Investment Q&A

Q: I asked this question a couple of years ago and am looking for your updated opinion.

I like the idea behind this business and perhaps it is a very long-term prospect. Or, perhaps it's just not working, as its stock price suggests.

Kevin

Q: Please give your opinion on whether you would buy, hold or sell the companies listed. Thinking of 5 year or more time-frame.

Thanks as always,

Kevin

Q: Hi again,

I asked a question about SAFE the other day. Thanks for your answer there.

I was actually asking because of the I didn't know whether the new public offering represented a positive or a negative sign. Can you comment on that?

Also, they talk about offering these shares at $61 until Nov 13 (tomorrow!) which is lower than the market price. I am a shareholder and would be interested in buying at this price, but am not sure if it's available to me or how I would acquire the shares.

Feel free to make this a public question if you think the information would be useful to other members. If you could reply in time for me to buy the shares (if I'm able), I'd appreciate it but don't expect it.

Q: Can you provide san updated analysis of Safehold (SAFE) including their third quarter earnings report and recent news?

Love this service. Thanks for all you do.

Q: I am intrigued by this company's business model of owning ground leases and working cooperatively with the owners of the business on top of that land. They say they collected 100% of payments during COVID and are essentially COVID and recession-proof.

In Geoff's previous question, he noted that it was "...likened it to a hundred year bond, yet if they can achieve their goal of increasing the distribution at twice the rate of inflation that is obviously better than a bond, safety comparisons aside."

Safety comparisons not aside, I'm interested in your views. It seems like raising capital and debt would be the main concerns. They seem to raise capital by offering more shares. How sustainable is that model?

All in all, can you assess the company in terms of safety and their claim to be more in the fixed income category than in the equity category. I actually like that they conserve dividend payments as it seems to justify this claim.

Q: Safehold realty (SAFE) was a top pick of real estate expert Michelle Wearing recently. Can I get your opinion on this relatively new stock and your opinion on their business model. She likened it to a hundred year bond, yet if they can achieve their goal of increasing the distribution at twice the rate of inflation that is obviously better than a bond, safety comparisons aside.

As a US REIT the majority of the distribution is return of capital. Am I correct that this would be the same tax treatment as a Canadian Reit, lowering my adjusted cost base. And how would the remainder of the distribution be taxed?
Finally what do you think of their major shareholder getting management fees, while many don’t like those sort of arrangements I have owned some similar companies where it has worked out well for me..
Geoff