Safety, Income & Growth Inc. has closed on a new $79 million non-recourse senior secured term loan with a life insurance company. The loan matures in 2028.
The innovative term loan structure was custom-tailored to meet the unique features of SAFE’s ground lease portfolio with an initial spread of T+86 and an all-in cost equal to T+120. The loan is interest-only for its entire 10-year term, is collateralized by seven ground leases and represents a 60% advance rate against SAFE’s investment basis in the collateral. In addition, the loan provides for asset addition and substitution flexibility within specified parameters.
“This financing represents another attractive long-term financing source for our business. Furthermore, the loan has an accordion feature that provides for potential increases in the loan size as we originate new ground lease investments,” said Andrew Richardson, Chief Financial Officer.
Safety, Income & Growth Inc. is the first publicly traded company focused on ground leases. The company seeks to provide real estate owners with better, lower cost capital through its modern ground lease structure, while delivering safe, growing income and long-term capital appreciation to its shareholders.