Welcome ToThe Revolution

2019 was an exceptional year for our company. Safehold was the best performing public REIT in 2019, delivering a 118% total return. Our business grew dramatically, ending the year with a portfolio eight times (8x) bigger than at IPO 30 months ago. Earnings continued to climb, growing 38% year over year. And while 2019 was certainly a year to be proud of, we believe we have just begun the ground lease revolution that should change real estate ownership for the better for decades to come.

How we got here

The success of Safehold in 2019 was built on ideas that have existed in various forms and in various markets for over a century. But it took deep insight, significant investment and stubborn persistence to pull together all the critical elements necessary to build this modern, first-of-its-kind ground lease business. Make no mistake, we are creating a whole new industry, using a wholly different approach that redefines the relationship between land and building owners as a value enhancing and symbiotic one. But we are also combining proven tools and lessons drawn from other investment markets to make this new idea clear, demonstrate its powerful potential and to unlock value for our customers.

How we got here is interesting, but far less important than what we can do going forward. By building a strong foundational framework, based on clear logic and a proven track record, we are now in a position to fundamentally change the industry and tell our story going forward with even more conviction.

What we do

Our message is a simple one. We make real estate ownership more efficient. By creating a modern, optimized ground lease, we deliver three significant benefits to building owners—better capital efficiency, better cost efficiency, and material risk reduction—that enable them to generate higher returns, avoid unnecessary transaction costs, and significantly reduce maturity risk in their capital structures. Building a nationally scaled, sophisticated platform gives us the ability to deliver these valuable benefits to our customers—building owners—in a way never done before.

We have provided this “better capital” to a wide range of building owners in a variety of markets involving a number of different product types. We have provided ground leases during the development phase, at the point of refinancing/recapitalization and during the purchase or sale of a property. Each new ground lease deal makes us a little better, a little smarter, as we seek to create the best solutions possible for our customers.

Why now

We are often asked why this powerful modernization is just taking place now. The real estate finance markets were modernized some 30 years ago. The net lease and sale-leaseback markets were modernized some 20 years ago. So why not ground leases? Written decades ago, most ground lease terms were clearly out of sync with modern real estate capital markets and desperately needed updating. Unfortunately, these outdated ground leases, their flaws laid bare in several high-profile properties, cast a dark cloud over the industry.

But when we studied these situations, we realized that not only was the problem mostly the result of poorly designed and poorly structured ground lease provisions, but that a traditionally adversarial relationship between land owners and building owners was further obscuring the very real benefits a modern, well designed ground lease could deliver to property owners all over the country. Our mission became to reinvent ground leases, make them work smoothly within the modern capital markets, and build the first fully scaled platform that viewed building owners as the true customer. Meeting their needs and delivering a better capital solution in a better, more customer-friendly way, would be the cornerstone of our approach, an approach that had helped iStar create major breakthroughs in other parts of the investment market in the past.

Why us

To make ground leases efficient and value enhancing, you have to understand the ins and outs of the real estate finance markets and you have to understand what has made the corporate sale-leaseback markets such an effective capital tool for CFOs over the past two decades.

This is where iStar comes in. As an innovative leader in the real estate finance world over the past 30 years, a leading player in the sale-leaseback market for almost as long, and an active buyer and seller of properties in its own right, iStar’s intricate knowledge of what lenders need to feel protected and what buyers and sellers need to execute their business plans becomes a critical competitive advantage. iStar is a lender, so it knows how to work with leasehold lenders to craft the right ground lease structure to make leasehold loans simple and cost-effective. iStar is a sale-leaseback expert, so it knows how to provide low cost capital solutions that unlock value for great operators. And iStar is a buyer and seller of buildings, so it knows what it doesn’t want to see in a ground lease and what others wouldn’t want to see either. This, together with iStar’s historical relationships, network of customers and financial support, created an almost perfect launching pad for us to reinvent the ground lease market and build the first, pure play ground lease company in the public markets.