Safehold
Safehold provides long-term, cost-efficient capital to commercial building owners and developers, utilizing a lender-friendly ground lease structure approved by major financial institutions.
Company Overview
Safehold provides long-term, cost-efficient capital to help high-quality commercial building owners and developers drive better returns and maximize the value of their assets. Safehold offers solutions that include a low cost of capital and the ability to unlock embedded value. The company operates in the top 30 markets nationwide and specializes in various property types such as multifamily, office, hotel, retail, industrial, life science, student, and senior housing.
Ground Lease Structure
Safehold's ground lease structure is lender-friendly and approved by banks, CMBS, debt funds, life companies, and agencies. The structure is designed to be financeable and salable, with 99 years of term and no fair market resets. It helps reduce upfront equity requirements, mitigate refinancing risk, and eliminate debt maturity risk. Additionally, the structure provides tax benefits and eliminates transaction friction costs over the 99-year term. Safehold utilizes this structure for acquisitions, recapitalizations, and ground-up developments.
Portfolio
Safehold has a ground lease portfolio valued at $6.4 billion across 135 transactions in 40 unique markets. This portfolio encompasses 33.2 million square feet of total space and includes properties in major cities such as New York, Chicago, Los Angeles, and Miami. The properties span various asset classes, including multifamily, office, hotel, and life science. Since its IPO, Safehold's portfolio has grown 19 times, showcasing its robust expansion in the commercial real estate market.
Market Reach
Safehold operates in the top 30 markets nationwide, catering to a diverse range of commercial property types. The company's ground lease transactions range from $15 million to $500 million in size. The ground lease cap rate ranges between 4.25% and 5.0%, with the ground lease to property value ratio ranging from 30% to 45%. These attributes make Safehold a preferred partner for high-quality commercial building owners and developers across the country.
Benefits of Safehold's Services
Safehold's ground lease structure offers various benefits, including the reduction of upfront equity requirements and cost of capital. It helps drive stronger cash flow yields and higher returns on exit. The structure supports building owners in winning competitive bids by manufacturing a higher cap rate with less equity and debt required upfront. Additionally, the ground lease structure helps convert outdated and problematic ground leases into modern, value-enhancing leases, thereby aiding owners in selling properties more efficiently and generating more sale proceeds than selling the property outright.