23 slides from Safehold Inc. New's earnings presentation, Nov 1, 2022
Slide 1: Q3 '22 Earnings Results
Q3 ‘22EARNINGS RESULTS
Slide 2: Forward-Looking Statements and Other Matters
2Forward-Looking Statements and Other MattersThis 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: Forward-Looking Statements and Other Matters
3Forward-Looking Statements and Other MattersInflation Adjusted Yield / CPI Adjustments: Safehold™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 CPI l
Slide 4: The Next Step in Safehold's Progression
4The Next Step in Safehold’s Progression Internalizes and betteraligns management team which helped revolutionize ground lease industryEnhances governance, widely distributes voting power, expands number of independent directors on BoardLowers costsas New Safehold scales compared to projected extern
Slide 5: Q3 '22 Highlights
5Q3 ’22 HighlightsSolidInvestments Strong Earnings SizableCapital Sources Note: Please see “Unrealized Capital Appreciation Details” in the Appendix for more information. (1) Investments in Q3 ’22 include $29m of new forward commitments that have not yet been funded. There can be no assurance that S
Slide 6: Investment Activity
6 Investment Activity $284mOriginations(1) 6 ground lease transactions All multifamily 5 markets (1 new market) 2 new clients, 4 repeat clients 6.0% w.a.Inflation Adjusted Yield(2)•5.8% with 0% inflation 37% w.a.GLTV(3) 3.0x w.a.Rent Coverage(3)Note: Please see the “Important Note re COVID-19” in th
Slide 7: Portfolio Growth
7 $0.3b$0.8b$1.5b$2.9b$4.0b$6.1bIPO(6/22/2017)Q3 '18Q3 '19Q3 '20Q3 '21Q3 '22Note: 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 renderings. (1) The
Slide 8: Earnings Results
8Earnings ResultsQuarterlyResults Year-to-DateResults 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
Slide 9: Attractive Ground Lease Realization
9 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 10: Inflation Captured Cash Flows
10 Inflation Captured Cash FlowsNote: Refer to the Glossary in the Appendix for yield calculations and additional details. (1) Safehold™originated ground leases typically include a periodic rent increase based on prior years cumulative CPI growth with the initiallookback year generally starting betw
Slide 11: Portfolio Metrics by Property Type
11 Office45%(36 Assets)Multifamily35%(66 Assets)Hotel12%(16 Assets)Life Science5%(5 Assets)Mixed Use & Other3%(5 Assets)Underlying Property(128 Assets)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
Slide 12: Geographic Breakdown
12 Geographic Breakdown(Current Portfolio Gross Book Value $5,786m) Detroit Milwaukee Central3%(6 assets) Minneapolis Nashville West26%(35 assets) Southwest6%(14 assets) Southeast13%(29 assets) Northeast39%(22 assets) Mid-Atlantic13% (22 assets) Washington, D.C. Philadelphia Atlanta Raleigh-Durham O
Slide 13: Capital Structure
13(1) Excludes outstanding borrowings under the Company’s unsecured revolving credit facility.(2) Based on SAFE closing share price of $29.25 on October 31, 2022.Capital Structure Interest Rates and Spreads(1)Q3 ’22Annualized Yield5.1%Effective Interest Rate3.7% Effective spread138 bpsAnnualized Cas
Slide 14: Estimated Unrealized Capital Appreciation
14 $10.5b$6.7b$5.1b$2.8b$1.6b$0.4bQ3 '22Q3 '21Q3 '20Q3 '19Q3 '18IPOEstimated Unrealized Capital Appreciation 83%CAGRSince IPO 13.2mSq. Ft. Total Square Feet: 32.7m 3.8mSq. Ft. +$597min Q3 ’22Office (1)Note: Please see the “Important Note re COVID-19” in the front of this presentation for a statement
Slide 15: Caret Update
15Caret Update Caret Units(Capital Appreciation above Original Cost Basis under specified circumstances) Safehold(NYSE: SAFE) GL Units (Rent Stream plusOriginal Cost Basis and certain other cash flows) MSD Partners(1) Employees 2018Incentive Plan ~83%100% ~15%~1% First Round Investors(2) ~1%(1) Conc
Slide 16: Caret Timeline
16Caret TimelineMay ’19:Management incentive plan(5)approved by shareholders, requiring management to deliver significant share price appreciation and crystalize the value of UCA over time for all stakeholdersFeb ’22:Outside investors participate in Series A round(4)(1) Reached 100 transaction miles
Slide 17: Appendix
17 APPENDIX
Slide 18: Income Statements
18Income StatementsAppendixNote: Figures in thousands except for per share amounts. 2022202120222021Revenues:Interest income from sales-t yp e leases$54,736 $30,145 $146,014 $83,244 O p eratin g lease income16,507 16,992 49,925 51,367 Other income453 144 1,004 390 Total revenues$71,696 $47,281 $196,
Slide 19: Balance Sheets
19Balance SheetsAppendixNote: Figures in thousands. September 30, 2022December 31, 2021Assets:Net investment in sales-t yp e leases$3,066,113 $2,412,716 Ground Lease receivables1,326,632 796,252Real estate:Real estate, at cost740,971 740,971 Less: accumulated de p reciation(32,864)(28,343)Real estat
Slide 20: Portfolio Reconciliation
20Portfolio ReconciliationAppendixNote: Figures in millions. Figures in the reconciliation table may not foot due to rounding. IPO(6/22/17) 9/30/189/30/199/30/209/30/219/30/22Net investment in Sales-Type Leases- - $465$1,089$1,802$3,066Ground Lease receivables- - 73 $480$691$1,327Pro-rata interest i
Slide 21: Earnings Reconciliation
21Earnings ReconciliationAppendixNote: Figures in millions except for per share amounts.Net income attributable to Safehold Inc. common shareholders excluding merger & Caret related costs and non-recurring gains for the period is a non-GAAP metric used internally as a supplemental performance measur
Slide 22: Unrealized Capital Appreciation Details
22Unrealized Capital Appreciation DetailsAppendixRefer 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 23: Glossary
23Glossary Aggregate CostBasisRepresents Cost Basis plus unfunded commitments. For unfunded commitments, it represents theaggregate future amount to be paid under the commitments. AggregateGross Book ValueRepresents the Current Portfolio plus unfunded commitments. For unfunded commitments, it repres