SAFE - Earnings call transcript Q2 2022

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Operator

Good morning, and welcome to Safehold's Second Quarter 2022 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 Jason Fooks, Senior Vice President of Investor Relations and Marketing. Please, go ahead, sir.

Jason Fooks

Good morning, everyone, and thank you for joining us today for Safehold's earnings call.

Officer. we Alvarado, Sugarman, Officer; President Asnas, Chief today, Executive and and call the Marcos Officer; and Financial the have Chairman Jay Chief Brett On Chief Investment a This presentation results. morning, to we walk that our second plan details quarter through found can website our on be by at Investors link. The and clicking on presentation safeholdinc.com the is PM and the dial-in will replay this of of time There the conference call code the Eastern replay XXX-XXX-XXXX, be a beginning with confirmation at X:XX for XXXXXXX.

over call that the turn Jay, earnings I'd which everyone I Before historical remind to to be statements call, like forward-looking. this in facts, are not may

any actual risk or these update statements, materially factors Our are obligation from except the cause forward-looking required by as could statements, disclaims these differences and SEC differ law. intent may that our detailed to these results in expressly forward-looking Safehold reports.

that committee potential to a Directors filed Lastly, transaction, with special a special highlight a Board in to respect Safehold advanced agreements. to and of discussions corporate are amended that of the negotiate committee I yesterday, are Board of proceeding of Directors they of XXD definitive and disclosing that of strategic iStar want the iStar an

Chairman there no won't I'd will like have been because this can CEO, that, With discuss turn Sugarman. on definitive and call. able yet Jay However, the that to be call to be executed agreements assurance be and no Jay? we to over definitive agreements executed, potential the transaction

Jay Sugarman

Thanks, Jason. today. joining us Thanks all for to of you

and progressed iStar Safehold second and remain strongly, Safehold. with revenues between Earnings was continue and one high grow busy future engagement significantly. for the The to customers regarding quarter a conversations

completed, to to won't be share near they conversations on future. in the be do able As to until hope details Jason said, but those so able we are

million. compelling need watch in us. of yields earnings rates in were Transaction feel and quite commercial markets real up has at remain volumes our strong started year-over-year new to to over year. the still For interest to and we'll overall XX% over inflation-adjusted so half investment estate Pricing the has up $XXX second moved quarter, the with activity slow, stabilize

continue from streams And a align coupon us long-term about and of our recent company. ways hear the innovation structures. financing flow you'll long-term matches flows to to also the liability Brett that that We stairstep contractual XX-year explore growing access more closely to cash enabled cash

cost of our sizable simplifying debt owners and for cities in tied the approach modern use on portfolio so $X the and certainly provide the the and focused we of asset our we of in the the full inflation is the protection Interest The last And capital company's so part rates top points. around and building of billion our and in expanding three value by UCA, As value. half of year impact value but highlighting billion to share ground portfolio back market reflected leases we we of ground on do inflation of play and solutions Safehold's the use price. returns. can on the country; a will $XX inside attractive things: continue calculation, in offerings; two getting capital to that the customers developers to positive Caret’s Caret equity success low in cost leases, participate in and more our providing remain the importantly, corporate can structure,

Marcos. create value Marcos? it see So built can and help we'll Brett be as Safehold market the to value working full over hard scale. With the to let's continues it what of that, to turn is the and

Marcos Alvarado

everyone. Jay, you, Thank morning, good and

X. on Slide begin Let's

meaningful by growth. UCA characterized The solid quarter earnings activity continued was investment results, second and

get will details left which quarter, capital quarter's new earnings a liquidity. through fresh us raised the structure, during Brett innovative of results. the debt into with this we Additionally, ample

First, let X. me Slide our activity, on beginning investment discuss

ground quarter, in the $XXX the million we of coming million, expect quarters. $XXX during funded balance we the the which new leases to totaling originated million fund seven $XX During quarter and

during originations quarter funded of leases to we across markets as commitments. the in the lease all major million prior the associated continue focus different we US. with and $XX four ground five seven These the spanned five customers types throughout ground property the Additionally, we new expand of markets, new utilization on

new percent as rates escalators, weighted of mentioned component investments made most zero a inflation, lower typical quarter, were leases rather again, investments we a fixed we yield of leases quarter quarter rent the increased result yield totaling during As scenario. ground in higher made do X.X%, during two assuming basis a quarter, $XX yield under XX feature And than is we've variable The zero the Safehold a X.X% which ground leases. acquisition Of originated the primarily the the the points we have CPI much last of pricing on bumps the generated we percent under not based the rent existing the the inflationary average our show million for as that with note, CPI moved. the of for but of have life lookbacks, of rent GAAP. first

million be pricing of of today. quarter our yield on would which levels the our for originations, is reflective Excluding investments, $XXX these X.X% the

discussed the We nor not meaningful market, financial we in is GAAP have by statements. recognized that protection our that capture inflation leases built into our our under reflected for the believe that portfolio previously value ground

the the capture rent of with still. lease ground X.X% are of second assuming to example, adoption would years provides growth XX just our hotel, quarter. representing five quarter mixed-use. a the and metrics high-quality expectation the investments closed our ground of approximately in latest and targets comprised including leases a end line Fed's For five in seven this result XX% of credit second aggregate coverage associated value widespread ground times. IPO contractual inflation quarter, times with different are during At X science originations product, since multifamily, our of with types, our The of life XX-year we a Slide over property inflation for at X.X our $X.X the the growth the quarter Underscoring the snapshot Louis quarter our stood lease St. modern billion, the of in X.XX%, portfolio ago. office,

You can see assets quarter originated during the the right the we on of quality of side the the slide.

we portfolio through to the focusing with Moving turn of a the US, that, to Slide financials. as breakdown the And We me Brett? to across geographic diversify X. XX go to show top markets. on Brett let our over it continue

Brett Asnas

XX% Slide our the detail the were XX% Revenues Marcos. $XX.X we $XX.X year. year. year earnings million, $XX.X quarterly increase Net Thank we earned the in period. the me million you, earnings share per for above X prior Continuing million $XX.X income in a earned Good last morning, last XX% was results. period quarter, on a $X.XX second was let from And same everyone. increase from million, $X.XX,

This quarter's expense compensation results million include Independent stock-based for $X.X annual the Directors.

the of dividend the Directors of during the to share. increase X.XX% an approved Board common a Additionally, quarter, rate $X.XXX annualized per

X% was consists of metrics our ground other. can XX% At office, weighted X% portfolio's was the XX% end to XX% of weighted the lease life portfolio type, our use mixed rent Slide portfolio quarter, and X.Xx. hotel, on value and multifamily, coverage X. average average be science Additional property and XX% By seen

a XX portfolios detail is under Our scenarios. On how amount lease we significant various yield it years. high-grade year-to-date a bonds these about portfolio. There's average is what long-term long-term term to Slide The our of inflation high correlation and our weighted price on impacts stock bonds. our high-grade cash XX, discussion values inflation and been we've and the market largely seen flows, between our relative yield

However, this of correlated as generates XX% flows with our in. current of inflation fixed, and as tight some portfolio built of does fact yield correlation are aren't inflation that positively Marcus but a cash yield of an The reflect portfolio our annualized mentioned, X.X% has X.X%. cash protection form the not approximately

metrics these ground the for X% environment a leases. However, assume of duration inflationary our

that priced higher we this to go to and rent it you down bonds. market yield and settles our XX-year comparable for will cash in understand. is Louis Said our believe fixed means XX rate when years, meaningful in our that latest But our additional that next has true valuation in to yield has yield led years investors results and This X.X%. if XX% it X.X%, up the They're way, flows. will portfolio would drive XX back higher also that St. yield higher of portfolio different not the it to cash inflation is rates, which investors increasing ends long-term Fed's essential apply take the X.XX%, like the generates expectations over not flow another to is the materially our If X.X%. X.X%. compounded If a portfolio portfolio scenario, should inflation-based up. inflation would the bumps a to And discount

which secured $XXX proportionate assumption million keeping we Slide the so, of debt is partnership. we representing structure. comprised debt of fair. $X.X leases, end And in second flow of an and nonrecourse our secured of approximately of of $X.X own the ground XX of notes provides cash the had At billion our billion $X.X billion debt, debt, by share overview capital not quarter, unsecured the of static

million cash average had of $XXX Combined on at in unsecured million with end. debt had weighted -- on we our we drawn addition, Our revolver. quarter liquidity $XXX hand,

to basis on X.Xx levered debt interest and match cash our markets, The on total to debt market X.X%, on which of equity interest X.X% a The innovate cash X.Xx during choppy in on is annualized X.X% on is profile rate to a an levered to portfolio. markets, book our a debt current and yield non-revolver XXX effective raising long-duration rate cap long-dated yield successfully effort and the continued debt in best the to We by X.X% average a debt basis. are equity the the on our Also flow to capital assets. quarter, basis weighted our portfolio. spread is cash Safehold spread positive point despite the non-revolver our

million significantly treasury XX-year trading. plus of of spread inside X.X%, public notes where XX-year which pricing unsecured structured bonds XXX $XXX with raised we XXXX, of XX-year at the our was Specifically, points, were of basis due U.S.

through this difference each Importantly, pay XX a interest in X.X% be in years maturity at responsive at of cash through net is the yield the at which rate will coupon a hedge increasingly continue will strike rate X.XX% the in to between the XX, structures semiannual cash XX resulting our In long-dated rate, financing are for meaningful through investors fully treasury accrue on XXXX. X.XX% principal rate high-quality to X.XX%. anticipation balance assets, our a interest in another payment Safehold million novel rate accretive a expand in financing, unsecured our to stated markets. to one the X.XX% and in as $XXX entered years of lock company financing transaction Stairstep X.XX% step The credit demonstrates a agreement features unsecured into we structure of and Safehold that credit XXXX with for This XX. footprint and years the in period repaid after unique

Lastly, provide on slide we on update UCA. an XX,

square institutional Mixed estate, XXth, square appreciation value million multifamily, Other portfolio approximately As Use sitting feet the the million billion, we land, XX.X above of Life at of of XXX,XXX Office, Science of our of types. UCA XXX,XXX feet compound of XX% & XX to feet capital estimated unrealized total, square all since the square comprised In growth of past feet of million $XXX five an square feet is June million property over of of the years feet commercial approximately Hotels, of by real million square X.X consisting annual XX $X.X IPO-ed. quality increased

in lease while it's on a far me performance, of leadership conclude, been industry. that, back position in was our strong challenging quarter, we ground so to expanding remain let With So year it turn terms it and very Jay. a stock to focused the

Jay Sugarman

the side questions. turn Safehold of anything Lots iStar to understand I this you you say Brett. the can't good conversations, many point. let's ask just to it hope but and on progress will we I know ahead want the balance so right of Thanks, about of at over go sheet there,

So we'll during the business Operator? stick about Q&A. to questions

Operator

Rich of Thank [Operator go line ahead. SMBC. Instructions] question the Please you. Our first from comes Anderson,

Rich Anderson

bit, Jay, to at chomping try Okay. the I'll here. nice play but

of of okay, you feel $XXX to liquidity, optionality XX million, the the bring terms months. let's on capital So course that six Do raise say additional over mentioned -- to out the next you to stock in of price platform might a we game recovery involve the reasonable asset perhaps grow kind of sales. the more in going joint in the would What be full way have plan don't ventures, forward? assuming you the

Jay Sugarman

source. all the find Rich, doing I best price. not We'll the the we're capital happy ideas to share but very accretive, are the on obviously try and Hi transactions still those compelling think yeah, with think We are table.

are other have ground in. from but leases would lot there There's access of the certainly not So rather capital third ways parties. interest an better of Frankly, a to. that they there's any to we give alternative creating, if we're that been we bring are up

Rich Anderson

And currently out going you're current closer the be present present leases? I it or day about Is the created maybe have a stepping newly ground running that know talk to do there just or about to But to investors the to what have, about you're ride to inflation be for in the perhaps protection investments, environment and CPI talked up macro new wait is you the protection. terms model flow. as the any cash of you lot this business? have for day, going

Jay Sugarman

Well, valuable the are protection inflation is the that life believers over lease. ground we that firm very of

more I more what really structure the customers, line to the try push than in to do look like liabilities and up think can same you've the capital rather the assets. is markets on our rent seen

of to benefit there our more pretty inflation will chance customers their but execute I with try right us. gives of customers plans the us to with certainty like right be also then business a their push opportunity back around go mindset. that balance there's what to frankly the cost feel a to strong gives found protection, So we them different rent think that now We into and

of I do opportunity changes of So on I lot a see the liability see front, coming a don't that but lot with side.

Rich Anderson

in What want the to the get terms Okay. STAR, done of not the collapsing just Last are XX mind, of the get close through be net at discussions too of lease where your terms like and through and to needs the to you you view point feel question for sales two you iStar getting of asset next in through the me do the the in at in platform. additional companies. about But gotten things We've like. to from months iStar?

Jay Sugarman

an was call, really else, we can as transaction we're the Look, you something iStar know, transaction. Yeah. about. milestone having Rich, lease going. created think our ecosystem are and And of about where we STAR excited the Safehold Everything talk we But this talk think a net yet. about ground future be success. beneficiaries That's having lease will I can't is it I both ultimately

on will we that those can't details, can, we where share So but we call. this do

Rich Anderson

very Okay. Fair enough. Thanks much.

Operator

question Our next Kramer, ahead. Stanley. Morgan from comes Adam go Please

Adam Kramer

Hey Appreciate it. thanks the for time. guys,

spread right? maybe to, ignoring the compared financing financing wanted three, how this the portfolio, before in quarter's portfolio, that of, whole may yields and on but and from you four maybe total and run-up on ground the between the costs? just that us, kind drill new remind between new quarters originations, spread on the originations ago the focusing just remind new the Just quarter, for So your just in us costs, spread leases I two, this disclosed and know the to

Brett Asnas

Hi, Adam.

think the portfolio portfolio, variable think we QX's is two million, existing originated or million an I rent. of that our originations that, We So kind is lease about ground of is was $XX way which $XXX buckets. about

in So GAAP. it reflected get doesn't

our of pre-inflation are debt we our inflation any kind X.X%. million, that So about cost today. any value. significant still X.X%, as component balance think think our that about ROAs -- obviously a And we're XX, versus point think so of basis and spread then XX getting of are as about of cash $XXX -- that's the I about I cap inflation rates Again,

Adam Kramer

That's guys. super Thanks. helpful,

so way of little you buying be existing as drilling on ground do a hopefully more ground down the leases. there of of of model it. rather kind bit maybe just And that that the buy that kind where think kind Is leases opportunities Is out portfolios phrased more to something there'll matures, thinking new product kind you that the something of of portfolios new kind guess, there existing out I kind way maybe of than

Brett Asnas

about leases an institution in university very hard purpose, municipal a the extremely rarely or family know, five away some event, owners case was it's XX% is as -- XX% passes sell. for It's the -- these of episodic leases We a This been are to usually existing here. And create. ground you some of business last other It's was land. actually selling somebody extremely the therefore, a years. our over ground to selling which

are process think So the for profile. our very of episodic I assets part when come along, we sale, fit those obviously

Adam Kramer

I -- whether many just stock that why right, may, to are I thinking maybe kind be the investors of to the things aren't of close changed, to and reasons improve it's of can't talk say, of about kind other if today, we technical kind the that you'd of you not can the too getting it's Safe I'm But And last I at flow, with -- of reasons clear that what look that sure the ask maybe one from the perspective. hopefully things change topic stock want when right, could transaction the more a potentially one, Awesome. just to kind about. some kind think

Jay Sugarman

make them structure, would in and you've mentioned, naturally Yes, some controlled are to shareholder point, an not the they I invest side, management on equity people equity both in on cases, heard Safehold. side, the important And the consistently as that it load hit for the literally we've to structure think side like external see. from on I debt the things investors impossible

like, beginning with of would the iStar, the benefit. parties we we So those are we at year felt tackle both constraints could out if laid that

in be of Safehold a make tremendous the we are from to and that Well, a, corporate architecture. we in of because of b, want eliminate potential. about has future, able been two the potential? how North participating terms our those reach would little undervalued bit And business that's do its we Star constraints is hope full underlying is to thinking because minds, last investors to thing precluded be the the So

Adam Kramer

the here Right. All guys. Thanks for time

Jay Sugarman

Thank you.

Operator

question Connor sorry, Please line ahead. from Siversky, the Our Berenberg. -- of our next next go comes

Connor Siversky

some lease considering these Thanks in that and drift upward just where curve acquisitions? real of quick potential initial seeing me and seeing is any question, these in the right plot duration ground the kind rate forward of one now Really having you on for of on call. the time dot terms. you're Are the yields

Brett Asnas

Yes, absolutely.

I to think XXX if of you up existing ground gone we then has million gone -- that number up GAAP if QX, up $XX at that QX that kind has And basis effective look points points. yield. those on leases you exclude pricing XX basis bought of that our

base So between to we're despite a in now. that we seeing seeing the values. positive on going Jay's echo it live. being I want said, occurring a reception, there A slowdown increase transactions positive from comments, right what bid customer is reception in our ask We're That our closed QX and pipeline clearly just it forward. our asset

And quarters. we expect year, some potentially so first second think two the about the over half we of the as slowdown

Connor Siversky

be maybe But transactions, stepping you same up Understood. more context, the buyers in from more away expect some you? opening similar for do opportunities might levered

Brett Asnas

Yes.

using product our ground of as your we regular what's looks last lease the the competitive way I think to at actually end think of than our spread versus it better did I And fee a advantage we look financing. sort year. at --

today, somewhat. do last what a volume assets I part bid capital We're ask expect of the some momentum are of but couple a on seeing to big still bid over down weeks, we reality pretty transaction slow is solution. -- the we positive the our were. And there's think

Connor Siversky

Understood. Thank you.

Operator

question next Laws, from Stephen Please line comes our Raymond of And James. the ahead. go

Stephen Laws

deck, you the transitioning, now I with guess I track talk you a the a deals about been lease, at how morning. were seven are fourth. clients. when the third second, noticed, of first. when it like and many five in those new new do I looks to good start how eventually how more client Hi, record got wanted Can think, think with do client a pretty I showed a new building add it that QX, onboard -- beginning kind things of about new you've or strong the in here it's do first year. you their of a you ground relationships, Kind and

Jay Sugarman

we're really board. clients. are the those Yes, They especially the excited, Stephen. fund large, of across Hey, managers domestic quality

very, So very quality. excited about the

last come groups and done -- another us couple back an XX% a time were XX% and or second transaction back transaction accurate. we do of more stats people us these go pretty the a equity show you a still that those with have did we If and approximately of raise transactions.

are clients. but done seeing better takes That So it, ability at important. has first our client, overall been the existing immediate almost getting to of it's sometimes the getting scale but stable deal, we're deal buildings the two a conversion, business stable, with that our extremely of creating first years, time kind and in growth by we're effects

Stephen Laws

Appreciate touch about situation, another the from Jay, initiative. you've the and SAFE some know there. of talked lot liquidity away big providing stay the I base, color there. I'll a but Caret’s to STAR,

I maybe your or there provide transaction on some outlook think of Can you February event that? liquidity current is from liquidity. a what window now your into type provide to some months on two-year and some updates do we're six that thoughts us

Jay Sugarman

misvalued focus, we see probably Stephen. most a see as catalyst of is we because Sure, things one It the marketplace. in it big and an the enormous

goal initial was Our the table. investors to to bring

first I round think the did that.

a mark-to-market lot So positive do have And tracking more with constructive. for the capture we're an part kind and tangibility of expresses. that? of gives very how understand and more and positive value? we quarters, that they are of How that growth are can it good, that dialogues people XX the on. rates on of the basis, engagements that last Certainly value think and I be those asset been digging in we how comfort trying We that us to a have

But any little We'll to as that eliminate discount. now. value reflected with ability start goal in that who a the getting know, ourselves we'll see long-term, think be full I an probably certainly reflected on requires liquidity That's next to Caret, that year. to and and the is stock you to is around folks digging our we goal to working ahead need Our get Safehold full really something are value, bit. see in of value that's liquidity ultimately, the address

Stephen Laws

Great. Thanks I for comments, Jay. this the And time your appreciate morning.

Operator

Our comes go of from Harsh Hemami, next question the Green Please Street. ahead. line

Harsh Hemami

my Hey. Thanks for taking question.

mentioned a volume guidance. that you the So in to in the ask on the leases back slow half, transaction bid market you expect ground and bit down little as

good So, Safehold? couldn't say, by does just to mean volume increase basis you achieve ground to you differently, it that as if originated that the points just on claiming XXX that lease pricing that's were acquisition try as,

Marcos Alvarado

Harsh. Hey

a point six refinance, broad we make of across sell. this gone Just here don't mean valuations last bid part volatility is macro broadly, a through customers. and we've ask, -- mean When are as our of or transacting bid a when asked capital so that and months I somebody clarification. buy to mean the statement a decision of values I between a I are bid down, or I'll ask asset recapitalize asset making solution

side. half in And we a with issue anticipate I'm so little the ask, It's not lease slowdown referring of and receptivity bid that's the of why ground year. the back a our a pricing on to bit the potentially

Harsh Hemami

Understood.

basis were pricing could today? the to increase spread to to points still try volume, you maintain you if So XXX

Marcos Alvarado

Yes.

feels of this to point are pretty XX XX kind we where today, think spread good I today. basis pre-inflation,

Harsh Hemami

from then one And me. Great. just more

transactions that in Have the future you Given tenants repeat growth. that having relationship you're these this in any giving they of with had there and maybe so repeat some on more future participate tenants your was with GP can more conversation some and this tariffs topic? conversation tenants

Jay Sugarman

couple to idea. love you're powerful liquidity until but steps a very little a that's create the it, we, thinking, demonstrate the bit think more value little that way of premature a around still. Harsh, a, we b, and still A but engage in away it's I

Harsh Hemami

you. Thank

Operator

And line of ahead. our next Bin question comes the Truist. Please Kim, Ki go from

Ki Bin Kim

we sheet guys for bit? Hi, talk million you $XXX I unsecured little of good Can balance morning. the some about raised noticed notes. a

curious, overtime, on interest because rate different? bit the I the that the it's is at bridge obviously, GAAP look Just when it's you but coupon seems stated what XXX, cash a like little know

Brett Asnas

Yes. Sure.

hedge So, X.XX% be P&L the We stated to that a enter rate. what prior on our will into transaction. did is booked

So, will amortized the was to $X gain, close offsetting which life. over there's million a that be

So, as next we the in from flow first is P&L, the the X.XX% through from over see rate that flow standpoint, said then remarks, effective operations, flow X.X% paid GAAP and the cash go through That's cash in over X.XX%. then years years, to you'll And the a from will X.XX%, years. and yield XX effective to up of up in where go cash. flows last and XX then the terms it in XX

Ki Bin Kim

-- [ph] not that questions. And What noticed I it almost any in that million couple balance? quarter. I I but revolver, just today? your balance out yet? the on the rate on the the XXX Q, this is know to $XXX guess, plans increased on a refinancing of you put And revolver it's

Brett Asnas

LIBOR margins. we it's like certainly of our to make borrowings. perspective, $XXX some out think term I million to now, we sure plus want I from Right Yes. maintain those our

and think So, look capital remarks, markets we'll additional hedge there's his forward, to at going with prudent to talking the continue debt and times. appropriate alluded room And definitely we're leverage lots of continue as to I Jay capital to look with sure to And to to what to excited serve currently our our this footprint customers. by, we'll look our availability make we're providers the innovation. that's in we'll

Ki Bin Kim

be quarter, closed is things deal I is that given I did other in just the thought, timing earnings. there on of? amount question the just just of or that last was the one a we're some there not curious aware when higher. you little -- of And a EPS were bit element if volume your will

Brett Asnas

Yes, you the days. outstanding head hit XX quarter is average the the day for nail of on there. The

on had So, origination largest and the it XX. back-ended was was we closed June pretty

when quarter, capture you'll that we So, or worth see rent income. in upcoming of quarter the full flow through a

Ki Bin Kim

Okay. Thank you.

Operator

And ahead. question Matthew of line is Please the Riley. B. go our Howlett, from next

Matthew Howlett

morning. taking question. Thanks Good for my

was there the this First in strategic question, process? G&A any onetime-ish from expenses

Brett Asnas

compensation For we have G&A, line that related other the in our Directors. flowed expense expense the second in announcement Independent for through stock-based item. our then our there to annual quarter was And some

Matthew Howlett

Okay.

some that some advisers the or So there's numbers? in of

Jay Sugarman

legal Yes, fees and accrued expense. other through other tax some

Matthew Howlett

Okay. Great.

I of numbers you've talked, $X year. look $X Second market big you've billion originations, question, this had size in billion about when Jay, long-term a I are term. terms some longer a we mean, at year, the talking of Obviously,

through just this Just years? annual product we -- of are the when in say, about we how cycle, five sort thinking next are you get let's originations, what --

Marcos Alvarado

Yes. get We $X.X about felt that billion number $X.X billion, to math, simple end was a billion a quite year. of comfortable to the put that. with XXXX We out $X.X by

we so much we're about I of think, got educating market solve because take is, obviously, variable more. the to of not more range parts very we're that compelling? side do ground say we Matt, market that there's equity billion, on opportunity modern the capturing industry. really off, think So we would what with I the $X able frankly, corporate is and And here so still comfortable architecture debt $X.X we because meaningful should the in lease constraints. to billion be Why if you is think those the constraints it we feel the

best very drive that's and capital, we conditions low-cost and in types. business We here. this part and of unleash job substantially providing across attractive been year, cities. reason equity And of own exercise from trillion are should our estate our XX top to cost the to that creating is continue to There's capital real solution property it a can't grow no multiple debt commercial our it's a So big provide $X the and capital to of additional this the markets, potential. down customers in think

Matthew Howlett

spreads, does Theoretically, more lease to wider clients higher more advantageous borrower your is mortgage rates the to attractive investment mean and ground it -- I a is it theoretically, today? given interest

Jay Sugarman

budget for said, building they're think, who at when bring develop I to bid-ask wide seeing as market pretty or when looking they Definitely. are But something. a transactions projects trying customers their a Marcos to are

just we're when the little you're markets are So of transaction a market, better bit flow seeing stabilized. uncertainty through

probably are a people getting ground we lease need provide. had right, can the calls not a that They working. solution efficiency from You're who

picking than have It highly real more market are But means happen. incremental solution volatile we a just in cases. conversations. say up we market. I'd transactions more So stable many And estate better we some a prefer macro, a

our we real and pulling feel share. high we be the about anything. from we estate we And engagement we've to some of now, doing back transaction in good see will it's just our So engaged And are bit that the push look all get fair audience. like continuing levels, little definitely that a and a steady, forward us the in volume our customers but transactions right receptive overall seen see and But spread guys to And are and is team string. there I it's very and know past, harder gospel for to our on happening. finding

Matthew Howlett

managed process today. it of and that working make extremely sort very a been – very Got transaction, you the it's well strategic investment in a still a does And it working run, what sounds you. had Can just sense there's question. case you're externally it -- quite undertaking we undertaking the like The tripled I mean stock you're Obviously, strategic been know, given past SAFE, question, SAFE, a was well. worked high-level for of you on being relationship. lot sense. mean, the did over you that still last is I it huge Makes well. for of three STAR the years. SAFE, relationship, just a --

Jay Sugarman

great an no the business. hard this can we about future enormous question a potential an question. launch as structure managed what the structure business. And we be said, the long mean and is think business. in we externally it's There's this I with think right Yes, to

not think the it structure. most best some not and right that the to Whether at really I clear potential just to business. us becoming tomorrow, structure point, the capture it's full today, the is pretty it's of to investors long-term it's

from as let's our standpoint, managers, -- with clarity. get So along show let's the world it,

pointing. external feels the and always like There's corporate us. architecture bit to so controlled and a everybody in good of to fewer conversation. in business. a That That's point management shareholder. positive constraint happening conversations a we're like Let's the and have direction much We'd about fewer

point. your take I So

actually for this years. a it's do believe the good think five the I first right one. We architecture architecture was

$X we're and on billion agreement an billion billion, $XX in we to a come clear forward As our do from how to pretty we better look sides can $XX say, go billion $XX there's it. to that minds if to architecture both

Matthew Howlett

this you of type said, Got conclusion that you. And to some near-term, official the will process. as communication,

Jay Sugarman

say I'll better. sooner, the just the

Matthew Howlett

Thank I appreciate that. Jay. you,

Operator

the Rich We Please from ahead. SMBC. of go Instructions] a have line [Operator question Anderson,

Rich Anderson

Thanks.

contract that that the And is of question. would probably be or accurate? that a to think, that Just a discussion, Safehold. factual that a to fee, annual fee. average Is I of management by three of that is -- subject cost second, times termination is all, first management the need I know involves felt

Jay Sugarman

if more contract XXXX, factual that I a I it's on be until anything the then. into be And piece, in can't believe that. go can't so -- it Just terminated than Rich. is going conversation The later really to happens before

Rich Anderson

Am I management the average right about annual annual it terminated. is fee, times three

Jay Sugarman

years… has there conditions actually until so terminated be is think seven before don't it more it's Post-XXXX, can but think operative correct, other three to times -- I the I be

Rich Anderson

you. Got

Jay Sugarman

only In terms of the issue.

that. So – I there's I on wouldn't too fixate think much

Rich Anderson

Fair Okay. much. very Thanks enough.

Operator

no at And are questions other there in queue. this time,

Jay Sugarman

joining Okay. Thanks. call Great. us. again? everyone, the please you, replay give Thank would for you conference Roshal, instructions

Operator

available Eastern midnight. after XX, Certainly. for at replay August gentlemen, p.m. be will Ladies conference today this through and XXXX XX:XX

our the Thank dial concludes International participation time code You toll-free XXX-XXX-XXXX by for the any XXX-XXX-XXXX and dialing and access conference of AT&T may the XXXXXXX. XXX-XXX-XXXX. is participants Again, AT&T and International replay and service. number is today. conferencing XXX-XXX-XXXX your for access you at for XXXXXXX. code the using may access That system entering

disconnect. now may You

Safehold (SAFE) 3 Aug 222022 Q2 Earnings call transcript