Better Solution,
Massive Market
We are disrupting a $7 trillion real estate market with a more efficient capital solution and better customer experience. Safehold’s portfolio has grown from $300 million to over $6 billion in just 5 years. A unique combination of investment attributes offers shareholders access to safe, growing income and long-term capital appreciation.
Strong Portfolio Growth
| 19x | Growth Since IPO (1) |
|---|---|
| $6.4B | Ground Lease Originations |
| 135 | Ground Lease Transactions (as of 09/30/23) |
(1) The portfolio is presented using Aggregate Gross Book Value. As of 12/31/22, the portfolio included $308M of forward commitments that have not yet been funded (such funding commitments are subject to certain conditions). There can be no assurance Safehold will fully fund these transactions.Superior
Principal Safety
Our target ground lease represents the senior-most 30%-45% of a real estate capital structure and we target opportunities where rent is covered approximately 3.0-4.5x by the building's cash flows. Assembling a large portfolio of these quality ground leases, diversified across the top 30 U.S. markets, by property type, and with strong real estate sponsors operating the buildings, further enhances the safety of our cash flow stream.
Protected Asset
CPI Lookbacks continue periodically through the life of the lease, which can provide meaningful inflation capture that is significantly better than the long-term fixed-rate bonds we benchmark against.
NOTE: 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 lookbacks are generally capped between 3.0% - 3.5% per annum compounded. In the event cumulative inflation growth for the lookback period exceeds the cap, the excess is not captured by the CPI lookback. Other forms of inflation protection include fair market value resets and percentage rent, typically for ground leases Safehold has acquired from 3rd parties.| 3.4% | Annualized Cash Yield In-Place with 0% Inflation |
|---|---|
| 5.1% | Annualized Yield In-Place with 0% Inflation |
Including Contractual Inflation Capture
- 5.6%
- Inflation Adjusted Yield at 2.0% Inflation
- 5.7%
- Inflation Adjusted Yield at 2.24% Inflation
- 6.1%
- Inflation Adjusted Yield at 3% Inflation
Unrealized Capital Appreciation (UCA)
Tangible asset, transparent value, trackable growth.
Ownership
At the end of its typical ground lease, Safehold will own everything on top of the land.
Capital Appreciation Tracker
Tracking and reporting the estimated current spot value of UCA. UCA is marked in part using market estimates from CBRE.
Growth Dynamic
External Growth: Each time a Safehold ground lease is closed, more UCA is added to the pool of value.
Internal Growth: UCA also grows from appreciation of buildings in the existing portfolio.
Growing Unrealized
Capital Appreciation Portfolio
- 23x
- estimated UCA growth since IPO
Caret Ownership Summary
Just as a ground lease splits the land from the building, Caret enables us to split our portfolio of ground leases into:
- The right to the rent stream, the original cost basis and certain other cash flows (GL Units)
- The right to the capital appreciation above the original cost basis under specified circumstances (Caret Units)
Continuously Creating Returns
We believe that Safehold's operational efficiency, low variable costs and a high rate of returning customers position the business for meaningful growth in the years to come in a $7 trillion market.
Growing with Innovative Thinking
By building a leadership position in a large, untapped market with what we believe to be superior risk-adjusted returns when compared to certain alternative highly-rated investments, Safehold is reinventing the ground lease sector and seizing this opportunity on behalf of its shareholders.