iStar Inc. (NYSE:STAR) Q2 2020 Earnings Conference Call - Final Transcript
Aug 06, 2020 • 10:00 am ET
Thank you. [Operator Instructions]. Our first question comes from Stephen Laws with Raymond James. Please go ahead.
Jay, I guess I'll first start with the ground lease. I know that's what you've been excited to help for a couple of years now, and not that you needed anybody to reinforce it. But I saw some articles last week about some new some other companies increasing their presence are looking to deploy more capital into ground leases on the call, it was mentioned specifically. Can you talk about the competitive environment there? What that's doing to returns and whether or not the opportunity may be so large that the competition doesn't move the needle yet? But can you maybe expand on kind of the competitive landscape for the ground lease business?
Yeah, sure. You know I think the punch line on this one is, we are in more places, with more people, with more products than anybody else in the space by, I would say a factor of 10. So there is there are people looking at this space, but we've got a full-fledged team across the country engaged in the top 30 markets and we don't see anybody who shows up in more than a fraction of the opportunities we're pursuing. So, it's still early in the game for this reinvention of the ground lease space, and certainly, others are paying attention and I'm starting to see some of the things we saw. But the real value that we see in SAFE that we've not seen anybody else really be able to do is to create a permanent light vehicle that is really building the whole ecosystem around ground leases.
And so we've got something that's a, larger; b, more expansive and c, has a business strategy and time horizon that we don't see anywhere else. So, right now, the competition is not an issue. It's really COVID. It's just hard to get transactions done when the markets are frozen. So we fully expect when the markets reopen, we'll continue to be the ground lease leader, but we'll also expect people to continue to try to do deals as well. It's just we haven't seen anybody be able to put the time, effort, and frankly the financial resources behind it that we have.
I appreciate that coloring. And moving to the I guess the other part of the net lease business or at least some of it, but the movie theater exposure I saw, I believe, AMC reached an agreement with EPR of about some of their agreements master lease structure they went into. But can you talk about how your investments there are performing? If they've been any material changes since you guys last gave an update to the market?
Yeah, look, as I said in my comments, we're watching those markets closely. The longer COVID continues to impact those companies the more concerned we get frankly. They've built decent runways, some better than others, but I think our overall