Q1 2024 Safehold Inc Earnings Call Transcript
Key Points
- Safehold Inc (SAFE) reported strong capital markets executions and positive pipeline momentum in the first quarter.
- The company issued $300 million of 10-year unsecured notes at a 6.1% coupon, using the net proceeds to repay outstanding revolver borrowings, enhancing financial flexibility.
- Safehold Inc (SAFE) has entered into a new $2 billion unsecured revolving credit facility, replacing and upsizing previous facilities, which improves financial terms and adds a new banking relationship.
- The company's ground lease portfolio grew significantly, with $71 million funded in the first quarter, including investments with a 6.7% economic yield.
- Safehold Inc (SAFE) has a strong liquidity position with $1.1 billion available, providing substantial buying power for future investments.
- Deal activity in the first quarter was limited due to higher interest rate headwinds, which slowed overall market activity.
- The company experienced higher GLTV ratios due to lower building values, reflecting tougher market conditions and higher cap rate assumptions.
- There were requests from VC investors to exercise the redemption option for CARET, leading to the decision to redeem the entire first round, indicating potential challenges in investor confidence.
- The company's office assets have experienced valuation headwinds, with approximately 80% reappraised over the last two quarters showing increased GLTVs.
- Despite having a good number of deals in the pipeline, the volatility in the market and the dependency on rate stability make future deal closures uncertain.
Good morning, and welcome to Safehold's First Quarter 2024 Earnings Conference Call. (Operator Instructions) As a reminder, today's conference is being recorded.
At this time for opening remarks and introductions, I would like to turn the conference over to Pearse Hoffmann, Senior Vice President of Capital Markets & Investor Relations. Please go ahead, sir.
Good morning, everyone. Thank you for joining us today for Safehold's earnings call. On the call today, we have Jay Sugarman, Chairman and Chief Executive Officer; Brett Asnas, Chief Financial Officer; and Tim Doherty, Chief Investment Officer.
This morning, we plan to walk through a presentation that details our first quarter 2024 results. The presentation can be found on our website at safeholdinc.com by clicking on the Investors link. There will be a replay of this conference call beginning at 2:00 p.m. Eastern Time today. The dial-in for the replay is (877) 481-4010 with a confirmation code of 50475.
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