2021 Highlights
2021 brought accelerated growth for Safehold, driven by repeat business, new customer adoption, market expansion and continued product innovation, resulting in strong financial performance.Accelerating Momentum
since IPO(1)
(1) The portfolio is presented using Aggregate Gross Book Value. As of 12/31/21, the portfolio included $166m of unfunded commitments (such funding commitments are subject to certain conditions). There can be no assurance Safehold will complete these transactions.
ground lease in
late 2021
stands at almost
$5 billion
17 ground leases
closed in Q4 2021
portfolio guidance
to $7.5 billion
Growing Customer Adoption and Retention
Cumulative # of unique sponsors that have been pitched a Safehold ground lease
deals with Safehold
are currently reviewing another deal
Source: Internal CRM tracking metrics.
(1) Based on numbers of unique sponsors
(2) Excludes Ground Lease Plus, IPO assets, deals in which iStar was the sponsor, and acquisition ground leases
Revenue & Earnings
Growth
| FY'21 | FY'20 | Y/Y Growth |
|
|---|---|---|---|
| Revenue | $187.0m | $155.4m | +20% |
| Net Income | $73.1m | $59.3m | +23% |
| Earning per Share | $1.35 | $1.17 | +15% |
Investment Grade Credit Ratings
In 2021, Safehold received unsecured investment grade credit ratings from both Moody’s at Baa1 and Fitch at BBB+, providing increased financial flexibility, broadening access to funding sources and enabling Safehold to deliver even more efficient ground lease capital to our customers. The debut rating is the highest ever for a public real estate or real estate-related company.
Rating Outlook:
Stable
"Safehold has been making inroads modernizing ground leases in the U.S. in the market that has historically been somewhat underdeveloped and fragmented. Modernized ground leases' long-term nature as well as their substantial asset protection support Safehold's robust assets quality."
– Moody’s Investors ServicesRating Outlook:
Stable
"The ratings reflect SAFE's focus on the relatively low-risk ground lease asset class, which is characterized by growing, long-dated revenue streams and significant overcollateralization, strong asset quality performance, consistent profitability, a scalable business model, low leverage, long-duration funding, solid dividend coverage, and the company's relationship with iStar Inc., which provides access to sponsor relationships and industry expertise."
– Fitch RatingsBreakthrough Innovation–Caret
Just as a ground lease splits the property into two investments, the land and the building, Caret generally enables us to split our portfolio of ground leases into two investments: (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 appreciation above the original cost basis under specified circumstances (Caret Units).
In Q1 2022, we sold and received commitments to purchase 1.37% of the total authorized Caret Units for $24 million at a valuation of $1.75 billion from a group of leading private equity, sovereign wealth and high net worth investors. As part of the sale, we are obligated to seek to provide a public market listing for the Caret Units within the next two years. If we are unable to achieve a public market liquidity event at a value in excess of the investors' basis, they would have the option to redeem their Caret Units at their original purchase price.
An advisory board comprised of some of the new investors was formed to help maximize the value of Caret over time. As Caret's value grows, it should enable us to provide even lower cost and more efficient capital to our customers.
NOTE: We previously formed a subsidiary called "Caret" that is structured to track and capture UCA to the extent UCA is realized upon expiration of our ground leases, sale of our land and ground leases, or certain other specified events. The Caret Ventures LLC agreement was publicly filed as part of our 2019 proxy.
