Safehold Inc. New · NYSE:SAFE
Safehold Inc. New — Safehold — Merger or Acquisition (September 2022)
30 slides from Safehold Inc. New's merger presentation, Sep 14, 2022
Slide 1: Investor Presentation September 2022
INVESTOR PRESENTATION INVESTOR PRESENTATION September 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 1H '22 Results
6 Strong 1H ’22 Results Robust Origination Volume… $1.1b of New Originations (1) 40% GLTV (2) 4.1x Rent Coverage (2) …Drove Double Digit Earnings Growth (1) Investments in 1H ‘22 include $194m of new forward commitments that have not yet been funded as of 6/30/22 (such funding com mitments are subje
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: II. Significant Growth Potential
8 GROWTH POTENTIAL II. SIGNIFICANT
Slide 9: Strong Portfolio Growth
9 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 renderings. (1) The portfolio is presented using Aggregate Gross Book Value. As of 6/30/22,
Slide 10: Increasing Customer Awareness and Adoption
10 Increasing Customer Awareness Growing Customer Adoption High Customer “Stickiness” & Improving Efficiency Diversifying Customer Base (1) 65% of existing customers have looked at or are currently reviewing another deal 39% of customers have closed multiple deals with Safehold Cumulative # of uniqu
Slide 11: III. Significant Value Potential
11 VALUE POTENTIAL III. SIGNIFICANT
Slide 12: Illustrative Safehold Structure and Ground Lease Safety
12 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 13: Inflation Captured Cash Flows
13 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 14: Growing Unrealized Capital Appreciation Portfolio
14 86% CAGR (From IPO to Q2 ‘22) IPO $0.4b Q2 ‘20 $5.2b Q2 ’22 $9.9b Growing Unrealized Capital Appreciation Portfolio +$543m Estimated Growth in Q2 ‘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 prope
Slide 15: IV. Caret Update
15 IV. CARET UPDATE
Slide 16: Unrealized Capital Appreciation Tracker
16 Please refer to SAFE’s Current Report on Form 8 - K filed with the SEC on August 3, 2022, which is incorporated herein by referenc e, for a more detailed explanation and presentation of the estimated UCA of our Owned Residual Portfolio as of June 30, 2022 and the methodology used to calculate it.
Slide 17: Caret Update
17 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 18: Caret Ownership Summary
18 Caret Ownership Summary Caret Units (Capital Appreciation above Original Cost Basis under specified circumstances) Safehold (NYSE: SAFE) GL Units (Rent Stream plus Original Cost Basis and certain other cash flows) MSD Partners (2) Employees Incentive Plan ~83% 100% ~15% ~1% First Round Investors
Slide 19: Appendix
19 APPENDIX
Slide 20: A Better Capital Solution
20 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 21: Internalized Management Creates Efficiency
21 Under identical acquisition and capitalization scenarios, internalization allows for maximized operating leverage without proportionate increase in overhead Internalized Management Creates Efficiency Note: $ in millions. Numbers are illustrative. Status Quo External assumes $1.25b origination vol
Slide 22: Increased Float and Broader Shareholder Base
22 Existing Safehold Shareholders 34% MSD 9% iStar Shareholders 37% Management 6% SpinCo 14% Increased Float and Broader Shareholder Base Transaction more than doubles Safehold’s free float and diversifies its shareholder base New Safehold Shareholder Makeup New Safehold Free Float Free Float (Pre T
Slide 23: Portfolio Metrics
23 Portfolio Metrics (Current Portfolio Gross Book Value: $5,542m) 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 $5,542m) Detroit Milwaukee Central 3% Minneapolis Nashville West 25% Southwest 6% Southeast 11% Northeast 40% Mid - Atlantic 15% Washington, D.C. Philadelphia Atlanta Raleigh - Durham Orlando Tampa Miami Sarasota Austin Dallas San Antonio L
Slide 25: Capital Structure and Interest Rates
25 Pro - Rata Held by JVs $272m Unsecured Revolver $445m Unsecured Notes $1,375m Non - Recourse Secured $1,498m Total $3.6b (1) Excludes outstanding borrowings under the Company’s unsecured revolving credit facility. (2) Based on SAFE closing share price of $40.62 on September 12, 2022. (3) Assumes
Slide 26: Income Statements
26 Income Statements Note: Figures in thousands except for per share amounts. 2022 2021 2022 2021 Revenues: Interest income from sales-type leases $48,247 $27,126 $91,278 $53,100 Operating lease income 16,452 16,964 33,418 34,374 Other income 185 123 551 246 Total revenues $64,884 $44,213 $125,247 $
Slide 27: Balance Sheets
27 Balance Sheets Note: Figures in thousands. June 30, 2022December 31, 2021 Assets: Net investment in sales-type leases $2,911,681 $2,412,716 Ground Lease receivables 1,235,744 796,252 Real estate: Real estate, at cost 740,971 740,971 Less: accumulated depreciation (31,357) (28,343) Real estate, ne
Slide 28: Portfolio Reconciliation
28 Portfolio Reconciliation Note: Figures in millions. Figures in the reconciliation table may not foot due to rounding. IPO (6/22/17) 6/30/18 6/30/19 6/30/20 6/30/21 6/30/22 Net investment in Sales-Type Leases - - $160 $1,045 $1,432 $2,912 Ground Lease receivables - - - $477 $680 $1,236 Pro-rata in
Slide 29: Unrealized Capital Appreciation Details
29 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 30: Glossary
30 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