28 slides from Safehold Inc. New's earnings presentation, Oct 25, 2018
Slide 1: Q3 '18 Earnings Results
Q3 ‘18 Earnings Results October 25, 2018 (NYSE: SAFE)
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: I. Earnings
I. Earnings Safety, Income & Growth Inc. The Ground Lease Company 2
Slide 4: Q3 '18 Highlights
Section 1 – Earnings Q3 ‘18 Highlights Earnings Investment Activity Scaling the Business Q3 ‘18 Q3 ‘17 Q2/Q3 Current Portfolio (at cost basis) Hired Tye Palonen $ in Per $ in Per to expand West 000’s share 000’s share 12% to $706M Coast originations Net $2,009 $0.11 ($721) ($0.04) Income FFO $4,299
Slide 5: Rent Growth
Section 1 – Earnings Rent Growth Quarterly Cash Rent Since Q3 ‘17 +34% growth $7.6M $5.7M Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q3 '18 At September 30th, our Annualized In-Place Cash Rent was $31.2M Note: Quarterly cash rent represents ground lease and other lease income for the quarter calculated in accord
Slide 6: General & Administrative Breakdown
Section 1 – Earnings General & Administrative Breakdown After a one–year waiver, SAFE began paying its management fee and reimbursables this quarter Q3 ‘18 Explanation Represents 0.25% of equity. Paid quarterly in stock Management fee $919 valued at the greater of the market price and the IPO pric
Slide 7: Dividend Coverage
Section 1 – Earnings Dividend Coverage $0.15 dividend was declared in the third quarter representing an annualized rate of $0.60 per share. $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.83 $0.30 $0.60 $0.60 $0.20 $0.33 $0.10 $0.00 TTM EPS TTM FFO TTM AFFO Annualized Dividend Note: $ amounts are given per
Slide 8: II. Portfolio
II. Portfolio Safety, Income & Growth Inc. The Ground Lease Company 7
Slide 9: Q3 '18 Portfolio Growth
Section 2 – Portfolio Q3 ‘18 Portfolio Growth +$106M Q2 ‘18 of new investment activity Q3 ‘18 $631M $706M Current Portfolio (at Cost Basis) Current Portfolio (at Cost Basis) +$76M +$30M 4 Ground Lease 1 Forward Commitment $664M Investments $770M Aggregate Portfolio Aggregate Portfolio (including for
Slide 10: Q3 '18 Investment Metrics
Section 2 – Portfolio Q3 ‘18 Investment Metrics (Origination vs Acquisition) Originations: $72M(1) Acquisition: $34M SAFE Ground Leases™ Existing Ground Lease W.A. Cap Rate (Initial) W.A. Rent Escalators Rent Structure 2.0% annualized fixed 4.1% increases with periodic CPI Adjustments 1.8% initial c
Slide 11: New Investments
Section 2 – Portfolio New Investments Balboa Executive Center Hyatt Centric The Madison San Diego, CA Washington, D.C. Phoenix, AZ A SAFE Ground Lease™ on a An acquisition of an existing A SAFE Ground Lease™ on a five-story, 121K sq. ft. Class A office ground lease on a 318-key, 16-story 177K sq. ft
Slide 12: New Investments (cont'd)
Section 2 – Portfolio New Investments (cont’d) The Jefferson D.C. Multifamily Washington, D.C. Washington, D.C. A SAFE Ground Lease™ on a 73K A forward commitment to create sq. ft., eight-story office building a SAFE Ground Lease™ on a located less than a mile from the 300+-unit, to be-be-built mid-
Slide 13: Geographic Diversification by MSA
Section 2 – Portfolio Geographic Diversification by MSA (Current Portfolio at Cost Basis: $706M) 12.9% Seattle Minneapolis Detroit 0.3% 10.2% 1.1% San Francisco Salt Lake City Milwaukee 3.1% 7.9% Durango 14.1% 2.9% Washington, D.C. 20.1% 1.7% Phoenix – NEW LOCATION 2.8% Raleigh-Durham 6.6% 10.5% Los
Slide 14: Portfolio Stratification
Section 2 - Portfolio Portfolio Stratification (Current Portfolio at Cost Basis: $706M) 20-60 yrs Office 6% 27% Multifamily 29% <20 yrs Medical Office 32% Property Type 4% Lease Term Industrial Remaining 2% Fixed w/ Future (w/ Extensions) CPI Adjustments >60 yrs 37% Percentage Rent 62% Hotel 37% 38%
Slide 15: Portfolio Metrics
Section 2 - Portfolio Portfolio Metrics (Current Portfolio at Cost Basis: $706M) Portfolio Rent Statistics Annualized base rent $27.7 TTM percentage rent $3.5 Total Annualized Cash Rent $31.2 Total GAAP rent (including TTM % rent) $51.0 Total Annualized Cash Rent as % of Cost Basis 4.4% W.A. annuali
Slide 16: Pipeline (as of October 22)
Section 2 – Portfolio Office Pipeline (as of October 22) 33% Multifamily 36% Property Type $853M Near-Term Pipeline (19 Deals) Hotel 14% In Discussion Entertainment $445M 17% 10 Deals Washington, D.C. 28% San Jose Under LOI 18% $408M New York City Location 9 Deals 14% (MSA) Denver 8% Various 12% T
Slide 17: Value Bank of $1.6B or $86 per Share
Section 2 – Portfolio Value Bank of $1.6B or $86 per Share Value Bank is calculated as today’s estimated Combined Property Value (CPV) less the Cost Basis of SAFE’s portfolio SAFE uses Value Bank to track the capital appreciation potential $1,576M at lease expiration from our rights to acquire t
Slide 18: III. Capital Structure
III. Capital Structure Safety, Income & Growth Inc. The Ground Lease Company 17
Slide 19: Debt Overview
Section 3 – Capital Structure Debt Overview As of September 30, 2018 Debt Maturity Profile Debt Profile 2022 (Principal Amt) (Effective Rate) $350(1) Jun.(1) $74 L+135 2023 Undrawn $227(3) Revolver Jan.(2) $71 3.04% $276 2027 Drawn $71(2) Revolver Apr.(3) $227 3.77% $74 Total $372 2018 2019 2020 202
Slide 20: Interest Rate Protection
Section 3 – Capital Structure Interest Rate Protection As of September 30, 2018 $770M Aggregate Portfolio $64M Forward Commitments The Company seeks to mitigate the impact of interest rate fluctuations by entering into hedges associated with each ground lease prior to taking on long-term debt Th
Slide 21: Appendix
Appendix Safety, Income & Growth Inc. The Ground Lease Company 20
Slide 22: Income Statement
Appendix Income Statement For the Three Months Ended For the Nine Months Ended September 30, 2018 September 30, 2018 Revenues: Ground lease and other lease income $11,567 $32,708 Other income 77 2,203 Total revenues $11,644 $34,911 Costs and expenses: Interest expense $3,747 $10,378 Real estate expe
Slide 23: EPS, FFO & AFFO Reconciliation
Appendix EPS, FFO & AFFO Reconciliation For the Three Months Ended For the Nine Months Ended Trailing Twelve September 30, 2018 September 30, 2018 Months Net income allocable to Safety, Income & Growth Inc. common shareholders $2,009 $7,432 $6,090 Add: Real estate related depreciation and amortizati
Slide 24: Balance Sheets
Appendix Balance Sheets As of As of September 30, 2018 December 31, 2017 Assets Real estate Real estate, gross $535,318 $413,145 Accumulated depreciation (8,756) (4,253) Real estate, net $526,562 408,892 Real estate-related intangibles, net(1) 163,314 80,766 Ground lease assets, net $689,876 489,658
Slide 25: Cost Basis Reconciliation
Appendix Cost Basis Reconciliation As of September 30, 2018 Real estate, net $526,562 Add: Accumulated depreciation 8,756 Real estate, gross $535,318 Add: Lease intangible assets, net 221,090 Add: Leasing costs, net 437 Add: Accumulated amortization 7,372 Less: Lease intangible liabilities, net (57,
Slide 26: Asset Summary
Appendix Asset Summary by Property Type Location Lease Expiration / Rent Escalation Property (MSA) Property Type As Extended Structure 6201 Hollywood (North) Los Angeles, CA Multifamily 2104 / 2104 CPI-Linked 6200 Hollywood (South) Los Angeles, CA Multifamily 2104 / 2104 CPI-Linked Onyx on First Was
Slide 27: Glossary
Appendix Glossary Calculated by adding (or subtracting) to FFO the following items: straight-line rental income, the amortization of real Adjusted Funds from Operations (AFFO) estate-related intangibles, stock-based compensation, acquisition costs, non-cash management fees, and expense reimbursement
Slide 28: Glossary – (cont'd)
Appendix Glossary – (cont’d) Management utilizes (i) estimated underlying property net operating income (NOI) in situations where actual underlying property NOI is unavailable and (ii) projected stabilized property NOI when a project is under development. These figures Estimated Underlying Property