3 unchanged sentences
(In thousands)
−Removed: September 30,
−Removed: Net investment in sales-type leases ($ 468 and $ 0 of allowances as of September 30, 2023 and December 31, 2022, respectively)
−Removed: Ground Lease receivables, net ($ 318 and $ 0 of allowances as of September 30, 2023 and December 31, 2022, respectively)
+Added: March 31, 2024
+Added: December 31, 2023
+Added: Net investment in sales-type leases ($ 907 and $ 465 of allowances as of March 31, 2024 and December 31, 2023, respectively)
+Added: Ground Lease receivables, net ($ 692 and $ 369 of allowances as of March 31, 2024 and December 31, 2023, respectively)
Real estate, at cost
4 unchanged sentences
Total real estate, net and real estate-related intangible assets, net and real estate available and held for sale
−Removed: Loans receivable, net - related party ( $ 2,421 of allowances as of September 30, 2023)
+Added: Loans receivable, net - related party ($ 2,392 and $ 2,429 of allowances as of March 31, 2024 and December 31, 2023, respectively)
Equity investments
13 unchanged sentences
shareholders' equity:
−Removed: Common stock, $ 0.01 par value, 400,000 shares authorized, 71,066 and 62,397 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively
+Added: Common stock, $ 0.01 par value, 400,000 shares authorized, 71,435 and 71,077 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively
Additional paid-in capital
Retained earnings
−Removed: Accumulated other comprehensive income
+Added: Accumulated other comprehensive income (loss)
Total Safehold Inc.
3 unchanged sentences
(1) Refer to Note 2 for details on the Company’s consolidated variable interest entities (“VIEs”).
−Removed: (2) As of September 30, 2023, includes $ 7.1 million due from related parties.
−Removed: (3) As of December 31, 2022, includes $ 8.5 million due to related parties.
+Added: (2) As of March 31, 2024 and December 31, 2023, includes $ 6.6 million and $ 7.1 million, respectively, due from related parties.
The accompanying notes are an integral part of the consolidated financial statements.
3 unchanged sentences
For the Three Months Ended
−Removed: For the Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Interest income from sales-type leases
8 unchanged sentences
General and administrative (3)
−Removed: Impairment of goodwill
Provision for credit losses
1 unchanged sentence
Total costs and expenses
−Removed: Gain on sale of net investment in lease
Income (loss) from operations before other items
9 unchanged sentences
Weighted average number of common shares:
−Removed: (1) For the nine months ended September 30, 2022, the Company recorded $ 2.1 million of “Interest income from sales-type leases” in its consolidated statements of operations from Ground Leases with iStar Inc.
(1) Refer to Note 6.
−Removed: (3) For the three and nine months ended September 30, 2023, includes $ 6.0 million and $ 13.2 million, respectively, of management fees from related parties.
−Removed: (4) For the three months ended September 30, 2023 and 2022, includes $ 7.5 million and $ 8.5 million, respectively, of general and administrative expenses incurred to related parties that includes management fees and expense reimbursements to the Former Manager (refer to Note 1) and equity-based compensation (including equity-based compensation to employees).
−Removed: For the nine months ended September 30, 2023 and 2022, includes $ 28.5 million and $ 25.8 million, respectively, of general and administrative expenses incurred to related parties that includes management fees, expense reimbursements to the Former Manager (refer to Note 1) and equity-based compensation (including equity-based compensation to employees).
+Added: (2) For the three months ended March 31, 2024, includes $ 5.5 million of management fees from related parties.
+Added: (3) For the three months ended March 31, 2023, includes $ 8.3 million of general and administrative expenses incurred to related parties that includes management fees and expense reimbursements to the Former Manager (refer to Note 1).
The accompanying notes are an integral part of the consolidated financial statements.
3 unchanged sentences
For the Three Months Ended
−Removed: For the Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Net income (loss)
1 unchanged sentence
Reclassification of (gains) losses on derivatives into earnings
−Removed: Unrealized gain on derivatives
−Removed: Other comprehensive income:
+Added: Unrealized gain (loss) on derivatives
+Added: Other comprehensive income (loss):
Comprehensive income (loss)
10 unchanged sentences
Income (Loss)
−Removed: Balance at June 30, 2023
−Removed: Net income (loss)
−Removed: Issuance of common stock, net / amortization
−Removed: Dividends declared ($ 0.177 per share)
−Removed: Change in accumulated other comprehensive income
−Removed: Distributions to noncontrolling interests
−Removed: Balance at September 30, 2023
−Removed: Balance at June 30, 2022
−Removed: Issuance of common stock, net / amortization
−Removed: Dividends declared ($ 0.177 per share)
−Removed: Change in accumulated other comprehensive income
−Removed: Distributions to noncontrolling interests
−Removed: Balance at September 30, 2022
Balance at December 31, 2023
−Removed: Impact from adoption of new accounting standard (refer to Note 3)
−Removed: Net income (loss)
Issuance of common stock, net / amortization
1 unchanged sentence
Change in accumulated other comprehensive income
−Removed: Contributions from noncontrolling interests, net
+Added: Change in noncontrolling interests
Distributions to noncontrolling interests
−Removed: Merger consideration (refer to Note 1 and Note 3)
−Removed: Balance at September 30, 2023
+Added: Balance at March 31, 2024
Balance at December 31, 2022
+Added: Impact from adoption of new accounting standard
Issuance of common stock, net / amortization
3 unchanged sentences
Distributions to noncontrolling interests
−Removed: Additional paid in capital attributable to redeemable noncontrolling interests
−Removed: Balance at September 30, 2022
+Added: Merger consideration (refer to Note 1 and Note 3)
+Added: Balance at March 31, 2023
(1) Refer to Note 3.
3 unchanged sentences
(In thousands)
−Removed: For the Nine Months Ended
−Removed: September 30,
+Added: For the Three Months Ended
Cash flows from operating activities:
7 unchanged sentences
Amortization of real estate-related intangibles, net
−Removed: Impairment of goodwill
Provision for credit losses
1 unchanged sentence
Distributions from operations of equity method investments
−Removed: Gain on sale of net investment in lease
Amortization of premium, discount and deferred financing costs on debt obligations, net
4 unchanged sentences
Changes in accounts payable, accrued expenses and other liabilities
−Removed: Cash flows (used in) provided by operating activities
+Added: Cash flows used in operating activities
Cash flows from investing activities:
−Removed: Acquisitions of real estate
Origination/acquisition of net investment in sales-type leases and Ground Lease receivables
−Removed: ( 1,210,274 )
Origination of loans receivable, net
2 unchanged sentences
Contributions to equity method investments
+Added: Distributions from equity method investments
Funding reserves received from Ground Lease tenant net of disbursements
−Removed: Net proceeds from sale of net investment in lease
−Removed: Net proceeds received from sale of real estate available and held for sale
−Removed: Deposits on Ground Lease investments
+Added: Funding of cash collateral for debt obligations
+Added: Proceeds received from derivative transaction
Other investing activities
Cash flows used in investing activities
−Removed: ( 1,047,610 )
Cash flows from financing activities:
−Removed: Proceeds from issuance of common stock
Proceeds from debt obligations
Repayments of debt obligations
−Removed: ( 1,005,000 )
Payments for deferred financing costs
4 unchanged sentences
Contributions from noncontrolling interests
−Removed: Contributions from redeemable noncontrolling interests
−Removed: Other financing activities
Cash flows provided by financing activities
10 unchanged sentences
Dividends declared to common shareholders
−Removed: Non-cash interest accrued to debt balances
+Added: Accruals for payments of withholding taxes upon vesting for stock-based compensation
+Added: Accrued finance costs
Accrued offering costs
21 unchanged sentences
and (iii) the Ground Lease contains contractual rent escalation clauses or percentage rent that participates in gross revenues generated by the commercial real estate on the land.
−Removed: As a Ground Lease lessor, the Company typically has the right to regain possession of its land and take ownership of the buildings and improvements thereon upon tenant default and the termination of the Ground Lease on account of such default.
+Added: As Ground Lease lessor, the Company typically has the right to regain possession of its land and take ownership of the buildings and improvements thereon upon tenant default and the termination of the Ground Lease on account of such default.
The Company believes that the Ground Lease structure provides an opportunity for potential value accretion through the reversion to the Company, as the Ground Lease owner, of the buildings and improvements on the land at the expiration or earlier termination of the lease, for no additional consideration from the Company.
24 unchanged sentences
(“MSD Partners”) pursuant to which MSD Partners agreed to purchase 5,405,406 shares of Old SAFE’s common stock then owned by iStar (the “MSD Stock Purchase”) for an aggregate purchase price of approximately $ 200 million, or $ 37.00 per share, payable in cash.
+Added: MSD Partners’ rights and obligations under the MSD Stock Purchase Agreement were subsequently assigned to certain of its affiliates.
The MSD Stock Purchase closed on March 31, 2023, shortly before the closing of the Merger.
MSD Partners has the right to designate an observer to the board of directors of the Company, a top-up right on future equity issuances (subject to certain exceptions) and registration rights.
−Removed: MSD Partners will be subject to a customary standstill and certain restrictions on sales of its shares of the Company’s common stock.
−Removed: On August 10, 2022, MSD Partners also agreed to purchase 100,000 Caret units (refer to Note 11) from the Company for an aggregate purchase price of $ 20.0 million (the “MSD Caret Purchase”).
−Removed: MSD Partners received a credit
+Added: MSD Partners is subject to a customary standstill and certain restrictions on sales of its shares of the Company’s common stock.
Safehold Inc.
Notes to Consolidated Financial Statements
−Removed: against their purchase price for Caret units equal to the amount they would have received had they held Caret units at the time of a December 2022 distribution to other Caret unit holders, which was equal to $ 0.6 million.
+Added: On August 10, 2022, MSD Partners also agreed to purchase 100,000 Caret units (refer to Note 12) from the Company for an aggregate purchase price of $ 20.0 million (the “MSD Caret Purchase”).
+Added: MSD Partners received a credit against their purchase price for Caret units equal to the amount they would have received had they held Caret units at the time of a December 2022 distribution to other Caret unit holders, which was equal to $ 0.6 million.
+Added: MSD Partners’ rights and obligations under the purchase agreement were subsequently assigned to certain of its affiliates.
The closing of the MSD Caret Purchase took place in conjunction with the closing of the Merger on March 31, 2023.
3 unchanged sentences
(“SpinCo Manager”), a Delaware corporation and a subsidiary of the Company, entered into a management agreement with Star Holdings effective as of March 31, 2023, pursuant to which SpinCo Manager will continue to operate and pursue the orderly monetization of Star Holding’s assets.
−Removed: Star Holdings will pay SpinCo Manager an annual management fee of $ 25.0 million in year one, $ 15.0 million in year two, $ 10.0 million in year three and $ 5.0 million in year four and 2.0 % of the gross book value of Star Holdings’ assets, excluding shares of the Company’s common stock, for each annual term thereafter.
+Added: Star Holdings paid SpinCo Manager an annual management fee of $ 25.0 million for the term ended March 31, 2024.
+Added: The annual fee declines to $ 15.0 million, $ 10.0 million and $ 5.0 million, respectively, for each of the following annual terms, and adjusts to 2.0 % of the gross book value of Star Holdings’ assets, excluding shares of the Company’s common stock, thereafter.
The Company and Star Holdings also entered into a governance agreement that places certain restrictions on the transfer and voting of the shares of the Company owned by Star Holdings, and a registration rights agreement under which the Company agreed to register such shares for resale in accordance with applicable securities laws.
2 unchanged sentences
Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements.
−Removed: These unaudited consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in the Old SAFE’s Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Annual Report”).
+Added: These unaudited consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”).
The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
5 unchanged sentences
Consolidated VIEs —The Company consolidates VIEs for which it is considered the primary beneficiary.
−Removed: As of September 30, 2023, the total assets of these consolidated VIEs were $ 73.2 million and total liabilities were $ 30.0 million.
−Removed: The classifications of these assets are primarily within “Net investment in sales-type leases,” “Real estate, net,” “Real estate-related intangible assets, net” and “Deferred operating lease income receivable” on the Company’s consolidated balance sheets.
−Removed: The classifications of liabilities are primarily within “Debt obligations, net” and “Accounts payable, accrued expenses and other liabilities” on the Company’s consolidated balance sheets.
−Removed: The liabilities of these VIEs are
+Added: As of March 31, 2024, the total assets of these consolidated VIEs were $ 74.5 million and total liabilities were $ 30.0 million.
Safehold Inc.
Notes to Consolidated Financial Statements
−Removed: non-recourse to the Company and can only be satisfied from each VIE’s respective assets.
−Removed: The Company has provided no financial support to VIEs that it was not previously contractually required to provide and did not have any unfunded commitments related to consolidated VIEs as of September 30, 2023.
+Added: classifications of these assets are primarily within “Net investment in sales-type leases,” “Real estate, net,” “Real estate-related intangible assets, net” and “Deferred operating lease income receivable” on the Company’s consolidated balance sheets.
+Added: The classifications of liabilities are primarily within “Debt obligations, net” and “Accounts payable, accrued expenses and other liabilities” on the Company’s consolidated balance sheets.
+Added: The liabilities of these VIEs are non-recourse to the Company and can only be satisfied from each VIE’s respective assets.
+Added: The Company has provided no financial support to VIEs that it was not previously contractually required to provide and did not have any unfunded commitments related to consolidated VIEs as of March 31, 2024.
Note 3—Summary of Significant Accounting Policies
Significant Accounting Policies
−Removed: Allowance for credit losses on net investment in sales-type leases and Ground Lease receivables —Effective January 1, 2023, upon the adoption of ASU 2016-13, the Company implemented procedures to estimate its allowance for credit losses on net investment in sales-type leases and Ground Lease receivables, including unfunded commitments, using a quantitative analysis to estimate expected loss rates for its portfolio of net investment in sales-type leases and Ground Lease receivables.
−Removed: ASU 2016-13 replaced the incurred loss impairment methodology in prior GAAP with a methodology that reflects expected credit losses over the life of the investment and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.
−Removed: The Company analyzes historical data provided by Trepp (“Trepp”) for single asset borrower loans and considers comparable loan to value ratios, loss rates, timing of losses, vintage, property type and other statistics.
−Removed: The Company updates its analysis for c urrent market conditions and reasonable and supportable forecasts of unemployment rates to develop an estimate of credit losses.
−Removed: The Company analyzes its portfolio of Ground Leases in two categories, based on whether the underlying property is a stabilized property or a development project (projects with unfunded commitments that are under development or in transition).
−Removed: The Company’s development properties are assigned a higher loss rate due to the higher inherent risk of deals under construction.
−Removed: Interest receivable is not included in the Company’s allowance for credit losses on net investment in sales-type leases and Ground Lease receivables as the Company performs timely write-offs, if any, of aged interest receivables.
−Removed: The Company has also made a policy election to write off aged interest receivables through interest income from sales-type leases as opposed to through the provision for credit losses.
−Removed: Real estate available and held for sale— The Company reports real estate assets to be sold at the lower of their carrying amount or estimated fair value less costs to sell and classifies them as “Real estate available and held for sale” on the Company’s consolidated balance sheets.
−Removed: If the estimated fair value less costs to sell is less than the carrying value, the difference will be recorded as an impairment charge.
−Removed: Impairment for real estate assets disposed of or classified as held for sale are included in "Impairment of assets"
−Removed: in the Company’s consolidated statements of operations.
−Removed: Once a real estate asset is classified as held for sale, depreciation expense is no longer recorded.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
−Removed: The Company classifies its real estate assets as held for sale in the period in which all of the following conditions are met:
−Removed: (i) the Company commits to a plan and has the authority to sell the asset;
−Removed: (ii) the asset is available for sale in its current condition;
−Removed: (iii) the Company has initiated an active marketing plan to locate a buyer for the asset;
−Removed: (iv) the sale of the asset is both probable and expected to qualify for full sales recognition within a period of 12 months;
−Removed: (v) the asset is being actively marketed for sale at a price that is reflective of its current fair value;
−Removed: and (vi) the Company does not anticipate changes to its plan to sell the asset.
−Removed: If circumstances arise that were previously considered unlikely and, as a result the Company decides not to sell a property previously classified as held for sale, the property is reclassified as held and used and included in "Real estate, net"
−Removed: on the Company’s consolidated balance sheets.
−Removed: The Company measures and records a property that is reclassified as held and used at the lower of:
−Removed: (i) its carrying amount before the property was classified as held for sale, adjusted for any depreciation expense that would have been recognized had the property been continuously classified as held and used;
−Removed: or (ii) the estimated fair value at the date of the subsequent decision not to sell.
Fair Values —The Company is required to disclose fair value information with regard to its financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practical to estimate fair value.
5 unchanged sentences
The Company determines the estimated fair values of financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the Company and the Company’s own assumptions about market participant assumptions.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
The following table presents the carrying value and fair value for the Company’s financial instruments ($ in millions):
−Removed: As of September 30, 2023
+Added: As of March 31, 2024
As of December 31, 2023
9 unchanged sentences
(2) The Company determined the carrying values of its cash and cash equivalents and restricted cash approximated their fair values and are classified as Level 1 within the fair value hierarchy .
+Added: Safehold Inc.
+Added: Notes to Consolidated Financial Statements
Redeemable Noncontrolling Interests —In February 2022, the Company sold 108,571 Caret units (refer to Note 12) for $ 19.0 million to third-party investors and received a commitment from an existing shareholder (which is affiliated with one of the Company’s independent directors) for the purchase of 28,571 Caret units for $ 5.0 million.
As part of the sale, the Company agreed to use commercially reasonable efforts to provide public market liquidity for such Caret units by seeking to provide a listing of the Caret units, or securities into which they may be exchanged, within two years of the sale.
−Removed: In the event public market liquidity of the Caret units is not achieved within such two year period at a valuation not less than the purchase price for the Caret units purchased in February 2022, reduced by an amount equal to the amount of subsequent cash distributions made to the investors on account of such Caret units, then the investors in the February 2022 transaction have the right to cause their Caret units purchased in February 2022 to be redeemed by Portfolio Holdings at their original purchase price as so reduced.
+Added: Because public market liquidity was not achieved by February 2024, the investors in the February 2022 transaction have the right to cause their Caret units purchased in February 2022 to be redeemed by Portfolio Holdings at their original purchase price less the amount of distributions previously made on such units.
+Added: During the three months ended March 31, 2024, the redemption option was extended to April 2024.
+Added: In April 2024, all of the investors in the February 2022 transaction exercised this right and elected to have their Caret units redeemed at the original purchase price less the amount of distributions previously made on such units .
The Company classifies these redeemable Caret units in accordance with Accounting Standards Codification (“ASC”) 480:
4 unchanged sentences
or (ii) the redemption value.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
−Removed: Stock-based compensation —In March 2023, the Company granted awards to employees with an aggregate grant date fair value of $ 25.0 million, or $ 28.89 per share.
−Removed: The awards vest ratably over a four-year service period.
−Removed: Compensation cost for stock-based awards is measured on the grant date and adjusted over the period of the employees’ services to reflect:
−Removed: (i) actual forfeitures;
−Removed: and (ii) the service conditions through the requisite service period.
−Removed: Compensation costs are recognized ratably over the applicable vesting/service period and recorded in "General and administrative"
−Removed: in the Company’s consolidated statements of operations.
−Removed: Income taxes — The Company (then known as iStar) elected to be taxed as a REIT under sections 856 through 859 of the Internal Revenue Code of 1986, as amended (the "Code") beginning with its taxable year ended December 31, 1998.
−Removed: The Company operates its business in a manner consistent with its election to be taxed as a REIT.
−Removed: As such, the consolidated financial statements of the Company have been prepared consistent with the Company’s qualification as a REIT for the periods presented.
−Removed: The Company will be subject to federal and state income taxation at corporate rates on its net taxable income;
−Removed: the Company, however, may claim a deduction for the amount of dividends paid to its shareholders.
−Removed: Amounts distributed as dividends by the Company will be subject to taxation at the stockholder level only.
−Removed: While the Company must distribute at least 90% of its net taxable income to qualify as a REIT, the Company intends to distribute all of its net taxable income, if any, and eliminate federal and state taxes on undistributed net taxable income.
−Removed: Certain states may impose minimum franchise taxes.
−Removed: In addition, the Company is allowed certain other non-cash deductions or adjustments, such as depreciation expense, when computing its net taxable income and distribution requirement.
−Removed: These deductions permit the Company to reduce its dividend payout requirement under federal tax laws.
−Removed: The Company’s tax years from 2019 through 2021 remain subject to examination by major tax jurisdictions The Company has two taxable REIT subsidiaries (“TRS”), one of which was formed during the year ended December 31, 2018 and had no material activity during the periods presented.
−Removed: Accordingly, no provision for income taxes was required.
−Removed: The second TRS provides management services to Star Holdings and internally to the REIT.
−Removed: The second TRS was acquired in the Company’s acquisition of iStar and first had activity during the three months ended June 30, 2023.
−Removed: For the nine months ended September 30, 2023, the Company recorded current income tax expense in the amount of $ 1.4 million, which was partially offset by a deferred tax benefit of $ 0.9 million with respect to the TRS.
−Removed: In addition, the Company paid other state and local income taxes in the amount of $ 0.1 million during the nine months ended September 30, 2023.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
−Removed: Loans receivable, net – related party —Loans receivable, net – related party includes the four-year term loan that the Company originated to Star Holdings (refer to Note 4).
−Removed: Loans receivable classified as held-for-investment are reported at their outstanding unpaid principal balance net of any unamortized acquisition premiums or discounts and unamortized deferred loan costs or fees and credit loss allowances.
−Removed: The Company performs a quarterly analysis of its loan receivable that incorporates management’s current judgments about credit quality based on all known and relevant internal and external factors that may affect collectability.
−Removed: The Company considers, among other things, payment status, lien position, borrower financial resources and investment collateral, collateral type, project economics and other economic factors.
−Removed: The Company estimates its Expected Loss on its loans receivable based on relevant information including current market conditions and reasonable and supportable forecasts that affect the collectability of its investments.
−Removed: The estimate of the Company’s Expected Loss requires significant judgment.
−Removed: The Company calculated its Expected Loss through the use of third-party market data that provided current and future economic conditions that may impact the performance of the commercial real estate assets securing its investments.
−Removed: The Company will consider a loan to be non-performing and place it on non-accrual status at such time as:
−Removed: (1) interest payments become 90 days delinquent;
−Removed: (2) it has a maturity default;
−Removed: or (3) management determines it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan.
−Removed: Non-accrual loans will be returned to accrual status when they have become contractually current and management believes all amounts contractually owed will be received.
−Removed: The Company made the accounting policy election to record accrued interest on its loan asset separate from its loans receivable and to exclude accrued interest from its amortized cost basis disclosures.
−Removed: Any accrued interest receivable is recorded in “Deferred expenses and other assets, net” on the Company’s consolidated balance sheets.
−Removed: As of September 30, 2023, the Company had $ 26 thousand of accrued interest on its consolidated balance sheets.
−Removed: The Company will place its loan on non-accrual status once interest on the loan becomes 90 days delinquent and will reverse any accrued interest as a reduction to interest income or recognizes a credit loss expense at such time.
−Removed: As such, the Company elected the practical expedient to not record an allowance against accrued interest receivable.
−Removed: During the three and nine months ended September 30, 2023, the Company did not reverse any accrued interest on its loan asset.
−Removed: Interest Income – related party —Interest income - related party (refer to Note 4) is recognized on an accrual basis using the effective interest method and is recorded in “Interest income – related party” in the Company’s consolidated statements of operations.
−Removed: Equity Investments —Equity investments are accounted for pursuant to the equity method of accounting if the Company can significantly influence the operating and financial policies of the investee.
−Removed: The Company has noncontrolling equity interests in multiple ventures (refer to Note 6) and determined the entities to be voting interest entities.
−Removed: As such, its equity interests in these ventures are accounted for pursuant to the equity method of accounting.
−Removed: The Company’s periodic share of earnings and losses in equity method investees are included in "Earnings from equity method investments"
−Removed: in the Company’s consolidated statements of operations.
−Removed: Equity investments are included in "Equity investments"
−Removed: on the Company’s consolidated balance sheets.
−Removed: The Company acquired two equity interests from iStar in connection with the Merger.
−Removed: In connection with the acquisition, the Company has basis differences in these equity interests that are amortized to income over the life of the underlying assets (refer to Note 6).
−Removed: Management fees —The Company earns management fees through SpinCo Manager’s management agreement with Star Holdings pursuant to which SpinCo Manager operates and pursues the orderly monetization of Star Holding’s assets (refer to Note 1).
−Removed: Effective March 31, 2023, Star Holdings will pay SpinCo Manager an annual management fee of $ 25.0 million in year one, $ 15.0 million in year two, $ 10.0 million in year three, $ 5.0 million in year four and 2.0 % of the gross book value of Star Holdings’ assets, excluding shares of the Company’s common stock, for each annual term thereafter.
−Removed: Management fees are paid quarterly in arrears.
−Removed: The Company recognizes management fee income in accordance
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
−Removed: with ASC 606:
−Removed: Revenue from Contracts with Customers (“ASC 606”).
−Removed: Upon the Company’s initial evaluation of the management contract, the Company evaluated the payment terms and termination clauses and it determined the estimated term of the contract to be three years and the total transaction price to be $ 50.0 million.
−Removed: The Company determined that the termination fees payable by Star Holdings in year one through year three upon termination of the management agreement would be substantive and therefore termination of the management agreement would be unlikely before year four.
−Removed: The Company will continue to evaluate the anticipated term and total transaction price of the management agreement as it executes its performance obligations under the management agreement.
−Removed: Pursuant to ASC 606, the Company allocated the transaction price to its performance obligations under the management agreement.
−Removed: The Company determined that the management contract represents a single continuing performance obligation and tracks its progress toward satisfying its performance obligation using an input method to measure the level of effort expended during the period and time budgeted to complete its obligations, which is subject to variability based on market conditions .
−Removed: The Company recognizes management fee income as it satisfies the performance obligations of the contract and records management fees in “Other income” in the Company’s consolidated statements of operations.
Acquisitions —The Company evaluates each acquisition transaction to determine whether the acquired asset meets the definition of a business.
4 unchanged sentences
Transaction costs related to asset acquisitions are capitalized as part of the cost basis of the acquired assets, while transaction costs related to business combinations are expensed as incurred.
−Removed: The Company’s acquisition of iStar was accounted for as a business combination.
+Added: The Company’s acquisition of iStar in 2023 was accounted for as a business combination.
For business combinations, the Company recognizes and measures identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their fair values on the Company’s consolidated balance sheets.
7 unchanged sentences
As lessee, right of use lease assets and lease liabilities are measured at the present value of lease payments not yet paid, discounted at the implied rate charged by the lessor if that rate is readily determinable, or if that rate is not readily determinable, the Company's incremental borrowing rate, as of the date of the acquisition.
−Removed: As lessee, operating lease right of use assets are included in “Deferred expenses and other assets, net” and operating lease liabilities are recorded in “Accounts payable, accrued expenses and other liabilities” on the Company’s consolidated balance sheets.
−Removed: As lessee, above-market operating lease intangibles, in-place operating lease intangibles and below-market lease assets are each recorded at their fair values and included in “Deferred expenses and other assets, net” on the Company’s consolidated balance sheets.
+Added: As lessee, operating lease
Safehold Inc.
Notes to Consolidated Financial Statements
+Added: right of use assets are included in “Deferred expenses and other assets, net” and operating lease liabilities are recorded in “Accounts payable, accrued expenses and other liabilities” on the Company’s consolidated balance sheets.
+Added: As lessee, above-market operating lease intangibles and below-market lease assets are each recorded at their fair values and included in “Deferred expenses and other assets, net” on the Company’s consolidated balance sheets.
The table below shows the Company’s purchase consideration for the acquisition of iStar ($ in thousands):
8 unchanged sentences
The Merger was accounted for as a business combination pursuant to ASC 805 and all Merger related costs were expensed as incurred.
−Removed: The Company recorded $ 0.1 million of Merger expenses during the three months ended September 30, 2023 in “Other expense” in the Company’s consolidated statements of operations.
−Removed: The Company recorded $ 18.9 million of Merger expenses during the nine months ended September 30, 2023, of which $ 14.1 million was recorded in “Other expense” and $ 4.8 million was recorded in “General and administrative” in the Company’s consolidated statements of operations.
−Removed: During the nine months ended September 30, 2023, the Company also recorded $ 0.9 million of related non-recurring charges in “Other expense” and a provision for credit losses of $ 2.3 million on the Secured Term Loan Facility (refer to Note 4) which was originated at the time of the Merger in conjunction with the Spin-Off.
−Removed: Excluding $ 3.0 million of related non-recurring charges and the $ 2.3 million provision for credit losses on the Secured Term Loan Facility, through September 30, 2023, the Company has incurred $ 26.6 million of Merger expenses.
+Added: The Company recorded $ 18.7 million of Merger expenses during the three months ended March 31, 2023, of which $ 13.9 million was recorded in “Other expense” and $ 4.8 million was recorded in “General and administrative” in the Company’s consolidated statements of operations.
+Added: During the three months ended March 31, 2023, the Company also recorded $ 0.6 million of related non-recurring charges in “Other expense” and a provision for credit losses of $ 2.3 million on the Secured Term Loan Facility (refer to Note 6) which was originated at the time of the Merger in conjunction with the Spin-Off.
+Added: Excluding $ 3.0 million of related non-recurring charges and the $ 2.3 million provision for credit losses on the Secured Term Loan Facility, through March 31, 2024, the Company has incurred $ 26.6 million of Merger expenses.
Safehold Inc.
Notes to Consolidated Financial Statements
−Removed: The following table sets forth the preliminary allocation as of March 31, 2023 of the purchase consideration to the fair values of identifiable tangible and intangible assets acquired and liabilities assumed, recognized as a result of the acquisition described in Note 1 above, measurement period adjustments and a revised allocation of the purchase consideration ($ in thousands):
+Added: The following table sets forth the preliminary allocation as of March 31, 2023 of the purchase consideration to the fair values of identifiable tangible and intangible assets acquired and liabilities assumed, recognized as a result of the acquisition described in Note 1 above, measurement period adjustments and a final allocation of the purchase consideration ($ in thousands):
Purchase Price
19 unchanged sentences
Reduction to goodwill resulting from measurement period adjustments
−Removed: Balance at September 30, 2023
+Added: Balance at December 31, 2023
(3) Deferred expenses and other assets includes $ 11.0 million attributable to operating lease right of use assets , $ 4.7 million attributable to prepaid expenses resulting from the settlement of iStar’s compensation plans, $ 2.1 million attributable to in-place prepaid contracts, $ 1.3 million attributable to office furniture and equipment and $ 6.3 million attributable to other receivables.
6 unchanged sentences
Notes to Consolidated Financial Statements
−Removed: The following table summarizes the Company's pro forma revenues and net income (loss) for the three and nine months ended September 30, 2023 and 2022 as if the Merger described in Note 1 was completed on January 1, 2022 ($ in thousands):
−Removed: For the Three Months Ended September 30,
−Removed: For the Nine Months Ended September 30,
+Added: The following table summarizes the Company's pro forma revenues and net income (loss) for the three months ended March 31, 2023 as if the Merger described in Note 1 was completed on January 1, 2022 ($ in thousands):
Pro forma revenues
−Removed: Pro forma net income (loss)
−Removed: The pro forma revenues and net income (loss) are presented for informational purposes only and may not be indicative of what the actual results of operations of the Company would have been assuming the transaction occurred on January 1, 2022, nor do they purport to represent the Company’s results of operations for future periods.
−Removed: For the nine months ended September 30, 2022, pro forma net loss includes $ 47.7 million of merger expenses (including $ 20.3 million of merger expenses borne by iStar), which are non-recurring in nature.
−Removed: For the three and nine months ended September 30, 2022, pro forma net loss includes $ 13.2 million and $ 171.9 million, respectively, of losses on extinguishment of debt, which are non-recurring in nature.
−Removed: From the date of the Merger closing through September 30, 2023, $ 0.1 million of total revenues and $ 6.0 million of net income of the acquiree are included in the Company’s consolidated statements of operations.
−Removed: Goodwill — Goodwill is calculated as the excess of purchase consideration over the fair value of the net identifiable assets acquired (or liabilities assumed) and primarily relates to the acquisition of iStar’s workforce and future synergies expected to be realized from the Merger.
−Removed: Goodwill is not subject to amortization but is tested annually for impairment or more frequently should potential triggering events be identified that may indicate potential impairment, such as when a company’s fair value, or the estimated fair value of a reporting unit of a company, is below its book value.
−Removed: During the three months ended September 30, 2023, the Company experienced a precipitous and sustained decline in the price per share of its common stock, which it identified as an indicator of goodwill impairment.
−Removed: As a result, the Company performed an interim goodwill evaluation.
−Removed: The Company determined that its current operations are carried out through a single reporting unit with a carrying value of approximately $ 2.4 billion.
−Removed: The estimated fair value of the Company was determined to be the Company’s market capitalization adjusted for a control premium estimated by the Company representing an amount a market participant would pay to obtain a controlling interest in the Company.
−Removed: The Company determined that its carrying value exceeded its estimated fair value and therefore recorded an impairment of goodwill.
−Removed: The Company recorded a $ 145.4 million full impairment of the goodwill recognized as a result of the Merger, which is recorded as a non-cash charge in “Impairment of goodwill” in the Company’s consolidated statements of operations.
−Removed: The Company does not expect goodwill to have any tax impact on its financial statements.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
−Removed: New accounting pronouncements —The following paragraph describes the impact on the Company's consolidated financial statements from the adoption of Accounting Standards Updates ("ASUs") on January 1, 2023.
−Removed: The Company adopted ASU 2016-13, Financial Instruments - Credit Losses:
−Removed: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), as amended, on January 1, 2023 using the modified retrospective approach method.
−Removed: Under the modified retrospective approach, the Company recorded a cumulative effect adjustment to retained earnings by recording an initial allowance for credit losses on net investment in sales-type leases and Ground Lease receivables.
−Removed: Periods presented that are prior to the adoption date of January 1, 2023 will not be adjusted.
−Removed: ASU 2016-13 replaced the incurred loss impairment methodology with a methodology that reflects a current expected credit loss ("Expected Loss").
−Removed: ASU 2016-13 impacted all of the Company’s investments held at amortized cost, which included its net investment in sales-type leases and Ground Lease receivables.
−Removed: Upon adoption of ASU 2016-13 on January 1, 2023, the Company recorded an initial allowance for credit losses on net investments in sales-type leases of $ 0.4 million and an initial allowance for credit losses on Ground Lease receivables of $ 0.2 million, both of which were recorded as a cumulative effect adjustment to retained earnings.
−Removed: Subsequent increases or decreases in the allowance for credit losses on net investment in sales-type leases or Ground Lease receivables will be charged to "Provision for credit losses"
−Removed: in the Company's consolidated statements of operations.
−Removed: Refer to "Significant Accounting Policies"
−Removed: above for more information on how the Company determines its allowance for credit losses on net investment in sales-type leases, Ground Lease receivables and loans receivable, net – related party.
−Removed: The Company also adopted ASU 2022-02, Financial Instruments—Credit Losses:
−Removed: Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”).
−Removed: ASU 2022-02 eliminated troubled debt restructuring recognition and measurement guidance and requires disclosure of gross write-offs by vintage for public business entities.
−Removed: The adoption of ASU 2022-02 did not have a material impact on the Company’s consolidated financial statements.
−Removed: Note 4—Net Investment in Sales-type Leases, Ground Lease Receivables and Loans Receivable, net – Related Party
+Added: Pro forma net income
+Added: The pro forma revenues and net income are presented for informational purposes only and may not be indicative of what the actual results of operations of the Company would have been assuming the transaction occurred on January 1, 2022, nor do they purport to represent the Company’s results of operations for future periods.
+Added: Due to the Merger closing on March 31, 2023, the revenue and net income of the acquiree for the three months ended March 31, 2023 had an immaterial impact on the Company’s total revenues and net income for the three months ended March 31, 2023.
+Added: New accounting pronouncements — In August 2023, the FASB issued ASU 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60):
+Added: Recognition and Initial Measurement (“ASU 2023-05”).
+Added: ASU 2023-05 requires a joint venture to initially measure all contributions received upon its formation at fair value and is effective for all joint venture entities with a formation date on or after January 1, 2025.
+Added: ASU 2023-05 is to be applied on a prospective basis, while retrospective application can be elected for joint ventures formed before the effective date.
+Added: The Company is currently evaluating ASU 2023-05 but does not expect this standard to have a material impact on its consolidated financial statements.
+Added: In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures (“ASU 2023-07”).
+Added: ASU 2023-07 improves disclosures for reportable segments primarily through enhanced disclosures about significant segment expenses.
+Added: ASU 2023-07 is effective on a retrospective basis for annual periods beginning after December 15, 2023 and for interim periods within fiscal years beginning after December 15, 2024.
+Added: Early adoption is permitted.
+Added: The Company does not expect the adoption of ASU 2023-07 to have a material impact on its consolidated financial statements.
+Added: In December 2023, the FASB issued ASU No.
+Added: 2023-09, Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures (“ASU 2023-09”).
+Added: ASU 2023-09 requires greater disaggregation of information in the rate reconciliation, income taxes paid disaggregated by jurisdiction and certain other amendments to improve income tax disclosures.
+Added: The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024.
+Added: Early adoption is permitted.
+Added: The Company is currently evaluating ASU 2023-09 but does not expect this standard to have a material impact on its consolidated financial statements.
+Added: Note 4—Net Investment in Sales-type Leases and Ground Lease Receivables
The Company classifies certain of its Ground Leases as sales-type leases and records the leases within “Net investment in sales-type leases” on the Company’s consolidated balance sheets and records interest income in “Interest income from sales-type leases” in the Company’s consolidated statements of operations.
2 unchanged sentences
The Company records interest income from Ground Lease receivables in “Interest income from sales-type leases” in the Company’s consolidated statements of operations.
−Removed: In July 2022, the Company, pursuant to an agreement with iStar and upon certain construction related conditions being met, acquired an existing Ground Lease from iStar for $ 36.4 million inclusive of closing costs and was recorded in “Net investment in sales-type leases” and “Real estate-related intangible assets, net” on the Company’s consolidated balance sheet.
−Removed: In September 2022, the Company sold a Ground Lease to a third-party for $ 136.0 million and recognized a gain of $ 55.8 million in the Company’s consolidated statements of operations.
−Removed: $ 9.5 million of the gain was attributable to noncontrolling interests, of which $ 0.7 million was attributable to redeemable noncontrolling interests.
In May 2023, the Company entered into a joint venture with a sovereign wealth fund, which is also an existing shareholder, focused on new acquisitions for certain Ground Lease investments.
−Removed: The Company committed approximately $ 275 million for a 55 % controlling interest in the joint venture and the sovereign wealth fund committed
+Added: The Company committed approximately $ 275 million for a 55 % controlling interest in the joint venture and the sovereign wealth fund committed approximately $ 225 million for a 45 % noncontrolling interest in the joint venture.
+Added: Each party’s commitment is
Safehold Inc.
Notes to Consolidated Financial Statements
−Removed: approximately $ 225 million for a 45 % noncontrolling interest in the joint venture.
−Removed: Each party’s commitment is discretionary.
+Added: discretionary.
The joint venture is a voting interest entity and the Company consolidates the joint venture in its financial statements due to its controlling interest.
3 unchanged sentences
The venture has first look rights on qualifying investments for 18 months .
−Removed: During the nine months ended September 30, 2023, the joint venture acquired two Ground Leases for an aggregate purchase price of $ 38.5 million, of which $ 14.5 million has been funded as of September 30, 2023.
+Added: Since formation, the joint venture acquired three Ground Leases for an aggregate purchase price of $ 60.1 million, of which $ 36.2 million has been funded as of March 31, 2024.
+Added: In January 2024, the Company acquired a Ground Lease from the Ground Lease Plus Fund for $ 38.3 million, excluding $ 36.5 million funded by the Company pursuant to a leasehold improvement allowance (refer to Note 14).
The Company’s net investment in sales-type leases were comprised of the following ($ in thousands):
−Removed: September 30, 2023
+Added: March 31, 2024
December 31, 2023
6 unchanged sentences
Net investment in sales-type leases (2)
−Removed: (1) As of September 30, 2023, total discounted cash flows were approximately $ 3,153 million and the discounted unguaranteed estimated residual value was $ 30.1 million.
+Added: (1) As of March 31, 2024, total discounted cash flows were approximately $ 3,312 million and the discounted unguaranteed estimated residual value was $ 30.8 million.
As of December 31, 2023, total discounted cash flows were approximately $ 3,225 million and the discounted unguaranteed estimated residual value was $ 30.4 million.
−Removed: (2) As of September 30, 2023, $ 6.5 million was attributable to noncontrolling interests.
+Added: (2) As of March 31, 2024 and December 31, 2023, $ 16.5 million and $ 16.4 million, respectively, was attributable to noncontrolling interests.
Safehold Inc.
Notes to Consolidated Financial Statements
−Removed: The following table presents a rollforward of the Company’s net investment in sales-type leases and Ground Lease receivables for the nine months ended September 30, 2023 and 2022 ($ in thousands):
+Added: The following table presents a rollforward of the Company’s net investment in sales-type leases and Ground Lease receivables for the three months ended March 31, 2024 and 2023 ($ in thousands):
Net Investment in
Sales-type Leases
−Removed: Nine Months Ended September 30, 2023
+Added: Three Months Ended March 31, 2024
Beginning balance
−Removed: Impact from adoption of new accounting standard (refer to Note 3)
Origination/acquisition/fundings (1)
3 unchanged sentences
Sales-type Leases
−Removed: Nine Months Ended September 30, 2022
+Added: Three Months Ended March 31, 2023
Beginning balance
+Added: Impact from adoption of new accounting standard
Origination/acquisition/fundings (1)
+Added: Recovery of credit losses
Ending balance (2)
1 unchanged sentence
For newly originated or acquired Ground Leases, the Company’s estimate of residual value equals the fair value of the land at lease commencement.
−Removed: (2) As of September 30, 2023 and December 31, 2022, all of the Company’s net investment in sales-type leases and Ground Lease receivables were current in their payment status.
−Removed: As of September 30, 2023, the Company’s weighted average accrual rate for its net investment in sales-type leases and Ground Lease receivables was 5.1 % and 5.4 % , respectively.
−Removed: As of September 30, 2023, the weighted average remaining life of the Company’s 35 Ground Lease receivables was 98.3 years.
+Added: (2) As of March 31, 2024 and December 31, 2023, all of the Company’s net investment in sales-type leases and Ground Lease receivables were current in their payment status.
+Added: As of March 31, 2024, the Company’s weighted average accrual rate for its net investment in sales-type leases and Ground Lease receivables was 5.2 % and 5.4 % , respectively.
+Added: As of March 31, 2024, the weighted average remaining life of the Company’s 34 Ground Lease receivables was 97.9 years.
Safehold Inc.
Notes to Consolidated Financial Statements
−Removed: Allowance for Credit Losses —Changes in the Company’s allowance for credit losses on net investment in sales-type leases and Ground Lease receivables for the three and nine months ended September 30, 2023 were as follows ($ in thousands):
+Added: Allowance for Credit Losses —Changes in the Company’s allowance for credit losses on net investment in sales-type leases and Ground Lease receivables for the three months ended March 31, 2024 and 2023 were as follows ($ in thousands):
Net investment in sales-type leases
−Removed: Three Months Ended September 30, 2023
+Added: Three Months Ended March 31, 2024
Allowance for credit losses at beginning of period
2 unchanged sentences
Ground Lease receivables
−Removed: Three Months Ended September 30, 2023
+Added: Three Months Ended March 31, 2024
Allowance for credit losses at beginning of period
−Removed: Provision for (recovery of) credit losses (1)
+Added: Provision for credit losses (1)
Allowance for credit losses at end of period (2)
Net investment in sales-type leases
−Removed: Nine Months Ended September 30, 2023
+Added: Three Months Ended March 31, 2023
Allowance for credit losses at beginning of period
−Removed: Impact from adoption of new accounting standard (refer to Note 3) (3)
−Removed: Provision for (recovery of) credit losses (1)
+Added: Impact from adoption of new accounting standard (3)
+Added: Recovery of credit losses (1)
Allowance for credit losses at end of period (2)
Ground Lease receivables
−Removed: Nine Months Ended September 30, 2023
+Added: Three Months Ended March 31, 2023
Allowance for credit losses at beginning of period
−Removed: Impact from adoption of new accounting standard (refer to Note 3) (3)
+Added: Impact from adoption of new accounting standard (3)
Provision for (recovery of) credit losses (1)
Allowance for credit losses at end of period (2)
−Removed: (1) During the three months ended September 30, 2023, the Company recorded a provision for credit losses on net investment in sales-type leases and Ground Lease receivables of $ 0.1 million and $ 0.1 million, respectively.
−Removed: The provision for credit losses was due primarily to a declining macroeconomic forecast since June 30, 2023.
−Removed: During the nine months ended September 30, 2023, the Company recorded a provision for credit losses on net investment in sales-type leases and Ground Lease receivables of $ 0.1 million and $ 0.1 million, respectively.
−Removed: The provision for credit losses on net investment in leases and Ground Lease receivables was due primarily to a declining macroeconomic forecast since December 31, 2022.
+Added: (1) During the three months ended March 31, 2024, the Company recorded a provision for credit losses on net investment in sales-type leases and Ground Lease receivables of $ 0.5 million and $ 0.3 million, respectively.
+Added: The provision for credit losses was due primarily to current market conditions, including an increase in the Ground Lease cost to value ratio on the Company’s portfolio of Ground Leases since December 31, 2023.
+Added: During the three months ended March 31, 2023, the Company recorded a recovery of credit losses on net investment in sales-type leases and Ground Lease receivables of $ 31 thousand and $ 25 thousand, respectively.
+Added: The recovery of credit losses on net investment in sales-type leases and Ground Lease receivables was due primarily to an improving macroeconomic forecast since December 31, 2023.
(2) Allowance for credit losses on unfunded commitments is recorded in “Accounts payable and accrued expenses” on the Company’s consolidated balance sheets.
−Removed: (3) On January 1, 2023, the Company recorded an allowance for credit losses on net investment in sales-type leases of $ 0.4 million and an allowance for credit losses on Ground Lease receivables of $ 0.2 million upon the adoption of ASU 2016-13, of which an aggregate of $ 0.1 million related to expected credit losses for unfunded commitments and was recorded in "Accounts payable, accrued expenses and other liabilities."
+Added: (3) On January 1, 2023, the Company recorded an allowance for credit losses on net investment in sales-type leases of $ 0.4 million and an allowance for credit losses on Ground Lease receivables of $ 0.2 million upon the adoption of ASU 2016-13, of which an aggregate of $ 0.1 million related to expected credit losses for unfunded commitments and was recorded in "Accounts payable, accrued expenses and other liabilities."
Safehold Inc.
Notes to Consolidated Financial Statements
−Removed: The Company’s amortized cost basis in Ground Lease receivables, presented by year of origination and by stabilized or development status, was as follows as of September 30, 2023 ($ in thousands):
+Added: The Company’s amortized cost basis in Ground Lease receivables, presented by year of origination and by stabilized or development status, was as follows as of March 31, 2024 ($ in thousands):
Year of Origination
3 unchanged sentences
Development properties
−Removed: Future Minimum Lease Payments under Sales-type Leases —Future minimum lease payments to be collected under sales-type leases accounted for under ASC 842 - Leases, excluding lease payments that are not fixed and determinable, in effect as of September 30, 2023, are as follows by year ($ in thousands):
+Added: The Company’s amortized cost basis in Ground Lease receivables, presented by year of origination and by stabilized or development status, was as follows as of December 31, 2023 ($ in thousands):
+Added: Year of Origination
+Added: Prior to 2019
+Added: Ground Lease receivables
+Added: Stabilized properties
+Added: Development properties
+Added: Future Minimum Lease Payments under Sales-type Leases —Future minimum lease payments to be collected under sales-type leases accounted for under ASC 842 - Leases, excluding lease payments that are not fixed and determinable, in effect as of March 31, 2024, are as follows by year ($ in thousands):
with Inflation
−Removed: 2023 (remaining three months)
+Added: 2024 (remaining nine months)
Total undiscounted cash flows
−Removed: During the three and nine months ended September 30, 2023 and 2022, the Company recognized interest income from sales-type leases in its consolidated statements of operations as follows ($ in thousands):
−Removed: Net Investment
−Removed: in Sales-type
−Removed: Three Months Ended September 30, 2023
−Removed: Total interest income from sales-type leases
−Removed: Net Investment
−Removed: in Sales-type
−Removed: Three Months Ended September 30, 2022
−Removed: Total interest income from sales-type leases
+Added: During the three months ended March 31, 2024 and 2023, the Company recognized interest income from sales-type leases in its consolidated statements of operations as follows ($ in thousands):
Net Investment
in Sales-type
−Removed: Nine Months Ended September 30, 2023
+Added: Three Months Ended March 31, 2024
Total interest income from sales-type leases
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
Net Investment
in Sales-type
−Removed: Nine Months Ended September 30, 2022
+Added: Three Months Ended March 31, 2023
Total interest income from sales-type leases
−Removed: Loans receivable, net – related party —On March 31, 2023, the Company, as lender and as administrative agent, and Star Holdings, as borrower, entered into a senior secured term loan facility in an aggregate principal amount of $ 115.0 million (the “Secured Term Loan Facility”) and an additional commitment amount of up to $ 25.0 million at Star Holding’s election (the “Incremental Term Loan Facility”, together with the Secured Term Loan Facility, the “Star Holdings Term Loan Facility”) (refer to Note 14).
−Removed: During the three and nine months ended September 30, 2023, the Company recorded $ 2.4 million and $ 4.8 million, respectively, of interest income on the Star Holdings Term Loan Facility, which is recorded in “Interest income – related party” in the Company’s consolidated statements of operations.
−Removed: As of September 30, 2023, the Star Holdings Term Loan Facility had a principal balance of $ 115.0 million and a carrying value of $ 112.1 million.
−Removed: The Star Holdings Term Loan Facility is a secured credit facility.
−Removed: Borrowings under the Star Holdings Term Loan Facility bear interest at a fixed rate of 8.00 % per annum, which may increase to 10.00 % per annum if any loans remain outstanding under the Incremental Term Loan Facility (refer to Note 14).
−Removed: The Star Holdings Term Loan Facility has a maturity date of March 31, 2027.
−Removed: The Star Holdings Term Loan Facility is secured by a first-priority perfected security pledge of all the equity interests in Star Holding’s primary real estate subsidiary.
−Removed: Starting the quarter that is nine months after closing, within five business days after Star Holdings has delivered its unaudited quarterly financial statements, Star Holdings will apply any unrestricted cash on its balance sheet in excess of the aggregate of (i) an operating reserve; and (ii) $ 50 million, to prepay its Star Holdings Term Loan Facility or alternatively, with the consent of the Company, Star Holdings may apply such cash to prepay its margin loan facility in lieu of any prepayment of the Star Holdings Term Loan Facility.
−Removed: The operating reserve will be calculated quarterly and is equal to the aggregate of projected operating expenses (including payments to the Star Holdings local property consultants but excluding management fees and public company costs), projected land carry costs, projected capital expenditure and projected interest expense on the margin loan facility and Star Holdings Term Loan Facility for the next twelve months; less the projected operating revenues for the next twelve months consistent with the operating budget approved by the Company.
−Removed: The Star Holdings Term Loan Facility contains certain customary covenants, including affirmative covenants on reporting, maintenance of property, continued ownership of interests in the Company as well as negative covenants relating to investments, indebtedness and liens, fundamental changes, asset dispositions, repayments, distributions and affiliate transactions.
−Removed: Furthermore, the Star Holdings Term Loan Facility contains customary events of default, including payment defaults, failure to perform covenants, cross-default and cross acceleration to other indebtedness, including the margin loan facility, impairment of security interests and change of control.
−Removed: During the three and nine months ended September 30, 2023, the Company recorded a provision for credit losses of $ 0.1 million and $ 2.4 million, respectively, on the Secured Term Loan Facility which was originated at the time of the Merger in conjunction with the Spin-Off.
Safehold Inc.
2 unchanged sentences
The Company’s real estate assets consist of the following ($ in thousands):
−Removed: September 30, 2023
+Added: March 31, 2024
December 31, 2023
6 unchanged sentences
Total real estate, net and real estate-related intangible assets, net and real estate available and held for sale
−Removed: (1) During the three months ended September 30, 2023, the Company acquired $ 7.2 million of real property that is being marketed for sale and is recorded in real estate available and held for sale.
−Removed: During the nine months ended September 30, 2023, the Company sold $ 1.5 million of real property that was acquired from iStar that was classified as available for sale upon acquisition.
−Removed: The Company recognized $ 0.1 million of gains on the sales, which is recorded in “Other income” in the Company’s consolidated statements of operations.
+Added: (1) During the three months ended March 31, 2024, the Company transferred $ 0.9 million of real property that is being marketed for sale to real estate available and held for sale.
Real estate-related intangible assets, net consist of the following items ($ in thousands):
−Removed: As of September 30, 2023
+Added: As of March 31, 2024
Above-market lease assets, net (1)
11 unchanged sentences
Notes to Consolidated Financial Statements
−Removed: The amortization of real estate-related intangible assets had the following impact on the Company’s consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022 ($ in thousands):
−Removed: Income Statement
−Removed: For the Three Months Ended September 30,
−Removed: Intangible asset
−Removed: Above-market lease assets (decrease to income)
−Removed: Operating lease income
−Removed: In-place lease assets (decrease to income)
−Removed: Depreciation and amortization
−Removed: Other intangible assets (decrease to income)
−Removed: Operating lease income
+Added: The amortization of real estate-related intangible assets had the following impact on the Company’s consolidated statements of operations for the three months ended March 31, 2024 and 2023 ($ in thousands):
Income Statement
−Removed: For the Nine Months Ended September 30,
+Added: For the Three Months Ended March 31,
Intangible asset
6 unchanged sentences
The estimated amortization of real estate-related intangible assets for each of the five succeeding fiscal years is as follows ($ in thousands):
−Removed: 2023 (remaining three months)
−Removed: (1) As of September 30, 2023, the weighted average amortization period for the Company’s real estate-related intangible assets was approximately 80.3 years.
+Added: 2024 (remaining nine months)
+Added: (1) As of March 31, 2024, the weighted average amortization period for the Company’s real estate-related intangible assets was approximately 80.7 years.
Real estate-related intangible liabilities, net consist of the following items ($ in thousands):
−Removed: As of September 30, 2023
+Added: As of March 31, 2024
Below-market lease liabilities (1)
5 unchanged sentences
Notes to Consolidated Financial Statements
−Removed: The amortization of real estate-related intangible liabilities had the following impact on the Company’s consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022 ($ in thousands):
−Removed: Income Statement
−Removed: For the Three Months Ended September 30,
−Removed: Intangible liability
−Removed: Below-market lease liabilities (increase to income)
−Removed: Operating lease income
+Added: The amortization of real estate-related intangible liabilities had the following impact on the Company’s consolidated statements of operations for the three months ended March 31, 2024 and 2023 ($ in thousands):
Income Statement
−Removed: For the Nine Months Ended September 30,
+Added: For the Three Months Ended March 31,
Intangible liability
1 unchanged sentence
Operating lease income
−Removed: Future Minimum Operating Lease Payments —Future minimum lease payments to be collected under non-cancelable operating leases, excluding lease payments that are not fixed and determinable, in effect as of September 30, 2023, are as follows by year ($ in thousands):
−Removed: 2023 (remaining three months)
−Removed: (1) During the three months ended September 30, 2023 and 2022, the Company recognized $ 0.2 million and $ 0.2 million, respectively, of percentage rent in “Operating lease income” in the Company’s consolidated statements of operations.
−Removed: During the nine months ended September 30, 2023 and 2022, the Company recognized $ 4.2 million and $ 1.1 million, respectively, of percentage rent in “Operating lease income” in the Company’s consolidated statements of operations.
+Added: Future Minimum Operating Lease Payments —Future minimum lease payments to be collected under non-cancelable operating leases, excluding lease payments that are not fixed and determinable, in effect as of March 31, 2024, are as follows by year ($ in thousands):
+Added: 2024 (remaining nine months)
+Added: (1) During the three months ended March 31, 2024 and 2023, the Company recognized $ 4.6 million and $ 3.7 million, respectively, of percentage rent in “Operating lease income” in the Company’s consolidated statements of operations.
+Added: Note 6 — Loan Receivable, net – Related Party
+Added: On March 31, 2023, the Company, as lender and as administrative agent, and Star Holdings, as borrower, entered into a senior secured term loan facility, which was amended on October 4, 2023, in an aggregate principal amount of $ 115.0 million (the “Secured Term Loan Facility”) and an additional commitment amount of up to $ 25.0 million at Star Holding’s election (the “Incremental Term Loan Facility”, together with the Secured Term Loan Facility, as amended, the “Star Holdings Term Loan Facility”).
+Added: During the three months ended March 31, 2024, the Company recorded $ 2.4 million of interest income on the Star Holdings Term Loan Facility, which is recorded in “Interest income – related party” in the Company’s consolidated statements of operations.
+Added: As of March 31, 2024, the Star Holdings Term Loan Facility had a principal balance of $ 115.0 million and a carrying value of $ 112.2 million.
+Added: As of December 31, 2023, the Star Holdings Term Loan Facility had a principal balance of $ 115.0 million and a carrying value of $ 112.1 million.
+Added: The Star Holdings Term Loan Facility is a secured credit facility.
+Added: Borrowings under the Star Holdings Term Loan Facility bear interest at a fixed rate of 8.00 % per annum, which may increase to 10.00 % per annum if any loans remain outstanding under the Incremental Term Loan Facility.
+Added: The Star Holdings Term Loan Facility has a maturity date of March 31, 2027.
+Added: The Star Holdings Term Loan Facility is secured by a first-priority perfected security pledge of all the equity interests in Star Holding’s primary real estate subsidiary.
+Added: Starting the quarter that is six months after closing, within five business days after Star Holdings has delivered its unaudited quarterly financial statements, Star Holdings will apply any unrestricted cash on its balance sheet in excess of the aggregate of (i) an operating reserve; and (ii) $ 50 million, to prepay its Star Holdings Term Loan Facility or alternatively, with the consent of the Company, Star Holdings may apply such cash to prepay its margin loan facility in lieu of any prepayment of the Star Holdings Term Loan Facility.
+Added: The operating reserve will be calculated quarterly and is equal to the aggregate of projected operating expenses (including payments to the Star Holdings local property consultants but excluding management fees and public company costs), projected land carry costs, projected capital expenditure and projected interest expense on the margin loan facility and Star Holdings
Safehold Inc.
Notes to Consolidated Financial Statements
+Added: Term Loan Facility for the next twelve months; less the projected operating revenues for the next twelve months consistent with the operating budget approved by the Company.
+Added: The Star Holdings Term Loan Facility contains certain customary covenants, including affirmative covenants on reporting, maintenance of property, continued ownership of interests in the Company as well as negative covenants relating to investments, indebtedness and liens, fundamental changes, asset dispositions, repayments, distributions and affiliate transactions.
+Added: Furthermore, the Star Holdings Term Loan Facility contains customary events of default, including payment defaults, failure to perform covenants, cross-default and cross acceleration to other indebtedness, including the margin loan facility, impairment of security interests and change of control.
+Added: During the three months ended March 31, 2024, the Company recorded a recovery of credit losses of $ 68 thousand on the Star Holdings Term Loan Facility, including amounts on the Incremental Term Loan Facility, which was undrawn as of March 31, 2024 and December 31, 2023.
+Added: As of March 31, 2024 and December 31, 2023, the Company had $ 0.1 million and $ 0.1 million, respectively, of accrued interest receivable which is recorded in “Deferred expenses and other assets, net” on the Company’s consolidated balance sheets.
+Added: During the three months ended March 31, 2024, the Company did not reverse any accrued interest on its loan asset.
Note 7—Equity Investments
1 unchanged sentence
Earnings from
−Removed: Earnings from
Carrying Value
Equity Method Investments (1)
−Removed: Equity Method Investments (1)
For the Three Months Ended
−Removed: For the Nine Months Ended
−Removed: September 30,
−Removed: September 30,
−Removed: September 30,
Equity investment
2 unchanged sentences
Leasehold Loan Fund (2)
−Removed: (1) As of September 30, 2023, the Company has a basis difference of $ 20.2 million in the Ground Lease Plus Fund that will be amortized over a weighted average remaining term of 100.6 years using the effective interest method.
−Removed: During the three and nine months ended September 30, 2023, $ 0.8 million and $ 1.6 million, respectively, of the basis difference was amortized as an increase to earnings from equity method investments.
−Removed: (2) As of September 30, 2023, the Company has a basis difference of $ 12.3 million in the Leasehold Loan Fund that will be amortized over a weighted average remaining term of 3.3 years using the effective interest method.
−Removed: During the three and nine months ended September 30, 2023, $ 1.0 million and $ 2.0 million, respectively, of the basis difference was amortized as an increase to earnings from equity method investments.
+Added: (1) As of March 31, 2024, the Company has a basis difference of $ 19.2 million in the Ground Lease Plus Fund that will be amortized over a weighted average remaining term of 106.3 years using the effective interest method.
+Added: During the three months ended March 31, 2024, $ 0.2 million of the basis difference was amortized as an increase to earnings from equity method investments.
+Added: (2) As of March 31, 2024, the Company has a basis difference of $ 10.2 million in the Leasehold Loan Fund that will be amortized over a weighted average remaining term of 2.8 years using the effective interest method.
+Added: During the three months ended March 31, 2024, $ 1.0 million of the basis difference was amortized as an increase to earnings from equity method investments.
425 Park Avenue —In August 2019, the Company formed a venture with a sovereign wealth fund that is an existing shareholder of the Company to acquire the existing Ground Lease at 425 Park Avenue in New York City.
3 unchanged sentences
32 Old Slip —In June 2021, the Company acquired a 29.2 % noncontrolling equity interest in a Ground Lease at an office property in New York City.
+Added: Safehold Inc.
+Added: Notes to Consolidated Financial Statements
Ground Lease Plus Fund —In connection with Merger, the Company acquired from iStar an investment fund that iStar managed that targets the origination and acquisition of Ground Leases for commercial real estate projects that are in a pre-development phase (the “Ground Lease Plus Fund”).
2 unchanged sentences
The Company receives a fee from its partner in exchange for managing the entity and is also entitled to a promote payment on investments in the Ground Lease Plus Fund.
−Removed: The Ground Lease Plus Fund has first look rights through December 2023 on qualifying pre-development projects that the Company has elected to not originate.
+Added: The Ground Lease Plus Fund had first look rights through December 2023 on qualifying pre-development projects that the Company has elected to not originate.
In November 2021, iStar acquired land for $ 33.3 million and simultaneously structured and entered into a Ground Lease on which a multi-family project will be constructed (refer also to Note 14).
1 unchanged sentence
At the time of iStar’s acquisition in November 2021, the Company and iStar entered into an agreement pursuant to which the Company would acquire the land and related Ground Lease from the Ground Lease Plus Fund when certain construction related conditions are met by a specified time period.
+Added: In January 2024, the Company acquired the Ground Lease from the Ground Lease Plus Fund for $ 38.3 million, excluding $ 36.5 million funded by the Company pursuant to a leasehold improvement allowance (refer to Note 14).
In June 2021, the Company entered into two agreements pursuant to each of which it agreed to acquire land and a related Ground Lease originated by iStar when certain construction related conditions are met by a specified time period.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
−Removed: In January 2022, iStar sold the two Ground Leases to the Ground Lease Plus Fund, which remain subject to the June 2021 agreement with the Company, and recognized an aggregate $ 0.5 million of gains on the sale.
+Added: In January 2022, iStar sold the two Ground Leases to the Ground Lease Plus Fund, which remain subject to the June 2021 agreement with the Company.
Leasehold Loan Fund —In connection with the Merger, the Company acquired from iStar an investment fund that iStar managed that targets customers that may require a mortgage leasehold loan as well as a Ground Lease (the “Leasehold Loan Fund”).
3 unchanged sentences
The Company is also entitled to a promote payment on certain investments in the Leasehold Loan Fund.
+Added: In March 2021, iStar acquired land and simultaneously structured and entered into with the seller a Ground Lease on which a multi-family project will be constructed.
+Added: iStar also committed to provide a $ 75.0 million construction loan to the Ground Lease tenant.
+Added: In September 2021, the construction loan commitment was transferred to the Leasehold Loan Fund.
+Added: As of March 31, 2024, the Leasehold Loan Fund funded $ 69.4 million of the commitment.
+Added: The construction loan was repaid in full in April 2024.
In February 2022, the Leasehold Loan Fund committed to provide a $ 130.0 million loan to the ground lessee of a Ground Lease originated by the Company.
The loan was for the Ground Lease tenant’s recapitalization of a life science property.
−Removed: As of September 30, 2023, the Company has not funded any of the commitment.
+Added: As of March 31, 2024, the Leasehold Loan Fund has not funded any of the commitment.
In June 2022, the Leasehold Loan Fund committed to provide a $ 105.0 million loan to the ground lessee of a Ground Lease originated by the Company.
The loan was for the Ground Lease tenant’s recapitalization of a mixed-use property.
−Removed: As of September 30, 2023, $ 39.5 million of the commitment has been funded.
+Added: As of March 31, 2024, the Leasehold Loan Fund funded $ 40.8 million of the commitment.
+Added: Safehold Inc.
+Added: Notes to Consolidated Financial Statements
Note 8—Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities
Deferred expenses and other assets, net, consist of the following items ($ in thousands):
−Removed: September 30, 2023
+Added: March 31, 2024
December 31, 2023
7 unchanged sentences
Deferred expenses and other assets, net
−Removed: (1) Operating lease right-of-use asset relates primarily to a property that is majority-owned by a third party and is ground leased to the Company.
+Added: (1) Operating lease right-of-use asset (and operating lease liability below) relates primarily to a property that is majority-owned by a third party and is ground leased to the Company.
The Company is obligated to pay the owner of the property $ 0.5 million, subject to adjustment for changes in the CPI, per year through 2044;
1 unchanged sentence
Operating lease right-of-use asset is amortized on a straight-line basis over the term of the lease and is recorded in “Real estate expense” in the Company’s consolidated statements of operations.
−Removed: During both the three months ended September 30, 2023 and 2022, the Company recognized $ 0.1 million in “Real estate expense” and $ 0.1 million in “Other income” from its operating lease right-of-use asset.
−Removed: During the nine months ended September 30, 2023 and 2022, the Company recognized $ 0.4 million and $ 0.3 million, respectively, in “Real estate expense” and $ 0.4 million and $ 0.3 million, respectively, in “Other income” from its operating lease right-of-use asset.
+Added: During both the three months ended March 31, 2024 and 2023, the Company recognized $ 0.1 million in “Real estate expense” and $ 0.1 million in “Other income” from its operating lease right-of-use asset.
The related operating lease liability (see table below) equals the present value of the minimum rental payments due under the lease discounted at the Company’s incremental secured borrowing rate for a similar asset estimated to be 5.5 % .
The Company also has operating leases for office space that it assumed from iStar in connection with the Merger (refer to Note 10).
−Removed: (2) Accumulated amortization of deferred finance costs was $ 9.7 million and $ 5.7 million as of September 30, 2023 and December 31, 2022, respectively.
−Removed: (3) As of September 30, 2023, includes $ 6.9 million of management fees due from Star Holdings.
−Removed: Through September 30, 2023, the Company has earned $ 13.2 million of management fees from Star Holdings and as of September 30, 2023, $ 36.8 million of the transaction price is attributable to performance obligations that remain unsatisfied.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
+Added: (2) Accumulated amortization of deferred finance costs was $ 12.3 million and $ 11.0 million as of March 31, 2024 and December 31, 2023, respectively.
+Added: (3) As of March 31, 2024, includes $ 19.1 million of cash posted as temporary replacement collateral in a pool that has asset substitution rights related to certain of the Company’s debt obligations.
+Added: As of March 31, 2024 and December 31, 2023, includes $ 6.2 million and $ 6.9 million, respectively, of management fees due from Star Holdings.
+Added: Through March 31, 2024, the Company has earned $ 24.9 million of management fees from Star Holdings and as of March 31, 2024, $ 25.1 million of the transaction price is attributable to performance obligations that remain unsatisfied.
Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands):
−Removed: September 30, 2023
+Added: March 31, 2024
December 31, 2023
3 unchanged sentences
Operating lease liability (1)
−Removed: Management fee payable
Accrued expenses (2)
Accounts payable, accrued expenses and other liabilities
−Removed: (1) As of December 31, 2022, other liabilities include $ 3.1 million due to the Former Manager for allocated payroll costs and costs it paid on the Company’s behalf.
(1) Refer to Note 10.
−Removed: (3) As of September 30, 2023, accrued expenses includes accrued compensation, legal, audit and property expenses.
−Removed: As of December 31, 2022, accrued expenses includes accrued legal, audit and property expenses.
+Added: (2) As of March 31, 2024 and December 31, 2023, accrued expenses includes accrued compensation, legal, audit and property expenses.
Safehold Inc.
2 unchanged sentences
The Company’s outstanding debt obligations consist of the following ($ in thousands):
−Removed: September 30, 2023
+Added: March 31, 2024
December 31, 2023
7 unchanged sentences
6.10 % senior notes
+Added: 3.98 % senior notes
February 2052
11 unchanged sentences
(1) For mortgages, represents the weighted average stated interest rate over the term of the debt from funding through maturity based on the contractual payments owed excluding the effect of debt premium, discount and deferred financing costs.
−Removed: As of September 30, 2023, the weighted average cash interest rate for the Company’s consolidated mortgage debt, based on interest rates in effect at that date, was 3.30 % .
+Added: As of March 31, 2024, the weighted average cash interest rate for the Company’s consolidated mortgage debt, based on interest rates in effect at that date, was 3.32 % .
The difference between the weighted average interest rate and the weighted average cash interest rate is recorded to interest payable within “Accounts payable, accrued expenses, and other liabilities” on the Company’s consolidated balance sheets.
−Removed: As of September 30, 2023, the Company’s combined weighted average stated interest rate and combined weighted average cash interest rate of the Company’s consolidated mortgage debt, the mortgage debt of the Company’s unconsolidated ventures (applying the Company’s percentage interest in the ventures - refer to Note 6), unsecured senior notes and trust preferred securities were 3.85 % and 3.32 % , respectively.
−Removed: In October 2023, the Company’s interest rates on the 2021 Unsecured Revolver and the 2023 Unsecured Revolver decreased to Adjusted SOFR plus 0.90 % as a result of a credit ratings upgrade.
+Added: As of March 31, 2024, the Company’s combined weighted average stated interest rate and combined weighted average cash interest rate of the Company’s consolidated mortgage debt, the mortgage debt of the Company’s unconsolidated ventures (applying the Company’s percentage interest in the ventures - refer to Note 7), unsecured senior notes and trust preferred securities were 4.04 % and 3.57 % , respectively.
(2) Represents the extended maturity date for all debt obligations.
−Removed: (3) As of September 30, 2023, $ 2.0 billion of real estate, at cost, net investment in sales-type leases and Ground Lease receivables served as collateral for the Company’s debt obligations.
+Added: (3) As of March 31, 2024, $ 2.0 billion of real estate, at cost, net investment in sales-type leases and Ground Lease receivables served as collateral for the Company’s debt obligations.
Mortgages —Mortgages consist of asset specific non-recourse borrowings that are secured by the Company’s real estate and Ground Leases.
−Removed: As of September 30, 2023, the Company’s mortgages are full term interest only, bear interest at a weighted average interest rate of 3.99 % and have maturities between April 2027 and November 2069.
+Added: As of March 31, 2024, the Company’s mortgages are full term interest only, bear interest at a weighted average interest rate of 3.99 % and have maturities between April 2027 and November 2069.
Unsecured Notes —In May 2021, Portfolio Holdings, then known as Safehold Operating Partnership LP, (as issuer) and the Company (as guarantor), issued $ 400.0 million aggregate principal amount of 2.80 % senior notes due June 2031 (the “ 2.80 % Notes”).
22 unchanged sentences
provided, that, so long as no default or event of default shall then exist, at any time on or after February 13, 2052, the Company may, at its option, prepay all or any part of the 5.15 % Notes at 100 % of the principal amount so prepaid, together with, in each case, accrued interest to the prepayment date, without any make-whole amount.
+Added: In February 2024, Portfolio Holdings (as issuer) and the Company (as guarantor) issued $ 300.0 million aggregate principal amount of 6.10 % senior notes due April 2034 (the “ 6.10 % Notes”).
+Added: The 6.10 % Notes were issued at 98.957 % of the principal amount.
+Added: The Company may redeem the 6.10 % Notes in whole at any time or in part from time to time prior to January 1, 2034, at the Company’s option and sole discretion, at a redemption price equal to the greater of:
+Added: (i) 100 % of the principal amount of the 6.10 % Notes being redeemed;
+Added: and (ii) a make-whole premium calculated in accordance with the indenture, plus, in each case, accrued and unpaid interest thereon to, but not including, the applicable redemption date.
+Added: If the 6.10 % Notes are redeemed on or after January 1, 2034, the redemption price will be equal to 100 % of the principal amount of the 6.10 % Notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the applicable redemption date.
+Added: Safehold Inc.
+Added: Notes to Consolidated Financial Statements
2021 Unsecured Revolver —In March 2021, Portfolio Holdings, then known as Safehold Operating Partnership LP, (as borrower) and the Company (as guarantor), entered into an unsecured revolving credit facility with an initial maximum aggregate principal amount of up to $ 1.0 billion (the “2021 Unsecured Revolver”).
In December 2021, the Company obtained additional lender commitments increasing the maximum availability to $ 1.35 billion.
−Removed: The 2021 Unsecured Revolver has an initial maturity of March 2024 with two 12-month extension options exercisable by the Company, subject to certain conditions, and accrued interest at an annual rate of applicable LIBOR plus 0.90 %, subject to the Company’s credit ratings.
+Added: The 2021 Unsecured Revolver had an initial maturity of March 2024 with two 12-month extension options exercisable by the Company, subject to certain conditions, and accrues interest at an annual rate of applicable SOFR plus 0.90 %, subject to the Company’s credit ratings .
The Company also pays a facility fee of 0.10 %, subject to the Company’s credit ratings.
−Removed: In January 2023, t he Company amended the 2021 Unsecured Revolver primarily to transition from LIBOR to Adjusted SOFR, as defined in the applicable agreement.
−Removed: As of September 30, 2023, there was $ 347.0 million of undrawn capacity on the 2021 Unsecured Revolver.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
+Added: In March 2024, the Company exercised one of its options to extend the maturity to March 2025.
+Added: As of March 31, 2024, there was $ 439.0 million of undrawn capacity on the 2021 Unsecured Revolver.
+Added: In April 2024, the Company entered into the 2024 Unsecured Revolver, which replaced the 2021 Unsecured Revolver (refer to Note 15).
2023 Unsecured Revolver — In January 2023, Portfolio Holdings, then known as Safehold Operating Partnership LP (as borrower) and the Company (as guarantor) closed on a new $ 500 million unsecured revolving credit facility (the “2023 Unsecured Revolver”).
−Removed: The 2023 Unsecured Revolver has a current borrowing rate of Adjusted SOFR, as defined in the applicable agreement, plus 90 basis points, subject to the Company’s credit ratings, with a maturity of July 31, 2025.
−Removed: As of September 30, 2023, there was $ 500.0 million of undrawn capacity on the 2023 Unsecured Revolver.
−Removed: Trust Preferred Securities —The Company assumed trust preferred securities from iStar in connection with Merger.
−Removed: The trust preferred securities bear interest at three-month Adjusted Term SOFR plus 1.50 % .
+Added: The 2023 Unsecured Revolver has a current borrowing rate of Adjusted SOFR, as defined in the applicable agreement, plus 0.90 % , subject to the Company’s credit ratings, with a maturity of July 31, 2025.
+Added: As of March 31, 2024, there was $ 500.0 million of undrawn capacity on the 2023 Unsecured Revolver.
+Added: In April 2024, the Company entered into the 2024 Unsecured Revolver, which replaced the 2023 Unsecured Revolver (refer to Note 15).
+Added: Trust Preferred Securities —The Company assumed trust preferred securities from iStar in connection with the Merger.
+Added: The trust preferred securities bear interest at three-month Adjusted Term SOFR plus 1.50 % and mature in October 2035.
Debt Covenants —The Company is subject to financial covenants under the 2021 Unsecured Revolver and the 2023 Unsecured Revolver, including maintaining:
3 unchanged sentences
Among other things, these covenants may restrict the Company or certain of its subsidiaries’ ability to incur additional debt or liens, engage in certain mergers, consolidations and other fundamental changes, make other investments or pay dividends.
−Removed: The Company’s 2.80 % Notes, 2.85 % Notes, 3.98 % Notes and 5.15 % Notes are subject to a financial covenant requiring a ratio of unencumbered assets to unsecured debt of at least 1.25 x and contain customary affirmative and negative covenants.
+Added: The Company’s 2.80 % Notes, 2.85 % Notes, 3.98 % Notes, 5.15 % Notes and 6.10 % Notes are subject to a financial covenant requiring a ratio of unencumbered assets to unsecured debt of at least 1.25 x and contain customary affirmative and negative covenants.
+Added: The Company’s 6.10 % Notes are also subject to a financial covenant limiting the incurrence of any secured debt that would cause the Company’s secured debt to total assets ratio to exceed 50 %.
The Company’s 3.98 % Notes and 5.15 % Notes contain a provision whereby they will be deemed to include additional financial covenants and negative covenants to the extent such covenants are incorporated into Portfolio Holdings’ and/or the Company’s existing or future material credit facilities, including the 2021 Unsecured Revolver and 2023 Unsecured Revolver, and to the extent such covenants are more favorable to the lenders under such material credit facilities than the covenants contained in the 3.98 % Notes and 5.15 % Notes.
The Company’s mortgages contain no significant maintenance or ongoing financial covenants.
−Removed: As of September 30, 2023, the Company was in compliance with all of its financial covenants.
−Removed: Future Scheduled Maturities —As of September 30, 2023, future scheduled maturities of outstanding debt obligations, assuming all extensions that can be exercised at the Company’s option, are as follows ($ in thousands):
−Removed: 2023 (remaining three months)
+Added: As of March 31, 2024, the Company was in compliance with all of its financial covenants.
+Added: Safehold Inc.
+Added: Notes to Consolidated Financial Statements
+Added: Future Scheduled Maturities —As of March 31, 2024, future scheduled maturities of outstanding debt obligations, assuming all extensions that can be exercised at the Company’s option, are as follows ($ in thousands):
+Added: 2024 (remaining nine months)
Total principal maturities
1 unchanged sentence
Total debt obligations, net
−Removed: (1) As of September 30, 2023, the Company’s weighted average maturity for its secured mortgages was 27.8 years.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
+Added: (1) As of March 31, 2024, the Company’s weighted average maturity for its secured mortgages was 27.3 years.
Note 10—Commitments and Contingencies
−Removed: Lease Commitments —Future minimum lease obligations under non-cancelable operating leases as of September 30, 2023 are as follows ($ in thousands):
−Removed: 2023 (remaining three months)
+Added: Lease Commitments —Future minimum lease obligations under non-cancelable operating leases as of March 31, 2024 are as follows ($ in thousands):
+Added: 2024 (remaining nine months)
Total undiscounted cash flows (1)
Present value discount (2)
−Removed: Other adjustments (2)
Lease liabilities
−Removed: (1) The lease liability equals the present value of the minimum rental payments due under the lease discounted at the rate implicit in the lease or the Company’s incremental secured borrowing rate for similar collateral.
−Removed: For operating leases, lease liabilities were discounted at the Company’s weighted average incremental secured borrowing rate for similar collateral estimated to be 5.8 % and the weighted average remaining lease term is 2.9 years.
−Removed: The Company assumed its operating leases from iStar in connection with the Merger and therefore did not directly make any payments under its operating leases for the three months ended March 31, 2023 or the three and nine months ended September 30, 2022.
−Removed: During the three and nine months ended September 30, 2023, the Company made payments of $ 1.4 million and $ 2.9 million, respectively, related to its operating leases.
−Removed: (2) Other adjustments relates to a property that is majority-owned by a third party and is ground leased to the Company.
+Added: (1) Includes cash flows that relate to a property that is majority-owned by a third party and is ground leased to the Company.
The Company is obligated to pay the owner of the property $ 0.5 million, subject to adjustment for changes in the CPI, per year through 2044;
however, the Company’s Ground Lease tenant at the property pays this expense directly under the terms of a master lease.
+Added: (2) The lease liability equals the present value of the minimum rental payments due under the lease discounted at the rate implicit in the lease or the Company’s incremental secured borrowing rate for similar collateral.
+Added: For operating leases, lease liabilities were discounted at the Company’s weighted average incremental secured borrowing rate for similar collateral estimated to be 5.7 % and the weighted average remaining lease term is 8.8 years.
+Added: The Company assumed its operating leases from iStar in connection with the Merger and therefore did not directly make any payments under its operating leases for the three months ended March 31, 2023.
+Added: During the three months ended March 31, 2024, the Company made payments of $ 1.4 million related to its operating leases.
Unfunded Commitments —The Company has unfunded commitments to certain of its Ground Lease tenants related to leasehold improvement allowances that it expects to fund upon the completion of certain conditions.
−Removed: As of September 30, 2023, the Company had $ 190.6 million of such commitments, excluding commitments to be funded by noncontrolling interests.
+Added: As of March 31, 2024, the Company had $ 70.2 million of such commitments, excluding commitments to be funded by noncontrolling interests.
The Company also has unfunded forward commitments related to agreements that it entered into for the acquisition of new Ground Leases or additions to existing Ground Leases if certain conditions are met (refer to Note 14).
−Removed: These commitments may also include leasehold improvement allowances that will be funded to the Ground Lease tenants when certain conditions are met.
−Removed: As of September 30, 2023, the Company had an aggregate $ 283.6 million of such commitments.
+Added: These commitments may also include leasehold improvement allowances that will be funded to the Ground Lease tenants
+Added: Safehold Inc.
+Added: Notes to Consolidated Financial Statements
+Added: when certain conditions are met.
+Added: As of March 31, 2024, the Company had an aggregate $ 262.5 million of such commitments.
There can be no assurance that the conditions to closing for these transactions will be satisfied and that the Company will acquire the Ground Leases or fund the leasehold improvement allowances .
1 unchanged sentence
We refer to these arrangements as performance-based commitments.
−Removed: As of September 30, 2023, the Company had $ 118.9 million of such commitments.
+Added: As of March 31, 2024, the Company had $ 105.9 million of such commitments.
Legal Proceedings —The Company evaluates developments in legal proceedings that could require a liability to be accrued and/or disclosed.
Based on its current knowledge, and after consultation with legal counsel, the Company believes it is not a party to, nor are any of its properties the subject of, any pending legal proceeding that would have a material adverse effect on the Company’s consolidated financial statements.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
Note 11—Risk Management and Derivatives
4 unchanged sentences
The Company did not have a significant concentration of interest income from sales-type leases or operating lease income from any tenant for the periods presented.
−Removed: Derivative instruments and hedging activity —The Company’s use of derivative financial instruments has been associated with debt issuances and primarily limited to the utilization of interest rate swaps and interest rate caps to manage interest rate risk exposure.
+Added: Derivative instruments and hedging activity —The Company’s use of derivative financial instruments has been associated with debt issuances and primarily limited to the utilization of interest rate swaps, interest rate caps and treasury locks to manage interest rate risk exposure.
The Company does not enter into derivatives for trading purposes.
4 unchanged sentences
Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s debt.
+Added: If an interest rate hedge is terminated prior to maturity it could result in a net derivative instrument gain or loss that continues to be reported in accumulated other comprehensive (loss) and is
+Added: Safehold Inc.
+Added: Notes to Consolidated Financial Statements
+Added: reclassified into earnings over the period of the original forecasted hedged transaction.
+Added: However, if it is probable that the original forecasted hedged transaction will not occur by the end of the original specified time period, the derivative instrument gain or loss reported in accumulated other comprehensive income (loss) will be reclassified into earnings immediately.
If a derivative includes an other-than-insignificant financing element at inception, when the Company is deemed to be the lender all cash inflows and outflows of the derivative are considered cash flows from investing activities in the Company’s consolidated statements of cash flows and when the Company is deemed to be the borrower all cash inflows and outflows of the derivative are considered cash flows from financing activities in the Company’s consolidated statements of cash flows.
3 unchanged sentences
Notes to Consolidated Financial Statements
−Removed: The table below presents the Company’s derivatives as well as their classification on the consolidated balance sheets as of September 30, 2023 and December 31, 2022 ($ in thousands):
−Removed: September 30, 2023
+Added: The table below presents the Company’s derivatives as well as their classification on the consolidated balance sheets as of March 31, 2024 and December 31, 2023 ($ in thousands):
+Added: March 31, 2024
December 31, 2023
3 unchanged sentences
Deferred expenses and other assets, net
+Added: Interest rate swaps
+Added: Accounts payable, accrued expenses and other liabilities
+Added: (1) As of March 31, 2024, the Company has two interest rate swap derivatives outstanding that mature in April 2028 and have an aggregate $ 500.0 million notional amount, which hedge in-place floating-rate debt.
+Added: The Company also has three designated derivatives outstanding that protect the Company against interest rate volatility with respect to long-term debt to be placed in the future, which have an aggregate $ 350.0 million notional amount, one of which matures in December 2024 and two that mature in December 2025.
+Added: These designated hedges protect the Company against interest rate volatility with respect to future debt with a tenor of approximately 30 years .
(2) Over the next 12 months, the Company expects that $ 4.4 million related to cash flow hedges will be reclassified from “Accumulated other comprehensive income (loss)” as a decrease to interest expense.
2 unchanged sentences
The Company has agreements with each of its derivative counterparties that contain a provision whereby if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.
−Removed: The table below presents the effect of the Company’s derivative financial instruments in the consolidated statements of operations and the consolidated statements of comprehensive income (loss) for the three and months ended September 30, 2023 and 2022 ($ in thousands):
+Added: The table below presents the effect of the Company’s derivative financial instruments in the consolidated statements of operations and the consolidated statements of comprehensive income (loss) for the three months ended March 31, 2024 and 2023 ($ in thousands):
Amount of Gain
9 unchanged sentences
Derivatives Designated in Hedging Relationships
−Removed: For the Three Months Ended September 30, 2023
−Removed: Interest rate swaps
−Removed: Interest expense
−Removed: For the Three Months Ended September 30, 2022
−Removed: Interest rate swaps
−Removed: Interest expense
−Removed: For the Nine Months Ended September 30, 2023
+Added: For the Three Months Ended March 31, 2024
Interest rate swaps
Interest expense
−Removed: For the Nine Months Ended September 30, 2022
+Added: For the Three Months Ended March 31, 2023
Interest rate swaps
2 unchanged sentences
Common Stock —At the effective time of the Merger on March 31, 2023, each share of Old SAFE common stock issued and outstanding immediately prior to the effective time (other than any shares owned directly by iStar or any of the wholly-owned subsidiaries of iStar and in each case not held on behalf of third parties) was converted into the right to receive one share of newly issued common stock of the Company.
−Removed: As of September 30, 2023, the Company has one class of common stock outstanding.
−Removed: In April 2023, the Company filed with the U.S.
−Removed: Securities and Exchange Commission (the “SEC”) an automatic shelf registration statement on Form S-3ASR.
−Removed: In addition, the Company and Portfolio Holdings entered into an ATM Equity Offering Sales Agreement (the “Primary Sales Agreement”) with the sales agents named therein pursuant to which
+Added: As of March 31, 2024, the Company has one class of common stock outstanding.
Safehold Inc.
Notes to Consolidated Financial Statements
−Removed: the Company may sell, from time to time, shares of its common stock, $ 0.01 par value per share (“Common Stock”), having an aggregate gross sales price of up to $ 300.0 million (the “Primary Shares”) through or to the sales agents.
+Added: In April 2023, the Company filed with the U.S.
+Added: Securities and Exchange Commission (the “SEC”) an automatic shelf registration statement on Form S-3ASR.
+Added: In addition, the Company and Portfolio Holdings entered into an ATM Equity Offering Sales Agreement (the “Primary Sales Agreement”) with the sales agents named therein pursuant to which the Company may sell, from time to time, shares of its common stock, $ 0.01 par value per share (“Common Stock”), having an aggregate gross sales price of up to $ 300.0 million (the “Primary Shares”) through or to the sales agents.
The Company may sell the Primary Shares in amounts and at times to be determined by the Company from time to time but has no obligation to sell any of the Primary Shares.
Actual sales, if any, will depend on a variety of factors to be determined by the Company from time to time, including, among other things, market conditions, the trading price of the Common Stock, capital needs and determinations by the Company of the appropriate sources of its funding.
−Removed: Through September 30, 2023, the Company has no t sold any shares of its common stock through the Primary Sales Agreement.
+Added: Through March 31, 2024, the Company has no t sold any shares of its common stock through the Primary Sales Agreement.
In August 2023, the Company sold 6,500,000 shares of its common stock in an underwritten public offering for gross proceeds of $ 139.1 million.
7 unchanged sentences
Prior to the effective time of the Merger, Old SAFE awarded all shares of Old SAFE common stock remaining available for issuance under the 2017 Equity Incentive Plan to members of its Former Manager’s management team and employees who performed services for Old SAFE.
−Removed: As of September 30, 2023, there were no shares available for issuance for future awards under Old SAFE’s 2017 Equity Incentive Plan.
+Added: As of March 31, 2024, there were no shares available for issuance for future awards under Old SAFE’s 2017 Equity Incentive Plan.
iStar’s amended and restated 2009 Long-Term Incentive Program (the “LTIP”) was approved by stockholders in 2021 and remained in effect after the closing of the Merger.
3 unchanged sentences
Grants under the LTIP are recognized as compensation costs ratably over the applicable vesting period and recorded in “General and administrative” in the Company’s consolidated statements of operations.
+Added: In March 2023, the Company granted awards to employees with an aggregate grant date fair value of $ 25.0 million, or $ 28.89 per share.
In June 2023, the Company issued an aggregate 24,336 vested shares of its common stock with a grant date fair value of $ 23.58 per share to its directors in consideration for their annual service as directors.
On June 20, 2023, the LTIP was further amended to, among other things, increase the aggregate number of shares of common stock available for issuance.
−Removed: As of September 30, 2023, an aggregate of 435,612 shares of the Company’s common stock remain available for awards under the LTIP.
−Removed: During the third quarter of 2018, Old SAFE adopted, and in the second quarter of 2019, its stockholders approved, the Caret Performance Incentive Plan (the “Original Caret Performance Incentive Plan”).
−Removed: Under the Original Caret Performance Incentive Plan, 1,500,000 Caret units were reserved for grants of performance-based awards to Original Caret Performance Incentive Plan participants, including certain of executives of iStar, and Old SAFE’s directors and service providers.
−Removed: Grants under the Original Caret Performance Incentive Plan were subject to vesting based on time-based service conditions and hurdles relating to Old SAFE’s common stock price, all of which were satisfied as of December 31, 2022, except with respect to approximately 850 Caret units that are scheduled to vest on December 31, 2023.
−Removed: In connection with the Merger, certain of Old SAFE’s former executive officers, entered into re-vesting agreements pursuant to which the
+Added: As of March 31, 2024, an aggregate of 89,998 shares of the Company’s common stock remains available for awards under the LTIP.
+Added: As of March 31, 2024, there was $ 12.5 million of total unrecognized compensation cost related to all unvested restricted stock units that is expected to be recognized over a weighted average remaining vesting/service period of 2.2 years.
+Added: Caret Performance Incentive Plan — During the third quarter of 2018, Old SAFE adopted, and in the second quarter of 2019, its stockholders approved, the Caret Performance Incentive Plan (the “Original Caret Performance
Safehold Inc.
Notes to Consolidated Financial Statements
−Removed: executives agreed to subject 25 % of their previously vested Caret units to additional vesting conditions which will be satisfied on the second anniversary of the Merger, subject to the applicable executive’s continued employment through such date.
+Added: Incentive Plan”).
+Added: Under the Original Caret Performance Incentive Plan, 1,500,000 Caret units were reserved for grants of performance-based awards to Original Caret Performance Incentive Plan participants, including certain of executives of iStar, and Old SAFE’s directors and service providers.
+Added: Grants under the Original Caret Performance Incentive Plan were subject to vesting based on time-based service conditions and hurdles relating to Old SAFE’s common stock price, all of which have been satisfied.
+Added: In connection with the Merger, certain of Old SAFE’s former executive officers, entered into re-vesting agreements pursuant to which the executives agreed to subject 25 % of their previously vested Caret units to additional vesting conditions which will be satisfied on the second anniversary of the Merger, subject to the applicable executive’s continued employment through such date.
In the event of a termination of the executive’s employment by the Company without “cause”, or due to the executive’s death, disability or retirement, the unvested Caret units shall continue to vest as and when the vesting conditions described above are satisfied.
1 unchanged sentence
Following the effectiveness of the Caret Assignment Agreement, Old SAFE amended and restated the Original Caret Performance Incentive Plan (the “Amended Caret Performance Incentive Plan”).
−Removed: Prior to the Merger, the Old SAFE compensation committee, and following the Merger, the Company’s compensation committee, approved the award of 76,801 new Caret units to executive officers and other employees, other than the Company’s Chief Executive Officer and the Company’s President and Chief Investment Officer, including 15,000 Caret units to the Company’s Chief Financial Officer.
+Added: Prior to the Merger, the Old SAFE compensation committee, and following the Merger, the Company’s compensation committee, approved the award of 76,801 new Caret units with an estimated grant date fair value of $ 8.1 million to executive officers and other employees, other than the Company’s Chief Executive Officer and the Company’s President and Chief Investment Officer, including 15,000 Caret units to the Company’s Chief Financial Officer.
The new Caret unit awards were granted immediately following the Merger and the effectiveness of the Amended Caret Performance Incentive Plan, and cliff vest on the fourth anniversary of their grant date if the Company’s common stock has traded at an average per share price of $ 60.00 or more for at least 30 consecutive trading days during that four-year period.
−Removed: As of September 30, 2023, and after giving effect to the Caret Restructuring and the post-Merger Caret unit awards, Amended Caret Performance Incentive Plan participants held 1,499,382 Caret units, representing 15.41 % of the then-outstanding Caret units and 12.50 % of the then-authorized Caret units.
−Removed: During the nine months ended September 30, 2023 and 2022, the Company recognized $ 1.0 million and $ 0.4 million in expense from Caret units, which is recorded in “General and administrative” in the Company’s consolidated statements of operations and “Noncontrolling interests” on the Company’s consolidated balance sheets.
+Added: As of March 31, 2024, there was $ 6.1 million of total unrecognized compensation cost related to all unvested Caret units that is expected to be recognized over a remaining vesting/service period of 3.00 years.
+Added: As of March 31, 2024, and after giving effect to the Caret Restructuring and the post-Merger Caret unit awards, Amended Caret Performance Incentive Plan participants held 1,395,082 Caret units, representing 14.5 % of the then-outstanding Caret units and 11.6 % of the then-authorized Caret units.
+Added: During the three months ended March 31, 2024, the Company recognized $ 0.5 million in expense from Caret units, which is recorded in “General and administrative” in the Company’s consolidated statements of operations and “Noncontrolling interests” on the Company’s consolidated balance sheets.
+Added: The Company did not incur expense from Caret units during the three months ended March 31, 2023.
+Added: 401(K) Plan —The Company has a savings and retirement plan (the "401(k) Plan"), which is a voluntary, defined contribution plan.
+Added: All employees are eligible to participate in the 401(k) Plan following completion of three months of continuous service with the Company.
+Added: Each participant may contribute on a pretax basis up to the maximum percentage
+Added: of compensation and dollar amount permissible under Section 402(g) of the Internal Revenue Code not to exceed the limits of Code Sections 401(k), 404 and 415.
+Added: At the discretion of the Company’s Board of Directors, the Company may make matching contributions on the participant’s behalf of up to 50 % of the participant’s contributions, up to a maximum of 10 % of the participants’ compensation.
+Added: The Company made gross contributions of $ 0.4 million for the three months ended March 31, 2024.
+Added: Safehold Inc.
+Added: Notes to Consolidated Financial Statements
+Added: Accumulated Other Comprehensive Income (Loss) —Accumulated other comprehensive income (loss) consists of net unrealized gains (losses) on the Company’s derivative transactions.
Noncontrolling Interests —Noncontrolling interests includes unrelated third-party equity interests in ventures that are consolidated in the Company’s consolidated financial statements and Caret units that have been sold to third-parties (refer to Note 1) or have been granted to employees of the Company’s Former Manager.
See also “ Redeemable Noncontrolling Interests” in Note 3.
−Removed: Accumulated Other Comprehensive Income (Loss) —Accumulated other comprehensive income (loss) consists of net unrealized gains (losses) on the Company’s derivative transactions.
Dividends —The Company (then known as iStar) elected to be taxed as a REIT beginning with its taxable year ended December 31, 1998.
1 unchanged sentence
Because taxable income differs from cash flow from operations due to non-cash revenues and expenses (such as depreciation and other items), in certain circumstances, the Company may generate operating cash flow in excess of its dividends, or alternatively, may need to make dividend payments in excess of operating cash flows.
−Removed: During the nine months ended September 30, 2023 and 2022, the Company declared cash dividends on its common stock of $ 35.3 million, or $ 0.531 per share, and $ 32.5 million, or $ 0.524 per share, respectively.
+Added: During the three months ended March 31, 2024 and 2023, the Company declared cash dividends on its common stock of $ 12.7 million, or $ 0.177 per share, and $ 11.1 million, or $ 0.177 per share, respectively.
Safehold Inc.
4 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Net income (loss)
3 unchanged sentences
Three Months Ended
−Removed: Nine Months Ended
−Removed: September 30,
−Removed: September 30,
Earnings attributable to common shares:
6 unchanged sentences
Weighted average common shares outstanding for basic earnings per common share
+Added: Effect of assumed shares under treasury stock method for restricted stock units
Weighted average common shares outstanding for diluted earnings per common share
4 unchanged sentences
common shareholders - diluted
−Removed: (1) For the three and nine months ended September 30, 2023, the effect of certain of the Company’s restricted stock awards were antidilutive due to the Company having a net loss for the period.
−Removed: For the three and nine months ended September 30, 2022, weighted average shares outstanding and earnings per share have been recast in accordance with ASC 805 to reflect the exchange ratio used in the reverse acquisition.
+Added: (1) For the three months ended March 31, 2024 and 2023, the effect of 21,792 and 4,650 , respectively, of the Company’s restricted stock awards were antidilutive.
Note 14—Related Party Transactions
21 unchanged sentences
3 x prior year’s management fee
−Removed: During the three months ended September 30, 2022, the Company recorded $ 5.3 million in management fees to the Former Manager.
−Removed: During the nine months ended September 30, 2023 and 2022, the Company recorded $ 5.2 million and $ 15.0 million, respectively, in management fees to the Former Manager.
+Added: During the three months ended March 31, 2023, the Company recorded $ 5.2 million in management fees to the Former Manager.
These management fees are recorded in “General and administrative” in the Company’s consolidated statements of operations.
1 unchanged sentence
The Company paid, or reimbursed iStar for, certain of the Company’s operating expenses as well as the costs of personnel performing certain legal, accounting, finance, due diligence tasks and other services, in each case except those specifically required to be borne or elected not to be charged by the iStar under the management agreement.
−Removed: During the three months ended September 30, 2022, the Company was allocated $ 3.1 million in expenses from iStar.
−Removed: During the nine months ended September 30, 2023 and 2022, the Company was allocated $ 3.1 million and $ 9.4 million, respectively, in expenses from iStar.
+Added: During the three months ended March 31, 2023, the Company was allocated $ 3.1 million in expenses from iStar..
These expenses are recorded in “General and administrative” in the Company’s consolidated statements of operations.
1 unchanged sentence
Prior to the Merger, iStar participated in certain of the Company’s investment transactions, as the Company’s tenant or either as a seller of land or by providing financing to the Company’s Ground Lease tenants.
−Removed: The following is a list of transactions in which the Company and iStar or other persons deemed to be related parties have participated for the periods presented.
+Added: Following is a list of transactions in which the Company and iStar or other persons deemed to be related parties have participated for the periods presented.
These transactions were approved by the Company’s independent directors in accordance with the Company’s policy with respect to related party transactions.
+Added: In November 2021, the Company entered into an agreement pursuant to which it agreed to acquire land and a related Ground Lease originated by iStar when certain construction related conditions are met by a specified time period.
Safehold Inc.
Notes to Consolidated Financial Statements
−Removed: In July 2022, the Company, pursuant to an agreement with iStar and upon certain construction related conditions being met, acquired an existing Ground Lease from iStar for $ 36.4 million inclusive of closing costs (refer to Note 4).
−Removed: In June 2022, the Company acquired land and simultaneously structured and entered into a Ground Lease as part of the Ground Lease tenant’s recapitalization of a mixed-use property.
−Removed: The Company also committed to provide an additional $ 35.0 million to the Ground Lease tenant if certain construction and leasing milestones are met.
−Removed: The Leasehold Loan Fund, in which an affiliate of an existing shareholder (which is affiliated with one of the Company’s independent directors) owns a noncontrolling equity interest, committed to provide a $ 105.0 million loan to the Company’s Ground Lease tenant for the recapitalization of the leasehold.
−Removed: The Company paid the Leasehold Loan Fund $ 5.0 million of additional consideration in connection with this investment.
−Removed: In April 2022, the Company acquired an existing Ground Lease from iStar for $ 9.0 million.
−Removed: In March 2022, the Company acquired land for a purchase price of $ 28.5 million and simultaneously structured and entered into a Ground Lease as part of the Ground Lease tenant’s recapitalization of a hotel property.
−Removed: One of the Company’s independent directors has an indirect ownership interest in the entity that is the Ground Lease tenant and controls the company that indirectly manages that entity.
−Removed: In March 2022, the Company paid iStar $ 0.3 million to terminate a purchase option that allowed iStar to purchase the land at the expiration of its Ground Lease with the Company.
−Removed: iStar sold the leasehold to a third party in March 2022.
−Removed: In March 2022, the Company acquired three land properties from iStar for a total purchase price of $ 122.0 million and simultaneously structured and entered into three Ground Lease’s directly with the Ground Lease tenant.
−Removed: In February 2022, the Company acquired land and simultaneously structured and entered into a Ground Lease as part of the Ground Lease tenant’s recapitalization of a life science development property.
−Removed: The Leasehold Loan Fund, in which an affiliate of an existing shareholder (which is affiliated with one of the Company’s independent directors) owns a noncontrolling equity interest, committed to provide a $ 130.0 million loan to the Company’s Ground Lease tenant for the recapitalization of the leasehold.
−Removed: The Company paid the Leasehold Loan Fund $ 9.0 million of additional consideration in connection with this investment.
−Removed: In November 2021, the Company entered into an agreement pursuant to which it agreed to acquire land and a related Ground Lease originated by iStar when certain construction related conditions are met by a specified time period.
The purchase price to be paid is $ 33.3 million, plus an amount necessary for iStar to achieve the greater of a 1.25 x multiple or a 12 % return on its investment.
−Removed: In addition, the Ground Lease documents contain future funding obligations to the Ground Lease tenant of approximately $ 51.8 million of leasehold improvement allowance upon achievement of certain milestones.
−Removed: In December 2021, iStar contributed the Ground Lease to the Ground Lease Plus Fund.
+Added: In December 2021, iStar contributed the Ground Lease to the Ground Lease Plus Fund (refer to Note 7).
The Company has a noncontrolling interest in the Ground Lease Plus Fund and an affiliate of an existing shareholder (which is affiliated with one of the Company’s independent directors) has a noncontrolling interest in the Ground Lease Plus Fund.
The terms of the Company’s commitment under the agreement did not change upon iStar’s contribution of the Ground Lease to the Ground Lease Plus Fund.
−Removed: There can be no assurance that the conditions to closing will be satisfied and that the Company will acquire the Ground Lease from the Ground Lease Plus Fund.
+Added: In January 2024, the Company acquired the Ground Lease from the Ground Lease Plus Fund for $ 38.3 million.
+Added: In addition, the Ground Lease documents contain future funding obligations to the Ground Lease tenant of approximately $ 51.8 million of leasehold improvement allowance upon achievement of certain milestones.
In May 2023, certain milestones were met by the tenant as it exited the pre-development stage and the tenant began accessing the leasehold improvement allowance.
−Removed: As of September 30, 2023, the Company funded $ 12.7 million of the leasehold improvement allowance.
+Added: As of March 31, 2024, the Company funded $ 36.5 million of the leasehold improvement allowance.
In June 2021, the Company acquired from iStar a purchase option agreement for $ 1.2 million, which amount was equal to the deposit previously made by iStar under such option agreement plus assumption of iStar’s out of pocket costs and expenses in connection with entering into such option agreement.
−Removed: Under the option agreement, the Company had the
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
−Removed: right to acquire for $ 215.0 million a property that is under a separate option for the benefit of a third party, whereby such third party has the right to enter into a Ground Lease and develop approximately 1.1 million square feet of office space.
+Added: Under the option agreement, the Company had the right to acquire for $ 215.0 million a property that is under a separate option for the benefit of a third party, whereby such third party has the right to enter into a Ground Lease and develop approximately 1.1 million square feet of office space.
In September 2023, the Company terminated its acquisition right under the option agreement for $ 0.3 million and recognized a loss of $ 1.9 million, inclusive of the derecognition of previously-capitalized deal structuring costs.
−Removed: The loss is recorded in “Other expense” in the Company’s consolidated statements of operations.
In June 2021, the Company entered into two agreements pursuant to each of which it agreed to acquire land and a related Ground Lease originated by iStar when certain construction related conditions are met by a specified time period.
3 unchanged sentences
There can be no assurance that the conditions to closing will be satisfied and that the Company will acquire the properties and Ground Leases from the Ground Lease Plus Fund.
−Removed: In February 2022, Old SAFE sold an aggregate of 108,571 Caret units, 1.08 % of the authorized Caret units, to a group of investors (refer to Note 3).
−Removed: In addition, an affiliate of an existing shareholder (which is affiliated with one of the Company’s independent directors) made a commitment to purchase 28,571 Caret units, or 0.29 % of the authorized Caret units, for a purchase price of $ 5.0 million.
+Added: In February 2022, Old SAFE sold an aggregate of 108,571 Caret units, 1.08 % of the then-authorized Caret units, to a group of investors (refer to Note 3).
+Added: In addition, an affiliate of an existing shareholder (which is affiliated with one of the Company’s independent directors) made a commitment to purchase 28,571 Caret units, or 0.29 % of the then-authorized Caret units, for a purchase price of $ 5.0 million.
As part of the sale, Old SAFE agreed to use commercially reasonable efforts to provide public market liquidity for such Caret units by seeking to provide a listing of the Caret units (or securities into which they may be exchanged) on a public exchange within two years of the sale.
−Removed: In the event public market liquidity of the Caret units is not achieved within such two year period at a valuation not less than the purchase price for the Caret units purchased in February 2022, reduced by an amount equal to the amount of subsequent cash distributions made to investors on account of such Caret units, then the investors in the February 2022 transaction have the right to cause their Caret units purchased in February 2022 to be redeemed by Portfolio Holdings at such purchase price as so reduced.
+Added: Because public market liquidity was not achieved by February 2024, the investors in the February 2022 transaction have the right to cause their Caret units purchased in February 2022 to be redeemed by Portfolio Holdings at such purchase price less the amount of distributions previously made on such units.
+Added: In April 2024, all of the investors in the February 2022 transaction exercised this right and elected to have their Caret units redeemed.
On March 31, 2023, shortly before the closing of the Merger, iStar sold and affiliates of MSD Partners bought 5,405,406 shares of Old SAFE’s common stock then owned by iStar.
1 unchanged sentence
Additionally, on March 31, 2023, existing third-party Caret unit holders purchased an aggregate of 22,500 Caret units from the Company for an aggregate $ 4.5 million.
+Added: Safehold Inc.
+Added: Notes to Consolidated Financial Statements
Star Holdings
3 unchanged sentences
The Separation and Distribution Agreement also includes a mutual release by Star Holdings, on the one hand, and the Company, on the other hand, of the other party from certain specified liabilities, as well as mutual indemnification covenants pursuant to which Star Holdings and the Company have agreed to indemnify each other from certain specified liabilities.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
SpinCo Manager has entered into a management agreement with Star Holdings, pursuant to which it will operate and pursue the orderly monetization of Star Holding’s assets.
−Removed: Pursuant to the management agreement, Star Holdings pays to SpinCo Manager an annual management fee of $ 25.0 million in year one, $ 15.0 million in year two, $ 10.0 million in year three and $ 5.0 million in year four and 2.0 % of the gross book value of Star Holding's assets, excluding shares of the Company’s common stock, for each annual term thereafter.
−Removed: The management agreement has an initial one-year term and will be automatically renewed for successive one-year terms each anniversary date thereafter unless previously terminated.
+Added: Pursuant to the management agreement, Star Holdings paid to SpinCo Manager an annual management fee of $ 25.0 million for the term ended March 31, 2024.
+Added: The annual fee declines to $ 15.0 million, $ 10.0 million and $ 5.0 million, respectively, in each of the following annual terms, and adjusts to 2.0 % of the gross book value of Star Holding's assets, excluding shares of the Company’s common stock, thereafter.
+Added: The management agreement had an initial one-year term and automatically renews for successive one-year terms each anniversary date thereafter unless previously terminated.
The management agreement may be terminated by Star Holdings without cause by not less than one hundred eighty days ’ written notice to SpinCo Manager upon the affirmative vote of at least two-thirds of Star Holdings’ independent directors, provided, however, that if the date of termination occurs prior to the fourth anniversary of the Spin-Off, the termination will be subject to payment of the applicable termination fee to SpinCo Manager.
−Removed: Star Holdings may also terminate the management agreement at any time, including during the initial term, with 30 days ’ prior written notice from Star Holdings’ board of trustees for “cause,” as defined in the management agreement.
+Added: Star Holdings may also terminate the management agreement at any time with 30 days ’ prior written notice from Star Holdings’ board of trustees for “cause,” as defined in the management agreement.
In the event of a termination without cause by Star Holdings prior to the fourth anniversary of the Spin-Off, Star Holdings will pay SpinCo Manager a termination fee of $ 50.0 million minus the aggregate amount of management fees actually paid to SpinCo Manager prior to the termination date.
1 unchanged sentence
In the event of a termination by the Company based on a reduction in the amount of Star Holdings’ consolidated assets below designated thresholds, Star Holdings will pay SpinCo Manager a termination fee of $ 30.0 million if the termination occurs in the first year, $ 15.0 million if the termination occurs in the second year and $ 5.0 million if the termination occurs in the third year, in each case, plus the balance of any unpaid portion of the annual management fee for the applicable year.
−Removed: During the three and nine months ended September 30, 2023, the Company recorded $ 6.0 million and $ 13.2 million, respectively, in management fees from Star Holdings.
+Added: During the three ended March 31, 2024, the Company recorded $ 5.5 million in management fees from Star Holdings.
The management fees are included in “Other income” in the Company’s consolidated statements of operations.
The Company and Star Holdings also entered into a governance agreement that places certain restrictions on the transfer and voting of the shares of the Company owned by Star Holdings, and a registration rights agreement under which the Company agreed to register such shares for resale in accordance with applicable securities laws.
−Removed: As of September 30, 2023, Star Holdings owned approximately 19.0 % of the Company’s common stock outstanding through a wholly-owned subsidiary.
+Added: As of March 31, 2024,
+Added: Safehold Inc.
+Added: Notes to Consolidated Financial Statements
+Added: Star Holdings owned approximately 18.9 % of the Company’s common stock outstanding through a wholly-owned subsidiary.
In April 2023, the Company, Portfolio Holdings and Star Investment Holdings SPV LLC (“Star Investment Holdings”), a subsidiary of Star Holdings, entered into an ATM Equity Offering Sales Agreement (the “Selling Stockholder Sales Agreement”) with the sales agents named therein pursuant to which Star Investment Holdings may sell, from time to time, subject to receiving the Company’s consent, up to 1,000,000 shares of the Company’s common stock (the “Selling Stockholder Shares”) through or to the sales agents.
1 unchanged sentence
Actual sales, if any, will depend on a variety of factors to be determined by Star Investment Holdings from time to time, including, among other things, market conditions, the trading price of the Company’s common stock, capital needs and determinations by Star Investment Holdings of the appropriate sources of its funding.
−Removed: Safehold Inc.
−Removed: Notes to Consolidated Financial Statements
Note 15—Subsequent Events
−Removed: On October 4, 2023, the Company entered into an amendment to the Star Holdings Term Loan Facility (refer to Note 4) with Star Holdings.
−Removed: The amendment provides that:
−Removed: (i) Star Holdings may access the existing $ 25.0 million additional commitment provided under the agreement to replenish funds expended by Star Holdings on or after October 4, 2023 to make voluntary prepayments under its margin loan facility;
−Removed: and (ii) Star Holdings will no longer have the right to pay interest in kind under the Star Holdings Term Loan Facility.
+Added: In April 2024, investors in Caret units (refer to Note 3) elected to have their Caret units redeemed at their original purchase price less the amount of distributions previously made on such units.
+Added: In April 2024, the Company closed on a new $ 2.0 billion unsecured revolving credit facility (the “2024 Unsecured Revolver”), which replaces the Company’s 2021 Unsecured Revolver and 2023 Unsecured Revolver, each of which were terminated.
+Added: At the time of termination, $ 916 million was drawn on the 2021 Unsecured Revolver, all of which rolled over into the 2024 Unsecured Revolver and remains outstanding as of the date hereof.
+Added: The 2024 Unsecured Revolver has a borrowing rate of Adjusted SOFR, as defined in the applicable agreement, plus 0.85 %, subject to the Company’s credit ratings, with an extended maturity date of May 1, 2029, which includes two six-month extension options.
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.