Good morning everyone, and thank you for joining us today for Safehold’s earnings call. On the call today, we have Jay Sugarman, Chairman and Chief Executive Officer; Brett Asnas, Chief Financial Officer; and Tim Doherty, Chief Investment Officer. This morning, we plan to walk through a presentation that details our third quarter 2024 results. The presentation can be found on our website at safeholdinc.com by clicking on the Investors' link. 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 a confirmation code of 51479. In order to accommodate all those who want to ask questions, we ask that participants limit themselves to two questions during Q&A. If you’d like to ask additional questions, you may re-enter the queue. Before I turn the call over to Jay, I'd like to remind everyone that statements in this earnings call, which are not historical facts, may be forward-looking. Our actual results may differ materially from these forward-looking statements and the risk factors that could cause these differences are detailed in our SEC reports. Safehold disclaims any intent or obligation to update these forward-looking statements except as expressly required by law. Now, with that, I’d like to turn it over to Chairman and CEO, Jay Sugarman.

Thanks Pearse, and thanks to all of you for joining us today. The third quarter saw steady investment activity, including the purchase of minority ownership interest held by our sovereign wealth joint venture partner and many smaller multifamily ground leases previously originated by Safehold. While it makes more sense for Safehold to own 100% of these smaller ground lease deals, we continue to work with our joint venture partner on larger transactions where the investment size is more appropriate for the joint venture. That purchase, along with several other transactions closed in the quarter, were executed at attractive yields, generally done at the higher end of our targeted returns on assets (ROAs) and at solid ground lease-to-value (GLTV) levels. Overall, the rate environment remains the most important near-term driver of investment activity. Lower rates generated increased engagement across a wide range of customers during the quarter, but the recent jump in yields and increased volatility will likely have an impact on capital stacks and customer decision-making. We remain cautiously optimistic that macro industry conditions are pointing to a better transaction environment in 2025. Turning to earnings, year-over-year EPS was higher, excluding enhancements to our general provision for credit loss methodology implemented during the quarter. We continue to look for ways to run and capitalize the business more efficiently until transaction activity picks up more fully. Lastly, unlevered cash flow (UCA) estimates moved slightly higher with existing portfolio UCA pressured by generally higher cap rate assumptions and tougher office fundamentals, offset by new UCA additions from attractive originations during the quarter. And with that quick summary, let me turn it over to Brett to review the quarter in more detail.

Thank you, Jay. Good morning everyone. Let's start with a summary of the quarter on Slide 2. During the quarter, new origination activity was $104 million, including three multifamily ground leases for $72 million and one leasehold loan for $32 million. Of the three new ground leases, two were student housing assets, and one was conventional multifamily, located across three markets with three different sponsors. Ground lease credit metrics were in line with our portfolio targets, with a GLTV of 29%, rent coverage of 3.2 times, and an economic yield of 7.2%. Also in the third quarter, we reached an agreement with our joint venture partner to purchase their ownership interest in the nine ground leases acquired by the venture to date. The total purchase price of the nine deals, including forward commitments, was $80 million. Excluding the asset originated early in the third quarter, which is already included in the new origination figures, the net purchase price was $69 million. This closed transaction created an opportunity to put additional capital to work in deals that we are already in at an attractive 7.2% yield, funded by a cheaper cost of capital than when the deals were originally closed. It also frees up additional capacity in the venture, which will remain in place, but without our partner's participation right in certain ground lease opportunities, which expired at the end of September. We expect the joint venture to focus on larger investment opportunities moving forward, and that Safehold will own 100% of the economics in smaller-sized deals. At quarter end, the total portfolio was $6.7 billion, UCA was estimated at $9.1 billion, GLTV was 48%, and rent coverage was 3.5 times. We ended the quarter with approximately $955 million of liquidity, which is further supported by the potential available capacity in our joint venture. Slide 3 provides a snapshot of our portfolio growth. In the third quarter, we funded a total of $122 million, including $53 million of new Q3 originations that have a 7.2% economic yield, $46 million to purchase our partner's joint venture interest, and nine ground leases that have a 7.2% economic yield and $23 million of ground lease fundings on pre-existing commitments that have a 5.6% economic yield.

Thanks Brett. Let's go ahead and open it up for questions.

Hi, good morning. I appreciate the comments this morning. Jay, I wanted to touch base on the pipeline. It looks like some of this rate volatility back. Can you talk about how discussions are going with borrowers in your pipeline? And then as you mentioned, larger deals will still look to go into the joint venture. Can you talk about the pipeline of those larger deals and kind of what it is that drives the finish line?

Hey Stephen, it's Tim. The pipeline, I would say, as Brett alluded to, the market is definitely opening up more and more every quarter. So, we saw an increase in volume over the last couple months. I'd say the rate drop in September really showed where the market needs to be for transactions to really start going. The latest tick up with, I think, probably a little uncertainty in the election and whatnot in the markets has dampened that a little bit, but we're seeing positive signs in the fundamentals of the market. Like we said last quarter, clarity, visibility, and stability are key. I think the one piece that's missing right now is stability of rates, but the market fundamentals are solid and we're seeing an increasing pipeline.

Yes, just as we've talked about in prior quarters, we haven't seen a lot of large transactions coming through. As Tim said, those tend to happen when the market has visibility going forward. We're certainly hoping 2025 feels more like that. But we are working on a couple of deals with our joint venture partner. It's not that we're hunting for elephants, but larger transactions sometimes have a more difficult time getting to the finish line. There are lots of moving parts. So, it's hard to predict them, but it's nice to at least be working on some, and that's a dynamic we hope plays out more fully in 2025.

Hey Stephen, it's Brett. From a leverage standpoint, we've set out from the beginning that we wanted to run at approximately 2 times. That isn't a hard cap. I mean we will continue to judiciously think about how to capitalize the business, both from a debt and equity standpoint as well as our current asset base. When you think about where we've been over the last year or throughout 2024, we've stayed right between 1.9 times to 2 times while growing. I think we have some runway here. Obviously, we want to make sure that we're thoughtful about our debt and equity cost of capital and when to enter the markets as appropriate. But right now, we have the tools available to us, and we need to be careful about when to tap each of those markets to continue to grow.

Thanks. I was curious about the GIC discussions on the joint venture and who initiated the discussion around changing up the joint venture?

Hey Mitch, morning. Yes, so the venture has been in place for a while. It was really intended to give us firepower to chase some of these larger deals that we expect will come back into the market as rates start to come down. That was its intention. It had a fixed period where they could look at every deal that we did, and obviously, some of these smaller deals were pretty attractive. That period is now over. Now we're just JV partners, but we can show them deals that we think are most appropriate for our joint venture. The interesting thing on the buyout was some of those small deals had some of the highest ROAs in the book. As rates started to come down a little bit, as we saw what we were doing on new transactions, we thought there was a win-win there. So, we approached them and thought we had a solution both in terms of the intent of the joint venture, but also the economics that would work for both sides. As you saw, the ROAs are pretty attractive at the price we paid. So, I think we did create a win-win, and we also freed up some capital in that joint venture for the types of transactions that I think it was originally put in place for.

That's really good color. And then I want to discuss the West 50th Street, 135 West 50th. Obviously, the asset went to auction. And in reading some of the press, it seemed to have some negative perception toward the ground lease arrangement. And Jay, I'm curious about kind of your takeaways from reading that? And where do you think the press was wrong regarding their perception of the impact on value?

Yes, I do think they kind of missed the most important thing, which is our capital is some of the lowest cost and longest term available to an owner. That transaction wouldn't have taken place if there wasn't long-term stable capital in the capital stack. We've seen lots of short sales from banks and things where values have been significantly impacted because they don't have attractive capital in place. So, I do think there's a positive side to this, and we've had dozens of deals trade hands. Many times, we think our capital actually is accretive to the owner. We continue to see situations where that is absolutely true. I think there's a general feeling that ground leases, particularly in the old form, have destroyed value for their owners. We want to differentiate our ground leases from others. We try to do that with the media often, and I think as our portfolio grows, we'll be able to give specific examples of where we've preserved and created value.

Hi there. Maybe kind of a follow-up to that last one, just on GLTV. If a property on Safehold land declines in value, then GLTV increases. So, how would you assess whether to keep the ground lease unchanged versus modify it to make the GLTV closer to your target? And are there any other scenarios that would prompt you to modify existing ground leases?

Hey Caitlin. Look, over 100 years, values are going to go up and down. Real estate is not a straight line. We certainly expect some volatility around that number. Hopefully, we've found ourselves in the safest part of the capital stack. Our capital, as we always say, is the lowest cost and longest-term capital in the market. So, it should be an asset for any owner to have. As GLTVs go up, we have no ability to resize them. But we have seen many cases where assets need to be well run. Our ground lease is, again, the longest-term capital, so you have time to execute a business plan. There’s no pressure on our owners. Good assets in good locations will find their highest and best use eventually. We have no ability to unilaterally change our lease terms. If there’s a smart thing to do with a customer, we have ways to help create value, which ultimately accrues to our benefit. Well, we would have loved to own them 100% at origination. Our partner did have an exclusive right to 45% of every deal we did, and these were pretty attractive deals. They took advantage of that. We were not expecting to split $15 million and $20 million ground leases with a partner. That’s a lot of logistics and work for very little return. Our partner has been great and when we approached them, we thought we had a solution both in terms of the intent of the joint venture and the economics that would work for both sides. I think it worked for both parties' benefit.

Good morning. Thanks for taking my question. I wanted to follow-up on the GIC questions. I'm curious at a high level if this signals their intent to pull back on forward capital deployment with you? And looking ahead, do you still have any obligation to show them deals that meet a certain size requirement?

Yes, that period is over. It is now at our discretion to show deals into the joint venture. I can't speak for them. They have been a great partner on the largest asset in our portfolio. They've engaged with us on transactions that have that kind of profile and quality. But we can't speak for their capital allocation, but they continue to engage with us, and we're working on some things as we speak.

Yes, thank you. I just want to go back to the leasehold loan fund and the deal you did. What does the whole picture look like to a sponsor and what you all are out there offering?

Sure, Anthony. Look, these are market-driven transactions. On this deal, it was a construction transaction with a 3 plus 1 plus 1 type of structure. The yields there were in line with market. We believe the total stack was roughly around 75% provided by us, and we felt that was a great attachment point for the debt side. We've got the expertise in-house to underwrite transactions, and when it matches up with the sponsor's need for capital and the cost of that capital, it’s a great execution for both sides.

I think what you saw in the third quarter is an appropriate run rate. The leasehold loans repaid over the last year have caused that to go down, so if we’re doing any new ground leases that are with a partner that are not consolidated or making new leasehold loans, that's where you would see any uptick.

Thank you. Good morning. Where is your fixed charge coverage ratio today as of 3Q?

Hey Ki Bin, it's Brett. Our fixed charge coverage is nearly 1.3 times. Our unencumbered assets, unsecured debt is about 1.5 times. That's well over $1 billion of originations without equity or additional cash flow. We have ample room on both of those covenants.

Thanks very much. If you do have any other questions, please feel free to reach out to me directly.

There will be a replay of this conference call beginning at 2:00 P.M. Eastern Time today. The dial-in replay information is 877-481-4010 with a confirmation code of 51479. This does conclude today's event. You may disconnect your lines at this time and have a wonderful day. Thank you for your participation.