Safehold Reports Second Quarter 2024 Results

Rhea-AI Summary

Safehold Inc. (NYSE: SAFE) reported strong Q2 2024 results, with revenue up 5% year-over-year to $89.9 million and net income attributable to common shareholders increasing 34% to $29.7 million. Earnings per share rose 20% to $0.42. The company closed six new ground leases for $98 million, bringing its total portfolio to 143 ground leases valued at $6.5 billion. Safehold also secured a new $2.0 billion unsecured revolving credit facility, replacing previous facilities and reducing costs. Additionally, the company established a $750 million unsecured commercial paper note program. CEO Jay Sugarman expressed optimism about increasing transaction activity and the company's ability to deliver value to customers.

Positive

• Revenue increased 5% year-over-year to $89.9 million in Q2 2024
• Net income attributable to common shareholders grew 34% to $29.7 million
• Earnings per share rose 20% to $0.42
• Closed six new ground leases for $98 million, expanding portfolio to 143 ground leases worth $6.5 billion
• Secured a new $2.0 billion unsecured revolving credit facility with lower costs
• Established a $750 million unsecured commercial paper note program

Negative

• None.

Insights

Financial Analyst

Safehold's Q2 2024 results demonstrate solid growth and strategic expansion. The 5% year-over-year revenue increase to $89.9 million and the impressive 34% jump in net income to $29.7 million indicate strong operational performance. The 20% rise in earnings per share to $0.42 is particularly noteworthy, suggesting improved profitability and potential value for shareholders.

The company's portfolio expansion is evident from the closure of six new ground leases worth $98 million, bringing their total to 143 ground leases valued at $6.5 billion. This growth trajectory aligns with Safehold's strategy of revolutionizing real estate ownership through modern ground leases.

Financially, Safehold has strengthened its position by securing a new $2.0 billion unsecured revolving credit facility, replacing previous facilities totaling $1.85 billion. This not only increases their available credit but also reduces facility costs, potentially improving their financial flexibility and profitability. The establishment of a $750 million unsecured commercial paper note program further diversifies their funding sources.

However, investors should note that while the company reports increased transaction activity and successful conversion of LOIs to closings, the broader real estate market conditions and interest rate environment could impact future performance. The company's REIT status offers tax advantages but also comes with specific regulatory requirements that investors should consider.

Overall, Safehold's Q2 results paint a picture of a company on a growth trajectory, with improving financials and strategic moves to strengthen its market position in the ground lease industry.

Real Estate Investment Specialist

Safehold's Q2 2024 results reveal intriguing developments in the ground lease sector. The company's innovative approach to unlocking land value beneath buildings is gaining traction, as evidenced by the addition of six new ground leases. This expansion brings their portfolio to an impressive 143 ground leases, valued at $6.5 billion.

The ground lease model, while not new, is being modernized by Safehold. This approach allows property owners to separate the land value from the building value, potentially leading to higher returns with reduced risk. For investors, this presents a unique opportunity to gain exposure to prime real estate locations without the full burden of property ownership.

The diversity of Safehold's portfolio is noteworthy. Spanning multifamily, office, industrial, hospitality, student housing, life science and mixed-use properties, it offers a broad spectrum of real estate exposure. This diversification can act as a buffer against sector-specific downturns.

However, it's important to consider the long-term nature of ground leases. While they can provide stable, growing income, they also lock in terms for extended periods. In a rapidly changing real estate landscape, this could be both a strength and a potential limitation.

The increased transaction activity mentioned by CEO Jay Sugarman is a positive sign, especially given current market uncertainties. It suggests that property owners are becoming more receptive to the ground lease model, which could drive further growth for Safehold.

Investors should watch for how Safehold deploys its enhanced credit facilities and commercial paper program. These financial tools could accelerate growth if used judiciously, but also increase risk if market conditions deteriorate.

NEW YORK, July 29, 2024 /PRNewswire/ -- Safehold Inc. (NYSE: SAFE) reported results for the second 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:

• Q2'24 revenue was $89.9 million, up 5% year-over-year
• Q2'24 net income attributable to common shareholders was $29.7 million, up 34% year-over-year
• Q2'24 earnings per share was $0.42, up 20% year-over-year
• Closed six new ground leases for $98 million¹ during the quarter, bringing the total aggregate portfolio to 143 ground leases and $6.5 billion
• Closed new $2.0 billion unsecured revolving credit facility, replacing previous $1.85 billion aggregate facilities and lowering facility cost
• Established $750 million unsecured commercial paper note program

"We are pleased to see transaction activity picking up and the successful conversion of LOIs to closings," said Jay Sugarman, Chairman and Chief Executive Officer. "Safehold is well positioned to continue pursuing opportunities and delivering value to our customers."

The Company will host an earnings conference call reviewing this presentation beginning at 9:00 a.m. ET on Tuesday, July 30, 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:	171484

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 July 30, 2024 through 12:00 a.m. ET on August 13, 2024 by calling:

Replay:	877.481.4010
International:	919.882.2331
Access Code:	50921

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 

1

Gross of joint venture partner's commitment of $39 million with respect to five of the new ground leases. Investments in Q2'24 include $40m of new forward commitments that have not yet been funded. Such funding commitments are subject to certain conditions. There can be no assurance that Safehold will complete these transactions.

View original content to download multimedia:https://www.prnewswire.com/news-releases/safehold-reports-second-quarter-2024-results-302208733.html

SOURCE Safehold

FAQ

What were Safehold's (SAFE) key financial results for Q2 2024?

Safehold reported Q2 2024 revenue of $89.9 million (up 5% YoY), net income of $29.7 million (up 34% YoY), and earnings per share of $0.42 (up 20% YoY).

How many new ground leases did Safehold (SAFE) close in Q2 2024?

Safehold closed six new ground leases for $98 million during Q2 2024, bringing its total portfolio to 143 ground leases valued at $6.5 billion.

What new financing arrangements did Safehold (SAFE) secure in Q2 2024?

Safehold secured a new $2.0 billion unsecured revolving credit facility and established a $750 million unsecured commercial paper note program.

When is Safehold's (SAFE) Q2 2024 earnings conference call scheduled?

Safehold's Q2 2024 earnings conference call is scheduled for Tuesday, July 30, 2024, at 9:00 a.m. ET.