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.

Better Solution, Massive Market

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 9/30/23, the portfolio included $212M of forward commitments including amounts to be paid to a fund partially owned by us 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.
Strong Portfolio Growth(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.

Superior Principal Safety

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
NOTE: Annualized Cash Yield is calculated as the annualized base Cash Rent plus Percentage Rent divided by Cost Basis. Annualized Yield is calculated as the annualized base Net Rent plus Percentage Rent divided by Gross Book Value.
Protected Asset
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
NOTE: Inflation Adjusted Yield calculation assumes FRED 30-yr Breakeven Inflation Rate of 2.24% annually. (Federal Reserve Bank of St. Louis, 30-year Breakeven Inflation Rate, retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/T30YIEM, February 27, 2023)​

Unrealized Capital Appreciation (UCA)

Tangible asset, transparent value, trackable growth.

Ownership
Ownership

At the end of its typical ground lease, Safehold will own everything on top of the land.

Capital Appreciation Tracker
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
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
Growing Unrealized 
Capital Appreciation Portfolio

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:

  1. The right to the rent stream, the original cost basis and certain other cash flows (GL Units)
  2. The right to the capital appreciation above the original cost basis under specified circumstances (Caret Units)
NOTE: For additional information on UCA, refer to the UCA 8-K and the UCA slides in our Corporate Presentation. (1) Series A Round: In Q1 ’22, six investors purchased or committed to purchase 1.37% of the then-authorized units for an aggregate $24.0m at a $1.75b valuation with redemption option. Including commitment to purchase 28,571 units. (2) Series B Round: In Q3 ’22, MSD Partners committed to purchase 1.0% of the then-authorized units for an aggregate $20.0m at a $2.0b valuation with no redemption option. Three participants from Series A Round committed under same terms as MSD with no redemption feature for an aggregate $4.5. Concurrent with the closing of the business combination and subject to Safehold shareholders’ consent to certain CARET modifications.
Caret Ownership Summary

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.

Continuously Creating Excess Compounding Returns

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.

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