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

Wednesday, 06 November 2019

Safehold Launches Program to Buy, Fix Archaic Ground Leases

Safehold Inc. has developed a program through which it buys fee interests in properties that might have archaic lease terms and restructures them to make them more palatable to the property owners as well as prospective lenders. A potential hotbed of opportunity is in Manhattan, where a number of ground leases are structured with onerous rent resets.

 

 

 

Commercial Real Estate Direct Staff Report

Safehold Inc. has developed a program through which it buys fee interests in properties that might have archaic lease terms and restructures them to make them more palatable to the property owners as well as prospective lenders.

The New York company, which invests in the ground beneath existing buildings - the fee interests - has completed its first transaction under its SAFE x SWAP program and has others in its pipeline. It's specifically targeting ground leases with onerous provisions, including those that call for rent resets based on a percentage of the ground's market value.

For its first deal under the program, Safehold paid $195 million for the ground beneath the 839-room Alohilani Resort Waikiki Beach in Honolulu. The hotel - the improvements - is owned by a venture of Highgate Holdings and Commerz Real, which had acquired a majority interest in the resort two years ago for $515 million.

The ground lease had a relatively short fuse - it had a 2047 maturity - that would have made lining up financing for the hotel challenging. The Commerz/Highgate venture had the ability to buy the ground, but such investments generally provide a low return relative to that generated by the leasehold, or...





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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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