Most real estate investment trusts (REITs) own properties, but it is the building on the property that takes center stage, not the land. Safehold (NYSE: SAFE) turns that view upside down. The business model is actually quite attractive, but there are a couple of small problems when it comes to investing in the stock.
If you think of REITs like Boston Properties, AvalonBay, or Host Hotels, the key story is that they are office, apartment, and hotel landlords, respectively. In fact, investing based on property type is pretty common in the REIT sector.
By contrast, Safehold is diversified, with assets across all three of the above sectors, getting around 55% of rents from offices, 30% from apartments, and 15% or so from hotels. Only diversification is not the real story here.
Source Fool.com