Safehold Inc. New · NYSE:SAFE
Safehold Inc. New — Safehold — Merger or Acquisition (November 2022)
31 slides from Safehold Inc. New's merger presentation, Nov 7, 2022
Slide 1: Investor Presentation November 2022
INVESTOR PRESENTATION INVESTOR PRESENTATION November 2022 Filed pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a - 12 of the Securities Exchange Act of 1934 Filing Person: Safehold Inc. Subject Company: Safehold Inc. Commission File Number: 001 - 38122
Slide 2: Forward-Looking Statements and Other Matters
2 Forward - Looking Statements and Other Matters This presentation may contain forward - looking statements. All statements other than statements of historical fact are forward - lo oking statements. These forward - looking statements can be identified by the use of words such as “illustrative”, “re
Slide 3: Forward-Looking Statements and Other Matters
3 Forward - Looking Statements and Other Matters Inflation Adjusted Yield / CPI Adjustments: Safehold Ρ originated ground leases typically include a periodic rent increase based on prior years cumulative CPI growth with the initial lookback year generally starting between lease year 11 and 21. These
Slide 4: I. Business Update
4 UPDATE I. BUSINESS
Slide 5: The Next Step in Safehold's Progression
5 The Next Step in Safehold’s Progression Internalizes and better aligns management team which helped revolutionize ground lease industry Enhances governance, widely distributes voting power, expands number of independent directors on Board Lowers costs as New Safehold scales compared to projected e
Slide 6: Strong YTD '22 Results
6 $135.0m $196.9m YTD '21 YTD '22 Revenue $50.1m $73.5m YTD '21 YTD '22 Net Income attributable to Safehold Inc. common shareholders excluding merger & Caret related costs and non - recurring gains for the period (3) $0.94 $1.21 YTD '21 YTD '22 EPS excluding merger & Caret related costs and non - re
Slide 7: 2022 Capital Highlights
7 2022 Capital Highlights First Sales of Caret Units – Latest Round at $2.0b Valuation In February, sold and received commitments to purchase 1.37% of the total authorized Caret Units at a total valuation of $1.75b with redemption options for purchasers (1) Concurrent with and conditioned upon the c
Slide 8: Attractive Ground Lease Realization
8 Attractive Ground Lease Realization In Q3 ’22, Safehold sold a ground lease in the Washington D.C. MSA for $136.0m, generating a gain for Safehold of approximately $55.8m (gross of Caret allocations to third parties) Safehold originally purchased the asset in December 2020 for $76.7 million After
Slide 9: II. Significant Growth Potential
9 GROWTH POTENTIAL II. SIGNIFICANT
Slide 10: Strong Portfolio Growth and YTD '22 Momentum
10 $0.3b $0.8b $1.5b $2.9b $4.0b $6.1b IPO (6/22/2017) Q3 '18 Q3 '19 Q3 '20 Q3 '21 Q3 '22 Note: Please see the “Important Note re COVID - 19” in the front of this presentation for a statement about metrics this quarter. Pictures of properties that are currently under development are presented as ren
Slide 11: Growing Customer Adoption
11 Growing Customer Adoption Cumulative # of unique sponsors that have been pitched a Safehold ground lease Source: Internal CRM tracking metrics. (1) Based on number of unique sponsors. (2) Excludes Ground Lease Plus, IPO assets, deals in which iStar was the sponsor, and acquisition of existing gro
Slide 12: III. Significant Value Potential
12 VALUE POTENTIAL III. SIGNIFICANT
Slide 13: Illustrative Safehold Structure and Risk Safety
13 Equity Leasehold Mortgage (40 - 70% CPV) Safehold Portfolio of Ground Leases (0 - 40% CPV) Illustrative Safehold Structure Illustrative CMBS AA (40 - 45% LTV) A (45 - 50% LTV) BBB (50 - 55% LTV) BB (55 - 60% LTV) B (60 - 65% LTV) Equity AAA (0 - 40% LTV) N/R Risk Safety Cash Flow Seniority and Pr
Slide 14: Inflation Captured Cash Flows
14 Inflation Captured Cash Flows Note: Refer to the Glossary in the Appendix for yield calculations and additional details. (1) Safehold Ρ originated ground leases typically include a periodic rent increase based on prior years cumulative CPI growth with the initi al lookback year generally starting
Slide 15: Growing Unrealized Capital Appreciation
15 83% CAGR (From IPO to Q3 ‘22) IPO $0.4b Q3 ‘20 $5.1b Q3 ’22 $10.5b Growing Unrealized Capital Appreciation Portfolio +$597m Estimated Growth in Q3 ‘22 Note: Please see the “Important Note re COVID - 19” in the front of this presentation for a statement about metrics this quarter. Pictures of prop
Slide 16: IV. Caret Update
16 IV. CARET UPDATE
Slide 17: Unrealized Capital Appreciation (UCA)
17 Please refer to SAFE’s Current Report on Form 8 - K filed with the SEC on November 1, 2022, which is incorporated herein by refere nce, for a more detailed explanation and presentation of the estimated UCA of our Owned Residual Portfolio as of September 30, 2022 and the methodology used to calcul
Slide 18: Caret Update
18 Caret Update What is Caret? Just as a ground lease splits the land from the building, Caret TM generally enables us to split our portfolio of ground leases into: (1) the right to the rent stream, the original cost basis and certain other cash flows (GL Units) and (2) the right to the capital appr
Slide 19: Caret Ownership Summary
19 Caret Ownership Summary Note: Caret unit percentages reflect percentage of 10,000,000 authorized units. (1) Including commitment to purchase 28,571 units. (2) Concurrent with and subject to the closing of the business combination and subject to Safehold shareholders’ consent to c ert ain CARET mo
Slide 20: Appendix
20 APPENDIX
Slide 21: A Better Capital Solution
21 Land Improved Capital Efficiency Improved Cost Efficiency Significant Risk Reduction $40m $100m The Building Making ground leases modern , efficient , and value - enhancing for building owners $70m Near - term maturity risk $60m A Better Capital Solution Buildings and land are different investmen
Slide 22: Earnings Results
22 Earnings Results Note: Please refer the “Earnings Reconciliation” section of the Appendix for more information with regard to the calculation of net income attributable to Safehold Inc. common shareholders excluding merger & Caret related costs and non - recurring gains for the period. (1) Merger
Slide 23: Portfolio Metrics
23 Portfolio Metrics (Current Portfolio Gross Book Value: $5,786m) Note: Please see the “Important Note re COVID - 19” in the front of this presentation for a statement about metrics this quarter. (1) The Company uses estimates of the stabilized Property NOI if it does not receive current tenant inf
Slide 24: Geographic Breakdown
24 Geographic Breakdown (Current Portfolio Gross Book Value $5,786m) Q3 ’22 Snapshot Detroit Milwaukee Central 3% (6 assets) Minneapolis Nashville West 26% (35 assets) Southwest 6% (14 assets) Southeast 13% (29 assets) Northeast 39% (22 assets) Mid - Atlantic 13% (22 assets) Washington, D.C. Philade
Slide 25: Capital Structure
25 Capital Structure Capital Updates Debt Overview Credit Ratings Q3 ’22 Snapshot Interest Rates and Spreads (1) Q3 ’22 Annualized Yield 5.1% Effective Interest Rate 3.7% Effective spread 138 bps Annualized Cash Yield 3.3% Cash Interest Rate 3.2% Cash spread 15 bps Debt and Liquidity Metrics Q3 ‘22
Slide 26: Income Statements
26 Income Statements Note: Figures in thousands except for per share amounts. Q3 ’22 Financials 2022 2021 2022 2021 Revenues: Interest income from sales-type leases $54,736 $30,145 $146,014 $83,244 Operating lease income 16,507 16,992 49,925 51,367 Other income 453 144 1,004 390 Total revenues $71,6
Slide 27: Balance Sheets
27 Balance Sheets Note: Figures in thousands. Q3 ’22 Financials September 30, 2022December 31, 2021 Assets: Net investment in sales-type leases $3,066,113 $2,412,716 Ground Lease receivables 1,326,632 796,252 Real estate: Real estate, at cost 740,971 740,971 Less: accumulated depreciation (32,864) (
Slide 28: Portfolio Reconciliation
28 Portfolio Reconciliation Note: Figures in millions. Figures in the reconciliation table may not foot due to rounding. Q3 ’22 Financials IPO (6/22/17) 9/30/18 9/30/19 9/30/20 9/30/21 9/30/22 Net investment in Sales-Type Leases - - $465 $1,089 $1,802 $3,066 Ground Lease receivables - - 73 $480 $691
Slide 29: Earnings Reconciliation
29 Earnings Reconciliation Q3 ’22 Financials 2022 2021 2022 2021 Net income attributable to Safehold Inc. common shareholders $66,077 $20,204 $113,628 $51,844 Less: Gain on sale of Net Investment in Lease (55,811) - (55,811) - Less: Selling profit from sales-type leases - (1,833) - (1,833) Add: Merg
Slide 30: Unrealized Capital Appreciation Details
30 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. SAFE
Slide 31: Glossary
31 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. Aggregate Gross Book Value Represents the Current Portfolio plus unfunded commitments. For unfunded commitments, it