Core Viewpoint - Safestore has reported accelerating revenues for the fourth quarter, leading to modest share price gains, indicating strong demand in its core UK market and positive contributions from both like-for-like and new stores across all markets [2][3][5]. Financial Performance - For the full year ending 31 October, Safestore's turnover reached £234.3 million, reflecting a 4.9% increase at reported rates and a 5% increase at constant exchange rates [2]. - Fourth-quarter revenues rose 7.1% to £62 million, with growth of 6.1% at stable exchange rates [3]. - On a like-for-like basis, full-year revenues increased by 3.1% at constant currencies to £228.7 million, while fourth-quarter revenues rose 3.3% to £59.4 million [4]. UK Market Performance - The UK unit drove revenue growth, with like-for-like sales increasing by 2.4% for the financial year and 3.4% for the fourth quarter, amounting to £42.9 million and £164.8 million respectively [5]. - Average storage rates in the UK rose by 6.6% in the last quarter, contributing to a full-year growth of 2.5% [5]. International Market Performance - In France, like-for-like revenues increased by 2% in the last quarter to €13.4 million, with annual growth of 1.3% to €51.9 million [6]. - However, average storage rates in France fell by 1.8% in the fourth quarter, resulting in a full-year growth of only 0.4% [6]. Occupancy and Rates - Closing occupancy reached 6.67 million square feet as of October, up 4%, with occupancy as a percentage of current lettable area increasing to 78.1% from 78% a year earlier [7]. - Average storage rates improved by 1.2% year-on-year to £30.20, with a 4% increase in rates during the fourth quarter to £30.84 [7]. Expansion and Future Outlook - Safestore opened four new stores in the past year, increasing its total maximum letting area to 9.3 million square feet [8]. - The company has added 0.7 million square feet of new maximum letting area in the 2025 financial year, with a pipeline of 1 million square feet on track for future development [8]. - The CEO expressed optimism about continued momentum and expects full-year earnings per share to meet City forecasts of 40.3p, down from 42.3p in financial 2024 [8]. Upcoming Reports - Safestore is scheduled to release its full-year report on 15 January [9].

Core Viewpoint - Safehold Inc. has successfully closed a $400 million unsecured term loan, enhancing its liquidity and addressing upcoming debt maturities [1][2][3] Group 1: Financial Details - The new term loan has a maturity date of November 15, 2030, with two twelve-month extension options [1] - Safehold's borrowing rate is set at SOFR plus 90 basis points, supported by its current A3/A-/A- credit ratings [1] - The company has a SOFR swap at a 3.0% strike rate through April 2028 to hedge this transaction [1] Group 2: Use of Proceeds - Proceeds from the loan will be utilized for debt repayment and general corporate purposes [2] - The company has recently repaid $227 million of secured debt due in 2027, freeing up twelve ground lease assets that were previously collateral [2] - The new unsecured term loan replaces the repaid capital and increases the company's liquidity position to $1.3 billion [2] Group 3: Management Commentary - The CFO of Safehold stated that this financing is a strong outcome, increasing liquidity and addressing near-term maturity with flexible unsecured capital [3] - The company appreciates the support from its banking partners and believes its long-term balance sheet positions it well for delivering attractive capital solutions [3] Group 4: Company Overview - Safehold Inc. is focused on revolutionizing real estate ownership by providing innovative ground lease solutions [4] - The company aims to help owners of various property types generate higher returns with reduced risk, while being taxed as a real estate investment trust (REIT) [4]

Core Points - S&P Global Ratings upgraded Safehold Inc.'s credit rating to A- from BBB+ with a stable outlook, reflecting the company's strong credit profile and market position [1][2] - The upgrade is attributed to Safehold's steady asset quality and business stability, particularly in the context of challenges in the commercial real estate (CRE) sector [2] Company Overview - Safehold Inc. is a leader in the modern ground lease industry, providing innovative solutions for real estate ownership and enabling property owners to unlock land value [3] - The company focuses on high-quality multifamily, office, industrial, hospitality, student housing, life science, and mixed-use properties, aiming to deliver safe, growing income and long-term capital appreciation to shareholders [3]

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Portfolio Composition - As of September 30, 2025, the gross book value of the company's portfolio was comprised of 41% multi-family, 40% office, 11% hotels, 6% life science, and 2% mixed use and other[190]. - The top market by gross book value is Manhattan, accounting for 21% of the total, followed by Washington, DC at 10% and Boston at 8%[219]. - The portfolio is diversified with 41% in multifamily properties and 40% in office properties, indicating a balanced investment strategy[220]. Financial Performance - Total revenues for the three months ended September 30, 2025, were $96.2 million, an increase of $5.5 million compared to $90.7 million for the same period in 2024[226]. - For the nine months ended September 30, 2025, total revenues increased to $287.7 million from $273.8 million for the same period in 2024, representing a growth of 5.1%[242]. - Net income for the nine months ended September 30, 2025, was $86.7 million, compared to $80.5 million in 2024, marking an increase of 7.6%[242]. - Interest income from sales-type leases rose to $72.4 million for the three months ended September 30, 2025, up from $67.1 million in the same period in 2024, driven by new originations[228]. - Interest income from sales-type leases rose to $212.7 million for the nine months ended September 30, 2025, up from $195.6 million in 2024, an increase of 8.8%[242]. - Earnings from equity method investments decreased to $14.6 million for the nine months ended September 30, 2025, down from $18.1 million in 2024, a decline of 19.4%[254]. Expenses and Losses - General and administrative expenses for the three months ended September 30, 2025, were $13.1 million, slightly down from $13.1 million in the same period in 2024[235]. - The provision for credit losses for the nine months ended September 30, 2025, was $5.7 million, a decrease from $8.4 million in the same period of 2024, reflecting improved market conditions[252]. - Interest expense increased to $154.2 million for the nine months ended September 30, 2025, compared to $147.7 million in 2024, an increase of 4.0% due to higher indebtedness[247]. Liquidity and Capital Management - The company has a liquidity capacity of $1.1 billion under its 2024 Unsecured Revolver as of September 30, 2025, enhancing its financial flexibility[264]. - The company entered into a new $2.0 billion unsecured revolving credit facility in April 2024, replacing previous facilities and extending maturity to May 1, 2029[262]. - As of September 30, 2025, the company had $12.1 million of unrestricted cash and $1.1 billion of undrawn capacity on its 2024 Unsecured Revolver[266]. - The company expects to meet its liquidity requirements over the next 12 months through cash on hand, cash flows from operations, and unused borrowing capacity[267]. Investment Strategy - The company targets Ground Lease investments where the initial cost represents 30% to 45% of the Combined Property Value, indicating a strong correlation between inflation and commercial real estate values over time[198]. - The company identifies a significant market opportunity in the approximately $7.0 trillion institutional commercial property market in the U.S., aiming to expand the use of Ground Leases beyond current fragmented ownership[210]. - The company has initiated new products such as the Ground Lease Plus Fund and Leasehold Loan Fund to enhance its service offerings and capture more market share[211]. Risk Factors - The company has entered into a forbearance agreement with a tenant under a significant New York office asset, which poses risks of potential losses if the tenant defaults[194]. - The rise in interest rates has adversely affected the U.S. office sector, leading to increased vacancies and reduced market liquidity, which could negatively impact the company's tenants and property values[192]. - A 100 basis point increase in interest rates could result in a decrease in net income by approximately $3.994 million[280]. - The company aims to mitigate interest rate volatility through hedging instruments, including interest rate swap agreements[277]. Cash Flow Analysis - Cash flows provided by operating activities increased to $35.495 million for the nine months ended September 30, 2025, compared to $29.957 million in 2024[268]. - Cash flows used in investing activities decreased to $(180.185) million in 2025 from $(190.897) million in 2024, primarily due to a decrease in the origination of Ground Leases[268]. - Cash flows provided by financing activities increased to $148.831 million in 2025 from $138.462 million in 2024, driven by acquisition activities in 2024[268]. Shareholder Actions - The company authorized a share repurchase program of up to $50.0 million on February 4, 2025, allowing for strategic capital management[259]. - As of September 30, 2025, approximately 14.4% of the outstanding Caret units were beneficially owned by the company's officers and employees, with 128,971 Caret units remaining available for issuance under the Caret Performance Incentive Plan[208].

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Core Insights - Safehold (SAFE) reported revenue of $96.16 million for Q3 2025, a 6% year-over-year increase, with an EPS of $0.41 compared to $0.37 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $95.33 million, resulting in a surprise of +0.87%, while the EPS also surpassed the consensus estimate of $0.40 by +2.5% [1] Revenue Breakdown - Operating lease income was reported at $16.99 million, exceeding the average estimate of $16.66 million, reflecting a year-over-year increase of +2.1% [4] - Other income amounted to $3.66 million, below the average estimate of $4.15 million, indicating a year-over-year decline of -19.7% [4] - Interest income from sales-type leases was $72.43 million, slightly below the estimated $72.96 million, but showed a year-over-year increase of +7.9% [4] Stock Performance - Over the past month, Safehold's shares have returned -3.7%, contrasting with the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - For Q3 2025, GAAP revenue was $96.2 million, net income was $29.3 million, and earnings per share was $0.41, with a year-over-year increase primarily due to a non-recurring $6.8 million provision taken last year [9][10] - Excluding non-recurring items, Q3 earnings per share increased by 4 cents year-over-year, or approximately 12%, driven by new investment activity [10] - The total portfolio at quarter-end was $7 billion, with an estimated unrealized capital appreciation (UCA) of $9.1 billion [7] Business Line Data and Key Metrics Changes - In Q3, the company originated four multifamily ground leases for $42 million, and in Q4 to date, an additional four leases for $34 million, all within the affordable housing subsegment [6] - The ground lease portfolio had 155 assets, including 92 multifamily properties, and has grown 21 times by both book value and estimated unrealized capital appreciation since the IPO [9] - The portfolio's cash yield was 3.8%, with an economic yield of 5.9%, which could increase to 7.5% when factoring in unrealized capital appreciation [10][11] Market Data and Key Metrics Changes - The portfolio's ground lease-to-value (GLTV) ratio remained flat at 52%, while rent coverage slightly declined from 3.5 times to 3.4 times [12] - The company ended the quarter with approximately $1.1 billion of liquidity, supported by joint venture capacity [8][13] Company Strategy and Development Direction - The company is focused on meeting customer needs through innovative products and solutions, including One Stop Capital Solutions and custom pricing [5] - There is a strong emphasis on affordable housing, with expectations for meaningful growth in this sector [6][14] - The company aims to leverage its strong balance sheet and liquidity position to pursue more aggressive strategies with customers [14] Management's Comments on Operating Environment and Future Outlook - Management noted steady activity in the ground lease business, with a recent decline in rates providing a constructive backdrop, although some deals are taking longer to close [4] - The company is optimistic about the affordable housing sector and expects it to boost origination volume [14] - Management expressed caution regarding the ongoing litigation with Park Hotels, emphasizing the importance of protecting shareholder value [15] Other Important Information - The company has an active hedging strategy, with a weighted average debt maturity of approximately 19 years and no maturities due until 2027 [12][13] - The effective interest rate on permanent debt is 4.2%, while the cash interest rate is 3.8% [14] Q&A Session Summary Question: Originations and Rent Coverage - Inquiry about the originations being primarily on the West Coast and the slight decline in rent coverage, with a request for insights on the appetite for affordable housing deals [17] - Response highlighted strong traction in affordable housing and conservative underwriting practices to ensure coverage metrics remain robust [18] Question: Park Hotels Litigation Timing - Question regarding the typical resolution timeframe for litigation [20] - Management indicated that such matters do not resolve quickly and emphasized the need to enforce contractual rights [21] Question: Breach of Contract Details - Inquiry about the specific claims of breach against Park Hotels and whether rent payments were affected [24] - Management clarified that the issue was related to maintenance standards, not rent payments [25] Question: Deal Pipeline and Economic Yields - Question about the expectations for economic yields and the impact of short-term rate changes on future deals [29] - Management noted that yields depend on the timing of closings and current market conditions, with a focus on maintaining a spread over long-term bonds [30] Question: Impact of Rent Stabilization - Inquiry about the potential impact of recent rent stabilization measures in New York City on affordable housing underwriting [51] - Management expressed concerns that reducing incentives to create supply could exacerbate housing shortages, emphasizing the need for increased supply to stabilize rents [52] Question: Multifamily Portfolio and Future Targets - Question about the current percentage of affordable housing in the multifamily portfolio and long-term targets [56] - Management indicated that the affordable housing segment is still small but growing, with aspirations for significant expansion [57] Question: New York City Multifamily Exposure - Inquiry about exposure to rent-stabilized units in New York City and the implications of potential rent freezes [63] - Management acknowledged the complexities of the New York market and the need for solutions that enhance supply rather than restrict it [64]

Q3'25 Earnings Results - Revenues reached $96.2 million, a 6% increase year-over-year, and $287.7 million year-to-date, a 5% increase[10] - GAAP Net Income was $29.3 million, a 51% increase year-over-year, and $86.6 million year-to-date, a 9% increase[10] - Earnings Per Share (EPS) was $0.41, a 52% increase year-over-year, and $1.21 year-to-date, an 8% increase[10] - Excluding non-recurring gains and losses, EPS increased by $0.04 year-over-year due to asset funding and origination[11] Portfolio Activity - Q3'25 originations included four new ground leases valued at $42 million with a 34% GLTV and a 7.3% economic yield[4,8] - Total portfolio aggregate GBV reached $7.0 billion, with an estimated unrealized capital appreciation (UCA) of $9.1 billion[5] - The company has $1.1 billion available in cash and credit facility[5] - The company has $400 million remaining capital for JV with Leading Sovereign Wealth Fund[5] Portfolio Composition - The core ground lease portfolio has a gross book value of $6.9 billion with a 91-year weighted average extended lease term[12,16] - Multifamily assets constitute 41% of the portfolio by GBV, with a rent coverage of 3.6x and a GLTV of 39%[18] - Office assets constitute 40% of the portfolio by GBV, with a rent coverage of 3.1x and a GLTV of 70%[18]

Financial Performance - Q3'25 revenues increased by 6% year-over-year to $96.2 million, compared to $90.7 million in Q3'24[8] - Net income attributable to Safehold Inc. rose by 51% year-over-year to $29.3 million, up from $19.3 million in Q3'24[8] - Earnings per share (EPS) increased by 52% year-over-year to $0.41, compared to $0.27 in Q3'24[8] - Net income attributable to Safehold Inc. common shareholders for Q3 2025 was $29.282 million, an increase of 51.7% compared to $19.331 million in Q3 2024[30] - EPS excluding non-recurring gains/losses for Q3 2025 was $0.41, compared to $0.37 in Q3 2024, reflecting an increase of 10.8%[30] - The company reported a net income excluding non-recurring gains/losses of $88.538 million for the nine months ended September 30, 2025, compared to $86.528 million for the same period in 2024, an increase of 2.3%[30] Portfolio and Assets - The Core Ground Lease Portfolio gross book value reached $6.9 billion, with a weighted average lease term of 91 years[10][14] - Total portfolio square footage increased to 37.2 million square feet, with 155 total assets[7] - Total assets as of September 30, 2025, reached $7.148 billion, up from $6.899 billion as of December 31, 2024, reflecting a growth of 3.6%[27] - The company's net investment in sales-type leases increased to $3.527 billion as of September 30, 2025, compared to $3.454 billion at the end of 2024, marking a rise of 2.1%[27] - Ground lease receivables increased to $1.961 billion as of September 30, 2025, compared to $1.833 billion at the end of 2024, showing a growth of 7.0%[27] - Real estate-related intangible assets, net, decreased slightly to $205.399 million as of September 30, 2025, from $208.731 million at the end of 2024, a decline of 1.1%[27] Debt and Equity - Total debt stood at $4.84 billion, with a total equity of $2.42 billion, resulting in a debt-to-equity ratio of 2.00x[22] - Total liabilities increased to $4.727 billion as of September 30, 2025, from $4.525 billion at the end of 2024, indicating a growth of 4.5%[27] - The total equity of Safehold Inc. shareholders increased to $2.390 billion as of September 30, 2025, from $2.344 billion at the end of 2024, a growth of 2.0%[27] Cash Flow and Funding - Cash and cash equivalents rose to $12.123 million, up from $8.346 million at the end of 2024, representing a significant increase of 45.5%[27] - The company funded four new ground leases totaling $42 million in Q3'25, with $33 million funded and $9 million unfunded[7] - The company has a remaining capital of $400 million for joint ventures with a leading sovereign wealth fund[4] Economic Metrics - Economic yield for Q3'25 was reported at 7.3%, slightly down from 7.4% in Q2'25[3] - Rent coverage ratio improved to 2.4x in Q3'25, compared to 2.5x in Q4'25 year-to-date[3] Strategic Initiatives - Safehold's merger with iStar was completed on March 31, 2023, resulting in the historical financial statements of Old Safehold becoming those of Safehold Inc.[47] - Safehold's GL Plus Fund targets the origination and acquisition of Ground Leases for commercial real estate projects in pre-development phases[44] Valuation and Yield - The portfolio is valued using Aggregate Gross Book Value, which reflects the historical purchase price plus accrued interest on sales-type leases[44] - The Economic Yield is calculated using projected cash flows beginning January 1, 2025, with an initial value equal to the cost of the land, incorporating contractual fixed escalators and an assumed long-term inflation rate of 2.0%[44] - 81% of the portfolio has some form of CPI lookback, while 93% has some form of inflation capture[44] - The Annualized Yield is based on GAAP treatment, assuming a 0% growth/inflation environment for existing legacy ground leases, with 16% of the portfolio earning 3.5% under this metric[44] Financial Metrics - The Debt Effective Interest Rate reflects the all-in stated interest rate over the term of debt from funding through maturity, excluding the effect of discounts and financing costs[44] - The Rent Coverage ratio is based on estimates of stabilized Property NOI, adjusted for material changes, and is used for assessing the ability to meet annualized Cash Rent obligations[44] - The Company tracks Unrealized Capital Appreciation (UCA) as the difference between the Combined Property Value (CPV) and the Aggregate Cost Basis, reflecting the safety of its position in tenant capital structures[44]