Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Monday, 10 September 2018

REIT That Invests in Ground Leases Shoots for $1Bln Portfolio

 

Safety, Income & Growth Inc., a year-old REIT managed by iStar Inc. that invests in the ground beneath commercial properties, is aiming to increase the size of its portfolio to at least $1 billion by the end of the year. It's well on its way. It recently completed four investments totaling about $70 million, bringing its portfolio to 25 assets valued at roughly $700 million.

Commercial Real Estate Direct Staff Report

Safety, Income & Growth Inc., a year-old REIT managed by iStar Inc. that invests in the ground beneath commercial properties, is aiming to increase the size of its portfolio to at least $1 billion by the end of the year.

It's well on its way. It recently completed four investments totaling about $70 million, bringing its portfolio to 25 assets valued at roughly $700 million. Meanwhile, it has a number of additional deals in its pipeline.

By increasing its asset size to $1 billion or more, the company could attract the attention of institutional investors, which should help bolster its stock price, giving it the flexibility to grow at a faster clip.

Because of its strategy of investing in perhaps the most secure asset class in commercial real estate, it's gotten traction among retail investors, primarily those classified as high net-worth. But it's still a relatively tiny company, with an equity market capitalization of just more than $310 million, based on its recent stock price.

The idea behind Safety Income, which often is referred to by its SAFE ticker symbol, was years in the making, explained Jay Sugarman, the company's chairman and chief executive, who serves in a similar capacity with iStar.

He noted that bond investors that pursue only AAA-rated bonds - the most secure - typically won't buy bonds rated BBB, which are riskier, so why, he asked, were property owners - the buyers of risk - taking positions in what amounted to AAA-rated bonds - the land beneath their holdings? The concept...





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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

REITCafe

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shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds
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