Safehold Reports First Quarter 2024 Results

Rhea-AI Summary

Safehold Inc. (NYSE: SAFE) reported strong first quarter 2024 results with revenue of $93.2 million, net income of $30.7 million, and earnings per share of $0.43. The company closed a new $2.0 billion unsecured credit facility, issued $300 million of 10-year unsecured notes, and realized hedge gains of $21 million. Safehold remains agile in a volatile macro environment, focusing on capital raises and pipeline expansion. The company's Chairman and CEO, Jay Sugarman, highlighted the positive outlook for capital deployment and customer service. Safehold's modern ground lease model aims to optimize real estate ownership and deliver consistent returns to shareholders.

Positive

• Strong Q1'24 financial results with revenue of $93.2 million, net income of $30.7 million, and earnings per share of $0.43.

• Closed new $2.0 billion unsecured credit facility and issued $300 million of 10-year unsecured notes, enhancing liquidity and flexibility.

• Realized hedge gains of $21 million, reducing yield to maturity to 5.3%.

• CEO Jay Sugarman emphasized successful capital raises, positive pipeline activity, and strategic capital deployment opportunities, ensuring continued growth and customer satisfaction.

• Safehold's innovative ground lease model aims to maximize returns for property owners across various real estate sectors, providing consistent income and long-term capital appreciation to shareholders.

Negative

• None.

Financial Analyst

The financial health of Safehold Inc. is exhibiting stability with a reported revenue of $93.2 million and net income of $30.7 million for Q1'24. The earnings per share (EPS) of $0.43 should catch an investor's attention as a tangible measure of profitability. The strategic move to close a new $2.0 billion unsecured revolving credit facility, which replaced the previous $1.85 billion, demonstrates the company's adeptness in capital management, ideally translating into increased financial flexibility. The issuance of $300 million unsecured notes at a 6.1% coupon, further optimized to 5.3% yield to maturity after hedge gains, indicates a proactive approach to debt management amid a rising rate environment. This can be an indication of the company's solid credit profile and capacity to secure favorable terms. Investors may regard these developments as indicators of leadership's ability to navigate through market fluctuations and enhance capital structure.

Market Analyst

Safehold's focus on modern ground leases—a niche segment within the broader REIT market—has potential for differentiation and yield generation, especially when traditional real estate investments are under pressure from various macroeconomic factors. The statement by CEO Jay Sugarman, pointing to a revitalized pipeline, could signal recovery and growth prospects in their specialized market segment. For an investor, the operational performance and strategic positioning in the post-pandemic environment can be particularly reassuring. However, it's essential to monitor how the company deploys its capital into 'attractive opportunities' as mentioned, since the effectiveness of these investments will influence long-term shareholder value.

REIT Specialist

As a REIT, Safehold's commitment to deliver 'safe, growing income and long-term capital appreciation' is in line with the typical REIT investment thesis. Investors in REITs often seek consistent and growing income streams and Safehold's results appear to support this aim. However, one must consider the broader industry context, such as interest rate sensitivity and real estate market cycles, which can impact Safehold's performance. The ground lease model does provide a level of insulation against market downturns due to the long-term, stable nature of lease agreements, but it's not entirely immune from macroeconomic headwinds. An investor should evaluate the company's disclosed financial metrics against sector benchmarks and historical performance to gauge its relative standing in the REIT space.

NEW YORK, May 6, 2024 /PRNewswire/ -- Safehold Inc. (NYSE: SAFE) reported results for the first quarter 2024.

SAFE published a presentation detailing these results which can be found on its website, www.safeholdinc.com in the "Investors" section.

Highlights from the earnings announcement include:

• Q1'24 revenue was $93.2 million
• Q1'24 net income attributable to common shareholders was $30.7 million
• Q1'24 earnings per share was $0.43
• Closed new $2.0 billion unsecured revolving credit facility, replacing previous $1.85 billion aggregate facilities and lowering facility cost
• Issued $300 million of 10-year unsecured notes at a 6.1% coupon. Realized hedge gains of $21 million, lowering yield to maturity to 5.3%

"Safehold continues to navigate a volatile macro environment, delivering solid earnings and executing on multiple capital raises that provide added liquidity and flexibility," said Jay Sugarman, Chairman and Chief Executive Officer. "We are pleased to see pipeline activity picking back up, and are well positioned to deploy capital into attractive opportunities and serve our customers."

The Company will host an earnings conference call reviewing this presentation beginning at 9:00 a.m. ET on Tuesday, May 7, 2024. This conference call will be broadcast live and can be accessed by all interested parties through Safehold's website and by using the dial-in information listed below:

Dial-In:	888.506.0062
International:	973.528.0011
Access Code:	285932

A replay of the call will be archived on the Company's website. Alternatively, the replay can be accessed via dial-in from 2:00 p.m. ET on May 7, 2024 through 12:00 a.m. ET on May 21, 2024 by calling:

Replay:	877.481.4010
International:	919.882.2331
Access Code:	50475

About Safehold:

Safehold Inc. (NYSE: SAFE) is revolutionizing real estate ownership by providing a new and better way for owners to unlock the value of the land beneath their buildings. Having created the modern ground lease industry in 2017, Safehold continues to help owners of high quality multifamily, office, industrial, hospitality, student housing, life science and mixed-use properties generate higher returns with less risk. The Company, which is taxed as a real estate investment trust (REIT), seeks to deliver safe, growing income and long-term capital appreciation to its shareholders. Additional information on Safehold is available on its website at www.safeholdinc.com.

Company Contact:
Pearse Hoffmann
Senior Vice President
Capital Markets & Investor Relations
T 212.930.9400
E investors@safeholdinc.com 

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SOURCE Safehold

FAQ

What were Safehold's revenue, net income, and earnings per share for the first quarter of 2024?

Safehold reported revenue of $93.2 million, net income of $30.7 million, and earnings per share of $0.43 for the first quarter of 2024.

What new credit facility did Safehold close in the first quarter of 2024?

Safehold closed a new $2.0 billion unsecured credit facility in the first quarter of 2024, replacing the previous $1.85 billion aggregate facilities.

What notes did Safehold issue in the first quarter of 2024?

Safehold issued $300 million of 10-year unsecured notes at a 6.1% coupon in the first quarter of 2024.

Who is the Chairman and CEO of Safehold?

Jay Sugarman serves as the Chairman and Chief Executive Officer of Safehold.

What is Safehold's business model?

Safehold revolutionizes real estate ownership through ground leases, aiming to unlock the value of land beneath buildings and generate higher returns with less risk.