Safehold (US:SAFE)2025-11-05 21:07Financial 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]