What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-06 compared with 2024-02-13 · 325 added, 205 removed, 1059 unchanged (33% of the section changed)

33 unchanged sentences

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Merger Transaction — Refer to Note 1 and 3 to the financial statements

Purchase Price Allocation — Refer to Note 3 to the financial statements

Critical Audit Matter Description

On March 31, 2023, Safehold Inc.

(“Old SAFE”) merged with and into iStar Inc.

(“iStar), at which time Old SAFE ceased to exist and iStar continued as the surviving corporation and changed its name to “Safehold Inc.” (the “Merger”).

For accounting purposes, the Merger was accounted for as a business combination using the acquisition method of accounting under Accounting Standards Codification (“ASC”) 805, Business Combinations and treated as a reverse acquisition in which iStar is considered the legal acquirer and Old SAFE is considered the accounting acquirer.

A key accounting judgment in evaluating the Merger transaction is the determination of accounting acquirer.

complexity of evaluating the applicable accounting guidance, this aspect of the accounting for the Merger required especially subjective auditor judgment and an increased extent of effort.

The Company recognized and measured identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree at their fair values on the Company’s consolidated balance sheets, and the difference between the purchase consideration and the fair value of identifiable net assets acquired is either recorded as goodwill or bargain purchase.

The determination of fair value of each asset acquired and liability assumed by management requires judgment and is based on estimated cash flow projections that utilize available market information, including discount rates and capitalization rates.

Performing audit procedures to evaluate the reasonableness of such assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve internal fair value specialists.

The Company accounts for the acquisition of properties by recording the purchase price of tangible and intangible assets acquired and liabilities assumed based on their relative fair values.

The value of the tangible assets, consisting of land, buildings, building improvements and tenant improvements is determined as if these assets are vacant.

Intangible assets may include the value of lease incentive assets, above-market leases, below-market Ground Lease assets and in-place leases, which are each recorded at their relative fair values.

Intangible liabilities may include the value of below-market leases, which are recorded at their relative fair values.

The relative fair value determination of assets acquired and liabilities assumed required management to make estimates related to future expected cash flows as well as capitalization and discount rates.

We performed audit procedures to evaluate the reasonableness of these estimates which required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to our evaluation of the Company’s determination of the accounting acquirer and the fair value of the assets acquired and liabilities assumed in the Merger included the following, among others:

● We tested the effectiveness of the Company’s controls over the accounting for the Merger which included testing of management’s controls related to the conclusion on the accounting acquirer and related to the management’s engagement and review of the fair values of the assets acquired and liabilities assumed.

● With the assistance of professionals in our firm having expertise in the accounting for business combinations, we evaluated management’s conclusion on the determination of accounting acquirer.

● With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) significant inputs such and discount rate and capitalization rate.

● With the assistance of our fair value specialists, we also tested the mathematical accuracy of the Company’s valuation models.

Our audit procedures related to the relative fair value of assets acquired and liabilities assumed by the Company included the following, among others:

• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) current market data, and (3) market rent, growth, discount, and capitalization rates by developing independent ranges of these assumptions based on market data and comparing our assumptions to those used by management.

We also tested the mathematical accuracy of the calculation of management’s analysis.

• We assessed the reasonableness of management’s projections of rental revenue by comparing the assumptions used in the projections to external market sources, in-place lease agreements, historical data, and results from other areas of the audit.

• We tested the effectiveness of internal controls over critical assumptions including management’s controls over:

◾ The selection of the methods and valuation techniques used to determine that fair value is appropriate and consistent with industry standards and previous Company acquisitions.

◾ Assumptions for allocating the purchase price to tangible and intangible assets and liabilities.

/s/ DELOITTE & TOUCHE LLP

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Total real estate, net and real estate-related intangible assets, net and real estate available and held for sale

Loans receivable, net - related party ($ 2,429 of allowances as of December 31, 2023)

Loans receivable, net - related party ($ 2,311 and $ 2,429 of allowances as of December 31, 2024 and 2023, respectively)

Equity investments

22 unchanged sentences

(1) Refer to Note 2 for details on the Company’s consolidated variable interest entities ("VIEs").

(2) As of December 31, 2023, includes $ 7.1 million due from related parties.

(3) As of December 31, 2022, includes $ 8.5 million due to related parties .

(2) As of December 31, 2024 and 2023, includes $ 3.8 million and $ 7.1 million, respectively, due from related parties.

The accompanying notes are an integral part of the consolidated financial statements.

14 unchanged sentences

Impairment of goodwill

Provision for credit losses

Provision for (recovery of) credit losses

Other expense

2 unchanged sentences

Income (loss) from operations before other items

Loss on early extinguishment of debt

Earnings from equity method investments

Selling profit from sales-type leases

Earnings (losses) from equity method investments

Net income (loss) before income taxes

1 unchanged sentence

Net income (loss)

Net (income) attributable to noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Net income (loss) attributable to Safehold Inc.

3 unchanged sentences

Weighted average number of common shares:

(1) For the years ended December 31, 2022 and 2021, the Company recorded $ 2.1 million and $ 8.4 million, respectively, of “Interest income from sales-type leases” in its consolidated statements of operations from Ground Leases with iStar Inc.

(1) For the year ended December 31, 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.

(2) Refer to Note 3.

(3) For the year ended December 31, 2023, includes $ 19.4 million of management fees from related parties.

(4) For the years ended December 31, 2023, 2022 and 2021, includes $ 31.6 million, $ 34.3 million and $ 24.1 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).

For the year ended December 31, 2023, general and administrative expenses were partially offset by $ 19.4 million of management fees earned from Star Holdings (refer to Note 1), which are included in “Other income.”

(3) For the years ended December 31, 2024 and 2023, includes $ 16.8 million and $ 19.4 million, respectively, of management fees from related parties.

(4) For the years ended December 31, 2023 and 2022, includes $ 31.6 million and $ 34.3 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).

The accompanying notes are an integral part of the consolidated financial statements.

4 unchanged sentences

Net income (loss)

Other comprehensive income:

Other comprehensive income (loss):

Reclassification of (gains) losses on derivatives into earnings (1)

Unrealized gain on derivatives

Unrealized gain (loss) on derivatives

Other comprehensive income (loss):

Comprehensive income (loss)

Comprehensive (income) attributable to noncontrolling interests

Comprehensive (income) loss attributable to noncontrolling interests

Comprehensive income (loss) attributable to Safehold Inc.

10 unchanged sentences

Balance at December 31, 2021

Net income (loss)

Issuance of common stock, net / amortization

1 unchanged sentence

Change in accumulated other comprehensive income (loss)

Contributions from noncontrolling interests

Distributions to noncontrolling interests

Balance at December 31, 2021

Contributions from noncontrolling interests

Additional paid in capital attributable to redeemable noncontrolling interests

Balance at December 31, 2022

Impact from adoption of new accounting standard (refer to Note 3)

Net income (loss)

Issuance of common stock, net / amortization

3 unchanged sentences

Distributions to noncontrolling interests

Additional paid in capital attributable to redeemable noncontrolling interests

Balance at December 31, 2022

Merger consideration (refer to Note 1 and Note 3)

Balance at December 31, 2023

Impact from adoption of new accounting standard (refer to Note 3)

Net income (loss)

4 unchanged sentences

Distributions to noncontrolling interests

Merger consideration (refer to Note 1 and Note 3)

Acquisition of noncontrolling interest

Redemption of noncontrolling interest

Balance at December 31, 2024

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Provision for credit losses

Loss on early extinguishment of debt

Earnings from equity method investments

Distributions from operations of equity method investments

Selling profit from sales-type leases

Gain on sale of Ground Leases

6 unchanged sentences

Changes in accounts payable, accrued expenses and other liabilities

Cash flows provided by operating activities

Cash flows provided by (used in) operating activities

Cash flows from investing activities:

2 unchanged sentences

( 1,278,406 )

( 1,247,980 )

Origination of loans receivable, net

2 unchanged sentences

Contributions to equity method investments

Distributions from equity method investments

Funding reserves received from Ground Lease tenant net of disbursements

1 unchanged sentence

Net proceeds received from sale of real estate available and held for sale

Deposits on Ground Lease investments

Return of deposits on Ground Lease investments

Return of cash collateral for debt obligations

Funding of cash collateral for debt obligations

Payments to acquire derivative transactions

Proceeds received from derivative transactions

Proceeds received from the settlement of derivative transactions

Other investing activities

Cash flows used in investing activities

( 1,145,953 )

Cash flows provided by (used in) investing activities

( 1,145,953 )

4 unchanged sentences

( 2,008,000 )

( 1,005,000 )

Payments for deferred financing costs

2 unchanged sentences

Payments for withholding taxes upon vesting for stock-based compensation

Redemption of redeemable noncontrolling interests

Distributions to noncontrolling interests

Contributions from noncontrolling interests

Acquisition of noncontrolling interest

Other financing activities

Cash flows provided by financing activities

Cash flows provided by (used in) financing activities

Changes in cash, cash equivalents and restricted cash

1 unchanged sentence

Cash, cash equivalents and restricted cash at end of period

For the Years Ended December 31,

Reconciliation of cash and cash equivalents and restricted cash presented on the consolidated statements of cash flows

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Accrued offering costs

Caret unit conversion (refer to Note 12)

Real estate transferred to real estate available and held for sale

The accompanying notes are an integral part of the consolidated financial statements.

43 unchanged sentences

Immediately before the closing of the Merger, iStar separated its remaining legacy non-ground lease assets and businesses, approximately $ 50.0 million of cash, exclusive of working capital reserves and restricted cash, and approximately 13.5 million shares of Old SAFE common stock into Star Holdings by distributing to iStar’s stockholders, on a pro rata basis, the issued and outstanding equity interests of Star Holdings (the “Spin-Off”).

Other Merger related transactions

Other Merger and Spin-Off related transactions

On August 10, 2022, iStar entered into an agreement (the “MSD Stock Purchase Agreement”) with MSD Partners, L.P.

8 unchanged sentences

The closing of the MSD Caret Purchase took place in conjunction with the closing of the Merger on March 31, 2023.

Star Holdings was capitalized in part with an 8.0 %, four-year term loan from the Company having an initial principal amount of $ 115.0 million, as well as SOFR plus 3.00 % bank debt with an initial principal balance of $ 140.0 million from Morgan Stanley Bank, N.A.

which is secured by approximately 13.5 million shares of the Company.

million from Morgan Stanley Bank, N.A.

which is secured by approximately 12.9 million shares of the Company as of December 31, 2024.

In connection with the Spin-Off, Safehold Management Services Inc.

(“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.

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.

Star Holdings paid SpinCo Manager an annual management fee of $ 25.0 million for the term ended March 31, 2024, and will pay an annual fee of $ 15.0 million for the term ended March 31, 2025.

The annual fee declines to $ 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 held by Star Holdings, 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.

3 unchanged sentences

Actual results could differ from those estimates.

Certain prior year amounts have been reclassified in the Company's consolidated financial statements and the related notes to conform to the current period presentation.

Principles of Consolidation —The consolidated financial statements include the accounts and operations of the Company, its wholly-owned subsidiaries and VIEs for which the Company is the primary beneficiary.

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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.

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.

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.

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).

The Company’s development properties are assigned a higher loss rate due to the higher inherent risk of deals under construction.

The Company analyzed historical data provided by Trepp (“Trepp”) for single asset borrower loans and considered comparable loan to value ratios, loss rates, timing of losses, vintage, property type and other statistics.

The Company updated its analysis for current market conditions and reasonable and supportable forecasts of unemployment rates to develop an estimate of credit losses.

Beginning in the third quarter of 2024, the Company enhanced its policy to inform credit loss estimates by analyzing historical loss data for high-credit rated long-duration bonds, which the Company believes have similar risk profiles to its Ground Leases, provided by external third parties along with the historical data provided by Trepp.

The Company continues to consider comparable loan to value ratios, loss rates, timing of losses, vintage, property type and other statistics in its estimate of credit losses.

The Company also continues to analyze 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).

The Company’s development properties are assigned a higher loss rate due to the higher potential risk for deals under construction.

The Company may adopt alternative approaches to estimate its credit losses in the future based on factors such as, but not limited to, the loan to value ratios, property type and the availability of relevant historical market loss data for similar type financial instruments.

The Company did not have any charge-offs of its net investment in sales-type leases or Ground Lease receivables for any of the periods presented.

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The Company accounts for its acquisition of properties by recording the purchase price of tangible and intangible assets and liabilities acquired based on their relative fair values.

The value of the tangible assets, consisting of land, buildings, building improvements and tenant improvements is determined as if these assets are vacant.

Intangible assets may include the value of lease incentive assets, above-market leases, below-market Ground Lease assets and in-place leases, which are each recorded at their relative fair values and included in "Real estate-related intangible assets, net" on the Company’s consolidated balance sheets.

The value of the tangible assets, consisting of land, buildings, building improvements and tenant improvements is determined as if these assets are vacant, using estimated cash flow projections of the properties acquired which incorporate market rent, growth, discount and terminal capitalization rates.

Intangible assets may include the value of lease incentive assets, above-market leases, below-market Ground Lease assets and in-place leases, which are each recorded at their relative fair values determined using current market rents and leasing costs as inputs and included in "Real estate-related intangible assets, net" on the Company’s consolidated balance sheets.

Intangible liabilities may include the value of below-market leases, which are recorded at their relative fair values and included in "Real estate-related intangible liabilities, net" on the Company’s consolidated balance sheets.

2 unchanged sentences

Below-market Ground Lease assets are amortized to real estate expense over the remaining non-cancelable term of the lease.

The Company may also engage in sale/leaseback transactions whereby the Company executes a net lease with the occupant simultaneously with the purchase of the asset.

The Company may also engage in sale/leaseback

transactions whereby the Company executes a net lease with the occupant simultaneously with the purchase of the asset.

These transactions are accounted for as asset acquisitions.

1 unchanged sentence

The value of a long-lived asset held for use is impaired if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the asset (taking into account the anticipated holding period of the asset) are less than its carrying value.

Such estimate of cash flows considers factors such as expected future operating income trends, as well as

the effects of demand, competition and other economic factors.

Such estimate of cash flows considers factors such as expected future operating income trends, as well as the effects of demand, competition and other economic factors.

To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the asset over the estimated fair value of the asset and reflected as an adjustment to the basis of the asset.

34 unchanged sentences

Any accrued interest receivable is recorded in “Deferred expenses and other assets, net” on the Company’s consolidated balance sheets.

As of December 31, 2023, the Company had $ 0.1 million of accrued interest on its consolidated balance sheets.

As of December 31, 2024, the Company did not have any accrued interest outstanding on its loan receivable – related party.

As of December 31, 2023, the Company had $ 0.1 million of accrued interest on its consolidated balance sheet.

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.

As such, the Company elected the practical expedient to not record an allowance against accrued interest receivable.

During the year ended December 31, 2023, the Company did not reverse any accrued interest on its loan asset.

During the years ended December 31, 2024 and 2023, the Company did not reverse any accrued interest on its loan asset.

Interest Income – related party —Interest income - related party (refer to Note 6) 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.

23 unchanged sentences

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).

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.

Star Holdings paid SpinCo Manager an annual management fee of $ 25.0 million for the term ended March 31, 2024, and will pay an annual fee of $ 15.0 million for the term ended March 31, 2025.

Management fees are paid quarterly in arrears.

10 unchanged sentences

Diluted earnings per share is calculated similarly, however, it reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share amount.

Deferred expenses and other assets —Deferred expenses and other assets (refer to Note 8) includes operating lease right-of-use assets, purchase deposits, deferred financing fees associated with the 2021 Unsecured Revolver (refer to Note 9) and the 2023 Unsecured Revolver (refer to Note 9), derivative assets, deferred costs, leasing costs such as brokerage, legal and other costs which are amortized over the life of the respective leases and presented as an operating

activity in the Company’s consolidated statements of cash flows.

Deferred expenses and other assets —Deferred expenses and other assets (refer to Note 8) includes operating lease right-of-use assets, purchase deposits, deferred financing fees associated with the Company’s unsecured revolvers (refer to Note 9), derivative assets, deferred costs, leasing costs such as brokerage, legal and other costs which are amortized over the life of the respective leases and presented as an operating activity in the Company’s consolidated statements of cash flows.

Amortization of leasing costs is included in "Depreciation and amortization" in the Company’s consolidated statements of operations.

3 unchanged sentences

Compensation cost for stock-based awards is measured on the grant date and adjusted over the period of the employees’ services to reflect:

(i) estimated or actual forfeitures;

(i) estimated forfeitures;

and (ii) the service conditions through the requisite service period.

The awards vest ratably over a four-year service period.

The awards generally vest ratably over a four-year service period.

Compensation costs are recognized ratably over the applicable vesting/service period and recorded in "General and administrative" in the Company’s consolidated statements of operations.

11 unchanged sentences

The Company has two taxable REIT subsidiaries (“TRS”), one of which was formed during the year ended December 31, 2018 and until the year ended December 31, 2023 had no material activity.

Accordingly, no provision for income taxes was required.

Accordingly, no provision for income taxes was required prior to the year ended December 31, 2023.

The second TRS provides management services to Star Holdings and internally to the REIT.

The second TRS was acquired in the Company’s acquisition of iStar and first had activity during the three months ended June 30, 2023.

For the year ended December 31, 2023, the Company recorded current income tax expense in the amount of $ 3.1 million, which was partially offset by a deferred tax benefit of $ 1.3 million with respect to the TRS.

In addition, during the years ended December 31, 2023, 2022 and 2021, the Company paid $ 5.4 million, $ 0.5 million and $ 0.1 million, respectively, in taxes.

The Company recorded the following provision for income tax expense (benefit) for the years ended December 31, 2024 and 2023 ($ in thousands):

Years Ended December 31,

Current tax expense

Total current income tax expense

Deferred income tax expense (benefit)

State and local

Total deferred income tax expense (benefit)

Income tax (benefit) expense

(1) During the years ended December 31, 2024, 2023 and 2022, the Company paid $ 3.4 million, $ 5.4 million and $ 0.5 million, respectively, in taxes.

The Company’s reconciliation of the income tax expense (benefit) if computed at the U.S.

federal statutory income tax rate to the Company’s reported income tax expense (benefit) for the years ended December 31, 2024 and 2023 is as follows ($ in thousands):

Years Ended December 31,

Income tax expense (benefit) of taxable subsidiaries at statutory rates

State income taxes, net of federal benefit

Equity-based compensation and other permanent items

Basis adjustments

Goodwill write off at taxable subsidiary

Miscellaneous

Return to provision

Valuation allowance

Income tax (benefit) expense

(1) The Company did not have any TRS activity during the year ended December 31, 2022.

The Company evaluates whether its deferred tax assets are realizable and recognizes a valuation allowance if, based on the available evidence, both positive and negative, it is more likely than not that some portion or all of its deferred tax assets will not be realized.

When evaluating whether its deferred tax assets are realizable, the Company considers, among other matters, estimates of expected future taxable income, nature of current and cumulative losses, existing and projected book/tax differences, tax planning strategies available, and the general and industry specific economic outlook.

This analysis is inherently subjective and requires the Company to forecast its business and general economic environment in future periods.

Changes in estimates of the Company’s valuation allowance, if any, are included in “Income tax (expense) benefit” in the consolidated statements of operations.

The Company recognizes interest expense and penalties related to uncertain tax positions, if any, as “Income tax (expense) benefit” in the Company’s consolidated statements of operations.

The Company had the following deferred tax assets (liabilities) as of December 31, 2024 and 2023 ($ in thousands):

As of December 31,

Basis differences

Deferred expense

Deferred revenue

Net operating loss carryforwards (1)

Valuation allowance

Deferred tax asset, net

(1) The net operating loss carryforwards carry forward indefinitely and do not expire.

Net operating loss deductions, however, are limited to 80 % of taxable income when utilized.

Derivative instruments and hedging activity —The Company’s use of derivative financial instruments is associated with debt issuances and primarily limited to the utilization of interest rate swaps and interest rate caps to manage interest rate risk exposure.

4 unchanged sentences

A VIE is consolidated by the primary beneficiary, which is the party that has the power to direct matters that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE.

This overall consolidation assessment includes a review of, among other factors, which interests create or absorb variability, contractual terms, the key decision-making powers, their impact on the VIE’s economic performance, and related party relationships.

This overall consolidation

assessment includes a review of, among other factors, which interests create or absorb variability, contractual terms, the key decision-making powers, their impact on the VIE’s economic performance, and related party relationships.

Where qualitative assessment is not conclusive, the Company performs a quantitative analysis.

1 unchanged sentence

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.

The Financial Accounting Standards Board ("FASB") guidance defines fair value as the price that would be received to sell an asset or

paid to transfer a liability in an orderly transaction between market participants on the measurement date.

The Financial Accounting Standards Board ("FASB") guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date.

The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value:

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(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.

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 the 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.

In the event public market liquidity of the Caret units is not achieved within such two year period at a value not less than the purchase price for the Caret units, reduced by an amount equal to the amount of subsequent cash distributions made to the investors on account of such Caret units, the investors have the right to cause Caret Ventures LLC to redeem their Caret units at their original purchase price as so reduced.

The Company classifies these redeemable Caret units in accordance with Accounting Standards Codification (“ASC”) 480:

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.

Because public market liquidity was not achieved by February 2024, the investors in the February 2022 transaction had 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.

During the three months ended March 31, 2024, the redemption option was extended to April 2024.

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 classified these redeemable Caret units in accordance with Accounting Standards Codification (“ASC”) 480:

Distinguishing Liabilities from Equity.

ASC 480-10-S99-3A requires that equity securities redeemable at the option of the holder be classified outside of permanent stockholders’ equity.

The Company classifies redeemable Caret units as “Redeemable noncontrolling interests” in its consolidated balance sheets and consolidated statements of changes in equity.

The redeemable noncontrolling interest’s carrying amount is equal to the higher of (i) the initial carrying amount, increased or decreased for the redeemable noncontrolling interest’s share of net income or loss and dividends;

The Company classified redeemable Caret units as “Redeemable noncontrolling interests” in its consolidated balance sheets and consolidated statements of changes in equity.

The redeemable noncontrolling interest’s carrying amount was equal to the higher of (i) the initial carrying amount, increased or decreased for the redeemable noncontrolling interest’s share of net income or loss and dividends;

or (ii) the redemption value.

In the case of the Company’s redeemable Caret units, the carrying amount equals both the initial carrying amount and the redemption value.

During the year ended December 31, 2022, redeemable noncontrolling interests were allocated $ 0.6 million of net income (refer to Note 4).

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.

The Company’s acquisition of iStar was accounted for as a business combination.

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.

8 unchanged sentences

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.

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.

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):

10 unchanged sentences

During the year ended December 31, 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 6) which was originated at the time of the Merger in conjunction with the Spin-Off.

During the year ended December 31, 2022, the Company recorded $ 7.7 million of Merger

expenses and $ 2.1 million of related non-recurring charges, both of which are recorded in “Other expense” in the Company’s consolidated statements of operations.

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 December 31, 2023, the Company has incurred $ 26.6 million of Merger expenses.

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):

During the year ended December 31, 2022, the Company recorded $ 7.7 million of Merger expenses and $ 2.1 million of related non-recurring charges, both of which are recorded in “Other expense” in the Company’s consolidated statements of operations.

Excluding $ 3.0 million of related non-recurring charges and the $ 2.3 million provision for credit losses on the Secured Term Loan Facility, the Company has incurred $ 26.6 million of Merger expenses.

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

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As a result, the Company performed an interim goodwill evaluation.

The Company determined that its current operations are carried out through a single reporting unit with a carrying value of approximately $ 2.4 billion.

At that time, the Company determined that its current operations are carried out through a single reporting unit with a carrying value of approximately $ 2.4 billion.

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.

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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.

The Company does not expect goodwill to have any tax impact on its financial statements.

New Accounting Pronouncements —In August 2023, the FASB issued ASU 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement (“ASU 2023-05”).

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.

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.

The Company is currently evaluating ASU 2023-05 but does not expect this standard to have a material impact on its consolidated financial statements.

In December 2023, the FASB issued ASU No.

Goodwill did not have any tax impact on the Company’s financial statements.

New Accounting Pronouncements — In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

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The Company is currently evaluating ASU 2023-09 but does not expect this standard to have a material impact on its consolidated financial statements.

In August 2023, the FASB issued ASU 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60):

Recognition and Initial Measurement (“ASU 2023-05”).

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.

The Company is currently evaluating ASU 2023-05 but does not expect this standard to have a material impact on its consolidated financial statements.

Note 4—Net Investment in Sales-type Leases and Ground Lease Receivables

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The Company records interest income from Ground Lease receivables in "Interest income from sales-type leases" in the Company’s consolidated statements of operations.

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.

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 “Gain on sale of Ground Leases” in the Company’s consolidated statements of operations for the year ended December 31, 2022.

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The joint venture is a voting interest entity and the Company consolidates the joint venture in its financial statements due to its controlling interest.

The Company’s joint venture partners’ interest is recorded in “Noncontrolling interests” on the Company’s consolidated balance sheets.

The Company’s joint venture partners’ interest was recorded in “Noncontrolling interests” on the Company’s consolidated balance sheet as of December 31, 2023.

The Company receives a management fee, measured on an asset-by-asset basis, equal to 25 basis points on invested equity for such asset for the first five years following its acquisition, and 15 basis points on invested equity thereafter.

The Company will also receive a promote of 15 % over a 9 % internal rate of return, subject to a 1.275 x multiple on invested capital.

The venture has first look rights on qualifying investments for 18 months .

During the year ended December 31, 2023, 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 December 31, 2023.

On August 30, 2024, the Company acquired its partners’ share of the Ground Leases for $ 48.3 million.

The excess of the purchase price and related transaction costs over the carrying value of $ 46.0 million was recorded as a reduction to additional paid-in capital in the Company’s consolidated statement of changes in equity.

Since formation through August 30, 2024, the joint venture acquired nine Ground Leases for an aggregate purchase price of $ 170.4 million, of which $ 101.2 million had been funded as of August 30, 2024.

The partner's participation right in certain qualifying Ground Lease investment opportunities expired on September 30, 2024.

In November 2023, the Company sold a Ground Lease to a third-party for $ 4.2 million and recognized a gain of $ 0.4 million in “Gain on sale of Ground Leases” in the Company’s consolidated statements of operations for the year ended December 31, 2023.

In January 2024, the Company acquired a Ground Lease from the Ground Lease Plus Fund for $ 38.3 million, excluding amounts funded by the Company pursuant to a leasehold improvement allowance (refer to Note 7 and Note 14).

The Company’s net investment in sales-type leases were comprised of the following ($ in thousands):

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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.

(2) As of December 31, 2023, $ 16.4 million was attributable to noncontrolling interests.

The following table presents a rollforward of the Company’s net investment in sales-type leases and Ground Lease receivables for the year ended December 31, 2024 ($ in thousands):

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Beginning balance

Impact from adoption of new accounting standard (refer to Note 3)

Origination/acquisition/fundings (1)

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As of December 31, 2024, the weighted average remaining life of the Company’s 41 Ground Lease receivables was 97.2 years.

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 year ended December 31, 2023 were as follows ($ in thousands):

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 years ended December 31, 2024 and 2023 were as follows ($ in thousands):

Net investment in sales-type leases

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Allowance for credit losses at beginning of period

Provision for (recovery of) credit losses (1)

Allowance for credit losses at end of period (2)

Year Ended December 31, 2023

Allowance for credit losses at beginning of period

Impact from adoption of new accounting standard (refer to Note 3) (3)

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Allowance for credit losses at beginning of period

Provision for (recovery of) credit losses (1)

Allowance for credit losses at end of period (2)

Year Ended December 31, 2023

Allowance for credit losses at beginning of period

Impact from adoption of new accounting standard (refer to Note 3) (3)

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Allowance for credit losses at end of period (2)

(1) 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.

The Company also recorded an allowance for credit losses of $ 0.1 million related to expected credit losses for unfunded commitments and was recorded in "Accounts payable, accrued expenses and other liabilities."

(1) The provision for credit losses for the year ended December 31, 2024 was due primarily to enhancements to the Company’s general provision for credit loss methodology (refer to Note 3), current market conditions and growth in the portfolio during the period.

During the year ended December 31, 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 $ 0.2 million, respectively.

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(2) Allowance for credit losses on unfunded commitments is recorded in “Accounts payable and accrued expenses” on the Company’s consolidated balance sheets.

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):

(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.

The Company’s amortized cost basis in net investment in sales-type leases and Ground Lease receivables, presented by year of origination and by stabilized or development status, was as follows as of December 31, 2024 ($ in thousands):

Year of Origination

Prior to 2020

Net investment in sales-type leases

Stabilized properties

Development properties

Year of Origination

Prior to 2020

Ground Lease receivables

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Development properties

Year of Origination

Prior to 2019

Net investment in sales-type leases

Stabilized properties

Development properties

Year of Origination

Prior to 2019

Ground Lease receivables

Stabilized properties

Development properties

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 December 31, 2024, are as follows by year ($ in thousands):

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Total real estate, net and real estate-related intangible assets, net and real estate available and held for sale

(1) During the year ended December 31, 2023, the Company acquired $ 9.7 million of real property that is being marketed for sale and is recorded in real estate available and held for sale.

During the year ended December 31, 2023, the Company sold $ 1.5 million of real property that was acquired from iStar that was classified as available for sale upon acquisition.

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.

Real estate-related intangible assets, net consist of the following items ($ in thousands):

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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 December 31, 2024, are as follows by year ($ in thousands):

(1) The tenant under a master lease relating to five hotel assets elected to extend the leases underlying three of the five hotels past the initial lease maturity of December 2025.

Note 6—Loan 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, 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”).

During the year ended December 31, 2023, the Company recorded $ 7.1 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.

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.

During the years ended December 31, 2024 and 2023, the Company recorded $ 9.5 million and $ 7.1 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.

As of both December 31, 2024 and 2023, the Star Holdings Term Loan Facility had a principal balance of $ 115.0 million.

The Star Holdings Term Loan Facility is a secured credit facility.

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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.

During the year ended December 31, 2023, the Company recorded a provision for credit losses of $ 2.4 million on the Secured Term Loan Facility which was originated at the time of the Merger in conjunction with the Spin-Off.

During the years ended December 31, 2024 and 2023, the Company recorded a recovery of credit losses of $ 0.1 million and a provision for credit losses of $ 2.4 million, respectively, on the Star Holdings Term Loan Facility which was originated at the time of the Merger in conjunction with the Spin-Off.

Note 7—Equity Investments

The Company’s equity investments and its proportionate share of earnings (losses) from equity investments were as follows ($ in thousands):

Earnings from

Earnings (losses) from

Carrying Value

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(1) As of December 31, 2024, the Company has a basis difference of $ 19.4 million in the Ground Lease Plus Fund that will be amortized over a weighted average remaining term of 105.6 years using the effective interest method.

During the year ended December 31, 2023, $ 2.4 million of the basis difference was amortized as an increase to earnings from equity method investments.

During the years ended December 31, 2024 and 2023, ($ 0.1 ) million and $ 2.4 million, respectively, of the basis difference was amortized as a (decrease) increase to earnings from equity method investments.

(2) As of December 31, 2024, the Company has a basis difference of $ 6.5 million in the Leasehold Loan Fund that will be amortized over a weighted average remaining term of 2.3 years using the effective interest method.

During the year ended December 31, 2023, $ 3.0 million of the basis difference was amortized as an increase to earnings from equity method investments.

During the years ended December 31, 2024 and 2023, $ 4.8 million and $ 3.0 million, respectively, 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.

venture acquired the Ground Lease in November 2019.

The venture acquired the Ground Lease in November 2019.

The Company has a 54.8 % noncontrolling equity interest in the venture and is the manager of the venture.

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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.

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).

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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.

In January 2024, the Company acquired the Ground Lease from the Ground Lease Plus Fund for $ 38.3 million.

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.

In January 2024, the Company acquired the Ground Lease from the Ground Lease Plus Fund for $ 38.3 million, excluding amounts funded by the Company pursuant to a leasehold improvement allowance (refer to Note 14).

In June 2021, the Company entered into two agreements (refer to Note 14) 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.

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.

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”).

The Company owns a 53.2 % noncontrolling equity interest in the Leasehold Loan Fund.

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The Company is also entitled to a promote payment on certain investments in the Leasehold Loan Fund.

In March 2021, iStar acquired land and simultaneously structured and entered into with the seller a Ground Lease on which a multi-family project was to be constructed.

iStar also committed to provide a $ 75.0 million construction loan to the Ground Lease tenant.

In September 2021, the construction loan commitment was transferred to the Leasehold Loan Fund.

The construction loan was repaid in full in April 2024.

The Leasehold Loan Fund funded $ 69.4 million of the commitment prior to its repayment.

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.

As of December 31, 2023, the Leasehold Loan Fund has not funded any of the commitment.

As of December 31, 2024, the Leasehold Loan Fund funded $ 0.8 million 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.

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As of December 31, 2024, the Leasehold Loan Fund funded $ 40.8 million of the commitment.

In July 2024, the Leasehold Loan Fund committed to provide a $ 31.5 million loan to the ground lessee of a Ground Lease originated by the Company.

The loan was for the Ground Lease tenant’s construction of a student housing property.

As of December 31, 2024, the Leasehold Loan Fund has not funded any of the commitment.

Summarized investee financial information — The following table presents the investee level summarized financial information of the Company’s equity method investments as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 ($ in thousands):

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(2) Accumulated amortization of deferred finance costs was $ 3.5 million and $ 11.0 million as of December 31, 2024 and 2023, respectively.

(3) As of December 31, 2023, includes $ 6.9 million of management fees due from Star Holdings.

(3) As of December 31, 2024 and 2023, includes $ 3.7 million and $ 6.9 million, respectively, of management fees due from Star Holdings.

Through December 31, 2024, the Company has earned $ 36.2 million of management fees from Star Holdings and as of December 31, 2024, $ 13.8 million of the transaction price is attributable to performance obligations that remain unsatisfied.

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Dividends declared and payable

Operating lease liability (2)

Management fee payable

Operating lease liabilities (1)

Accrued expenses (2)

Accounts payable, accrued expenses and other liabilities

(1) As of December 31, 2022, other liabilities includes $ 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.

(3) As of December 31, 2023, accrued expenses primarily includes accrued compensation, legal, audit and property expenses As of December 31, 2022, accrued expenses primarily includes accrued legal, audit and property expenses.

(2) As of December 31, 2024 and 2023, accrued expenses primarily includes accrued compensation, legal, audit and property expenses.

Note 9—Debt Obligations, net

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6.10 % senior notes

5.65 % senior notes

3.98 % senior notes

February 2052

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As of December 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 6), unsecured senior notes and trust preferred securities were 4.18 % and 3.80 % , respectively.

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.

(2) Represents the extended maturity date for all debt obligations.

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If the 2.80 % Notes are redeemed on or after March 15, 2031, the redemption price will be equal to 100 % of the principal amount of the 2.80 % Notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the applicable redemption date.

In November 2021, Portfolio Holdings, then known as Safehold Operating Partnership LP, (as issuer) and the Company (as guarantor), issued $ 350.0 million aggregate principal amount of 2.85 % senior notes due January 2032 (the “ 2.85 % Notes”).

“ 2.85 % Notes”).

The 2.85 % Notes were issued at 99.123 % of par.

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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.

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.

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 bears interest at an annual rate of Adjusted SOFR, as defined in the applicable

agreement, plus 0.90 %, subject to the Company’s credit ratings.

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.

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”).

The 6.10 % Notes were issued at 98.957 % of the principal amount.

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:

(i) 100 % of the principal amount of the 6.10 % Notes being redeemed;

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.

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.

In November 2024, Portfolio Holdings (as issuer) and the Company (as guarantor) issued $ 400.0 million aggregate principal amount of 5.65 % senior notes due January 2035 (the “ 5.65 % Notes”).

The 5.65 % Notes were issued at 98.812 % of the principal amount.

The Company may redeem the 5.65 % Notes in whole at any time or in part from time to time prior to October 15, 2034, at the Company’s option and sole discretion, at a redemption price equal to the greater of:

(i) 100 % of the principal amount of the 5.65 % Notes being redeemed;

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.

If the 5.65 % Notes are redeemed on or after October 15, 2034, the redemption price will be equal to 100 % of the principal amount of the 5.65 % Notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the applicable redemption date.

2024 Unsecured Revolver —In April 2024, the Company entered into a $ 2.0 billion unsecured revolving credit facility (the “2024 Unsecured Revolver”), which replaced the Company’s 2021 Unsecured Revolver (see below) and 2023

Unsecured Revolver (see below), each of which were terminated.

At the time of termination, $ 916 million was drawn on the 2021 Unsecured Revolver, all of which rolled over into the 2024 Unsecured Revolver.

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.

The Company also pays a facility fee of 0.10 %, subject to the Company’s credit ratings.

As of December 31, 2023, there was $ 233.0 million of undrawn capacity on the 2021 Unsecured Revolver.

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”).

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.

As of December 31, 2023, there was $ 500.0 million of undrawn capacity on the 2023 Unsecured Revolver.

Trust Preferred Securities —The Company assumed trust preferred securities from iStar in connection with Merger.

As of December 31, 2024, there was $ 1.3 billion of undrawn capacity on the 2024 Unsecured Revolver.

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”), which amount was increased to $ 1.35 billion in December 2021.

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 accrued interest at an annual rate of applicable SOFR plus 0.90 %, subject to the Company’s credit ratings.

In March 2024, the Company exercised one of its options to extend the maturity to March 2025.

The 2024 Unsecured Revolver replaced the 2021 Unsecured Revolver.

2023 Unsecured Revolver— In January 2023, Portfolio Holdings, then known as Safehold Operating Partnership LP (as borrower) and the Company (as guarantor) entered into a $ 500 million unsecured revolving credit facility (the “2023 Unsecured Revolver”).

The 2023 Unsecured Revolver accrued interest at a rate of Adjusted SOFR , as defined in the applicable agreement, plus 0.90 % , subject to the Company’s credit ratings .

The 2024 Unsecured Revolver replaced the 2023 Unsecured Revolver.

Trust Preferred Securities —The Company assumed trust preferred securities from iStar in connection with the Merger.

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:

Commercial Paper Program — In June 2024, Portfolio Holdings, as issuer, entered into a new U.S.

commercial paper program (the “Commercial Paper Program”) on a private placement basis, pursuant to which the Company may issue up to $ 750.0 million of short-term, unsecured commercial paper notes outstanding at any time, which are guaranteed by the Company.

Under the Commercial Paper Program, the Company may issue the commercial paper notes from time to time and will use the proceeds for general corporate purposes.

The Commercial Paper Program is backed by the Company’s 2024 Unsecured Revolver.

The commercial paper notes will be sold under customary terms in the commercial paper market and will rank pari passu with all of Portfolio Holding’s other unsecured senior indebtedness.

The interest rates will vary based on the ratings assigned to the commercial paper notes by credit rating agencies and market conditions at the time of issuance.

As of December 31, 2024, the Company had no outstanding balance under the Commercial Paper Program.

Borrowings reduce amounts otherwise available under the 2024 Unsecured Revolver.

The documents governing the Commercial Paper Program contain customary representations, warranties, covenants, defaults and indemnification provisions, and provide the terms under which the Notes will be sold pursuant to an exemption from the federal and state securities laws.

Debt Covenants —The Company is subject to financial covenants under the 2024 Unsecured Revolver, including maintaining:

(i) a ratio of total unencumbered assets to total unsecured debt of at least 1.33 x;

and (ii) a consolidated fixed charge coverage ratio of at least 1.15 x, as such terms are defined in the documents governing the 2021 Unsecured Revolver and the 2023 Unsecured Revolver, as applicable.

In addition, the 2021 Unsecured Revolver and the 2023 Unsecured Revolver contain customary affirmative and negative covenants.

and (ii) a consolidated fixed charge coverage ratio of at least 1.15 x, as such terms are defined in the documents governing the 2024 Unsecured Revolver, as applicable.

In addition, the 2024 Unsecured Revolver contains customary affirmative and negative covenants.

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.

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.

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 2.80 % Notes, 2.85 % Notes, 3.98 % Notes, 5.15 % Notes, 6.10 % Notes and 5.65 % 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.

The Company’s 6.10 % Notes and 5.65 % 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 %.

Holdings’ and/or the Company’s existing or future material credit facilities, including the 2024 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.

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For operating leases, lease liabilities were discounted at the Company’s weighted average incremental secured borrowing rate for similar collateral estimated to be 5.6 % and the weighted average remaining lease term is 10.4 years.

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 years ended December 31, 2022 and 2021.

During the nine months ended December 31, 2023, the Company made payments of $ 4.3 million related to its operating leases.

During the year ended December 31, 2024 and the nine months ended December 31, 2023, the Company made payments of $ 5.7 million and $ 4.3 million, respectively, 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.

2 unchanged sentences

These commitments may also include leasehold improvement allowances that will be funded to the Ground Lease tenants when certain conditions are met.

As of December 31, 2023, the Company had an aggregate $ 283.1 million of such commitments.

As of December 31, 2024, the Company had an aggregate $ 150.3 million of such

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 .

7 unchanged sentences

Credit risk is the risk of default on the Company’s leases that result from a tenant’s inability or unwillingness to make contractually required payments.

same geographic region, or have similar economic features, such that their ability to meet contractual obligations, including those to the Company, could be similarly affected by changes in economic conditions.

Risk concentrations —Concentrations of credit risks arise when the Company has multiple leases with a particular tenant or credit party, or a number of the Company’s tenants are engaged in similar business activities, or activities in the same geographic region, or have similar economic features, such that their ability to meet contractual obligations, including those to the Company, could be similarly affected by changes in economic conditions.

Although the Company’s Ground Leases are geographically diverse and the tenants operate in a variety of industries and property types, to the extent the Company has a significant concentration of interest income from sales-type leases or operating lease income from any tenant, the inability of that tenant to make its payment could have a material adverse effect on the Company.

9 unchanged sentences

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.

inflows and outflows of the derivative are considered cash flows from financing activities in the Company’s consolidated statements of cash flows.

For the Company’s derivatives not designated as hedges, the changes in the fair value of the derivatives are reported in "Interest expense" in the Company’s consolidated statements of operations.

10 unchanged sentences

(1) As of December 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.

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 $ 400.0 million notional amount, one of which matures in December 2024 and two that mature in December 2025.

The Company also has two 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 $ 250.0 million notional amount and mature in December 2025.

These designated hedges protect the Company against interest rate volatility with respect to future debt with a tenor of approximately 30 years .

2 unchanged sentences

Over the next 12 months, the Company expects that $ 0.9 million related to cash flow hedges will be reclassified from "Accumulated other comprehensive income (loss)" as a decrease to interest expense.

(3) During the years ended December 31, 2023 and 2022, the Company received $ 11.4 million and $ 11.0 million, respectively, in settlement of certain interest rate hedges.

During the year ended December 31, 2021, the Company paid $ 19.9 million to terminate certain interest rate hedges.

(3) During the years ended December 31, 2024, 2023 and 2022, the Company received $ 32.1 million, $ 11.4 million and $ 11.0 million, respectively, in settlement of certain interest rate hedges.

Credit Risk-Related Contingent Features —The Company reports derivative instruments, if any, on a gross basis in its consolidated financial statements.

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.

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 for the years ended December 31, 2023, 2022 and 2021 ($ in thousands):

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 years ended December 31, 2024, 2023 and 2022 ($ in thousands):

Amount of Gain

13 unchanged sentences

Interest expense

Interest rate swaps (1)

For the Year Ended December 31, 2023

1 unchanged sentence

Interest expense

Interest rate swaps (1)

For the Year Ended December 31, 2022

19 unchanged sentences

Grants under the 2017 Equity Incentive Plan were recognized as compensation costs ratably over the applicable vesting period and recorded in “General and administrative” in the Company’s consolidated statements of operations.

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.

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.

As of December 31, 2024, there were no shares available for issuance for future awards under Old SAFE’s 2017 Equity Incentive Plan.

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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.

In May 2024, the Company issued an aggregate 32,300 shares of its common stock with a grant date fair value of $ 20.78 per share to its directors that vest after one year in consideration for their annual service as directors.

In addition, in May 2024, the Company’s shareholders approved an increase to the LTIP of 1,000,000 shares.

As of December 31, 2024, an aggregate of 1,055,711 shares of the Company’s common stock remain available for awards under the LTIP.

2 unchanged sentences

Nonvested at end of period

(1) The Company also granted 441,233 shares of common stock to certain employees under the LTIP as part of annual incentive awards that included a mix of cash and equity awards.

The weighted average grant date fair value per share of these share awards was $ 20.12 and the total fair value was $ 8.9 million.

The shares are fully-vested and 262,635 shares were issued net of statutory minimum required tax withholdings.

The total fair value of restricted stock units that vested during the year ended December 31, 2024 was $ 3.6 million and the weighted average grant date fair value per share of restricted stock units granted during the year ended December 31, 2024 was $ 28.86 .

2 unchanged sentences

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.

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, 2023.

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.

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.

In connection with the consummation of the Merger and the Caret Restructuring, Old SAFE, Caret Ventures and CARET Management Holdings LLC assigned each Award Agreement (as defined in the Original Caret Performance Incentive Plan) relating to outstanding Caret unit awards to Portfolio Holdings pursuant to the Omnibus Assignment, Assumption and Amendment Agreement, dated as of March 31, 2023 (the “Caret Assignment Agreement”).

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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.

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During the year ended December 31, 2024, the Company declared cash dividends on its common stock of $ 50.9 million, or $ 0.708 per share.

Dividends paid in 2023 were a return of capital for tax reporting purposes.

During the year ended December 31, 2022, the Company declared cash dividends on its common stock of $ 43.6 million, or $ 0.701 per share.

Dividends paid in 2024 consisted of 4.795 % of qualified dividend income and 95.205 % of return of capital for tax reporting purposes.

During the year ended

December 31, 2023, the Company declared cash dividends on its common stock of $ 48.0 million, or $ 0.708 per share.

Dividends paid in 2023 were a return of capital for tax reporting purposes.

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Net income (loss)

Net (income) attributable to noncontrolling interests

Net (income) loss attributable to noncontrolling interests

Net income (loss) attributable to Safehold Inc.

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common shareholders - diluted

(1) For the year ended December 31, 2023, the effect of 31,557 of the Company’s restricted stock awards were antidilutive due to the Company having a net loss for the period.

For the years ended December 31, 2022 and 2021, 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.

(1) For the year ended December 31, 2024, the effect of 7,803 of the Company’s restricted stock awards was antidilutive.

For the year ended December 31, 2023, 31,557 of the Company’s restricted stock awards were antidilutive due to the Company having a net loss for the period.

For the year ended December 31, 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.

Note 14—Related Party Transactions

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3 x prior year’s management fee

During the years ended December 31, 2023, 2022 and 2021, the Company recorded $ 5.2 million, $ 20.3 million and $ 14.9 million, respectively, in management fees to the Former Manager.

During the years ended December 31, 2023 and 2022, the Company recorded $ 5.2 million and $ 20.3 million, respectively, 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 iStar under the management agreement.

During the years ended December 31, 2023, 2022 and 2021, the Company was allocated $ 3.1 million, $ 12.5 million and $ 7.5 million, respectively, in expenses from iStar.

During the years ended December 31, 2023 and 2022, the Company was allocated $ 3.1 million and $ 12.5 million, respectively, in expenses from iStar.

These expenses are recorded in "General and administrative" in the Company’s consolidated statements of operations.

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These transactions were approved by the Company’s independent directors in accordance with the Company’s policy with respect to related party transactions.

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.

The Company also committed to provide an additional $ 35.0 million to the Ground Lease tenant if certain construction and leasing milestones are met.

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.

The Company paid the Leasehold Loan Fund $ 5.0 million of additional consideration in connection with this investment.

In April 2022, the Company acquired an existing Ground Lease from iStar for $ 9.0 million.

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.

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.

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.

iStar sold the leasehold to a third party in March 2022.

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.

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.

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.

The Company paid the Leasehold Loan Fund $ 9.0 million of additional consideration in connection with this investment.

The Company entered into a discretionary commitment to fund up to $ 9.0 million of preferred equity in an entity that owns the leasehold interest under one of the Company’s office Ground Leases located in Washington, DC.

This preferred equity position is intended to fund any operating cash flow deficits and leasing capital necessary at the property as our tenant explores potential re-leasing or a leasehold sale.

In-place cash flows at the property covered ground rent through December 31, 2024, though a semi-annual property tax payment made in September 2024 produced a shortfall, which resulted in a $ 1.5 million funding.

During the year ended December 31, 2024, the Company funded $ 1.5 million of

the commitment which is included in “Deferred expenses and other assets” on the Company’s consolidated balance sheet as of December 31, 2024.

In addition, the Company has recognized $ 6.7 million of interest income from sales-type leases from the Ground Lease in its consolidated statements of operations for the year ended December 31, 2024.

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.

In December 2021, iStar contributed the Ground Lease to 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 and in January 2024 the Company acquired the Ground Lease from the Ground Lease Plus Fund for $ 38.3 million.

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.

In January 2024, the Company acquired the Ground Lease from the Ground Lease Plus Fund for $ 38.3 million.

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.

As of December 31, 2023, the Company funded $ 23.7 million of the leasehold improvement allowance.

As of December 31, 2024, the $ 51.8 million leasehold improvement allowance has been fully funded.

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.

5 unchanged sentences

In addition, each Ground Lease provides for a leasehold improvement allowance up to a maximum of $ 83.0 million, which obligation would be assumed by the Company upon acquisition.

In January 2022, iStar sold the Ground Leases to the Ground Lease Plus Fund in which the Company owns a noncontrolling

interest and an existing shareholder (which is affiliated with one of the Company’s independent directors) owns a noncontrolling interest.

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.

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).

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.

In January 2022, iStar sold the Ground Leases to the Ground Lease Plus Fund in which the Company owns a noncontrolling interest and an existing shareholder (which is affiliated with one of the Company’s independent directors) owns a noncontrolling interest.

One of the agreements expired in June 2024.

There can be no assurance that the conditions to closing will be satisfied and that the Company will acquire the other property and Ground Lease from the Ground Lease Plus Fund.

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).

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.

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.

Because public market liquidity was not achieved by February 2024, the investors in the February 2022 transaction had 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.

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.

On March 31, 2023, in conjunction with the closing of the Merger, affiliates of MSD Partners also purchased 100,000 Caret units (refer to Note 11) from the Company for an aggregate purchase price of $ 20.0 million.

On March 31, 2023, in conjunction with the closing of the Merger, affiliates of MSD Partners also purchased 100,000 Caret units from the Company for an aggregate purchase

price of $ 20.0 million.

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.

4 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.

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.

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.

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.

In connection with the Spin-Off, SpinCo Manager entered into a management agreement with Star Holdings, pursuant to which it will operate and pursue the orderly monetization of Star Holding’s assets.

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.

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 held by Star Holdings, thereafter.

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.

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.

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.

However, if Star Holdings has completed the liquidation of its assets on or before the termination date, the termination fee will consist of any portion of the annual management fee

that remained unpaid for the remainder of the then current annual term plus, if the termination date occurs on or before the third anniversary of the Spin-Off, the amount of the management fee that would have been payable for the next succeeding annual term, or if the termination date occurs after the third anniversary of the Spin-Off, zero .

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.

During the year ended December 31, 2023, the Company recorded $ 19.4 million in management fees from Star Holdings.

However, if Star Holdings has completed the liquidation of its assets on or before the termination date, the termination fee will consist of any portion of the annual management fee that remained unpaid for the remainder of the then current annual term plus, if the termination date occurs on or before the third anniversary of the Spin-Off, the amount of the management fee that would have been payable for the next succeeding annual term, or if the termination date occurs after the third anniversary of the Spin-Off, zero .

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 $ 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.

During the years ended December 31, 2024 and 2023, the Company recorded $ 16.8 million and $ 19.4 million, respectively, in management fees from Star Holdings.

The management fees are included in “Other income” in the Company’s consolidated statements of operations.

4 unchanged sentences

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.

Note 15—Segment Reporting

The Company conducts its business through one reportable and one operating segment by acquiring, managing and capitalizing Ground Leases, which the Company believes provides an opportunity for safe, growing income.

The Company’s chief executive officer is the chief operating decision maker (“CODM”) and uses net income (loss), as reported on the consolidated statements of comprehensive income (loss), to measure segment operating performance.

All of the Company’s expenses are included in segment operating performance and are reviewed regularly.

However, the CODM reviews interest expense and general and administrative expense on a more disaggregated basis.

The CODM reviews interest expense in more detail because the Company uses its cost of capital to price its investments.

The CODM also reviews general and administrative expense, which includes public company costs consisting of compensation, occupancy, and other corporate costs, in more detail to ensure its resources are in line with its business and operating needs.

The measure of segment assets is reported on the Company’s consolidated balance sheets as total assets.

The CODM also reviews assets and asset level metrics such as rent coverage, GAAP and cash asset yields, Ground Lease cost to value ratios, unrealized capital appreciation and certain other metrics on a regular basis.

The following table presents the Company’s expenses that are reviewed in more detail by the CODM for the years ended December 31, 2024, 2023 and 2022 ($ in thousands):

For the Years Ended December 31,

Interest expense

Subtotal interest expense

General and administrative (1)

Public company and other costs

Stock-based compensation

Management fees

Expense reimbursements to the Former Manager

Subtotal general and administrative

(1) The CODM also considers management fees earned from Star Holdings (refer to Note 14) in their review of general and administrative expense because many of the Company’s employees spend time and resources performing basic functions for the management of Star Holdings.

During the years ended December 31, 2024 and 2023, the Company earned $ 16.8 million and $ 19.4 million, respectively, in management fees from Star Holdings.

The management fees are included in “Other income” in the Company’s consolidated statements of operations.

Note 16—Subsequent Events

In January 2024, the Company acquired a Ground Lease from the Ground Lease Plus Fund for $ 38.3 million (refer to Note 14).

On February 4, 2025, our Board authorized the repurchase of up to $ 50.0 million of our common stock.

W e have no obligation to repurchase additional shares, and the timing, actual number and value of the shares that are repurchased, if any, will be at the discretion of management and will depend on a number of factors, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate.

Repurchases may be suspended, terminated or modified at any time for any reason.

The share repurchase

program does not have an expiration date.

Any repurchased shares will be returned to the status of authorized but unissued shares of common stock.

Safehold Inc.

25 unchanged sentences

Washington, DC

North Carolina

Real estate available and held for sale

7 unchanged sentences

Acquisitions (1)

Transfer to net investment in sales-type lease

Ending balance (2)

7 unchanged sentences

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.

What changed 10-K

Item 8. Financial Statements and Supplementary Data