What Makes Something Valuable In Collecting, Investing? Safehold CEO Explains

Safehold Inc SAFE CEO Jay Sugarman provided lessons from the worlds of collecting and investing Thursday at Benzinga's "Reopening Stocks Summit." 

Sugarman has been collecting coins, comic books and baseball cards since he was a kid, he said, adding that he has been investing in companies and different forms of art for around 30 years.

"This market is unlike really anything I've ever seen."

What Makes Something Valuable? The combination of scarcity and desirability or low supply and high demand creates significant value, Sugarman explained. 

Companies are desirable for investors if they offer strong profitability, high growth potential and downside protection, he said. It can be difficult to find companies that have all three characteristics, he noted.

A company exhibits scarcity if it shows dominant market leadership, is able to achieve economies of scale in large markets and has access to low-cost capital, Sugarman said. 

Why Safehold Is A Valuable Business: Safehold is the creator and leader of the modern ground lease industry, he said. The company has a 66% annual growth rate and 100% of the company's rent income was collected during the pandemic, which shows the company's profitability, high growth potential and downside protection, Sugarman said.

Related Link: EXCLUSIVE: Safehold CEO Jay Sugarman Talks Revolutionizing Real Estate Ownership On 'Power Hour'

Safehold is the only publicly traded ground lease company and has the only pure-play investment grade platform, he said. 

The commercial real estate industry has a $7-trillion total addressable market size, Sugarman noted. 

"When you get the scarcity and desirability equation right, good things happen."

See the full interview here:

SAFE Price Action: Safehold has traded as high as $95.29 and as low as $49.70 over a 52-week period.

Safehold closed up 0.87% at $88.77 on Thursday.

Photo by Free-Photos from Pixabay.