28 slides from Safehold Inc. New's earnings presentation, Jul 26, 2018
Slide 1: Q2 '18 Earnings Results
Q2 ‘18 Earnings Results July 26, 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: Q2 '18 Results
Section 1 – Earnings Q2 ‘18 Results $ in Thousands Per Share Net Income $1,703 $0.09 Earnings FFO(1) $3,978 $0.22 AFFO(1) $3,022 $0.17 $44M in ground lease investments added from four new leases Investment $631M Cost Basis of portfolio at June 30, 2018 Activity $1.5M termination fee received in Q2 a
Slide 5: Q2 '18 Highlights
Section 1 – Earnings Q2 ‘18 Highlights Rent Growth Investment Activity Portfolio Expansion Q1/Q2 Cash Rent Q1/Q2 Portfolio (Excluding Park Hotels % Rent) 7.5% to $631M +12% $6.2M Four new leases Q1/Q2 Value Bank $5.6M 6% to $1.3B Cash Rent (excluding annual Park SAFE added four new ground leases SAF
Slide 6: First Year Highlights
Section 1 – Earnings First Year Highlights Since its IPO in June of 2017, SAFE has: Closed $291M of additional transactions, increasing the size of its portfolio by 86% to $631M Annualized Cash Rent rose from $17.4M to $29.4M, driven by a combination of new ground lease originations and the rent
Slide 7: Income Statement
Section 1 – Earnings Income Statement For the Three Months Ended For the Six Months Ended June 30, 2018 June 30, 2018 Revenues: Ground lease and other lease income $9,861 $21,141 Other income 1,713 2,126 Total revenues $11,574 $23,267 Costs and expenses: Interest expense $3,376 $6,631 Real estate ex
Slide 8: FFO / AFFO
Section 1 – Earnings FFO / AFFO For the Three Months Ended For the Six Months Ended June 30, 2018 June 30,2018 Net income allocable to Safety, Income & Growth Inc. common shareholders $1,703 $5,422 Add: Real estate related depreciation and amortization 2,275 4,546 FFO allocable to Safety, Income & G
Slide 9: General & Administrative Breakdown
Section 1 – Earnings General & Administrative Breakdown 100% of the management fee and reimbursables were Q2 ‘18 G&A waived through June 30, 2018. Beginning in Q3, the company will begin paying its management fee in the $1.3M of $3.3M form of SAFE stock. is waived Management fee and reimbursable
Slide 10: Dividend Coverage
Section 1 – Earnings Dividend Coverage $0.15 dividend was declared in the second quarter representing an annualized rate of $0.60 per share. $0.80 $0.70 $0.60 $0.50 $0.40 $0.68 $0.64 $0.30 $0.60 $0.20 $0.18 $0.10 $0.00 TTM EPS TTM FFO TTM AFFO Annualized Dividend Note: $ amounts are given per shar
Slide 11: II. Portfolio
II. Portfolio Safety, Income & Growth Inc. The Ground Lease Company 10
Slide 12: Q2 '18 Investment Metrics
Section 2 – Portfolio Q2 ‘18 Investment Metrics Q1 ‘18 Q2 ‘18 +7.5% $588M $631M Cost Basis Cost Basis +$44M 18 From 4 new ground leases 22 Ground Leases Ground Leases Q2 ‘18 Deals W.A. Cap Rate W.A. Rent Escalators W.A. Ground Rent Coverage W.A. Cost Basis as a % of CPV 2.0% annualized fixed increas
Slide 13: New Investments
Section 2 – Portfolio New Investments Glenridge Point Promenade Crossing Miami Airport 1 & 2 Atlanta, GA Orlando, FL Miami, FL A SAFE Ground Lease™ on two five-story office buildings in the Two SAFE Ground Leases™ on A SAFE Ground Lease™ on a adjoining industrial properties in Central Perimeter subm
Slide 14: Geographic Diversification by MSA
Section 2 – Portfolio Geographic Diversification by MSA Seattle 14.5% Detroit Minneapolis 0.3% Salt Lake City 11.5% 1.2% San Francisco Milwaukee 3.4% 8.9% Washington, D.C. 7.8% 3.3% 22.5% San Diego Durango 3.2% Raleigh-Durham 5.1% 11.8% 2.2% Los Angeles Atlanta Dallas 2.1% Orlando 2.2% Miami Safety,
Slide 15: Portfolio Stratification
Section 2 - Portfolio Portfolio Stratification 20-60 yrs 0.1% Multifamily Office 32% 28% <20 yrs 39% Fixed w/ CPI- Lease Term Property Type Based Adjustments Percentage Rent Remaining(1) >60 yrs 34% 36% 61% Industrial Hotel 3% 37% Rent Escalator 30-40% Type 22% 40-55% 5.0x+ 23% 53% Fixed 7% Ground R
Slide 16: Portfolio Metrics
Section 2 - Portfolio Portfolio Metrics Portfolio Rent Statistics Annualized base rent $26.1M TTM Park Hotels percentage rent $3.3M Total Annualized Cash Rent $29.4M Total GAAP rent (including TTM % rent) $46.4M Total Annualized Cash Rent as % of Cost Basis 4.7% W.A. annualized contractual fixed ren
Slide 17: Pipeline (as of July 17)
Section 2 – Portfolio Pipeline (as of July 17) Office 14% Multifamily 50% $620M Near-Term Pipeline (19 Deals) Property Hotel 21% Type In Discussion $480M Entertainment 15% 12 Deals Chicago San 15% Diego 7% Indianapolis 6% Under LOI New York $141M 18% Stamford 6% 7 Deals Location (MSA) Washington D.C
Slide 18: Value Bank of $1.3B or $69 per Share
Section 2 – Portfolio Value Bank of $1.3B or $69 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 $1,259M at lease expiration from our rights to acquire t
Slide 19: III. Capital Structure
III. Capital Structure Safety, Income & Growth Inc. The Ground Lease Company 18
Slide 20: Debt Overview
Section 3 – Capital Structure Debt Overview As of June 30, 2018 Debt Maturity Profile Debt Profile (Effective Rate) 2022 W.A. Extended Maturity is 7.6 years $300(1) Jun.(1) $10 L+135 $227(3) 2023 Undrawn Jan.(2) $71 3.04% Revolver $290 2027 $71(2) Drawn Apr.(3) $227 3.77% Revolver $10 Total $308 201
Slide 21: Interest Rate Protection
Section 3 – Capital Structure Interest Rate Protection As of June 30, 2018 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 $440M In addition to $227M of long-term fixed-rate debt, t
Slide 22: Balance Sheets
Section 3 – Capital Structure Balance Sheets As of As of June 30, 2018 March 31, 2018 Assets Real estate Real estate, gross $484,458 $456,476 Accumulated depreciation (7,255) (5,754) Real estate, net 477,203 450,722 Real estate-related intangibles, net(1) 140,016 125,802 Ground lease assets, net 617
Slide 23: Appendix
Appendix Safety, Income & Growth Inc. The Ground Lease Company 22
Slide 24: Cost Basis Reconciliation
Appendix Cost Basis Reconciliation As of June 30, 2018 Real estate, net $ 477,203 Add: Accumulated depreciation 7,255 Real estate, gross $ 484,458 Add: In-place lease intangibles, net 38,512 Add: Above market intangibles, net 158,406 Add: Lease inducement intangibles, net 747 Add: Leasing commission
Slide 25: EPS, FFO, & AFFO Reconciliation
Appendix EPS, FFO, & AFFO Reconciliation Trailing Twelve Months Ended June 30, 2018 Net income allocable to Safety, Income & Growth Inc. common shareholders $3,360 Add: Real estate related depreciation and amortization 9,078 FFO allocable to Safety, Income & Growth Inc. common shareholders $12,438 F
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 Multi-Family 2104 / 2104 % of CPI 6200 Hollywood (South) Los Angeles, CA Multi-Family 2104 / 2104 % of CPI Onyx on First Washi
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) The ratio of Underlying Property NOI or Estimated Underlying Property NOI to the annualized base rental payment due to SAFE. The Company believes the metric is indicative of its seniority in a property’s cash flow waterfall. Underlying Ground Rent Coverage Property NOI i