly-traded company focused on creating a better and Unique more efficient capital structure for the $7 trillion U.S. institutional Business commercial real estate industry through the use of ground leases Portfolio has increased by 8x since IPO as the company ad
Slide 4: I. Business Strategy
I. BUSINESS STRATEGY 4
Slide 5: Proven Formula for Success
Proven Formula for Success Safehold’s mission is to revolutionize commercial real estate ownership by providing a better and more efficient way for owners to unlock the value of the land beneath their buildings. Deliver a Make a Big Powerful + = Better Industry Market Customer More Efficient Disrupt
Slide 6: A Better, More Efficient Solution
A Better, More Efficient 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 Insur
Slide 7: Gaining Traction – Growing Customer Penetration
Gaining Traction – Growing Customer Penetration (Aggregate Gross Book Value) (1) $2.8b 8x Growth Since IPO $1.1b $0.6b $0.3b IPO (6/22/2017) Q1 '18 Q1 '19 Q1' 20 Note: Please see the “Important Note re COVID-19” in the front of this presentation for a statement about metrics. Refer to Appendix for P
Slide 8: Gaining Traction – Strong Financial Performance
Gaining Traction – Strong Financial Performance EPS Growth SAFE Stock Performance Since IPO(1) $53.79 $1.01 $46.88 +11% +169% $0.91 $34.00 $28.00 $20.00 Q3 ’19 IPO FO FO FO Current TTM (Q1 '19) TTM (Q1 '20) (6/22/17) (8/7/19) (11/19/19) (3/18/20) (5/26/20) (1) $20.00, $28.00, $34.00 and $46.88 repre
Slide 9: Breaking Through
Breaking Through Trophy Assets & Institutional Customers Alohilani Resort: 195 Broadway: SAFE x SWAP for 135 West 50th Street: 685 Third Ave: Landmark New York Office Large European $25b Core Fund Client Global Real Estate Fund Institutional Investor 9
Slide 10: Capital Structure
Capital Structure $1.2b $1.7b Total Equity Total Debt(2) $338m cash and revolver availability ~150 bps accretive spread (as of April 22, 2020) – 5.5% w.a. yield of portfolio – 4.0% w.a. effective interest rate(3) ~$1.0b purchasing power (assuming 2x leverage) 3.1% w.a. cash interest rate(3) 1.4x deb
Slide 11: III. Investment Opportunity
III. INVESTMENT OPPORTUNITY 11
Slide 12: Key Investment Attributes of Safehold's Portfolio
Key Investment Attributes of Safehold’s Portfolio Low Risk High Return Potential Contractual, Unrealized Principal Escalating Capital Safety Cash Flows Appreciation 12
Slide 13: Principal Safety
Principal Safety Illustrative Illustrative CMBS Safehold Structure Highest Risk Equity Equity N/R B (55-60% LTV) BB (50-55% LTV) Leasehold Mortgage BBB (45-50% LTV) (35-65% CPV) Senior Position in A (40-45% LTV) Capital Structure AA (35-40% LTV) Safehold Portfolio AAA of Ground Leases (0-35% LTV) (0
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 Ground Lease vs. 100-Year MIT Bond Why Compare to a 100- 22.6% Year MIT bond? SAFE
Slide 15: Illustrative Cash Flow Analysis
Illustrative Cash Flow Analysis Illustrative Model for Target Ground Leases Safehold ground leases offer the opportunity for superior risk-adjusted returns Target Ground Lease Portfolio YTM(1) Discount Rate Value Multiplier(2) 5% - 5.5% 3.1% ~2x (MIT Bond YTM) (NPV per $ invested) Note: This present
Slide 16: Growing Platform
Growing Platform Illustrative Platform Model We believe the investment community rewards businesses that repeatedly generate superior risk-adjusted returns (Based on assumptions from prior page) Creates cash flow Generates Each $1b of new stream with NPV of excess value of Safehold ground leases ~$2
Slide 17: Unrealized Capital Appreciation
Unrealized Capital Appreciation $5.0b 11x Unrealized Capital Appreciation (UCA) is calculated as today’s estimated Combined Property Value (CPV) less the Aggregate Cost Basis of SAFE’s portfolio. CBRE UCA Growth conducts independent appraisals of the CPV Since IPO of each property(1). The Company fo
Slide 18: Conclusion
Conclusion Using a deep skill set and history of innovation to solve Outsized a major market inefficiency in the $7 trillion U.S. Opportunity institutional commercial real estate market Fast growing platform offers the potential for premium Growth and risk-adjusted returns and creates unique shareho
Slide 19: Appendix
APPENDIX [od Safehold
Slide 20: Portfolio Breakdown
Appendix Portfolio Breakdown (Current Portfolio Gross Book Value: $2,705m) Property Office Hotel Multifamily Other Type 63% 19% 17% 1% Geographic Breakdown Seattle 3.4% Minneapolis New Haven Portland 0.1% 0.1% 0.1% Milwaukee 46.3% New York San Francisco 0.3% 2.7% Salt Lake City 0.8% 1.4% Philadelphi
Slide 21: Income Statements
Appendix Income Statements For the three months ended Mar 31, 2020 2019 Revenues: Operating lease income $20,780 $20,516 Interest income from sales-type leases 18,901 922 Other income 484 382 Total revenues $40,165 $21,820 Costs and expenses: Interest expense $15,148 $4,521 Real estate expense 798 8
Slide 22: Balance Sheets
Appendix Balance Sheets March 31, 2020 December 31, 2019 Assets: Real estate: Real estate, at cost $687,902 $687,902 Less: accumulated depreciation (17,793) (16,286) Real estate, net $670,109 $671,616 Real estate-related intangibles, net 241,171 242,837 Total real estate, net and real estate-related
Slide 23: Portfolio Reconciliation
Appendix Portfolio Reconciliation IPO (6/22/17) 3/31/18 3/31/19 3/31/20 Net investment in Sales-Type Leases - - $129 $1,029 Ground Lease receivables, net - - - $422 Pro-rata interest in Sales-Type Leases held as equity method investments - - - $342 Real estate, net (Operating Leases) $265 $451 $661
Slide 24: Glossary
Appendix Glossary Represents Cost Basis plus forward commitments. For forward commitments, it represents the aggregate contractual purchase price to be paid Aggregate Cost Basis under the commitments. Represents the Current Portfolio plus forward commitments. For forward commitments, it represents t