Safety, Income & Growth Inks $105M in New Ground Leases

NEW YORK CITY—Locally-based Safety, Income & Growth reports it has secured five new ground lease transactions with institutional partners and leasehold lenders for $105 million of committed capital in the Washington, DC, San Diego and Phoenix markets.

The four ground lease deals originated under SAFE’s Ground Lease program included the Jefferson Building, a 73,000 square-foot., eight-story office building in Washington, DC located less than a mile from the White House.

A second ground lease deal involves the Southwest Waterfront in Washington, DC, a more than 300-unit, to-be-built mid-rise multifamily property. SAFE executed a forward commitment to purchase the ground lease and fund additional proceeds to complete construction, the company states.

Also in the Washington, DC area market, Safety Income & Growth acquired the existing ground lease of the Hyatt Centric, a 318-key, 16-story Hyatt branded hotel. The property is located across the street from the Rosslyn Metrorail station.

The two other ground lease transactions were on the Madison, a 177,000-square-foot Class A office property in the Camelback Corridor in the Phoenix metro area. The property has recently undergone a major renovation with upgrades to the lobbies, corridors, and exterior.

The fifth transaction was a ground lease on the 121,000-square-foot Balboa Executive Center in San Diego, The Class A office building has recently undergone significant renovations to its lobby, corridors, landscaping and fitness center.

Safety, Income & Growth chairman and CEO Jay Sugarman says that the firm has a goal of having its portfolio valued at $1 billion by the end of this year. The company states that its current portfolio is valued at more than $700 million.

The latest transactions involve the company’s entrance into the Phoenix market and enhancing its presence in San Diego and the nation’s capital.

Earlier this month, Safety, Income & Growth announced that Mizuho Bank had committed $50 million which increased the company’s revolving credit facility involving six lenders to $350 million.

In June, the company signed a ground lease with Houston-based the Dinerstein Companies on its Promenade Crossing apartment complex in the Baldwin Place submarket of Orlando. The 212-unit Promenade Crossing was capitalized by an institutional lender and a “SAFE Ground Lease,” which features fixed annual rent escalations over 99 years with periodic CPI-based adjustments.