Jay Sugarman is the Chairman and CEO of Safety, Income & Growth Inc., and he is also Chairman and CEO of iStar. He has served as a director of iStar (NYSE:STAR) since 1996 and its Chief Executive Officer since 1997. Prior to forming iStar and its predecessors, Mr. Sugarman managed private investment funds on behalf of the Burden family — a branch of the Vanderbilt family — and the Ziff family. Mr. Sugarman received his undergraduate degree summa cum laude from Princeton University, where he was nominated for valedictorian and received the Paul Volcker Award in Economics, and his MBA with high distinction from Harvard Business School, graduating as a Baker Scholar and recipient of the school’s academic prizes for both finance and marketing.
He is the CEO of a new real estate company and is enthusiastic about its prospects. In this exclusive interview with the Wall Street Transcript, he describes it’s strategic direction and details its future development:
“We call it the SAFE Ground Lease. It’s so fundamentally different from many of the ground leases that exist today that we’ve trademarked that. It’s lender-friendly. It’s owner-friendly. It’s cap-rate-friendly. We think ultimately, at the end of the day, it creates higher cash-on-cash returns for owners and higher IRRs. We love businesses where, when we do a deal, both sides win.”
The idiosyncratic investment vehicle is a positive sign, according to Jay Sugarman.
“There’s very little information on this industry, which we like. We like industries that are either misunderstood or not studied at all. As I said, it took about a year trying to figure out the answer to your question. We think the existing ground lease market is about $100 billion in what is a $7 trillion commercial real estate market. We think it should be, with a lender-friendly, owner-friendly modern ground lease structure, something on the order of $500 billion.”
Read the entire interview in the Wall Street Transcript in order to get inside the mind of one of the most prominent real estate investors in the United States.