Safehold (SAFE) 30 Jul 242024 Q2 Earnings call transcript

Good morning, and welcome to Safehold's Second Quarter 2024 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 Pearce Hoffman, Senior Vice President of Capital Markets and Investor Relations. Please go ahead, sir.

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

we Asnas, Sugarman, Tim Chief Investment today, Executive and Doherty, call Officer. Brett Officer; Financial the have Chairman Jay Chief Chief On Officer; and our through we presentation to morning, XXXX walk This that plan details second quarter results. a our found on link. The safeholdinc.com Investors at on can by website presentation be clicking the of a There call at will replay be X:XX beginning conference this p.m. Eastern Time today. is confirmation code The a dial-in of with for (XXX) XXX-XXXX the replay XXXXX. to that X those who during want ask participants to limit order ask themselves accommodate all In questions questions, Q&A. to we

If to the additional you queue. questions, you'd ask like may reenter

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

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

I'd Jay to like over to it Now Jay? with Sugarman. that, turn CEO, and Chairman

of Pearse, thanks Thanks, and you to for this morning. us joining all

quarter highlighted progress earnings, G&A. solid on was by attractive and deals second The

engagement. progress good much we made can more targets Earnings smaller efforts see to that as how size and the sure New but number. run but the overall said, origination our the existing by we've customer were pleased sovereign JV of under further up dollar originations so limited net efficiently our and allocation were That do we helped activity Not wealth the business possible. improved as against pick front, partner to to far. our on level with

and later our real this environment, multifamily the market overall for opportunities transaction year markets other focus in types with activity. help should remains asset more The of rates lower sector estate terms the limited. In potential

impacted cap let detail. With change overall the by it somewhat by me new valuations over CBRE assumptions to again the additions tougher in office review estimate quarter. fundamentals, Brett that, UCA for leaving more UCA for our rate little offset market and to higher from from were Lastly, UCA originations, turn quarter

good Jay, you, everyone. and Thank morning,

the Slide X. with start a summary of Let's quarter on

we of one quarter, the million. expand X the of housing, coverage Credit and X X affordable space with ground with sponsors. for markets $XX During and targets leases they X.X%. our were GLTV student with are X rent the in new housing across metrics and X.Xx in of X Of originated the economic XX%, and yield deals, portfolio multifamily an line

returns. We closings, very of converted are LOIs to are we announced previously believe attractive most our risk-adjusted have pleased at what into particularly

well in participate. on that We clearer path we price stimulate broader as will are optimistic rates which and transaction interest discovery a can volume the as increasing in liquidity market

unsecured options our several On previous immediately had increasing which liquidity aggregate credit upsized the financial front, fresh June, capacity, alternative commercial short-term maturities billion $X closed $XXX has billion replaced a as a new unsecured the a in revolver paper further we dollar-for-dollar a outcomes overall term, as new X-month the $X.XX we million capital program full which our facility, lowering positive extending nearest-term revolver In We incremental flexibility. X not paper strong on extension and our backstop. with $XXX announced our borrowing credit costs, includes X-year and recast commercial program. This view facilities. and to improving funding for revolving April million, company,

amounts so program the issued. would yet revolver do not have which on interest recognize utilized near may in but savings We term, us the help versus the

million X%, a current interest approximately rates. rate from of saving company benefit We at strategy. XXXX $X active of of million $XXX hedging continue place has until April to an SOFR per in approximately cash The swaps quarter at

on UCA million, $XX current future a long-term quarter $XXX cost to million end, of have to financings. economic was which with We capacity long-term $X.X approximately a is the further of economic $X.X liquidity, our provide treasury lease yield. mark-to-market new the venture. of our $XX commitment by X.Xx. $XX of X $X.X was economic $XX million yield billion Slide expected into growth. Of we of joint QX billion, in fundings locks in million million. GLTV at quarter we QX, coverage place gain X portfolio total estimated At lease Safehold's and which a the of in the of new our In originations was the approximately our $XX quarter, at a joint billion. venture. commitment that provides that is rent including is Additionally, of partners benefit the position X.X% total preexisting portfolio XX% $XX potential enhanced snapshot a a ended million, have and ground available true was second funded closed million, originations is have X X.X% and commitments ground JV

assets has unrealized since XXx our our estimated and IPO, appreciation above XXX the while Our grown sitting leases ground has capital ground has grown lease XXx. portfolio

life Continuing office, million from XX% and property approximately our to science the results. of portfolio estate, emphasize XX.X X In continue X% of consisting real earnings other have multifamily today. million our quality assets multifamily under of We by me total, on ground of detail square feet square feet X,XXX X, XX,XXX institutional unrealized appreciation quarterly XX capital count over types. and square of keys feet the commercial exposure is Slide hotel of units, let at and comprised million portfolio leases increased approximately IPO to

up by revenue expense. from Holdings of growth $X.XX. per approximately For as as well million the second and income interest million $XX.X increase offset EPS investments in new in savings was $X.X of share revenue management million, approximately approximately net was driven asset-related $X.X net quarter, fee, $X was earnings by was additional year-over-year and rent G&A $X.XX million million $XX.X Star

external team into. the where business quarter's will target the team members savings The to legal we G&A same team call, Certain asset legal seasoned of what flexible in firm for the better services provide to On $XX XXXX cost-effective structure to were and said but has corporate legal Safehold, a second approximately million. fit was quarter's result net continue in-house our G&A from reorganizing annualized counsel, last of to our manner. transitioned a that more and and

this of we're legal Slide yields. we result $XX in our our to this continue in a now environment. structure finding we'll detail business to and cost revising great As On recently X, the portfolio's transition, made aligning progress expectation We've be thoughtful to efficiencies, million.

in On primarily earns on excludes IPO yield. within which as adjustments market rent we've contractual investments. fair percentage interest all earnings, yield economic economic currently an to Reserve's we are variable basis, accounting appreciation leases. of rate yield assets, GAAP generates annualized largely to in with a unrealized XX% that resets, the which X.XX%, backs, For rent, be X.X% yield yield. underwritten all today. layering the including a That unrealized inflation the X.X% rent, look adjusted from We X.X% includes believe long-term its yield This using has Federal economic future methodology have X.X% economic adjusted yield ground X.X% economic of our calculation significant capital but significant source periodic Annualized in for noncash which value X.X% at an and increases a amortization, is CARET assets escalators, X.X% which value drivers. the portfolio these ownership and $X to additional cash CPI company current by yield, the valuation. inflation Safehold's after XX% conforms a is upside, a increases how of most Using an capital that market portfolio appreciation or unrecognized estimate for such inflation in billion recent remains breakeven CPI-based depreciation our the that IRR-based

the and X. underlying highlight We portfolio type. diversification to property our location Slide of Turning by

annual after page of the coverage portfolio. representing several the based Our are type. top for of gross appraisals at region markets, detail rent X.Xx. portfolio XX property metrics the at have Rent from quarters We and on of quarter-over-quarter XX% as GLTV of which right CBRE increases. Portfolio such the by coverage and book include remained by we and out key is GLTV markets in each these additional stable bottom quarter second also the approximately called the stabilized on on value asset

well-located We leases ground stakeholders long its to the have that believe of over attractive markets investing XX institutional quality company risk-adjusted top and time. in continue that benefit the in periods will returns

of which of Lastly, $X.X Slide had billion billion we $XXX million of nonrecourse new ground million Pro-Rata X, of $X.X comprised unsecured the on capital debt billion joint secured ventures. $XXX quarter, we second notes, structure. of At on on provide unsecured our the own in our of an our end debt and share revolver leases, of approximately $X.X overview we of debt,

approximately end, credit years, XX approximately XXXX. is maturity cash $X.X billion no debt and of due quarter we average had until At availability. maturities weighted Our and have we facility

AX outlook stable Our at with with and credit a are Moody's outlook Fitch. positive at ratings BBB+

As through interest outstanding, million on a approximately SOFR balance is X% April and our XXXX. earlier, manage produces cash savings $XXX several the to hedges current million at borrowings. We received P&L. of million flowing risk swap through revolver floating basis payments in per rates, have at currently mentioned that $X cash and interest limited to rate the is quarter that place today's Of each we $XXX swapped fixed rate month

we treasury average no so they balance approximately approximately $XXX in month. of is sheet locks treasury gains at hands on X.XX%, comprehensive million the a position These yet $XX cash and while rate rates instruments, in weighted do at have We P&L. each other recognized changes also locks of And which current income, our these are not treasury mark-to-market are long-term a of recognize gain million.

at be unwound of any prior. term, utilized through end for cash designated they can hedges can their be point the While

to borrowings thereafter. unwind with P&L long-term hedges the the look to the would we then debt, flow we As have ability out through term which revolver

on a basis. is and rate We are cash portfolio's permanent on permanent interest total on X.XXx X.X% rate The is debt levered the interest X.X%. effective debt debt-to-equity

and terms and to liquidity business, to balance it be we'll with sheet rate we're that, So The to to let deliver we ample see look our cuts to harness Jay. of to and back in opportunities our me customers. conclude, to up, well beneficial for activity transaction turn And valuation. expect to begin our positioned, is encouraged pick value both

Brett. Thanks,

ahead and go open Let's Operator? up questions. for it

with Crossett [Operator Nate you. BNP coming first Paribas. Our is question from Thank Instructions]

is And Maybe months X Maybe what X you you're you mentioned through having? now? based like the multifamily. for could what talk the still that like conversations on expectations mostly pipeline think are right? the look Is your I just to next right it's

Tim, answer? you don't why Yes.

last we It's Tim. announced Yes. as closed Yes, X the you X deals of quarter. saw, we

to we in just LOIs LOIs. There's this what both on it's optimistic Activity, are pretty actually seeing And that general closing The close conversion other predominantly on then X activity yes, deal we're and multifamily. will that quarter. market, were additional likely can up been quarter-to-quarter year. later the signed vary, the this

for where even CMBS. the is the I into in think obviously, It's in increasing, now predominantly that the liquidity news that's reason funds, starting there, and are also but right other that competition is lifecos, activity tightening, the is pretty classes. that's we're capital the seeing debt banks, with asset the with the competitive, is market. But good spreads agencies, pushing

seeing activity clarity front-end increased and we're pretty the right we're pick visibility and those So optimistic the in on transaction the now, flow. up mostly market with but

just funding you just I much wanted it revolver? just left is savings the guys us commercial terms on if the know of program, put the the the on And how can then what's remind in on deal to JV? then versus rate And flow, you also paper Okay.

at it's Nate, Brett. million. $XXX venture the there end, quarter In joint was

million investments quarters. share coming the partner here our was over So remaining future that go towards $XXX will

In of the the in June. we terms paper, commercial of place at program put end

a I think were left days the in couple there quarter. of

hit we've Now earnings.

that in on So now, costs. facility. probably The XX pay points our in hope term, would Right the manner. credit basis judicious versus near savings XX close be we our adjusted points revolving line we to will utilize basis to here plus a SOFR

around savings net commercial I'd on depending the paper probably issue, the be of in that say we the number. So tenor will average landscape what

Thank you.

Burrows Our coming with question Goldman Sachs. from next Caitlin is

a Maybe just the you know pipeline. recently. obviously been focused on follow-up guys on I multifamily have

types point limited, of size like or I what up deals the something just types, Just or then But interested being the kind wondering of other in be? the ends they you might could the property if you could of you talking Because do. could relatively get at comment on cap yields maybe although multifamily and portfolio rates of feel kind that of those about deals what there's yes, deals expect. you stickiness

again. Tim Sure. It's

there flow probably of tracking attention obviously, being the office, the right them. earlier, and We're in more what's markets up rest them, the pretty that's there. said capitulation provided what's I being all to sort on hospitality, is activity one activity asset going is starting side markets classes, again, open which flow. hospitality as remains beginning on So the asset on the capital the sales of paying other as other the areas, of there, Transaction low key see transaction in those leading classes. those for of going investment the capital to capital But in to all the the fundamentals in retail, we're

for opportunities the we're just ready We're So on flow a go the right waiting lot to of increase. to those. in transaction

it. Got

lease's West being that we then noticed property a And XXX you XX where a auctioned. ground is Okay. have

I want to a property specifics, a there's new the just reasonable to case best like owner risk. rate, sells cap understand maybe general, scenario for that and specific would Safehold. don't to in whether talk So asset downside what's just be you if change if the no realize But or a to trying

if how does sold any there is for to if returned end up guys? example, low lender, dollar impact a amount, or that property for it's impacting to So a Safehold you is

Jay. it's Lin, Okay.

do obviously, process Midtown So the a and lot from investment, New there. is building pretty think The market well. benefited we sponsor recovering running is York of a the has

how So out. that let's plays see process

how us. on an that effective I but preservation. end focused to should we're think up. price impact premature lease not exactly dollar say obviously, does our more capital fair value will ground speculate But to by low viewed one be as it's it's A very owner, long-term

value. So all long-term as leases, we ground do looking maximize with we're to

that process we're So watching closely.

is Paolone with from JP question next coming Our Morgan. Anthony

would Can rate where had talk debt sort and debt incremental just just and now of you into duration be your just if most capital right about on attractive market? to side go that longer-term the you the

Brett. It's Sure.

not talked now, right that's funding us, in long how commercial our saw do the alternative we've you that incremental an paper as view but to really term. not and as business program, that's the So about capital We earlier, we're just revolver.

a is private over go I and us years seen the long-term you've basis, think do markets. the to what debt on public

now, have at XX right that in. So tightened about bonds that back XX to spread issued in February, points. we XXX basis our Those a we did of

all benefit is of second flow So we've seen on hard here over getting still X%. Fitch the focused everyone We close well. XX-year some bonds the hump that through. of benefits provide to get work the doing that Right now, additional think We're as those to trade that A rating. will

is seen at well And nice If treasury you've terms a into a some mid-Xs. creating the in the looked from spread the X% over XX-year both basis, would accretion. here of where gets where that you market as us be we're recently originate yield, where you as

be be the the flat and But existed, to we So in re-coupons It XX-year be also about could that's past. points. has will look points feels been that It's year-end. think I the it today, the hedging you've at that do and as has versus where And public of now, like is to Today, It forward curve year-end down the going a at again think coupons. step a markets. basis strategy. it's move that our XX the when think come X-year which private us important certainly and I basis we and steepening XX mix difference seen bunch. it very about right both certainly be could

our accretion earnings margins So we're creating profile. in and constantly some thinking for about nice locking

to it sweet Or you days And doing where of. multifamily understand with seem in delivered like just spot fits a just stack you then type affordable, these these solution of it but just it were bunch getting your terming multifamily? Class Is Just is, as more to lot Or is where is. the just-- Got B? that's a projects? it follow-up about of trying cap out development question it be Can most? lot transactions talk is to Okay. affordable the relates a it. a kind sounds

Yes. those on all This location demographics Look, are whether these is be spans of it age the multifamily where of it again. based is and the moving. multifamily, of Tim drivers really

capital now cost blended It's cost other deals provide lot see proceeds, a any West. as Sunbelt. right? market same, incremental remains as where the goes you of That's a So ground be well of rate, we lot multifamily increase down. the us are across, closing of the right liquidity low lease affordable occurring you're or the it for capital out that sponsor benefits the as of in transactions whether seeing The

seeing we're side activity the and side, even the both multifamily So development recapitalization space. in on acquisitions

momentum very that in multifamily. So positive in

All right.

sponsor So I their the what mean like leasehold debt? to where the sponsor-- are proceeds does on

are So to agencies there cash with that see people lease finance able its to staying they Safehold, coming project, on be modern to on and in those they life their liquidity know provides where banks them to are flows typically, would metrics the in sizing institutions lease based fee depending they cycle. transaction. the the is lender credit that And it ground us are be for also or the the simple because our use recapitalized with

is that everything the spending one of CapStack, that we have look, a Therefore, time metrics they that them that the liquidity the credit in brought with this can they sure need provides to in market they make to sponsor. to the that's So that lot benefits the lenders case, here the the provide require. everyone of they

is Our Citizens Germain Mitch next with from question JMP.

this with into for a quarter. that the the relationship introduction I'm did you take how transaction? it new And harvest from deals curious long to did about sponsors

to a base. themselves. of it customer the pay in different our we range. parts of are on depends mean lot some Great is try We as out expand where pipeline can their lot question. clients cycle I of a their and That's window. to reach It the it it's Mitch, something they to different Tim. varies, right? attention investing sponsor are look, what But of there we

X-plus Some transactions of getting done these relationships, with we've and ago, years started from now. we're

is of a ones done bear see heard tend can fruit of to clients relationships bit want that come and quicker. in those they we've their how it and and have other what this work, little peers, Some to with

You're starting XXX to see that transactions. over window obviously, done as, we've narrow

that to execution from starting You're of time transaction. initial see first a of conversation window to

So a as we've I it varies would quite it's narrowed as bit, but say well. matured

Thank you.

is from Harsh Green Our next question with Street. coming Hemnani

following Just pipeline up on a the second. for

types, in So incrementally be on backdrop you tightening little rates that property cap activity if feels the to It that yields mentioned like liquidity maybe types? in those How against hospitality and yield sustain Against coming a sort other and pick of underwrite backdrop, origination think could you're you you help come the that now? do you of mentioned mid-Xs office. you yields that multifamily property the were in could to multifamily. lot the seeing down. continues And much some on space, all-in of additional maybe Could bit. rates a up

Yes.

stack, the large class the terms in office definitely our of the The levels. part multifamily and debt. now much rates obviously, in cap the of rate which compressed asset the multifamily historically the are from have in of the cap in still think hospitality remains cost no I spreads space capital cap wider cheapest and right, discussing, you're side, cost is matter that

couple a rates usually tighter, higher still you've spots instance there's basis. some Yes, on of where of but a seen seeing in that consistent drifting cap mid-Xs, the why occurred. you're an not if there's However,

Hospitality capturing spread there'll still, little the be sure, we're extra So a see, you on multifamily. office there. the spreads and as

point for coverage transactions, for making and focused capital that point that on it's we're However, the us, of really transaction, the also the providing ourselves. we're efficient really every right cost attachment those but attachment sure but an

lenders a process function Any at little It it to thoughts team. helping the you contract, a on legal was Safehold standardized terms them old bringing and where is then in with elaborate in terms. any and this such point And today having Or the of like of making of taking could the it. a helping these and big company that that? comfortable ground lease the maybe behind scale thoughts growth outsourcing maybe that bit of big it? a behind behind reorganization thought seems part the driver Got

Sure, Jay. Harsh. It's

wanted we this leader. know, to had you to do really industry, build to of a as the we So lot work be and

resources So now yes, comfortable getting of run I we lease But but little we're spent same think time a mature a ground running company, business. and a that expense of in-house, a the modern steady-state also those this could helping realized sharing with the structures outsourcing format. to and less is what get a resources more with we been right and a of get kept legal we're benefit more more the able little of market lot by we've efficiently we that We've lot those some them.

worlds. We now but So the of in-house, outside but kept the I that in P&L of of have the need sit we firms XXX% best both the them, when also think we lag our intellectual time. some and on property that not kept got can resources it

Mizuho. is [indiscernible] from with next coming Our Handel question

Vaidya Ravi on Handel. is the for line This

difference another of any affordable the and do ground multifamily? multifamily weigh you you follow-up that in leases traditional rate? on on opportunity And higher of question is to Any rate wanted brief there ones? earlier. Just the deal any was or How a market with terms noticeable acquiring asked Are return? market pursuing risk

can of the assets a assets. not of location it's Again, flow quick of is, At the the with there and what from are affordable the growth the ground cash be of sponsor can cash difference, at generated we're big of These that to how generate to I day, allow provide we're these looking the is in path those is area probably in. the those the lease terms and know, right, the in that that Ravi, Tim. guess needed the those well-located as low-cost transactions. the of end capital. help underwriting assets answer are and those you come country us the flows infill across that,

I structuring. on short and every pay largely nuances flow focused the But day, we're cash to are what ground generation class cash percentage here to that at think same. the underwriting So of the be rent. end flow asset the the is utilized our the answer remains There and that should _ of

I fair think obviously, to loan to bit I it's say, class. And asset occupancy, in would say that than high lower straight generically, very cost is a little multifamily.

That's helpful.

Just acquisitions you sheet, about are are on which restricted how us into one up guys you again more Can classes remind any when asset here. which do _ or with JV? And your balance goes transactions go the partnering that decide there one JV?

The has construct where first place JV put the Yes. in originally was look.

another the were going construct get probably here metrics, specific don't that not metrics, they they're excluded. But those still is so. if though, So those There's quarter to or There for think market in in nothing JV. place fit some dependent. where I are

so it's far, good relationship. And been a really

is question Laws from next Our with Stephen James. Raymond coming

JV about investment regards Can commercial anything at capacity raise how equity need program of you about additional you leverage a where you'll given a the the equity total running to your you debt capital? in changed kind little standpoint. from before think talk to paper with XX% capacity And bit operate to do here, the

Stephen, Brett. it's

a backstop dollar think additional revolver. or dollar additional don't it So of as has the from from for a leverage It standpoint, really paper full we liquidity. commercial

cost looking savings really it at an we're from So as alternative a perspective.

utilize forward, see there's market of our line, success on think and credit incremental at instead tenors, there. that higher savings the paying to different a we'll and we So issue our market able what of if see moving that is we're but spread depth

So just from as We an no alternative. is change. standpoint, a there strategy view it

we our In X.XXx. the terms at leverage of quarter ended profile,

the math, venture that You're of the about it's now right our based deployed turns million of are about joint leverage. and $XXX X.XX every dollars on is right in terms

dollars there's in equity being levers utilize of of other million of So and to that debt Obviously, that couple another have hundred both takes we deployment. the able us markets. terms to

to the look last some feels Obviously, continue flip hedges. think to beginning has tomorrow I indicated how what forward, the business. as And the in out a here going to half to pricing moving well best then here the the We as or we're really figure current from year and and that X, enter the standpoint, do think we've of but market's and recently. is to the our year we XXXX. valuable put environment liquidity Fed really economic like But it rate important, So fund meeting the hedging over cuts September. in pipeline, second into

cuts I valuation from profile think rate on clarity benefit and where from originations just pipeline rate an earnings get is. both people should standpoint standpoint, be a for business, our the and as a environment

liquidity business? something event? update before look And accelerate as side potential moving UCA the the far or looking CARET that you really as that to Or originations, higher a follow-up, anything Any there with Jay, get is carats? the could you give us investors the an again update to as you're do on of

side. component is that's component Yes, future obviously external growth big growth going Stephen. spot the the of value. CARET's to a really of origination on, That follow It's

we interest. of like once a feels quite we're the We've really our up think to I moving have environment, so, there, and a And side. on it see story bit I had CARET a solid us think better activity you'll pick

We the really a not, we way it's story, we pursued when, it. whole the until have not if. But want tell to can tell

is origination as delivering soon really come to picture clear like of side a business is the we as feel will it going grow how this So over time.

Markets. Our next RBC with question coming Lee is Kenneth Capital from

think how previous follow-up real potential rate a reductions, further catalyze for transaction question. At level, a markets? from just the the higher outlook of the in could Somewhat activity this do potentially given estate quickly you

look, that's flow. produce transaction say, what and would visibility I we're clarity seeing. And

couple on out visibility. of the Brett's rate come people high and with confidence people reductions the as a in go the I debt equity have that That about some out in have lot execute weeks both and more are reports to probability last at I side. coming market this provides think of mean you the and comment the transactions, the point. pretty on

what there's market we good participants. we're with dialogue feels make It our a and sure the So indicators, like swell and can all flow keeping up. transaction starting the cost of

going It's then cut stop then they actually They say cycle. do of a cut. they they're and sort X-part to raising,

And said, opportunity place, really more to a so, accept I has drop we mentality piece last But of into place. but everybody the them. I there's ahead think the see fall taken Tim to here think in to that as begin one before shoe shift wants markets definitely see

comes we'll And September. see if in so, that

Got you. yields, or you then could in to deals. that origination I expect the Very that helpful the risk-free you there. new the Any recent there? the X.X% of over change spread potential terms rates And the outlook got on saw economic

as Yes, transactions. when of second probably some quarter had can closed rates in those pretty Sure. decent the peaks guess, you we some

numbers, you XX-year So we're close rates where off treasury. those in originated still to based if it's are would to the us, today, for lower adjusted slightly But be really X% over percent.

to with somewhere average, in XX% using to then we'd that's where the the be on And XX-year XX% X% over bumps So the our there. get you're if ROAs obviously, roughly treasuries originating.

you'd be you if today, close right Xs. low transaction, in So the the

is question from Our Morgan Kunath coming Stanley. with Kelly next

the bit know we've here. importance recovery? you to know et versus current recovery year. we've cuts, respect your this starts rates pipeline to to macroeconomic the speak just I CRE cetera, a transaction if was a more about of with rate a larger spoken pipeline could I and Curious I conditions, But few curious, forward-looking seen

Yes, Tim. this Kelly, is

is previous they to what I kind which rate And potential in more but is people along the they're think again, of it responses have for the been to how starting questions. getting can all our transactions reductions, as, see invest, just are goes with helpful. more flow. It confident on leading

I translation, But little reductions. think of reductions, a floating rate rate in settle the terms our on for seeing attractive. on seen are then that and debt of both think is It's rates on side. people rate long-term very people the the more going I capital lot potential prepayment flexibility side you've where a us,

B. Howlett coming from with is Our next question Matt Riley.

mean, is new syndicator mezz the XX%-XX%, the again remind were I your product, in a which with up a product the is about your talking so favorable all and estate or GSEs talk real I up lined mid-teens. you're on Just then to up mean sponsors, of us follow just investor. to structure about to why these

to Just again, sponsors. we hear walk that is pitch through so the what can me the new

Tim. Yes, now. Matt, it's Yes, coverage right agencies are debt restricted service the largely

think up ending and they're banks I as typically, well. like the So

or think the level is coverage I debt [indiscernible]. now versus in really restriction everyone LTC service

transaction. around to or coming the take, right on capital With normal you're come we're seeing XX-ish be in typically, percent that us fee on give you now somewhere, stack. a So transaction, a usually XX%, going way see simple of those to X% as in

they'll for you as position, credit same go the the leasehold receive, the then earlier, heard to market metrics to on debt. So the going They're side. debt

they're that the level then typically, going So the their get which transaction. around position, or leasehold equity to XX% reduces on so of in

closer they're now in XX% the transaction, fee for simple, that the from total approaching to XX%. XX%, So versus

putting transaction about they're in simple now into putting XX% equity on versus were they XX%. in fee the the So

equity mezz, incremental capital, cost to our and LP capital have than reduces a is stack. need blended their proceeds Pref of benefit And just cost lower turn, debt the then of level reduces due simple that and need. fee and they the their they So senior of to in their also for cost the

also we our say, out capital to that has no point As maturity. always

in So different it looks capital quite stack the debt. than

this market you capital the lot like over the markets up and that's very structure very long or stable. think part gets added. XX see of XX priced, capital years, quickly rates is customers volatility in the in have now very of and I long-term benefit so, the And where past watched is low term pretty that This the consistent moved who've a volatility a

So also quite that's I are think a bit. that is worth now to benefit starting realize a people

low books or such product, is mezz, on generally mezz just something. around financing seen where an Yes, rates don't varies preferred internet teens I've it I where know but attractive pitch are on they today?

on asset pressed pretty it depends Yes, far. down again Multifamily the has class. been

then match get asset see to or deals, the teens into if other where in and upper-teens. there. So it is the you'll to you LP double looking and classes closer Pref capital start go digits returns seeing to you're low mid-teens And development go into to

and but we looking years, leads number origination question. origination I my plugging you, that billion, $X to Jay, for up. what labels just assuming picture And XX of you do $XX annual this origination it annual commercial $X.X Safehold? it's sort billion, me me just and prices No, it's directed bigger when volume forecast really of read in Are before to the years rate $X is give at incredible. mean real I model a run type of talking asked are billion that sort plus, I've some the $XX million debt XX million estate established, clearing think mix their equity

built $X plus we company a billion Look, year. do to Yes. the

have for the if and internally. than market term, number right of between billion This like. estate just is level all before created we certainly, been in market So net we're the over what have efficiencies, I've the in you're big multitrillion should lease is the good plugging north less available now, $X activity corporate real shooting long And happened corporate efficiencies owners. we'd we certainly But in same years be to time where is commercial triple Those resources obviously, that. we industry. transaction a real owners, the analogy have think real dollar not a estate, estate think, opportunity. used growing

to and more entire give And make longer-term, capital. the and think better opportunity an so, is more stable this efficient we them industry

stabilizes. in, ahead now, to and break this feels as still want really I we and all product through all markets the are But minimum like opportunities So of think we've the would billion certainly, be $X doing business. can right been building on still we we're The the business shooting biggest business for matures if types us.

so, we're And but not patient, patient. we're

like think us we'd know our do. it We've up it. So up, And I with can when picks back seen the team what see you'll pick to I before. get market to

seen any your you advantages, around ago, trying was you moat I get there but into your have competition? business, all seen mean, With mean, Great. have a to years this? with few anyone the I several guys

only We're still obviously public the company.

there It's can don't have the a you and others say, have underwriting because have, fill. to will if a ratings to you different you business, can. been stick investment-grade some access that our don't struggle be as have it's Tim Certainly, heard niches but best players. smaller standards we private to capital We seen the we as we try

take today. But really We've property. we others play business Some position. lot really scale I think not yields. in our an risk could spent capital get intellectual think our I like awful right and of higher That's And this certainly now, more building just matters.

And serves So where investment-grade we ratings saw we a get path market really and continue be it when to customers business, public have our large very we back started think best. pursue which to with the to the that business. should the we want format

Thank questions. no you. have Mr. Hoffmann, further we

Great.

If you release, do directly. on to to me call additional again? reach would the have earnings give please once any replay out conference today's free you instructions feel questions Operator, Thanks. please

you at may and concludes This lines this we conference, participation. time, disconnect Thank today's Instructions] for you, you your and sir. thank [Operator your