Safehold Inc. (NYSE:SAFE) Q4 2022 Earnings Call Transcript

Ki Bin Kim: Joining the call a little bit late, sorry if you already answered this question. Just curious on the 4Q’s deal volume at a 6.9% yield. I mean, it’s pretty high. I mean just kind of saying the obvious but I’m curious about what special situation this was, if it was that? And what kind of customer would transact on a ground needs of that type of yield even in this environment?

Marcos Alvarado: Yes. I would say those are opportunistic as I said before in the other question, I think generally, we’re kind of targeting low 6s to mid-6s. I’m hopeful that we continue to get stuff close to the 7% range but I would call these 3 originations sort of situational. But the sponsors are ultra-high net worth family office, Southeast operator that owns over 10,000 units and then another family office. So I think they looked at the situation and we were the most efficient capital solution available in the market in Q4 to get their transactions off the ground. And I still think that dynamic plays forward in sort of Q1, Q2. So for the people who need to make decisions, we are still going to be the most efficient option out there.

Ki Bin Kim: And going back to your comments about low to mid-6 is feeling achievable. I’m curious about how deep the market is at those type of yields? Or do you have to go sub-secs for it to really hit your stride on a volume perspective?

Marcos Alvarado: I think at those levels, when I look at the alternative options, I feel good. I think from a volume perspective, I think as I said, we’re cautious. What we really need to have happened for us to kind of hit pace again from an origination standpoint, is this in past between buyers and sellers, this value in past to sort of abate. We’re starting to see it in the multi space, as I said before but we haven’t seen it in other asset classes. So I would say volumes will probably be muted in Q1. And hopefully, there’s some pickup in Q2 and the back half of the year.

Operator: Mr. Hoffmann, we have no further questions.

Pearse Hoffmann: Great, thank you. If you should have any additional questions on today’s earnings release, please feel free to contact me directly. Holly, could you please give the conference call replay instructions once again?

Operator: Certainly. 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 the confirmation code 47581. Thank you. This does conclude today’s event. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.