What changed in this filing

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Item 1. Business

2021-02-23 compared with 2020-02-24 · 35 added, 24 removed, 106 unchanged (36% of the section changed)

12 unchanged sentences

The Company's primary reportable business segments are net lease, real estate finance, operating properties and land and development.

The Company's primary sources of revenues are rent and reimbursements that tenants pay to lease the Company's properties, interest that borrowers pay on loans, land development revenue from lot and parcel sales, proceeds from asset sales and income from management fees and equity investments.

As of December 31, 2020, based on our gross book value, including the carrying value of our equity method investments exclusive of accumulated depreciation, our total investment portfolio has the following characteristics:

The net lease portfolio includes the Company's traditional net lease investments and its Ground Lease investments made primarily through Safehold Inc.

The net lease portfolio includes the Company's traditional net lease investments and its Ground Lease investments made through Safehold Inc.

("SAFE"), a publicly traded REIT focused exclusively on Ground Leases that we launched in 2017 and manage pursuant to a management agreement, both of which we believe offer stable long-term cash flows.

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As of December 31, 2020, we owned approximately 65.4% of SAFE's outstanding common stock.

During the year ended December 31, 2019, the Company's largest net lease tenant accounted for approximately 11.8% of the Company's revenues.

Real Estate Finance :

The real estate finance portfolio is comprised of senior and mezzanine real estate loans that may be either fixed-rate or variable-rate and are structured to meet the specific financing needs of borrowers.

The Company's portfolio also includes leasehold loans (including leasehold loans to SAFE's tenants), preferred equity investments and senior and subordinated loans to business entities and may be either secured or unsecured.

The real estate finance portfolio is comprised of leasehold loans (including leasehold loans to SAFE's tenants), preferred equity investments and senior and subordinated loans to business entities and may be either secured or unsecured.

The Company's loan portfolio includes whole loans and loan participations.

The Company's real estate loans may be either fixed-rate or variable-rate and are structured to meet the specific financing needs of borrowers

Operating Properties :

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The Company may develop these properties itself, or in partnership with commercial real estate developers, or may sell the properties.

Investment Strategy

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Our Ground Lease strategy is the most recent example of our historical approach.

We believe that investment and financing opportunities in the Ground Lease sector currently offer more attractive risk adjusted returns than other investment opportunities, and should enable us to benefit from the unique insights and competitive advantages we have gained through the launch of SAFE.

In originating new investments, the Company's strategy is to focus on the following:

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We use leverage to enhance our return on assets.

Our principal financing sources are our revolving credit facility and term loan, individual mortgage loans and unsecured bonds issued in capital markets transactions.

We took advantage of favorable interest rate and liquidity conditions in 2019 to refinance and pay down outstanding debt through the issuance of an aggregate of $1.325 billion of unsecured notes.

The refinancings reduced our interest costs and improved our debt maturity profile.

Our principal financing sources are unsecured bonds issued in capital markets transactions, our revolving credit facility and term loan and individual mortgage loans.

In August 2020, we took advantage of favorable interest rate and liquidity conditions to refinance debt through the issuance of $400 million of unsecured notes due February 2026.

Proceeds from the issuance were used to repay unsecured notes due September 2022.

We have no corporate debt maturities through September 2022.

In addition, substantially all of our Series J preferred stock was converted by the holders thereof into approximately 16.5 million shares of our common stock, which increased our equity base.

As a result of these and other transactions, the three principal national credit rating agencies have raised the ratings on our corporate, senior unsecured and senior secured debt one or more times since the third quarter of 2017.

Going forward, the Company will seek to raise capital through a variety of means, which may include unsecured and secured debt financing, debt refinancings, asset sales, sales of interests in business lines, issuances of equity, joint ventures and other third party capital arrangements.

Going forward, the Company will seek to raise capital through a variety of means, which may include unsecured and secured debt financing, debt refinancings, asset sales, issuances of equity, engaging in joint venture transactions and other third party capital arrangements.

A more detailed discussion of the Company's current liquidity and capital resources is provided in Item 7—"Management's Discussion and Analysis of Financial Condition and Results of Operations."

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and (6) evaluating the liquidity of the investment.

The Company intends to use a similar screening methodology for leasehold loans to tenants of SAFE and related party transactions with SAFE.

The Company uses a similar screening methodology for leasehold loans to tenants of SAFE and related party transactions with SAFE.

The Company maintains an internal investment committee, and certain investments, including related party transactions and leasehold loans to tenants of SAFE, are subject to the approval of the Board of Directors or a committee thereof.

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When the Company's variable-rate debt obligations differ from its variable-rate lending assets, the Company may utilize derivative instruments to limit the impact of changing interest rates on its net income.

The Company also uses derivative instruments to limit its exposure to changes in currency rates in respect of certain investments denominated in foreign currencies.

The Company may also use derivative instruments to limit its exposure to changes in currency rates in respect of certain investments denominated in foreign currencies.

The derivative instruments the Company uses are typically in the form of interest rate swaps, interest rate caps and foreign exchange contracts.

Policies with Respect to Other Activities

The Company's investment, financing and corporate governance policies (including conflicts of interests policies) are managed under the ultimate supervision of the Company's Board of Directors.

The Company can amend, revise or eliminate these policies at any time without a vote of its shareholders.

The Company intends to originate and manage investments in a manner consistent with the requirements of the Internal Revenue Code of 1986, as amended (the "Code") for the Company to qualify as a REIT.

Investment Restrictions or Limitations

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The Company is also required to comply with certain provisions of the Equal Credit Opportunity Act that are applicable to commercial loans.

In the judgment of management, existing statutes and regulations have not had a material adverse effect on the business conducted by the Company.

It is not possible at this time to forecast the exact nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon the future business, financial condition or results of operations or prospects of the Company.

The Company has elected and expects to continue to qualify to be taxed as a REIT under Section 856 through 860 of the Code.

In the judgment of management, the Company's compliance with existing statutes and regulations, including environmental regulations, is not currently expected to have a material effect on the Company's capital expenditures, earnings and competitive position.

It is not possible at this time to forecast the exact nature of any future legislation, regulations, judicial decisions, orders or interpretations, nor their impact upon the future capital expenditures, earnings or competitive position of the Company.

The Company has elected and expects to continue to qualify to be taxed as a REIT under Section 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code").

As a REIT, the Company must generally distribute at least 90% of its net taxable income, excluding capital gains, to its shareholders each year.

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These requirements include specific share ownership tests and asset and gross income tests.

If the Company fails to qualify as a REIT in any taxable year, the Company will be subject

If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to U.S.

federal income tax on its net taxable income at regular corporate tax rates.

9 unchanged sentences

As of December 31, 2020, there have been no amendments to the Code of Conduct and the Company has not granted any waivers from any provision of the Code of Conduct to any directors or executive officers.

As of February 21, 2020 , the Company had 155 employees and believes it has good relationships with its employees.

The Company's employees are not represented by any collective bargaining agreements.

Employees and Human Capital Resources

Central to our business strategy is attracting, developing and retaining a talented, diverse and engaged workforce to drive our success.

As of February 19, 2021, the Company had 143 employees.

The Company believes it has good relationships with its employees.

Substantially all of our employees are full time employees and they are not represented by any collective bargaining agreements.

As we have transitioned the focus of our business to growing our Ground Lease platform, we have sought to recruit new talent and provide training to existing employees to support our business strategy.

In our recruiting efforts, we generally strive to have a diverse group of candidates to consider for roles.

We have designed a compensation structure, including an array of benefits, that we believe is attractive to current and prospective personnel.

We also offer our professionals the opportunity to participate in a variety of development programs, including discussions led by outside speakers on topics of interest and a learning management tool that enables employees and their managers to select courses that enhance professional development.

In fiscal 2020, the COVID-19 pandemic had a significant impact on our human capital management.

Substantially all of our workforce worked remotely throughout the initial several months of the pandemic, and we instituted safety protocols and procedures to enable certain employees to work on site in shifts later in the year.

We maintain a number of health and wellness programs to support the welfare of our people.

These programs include an employee assistance program that offers confidential assessment, counseling and referral services at no cost to the employee.

We seek to provide a safe workplace for our employees.

In addition to the safety protocols that we instituted in response to the pandemic, we have established emergency procedures that address emergency health and safety situations.

We support the charitable endeavors of our employees with a program that matches the contributions made by them within limits that vary by position.

We have engaged with, and made significant investments in, some of the communities where we do business in an effort to enhance the communities’ economic prospects and quality of life.

For example, in connection with some of our development projects, we have partnered with a local construction company to create a workforce development, apprenticeship and internship program that offers residents the opportunity to learn valuable trade skills;

launched a job training program for local residents interested in pursuing opportunities in the hospitality sector;

and we setup and promote a seasonal farmers' market in one of our communities to support local businesses.

Additional Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business