EXCLUSIVE Safehold Makes It Possible To Invest In The Land Below Hotels, Apartments And Office Buildings

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Safehold Inc (NYSE: Protected) is the only publicly traded floor lease organization, wielding the only pure-play investment decision quality platform.

“Any piece of professional real estate … is pretty much just two factors,” Ian Selig, IR at Safehold, said Friday during a presentation at the “2022 FinTwit Meeting” hosted by Benzinga and Lupton Capital.

“It is really the land, and it can be the creating that sits on major of that land and in a ground lease composition, we individual those parts.”

Safehold owns the land beneath a number of commercial buildings. A different celebration leases that land to the setting up tenants for a lengthy length of time, generally 99 a long time.

The Essential: “At the termination of the lease, at the conclude of that 99 a long time, not only does Harmless get its land back again, it receives the creating and all of its improvements again as perfectly,” Selig mentioned.

Any time anyone buys a house, they acquire a setting up and they acquire the land underneath, but those are really various investments, he mentioned. The setting up is generally the driver of returns in the small term, whereas the land functions as more of a extensive-phrase expense, he extra.

Safehold enables a setting up owner to improve cash performance and lessen risk by purchasing the land beneath the setting up and getting into into a ground lease, Selig stated.

For case in point, if a hotel residence is for sale for $100 million, a prospective buyer could occur to Safehold for a floor lease and minimize financial investment fees. The potential consumer might conclusion up shelling out $65 million for the developing, whilst Safehold pays $35 million for the land and leases it to the setting up operator.

“$65 million in addition what ever fairness you place in is a lot less complicated to tackle than $100 million,” Selig explained.

Improving upon The System: Safehold failed to invent floor leases, but it modernized the process to make it appealing in cash markets these days. The enterprise has eliminated provisions that formerly skewed benefit towards the landowner and has built floor leases much more interesting to all functions included, Selig described.

“Some of the major and greatest providers these days are being built by rethinking how matters have traditionally been accomplished and offering essentially far better options,” he said.

See the total presentation below: