What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-06 · 109 added, 95 removed, 270 unchanged (43% of the section changed)

15 unchanged sentences

Capital appreciation is realized though appreciation in the value of the land over time and through our typical rights as landlord to acquire the commercial buildings on our land at the end of a Ground Lease, which may yield substantial value to us.

As of June 30, 2025, the percentage breakdown of the gross book value of our portfolio was 41% multi-family, 40% office, 11% hotels, 6% life science and 2% mixed use and other.

As of September 30, 2025, the percentage breakdown of the gross book value of our portfolio was 41% multi-family, 40% office, 11% hotels, 6% life science and 2% mixed use and other.

The diversification by geographic location, property type and sponsor in our portfolio further reduces risk and enhances potential upside.

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To combat the increase in inflation over the past few years, the Federal Reserve raised interest rates and has kept interest rates generally high.

This increase in interest rates has produced progress on inflation and in September 2024, the Federal Reserve reduced the federal funds rate by 50 basis points, which marked the first interest rate cut in four years.

The Federal Reserve further reduced the federal funds rate by 25 basis points in each of November 2024 and December 2024.

The Federal Reserve has indicated that the economic outlook, including any potential impact on the economy from changes to U.S.

trade policy, is uncertain and it will continue to monitor incoming data on unemployment and inflation before adjusting monetary policy;

This increase in interest rates produced progress on inflation and in September 2024, the Federal Reserve reduced the federal funds rate by 50 basis points, which marked the first interest rate cut in four years.

The Federal Reserve further reduced the federal funds rate by 25 basis points in each of November 2024, December 2024 and September 2025.

The Federal Reserve has indicated that the economic outlook, which could include any potential impact on the economy from changes to U.S.

trade policy or the U.S.

government shutdown, is uncertain and it will continue to monitor incoming data on unemployment and inflation before adjusting monetary policy;

however, high interest rates have, and any future increase in interest rates may continue to result in a reduction in the availability or an increase in costs of leasehold financing for Ground Lease tenants, which is critical to the growth of a robust Ground Lease market.

43 unchanged sentences

We calculate this estimated value by subtracting our original aggregate cost basis in the Ground Leases from our estimated aggregate Combined Property Value, based on estimates by the valuation firm and by management.

The table below shows the current estimated UCA in our owned residual portfolio as of June 30, 2025 and December 31, 2024 ($ in millions):

June 30, 2025

The table below shows the current estimated UCA in our owned residual portfolio as of September 30, 2025 and December 31, 2024 ($ in millions):

September 30, 2025

December 31, 2024

2 unchanged sentences

Unrealized Capital Appreciation in Our Owned Residual Portfolio

(1) Please review our Current Report on Form 8-K filed on August 5, 2025 for a discussion of the valuation methodology used and important limitations and qualifications of the calculation of UCA.

(1) Please review our Current Report on Form 8-K filed on November 5, 2025 for a discussion of the valuation methodology used and important limitations and qualifications of the calculation of UCA.

See “Risk Factors- Certain tenant rights under our Ground Leases may limit the value and the UCA we are able to realize upon lease expiration, sale of our land and Ground Leases or other events ” included in “Risk Factors” of our 2024 Annual Report for a discussion of certain tenant rights and other terms of the leases that may limit our ability to realize value from the UCA.

(2) Combined Property Value includes our applicable percentage interests in our unconsolidated Ground Lease ventures and $291.1 million and $319.8 million related to transactions with remaining unfunded commitments as of June 30, 2025 and December 31, 2024, respectively.

(2) Combined Property Value includes our applicable percentage interests in our unconsolidated Ground Lease ventures and $288.3 million and $319.8 million related to transactions with remaining unfunded commitments as of September 30, 2025 and December 31, 2024, respectively.

Combined Property Value excludes the term loan to Star Holdings, the assets in the Leasehold Loan Fund (refer to Note 8 to the consolidated financial statements), the assets in the Ground Lease Plus Fund and amounts attributable to noncontrolling interests.

Ground Lease Cost includes our applicable percentage interests in our unconsolidated Ground Lease ventures and $90.5 million and $46.2 million of unfunded commitments as of June 30, 2025 and December 31, 2024, respectively.

Ground Lease Cost includes our applicable percentage interests in our unconsolidated Ground Lease ventures and $84.5 million and $46.2 million of unfunded commitments as of September 30, 2025 and December 31, 2024, respectively.

Ground Lease Cost excludes the term loan to Star Holdings, our leasehold loans, the assets in the Leasehold Loan Fund, the assets in the Ground Lease Plus Fund and amounts attributable to noncontrolling interests.

As of June 30, 2025, our gross book value as a percentage of combined property value was 52%.

As of September 30, 2025, our gross book value as a percentage of combined property value was 52%.

Our Caret Program (as defined below) is designed to recognize the two distinct components of value in our Ground Lease portfolio by separating them into:

12 unchanged sentences

We have a Caret Performance Incentive Plan (the “Caret Performance Incentive Plan”) pursuant to which Caret units are reserved for grants of performance-based awards to participants including certain employees of the Company, directors and service providers.

As of June 30, 2025, all outstanding Caret units awarded under the Caret Performance Incentive Plan are fully vested except for grants awarded in connection with the merger between Safehold Inc.

As of September 30, 2025, all outstanding Caret units awarded under the Caret Performance Incentive Plan are fully vested except for grants awarded in connection with the merger between Safehold Inc.

and iStar Inc.

on March 31, 2023 to executive officers and other employees, which are subject to cliff vesting on March 31, 2027 if our common stock has traded at an average price of $60.00 or more for at least 30 consecutive trading days since the grant date, and certain awards granted to a former employee that vest in December 2025, subject to certain conditions.

As of June 30, 2025, vested and unvested Caret units beneficially owned by our officers and other employees represent approximately 14.4% of the outstanding Caret units and 11.4% of the authorized Caret units, including 6.1% held directly and indirectly by Jay Sugarman, our Chairman and Chief Executive Officer, and approximately 128,871 Caret units remain available for issuance under the Caret Performance Incentive Plan.

In addition to the Caret units awarded or reserved for issuance under our Caret Performance Incentive Plan, we have sold 122,500 Caret units to third-party investors, including affiliates of MSD Partners, that remain outstanding as of June 30, 2025.

As of June 30, 2025, the Company owned 84.3% of the outstanding Caret units.

As of September 30, 2025, vested and unvested Caret units beneficially owned by our officers and other employees represent approximately 14.4% of the outstanding Caret units and 11.4% of the authorized Caret units, including 6.1% held directly and indirectly by Jay Sugarman, our Chairman and Chief Executive Officer, and approximately 128,971 Caret units remain available for issuance under the Caret Performance Incentive Plan.

As of September 30, 2025, the Company owned 84.3% of the outstanding Caret units.

In connection with the sale of 137,142 Caret units in February 2022 (28,571 of which were committed to be purchased at the time, but did not close), we 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.

18 unchanged sentences

Our portfolio is comprised of Ground Leases, leasehold loans and one master lease (relating to five hotel assets that we refer to as our “Park Hotels Portfolio”) that has many of the characteristics of a Ground Lease.

The tenant under our Park Hotels Portfolio elected to extend the leases underlying three of the five hotels past the initial lease maturity of December 2025 (see the "Risk Factors - We may be unable to renew expiring Ground Leases, re-lease the land or sell the properties on favorable terms or at all , -

Percentage rent payable under our master lease relating to the Park Hotels Portfolio is calculated on an aggregate portfolio-wide basis , - We are the tenant of a Ground Lease underlying a majority of our Doubletree Seattle Airport property " in our 2024 Annual Report for a discussion of our Park Hotels Portfolio).

As of June 30, 2025, our estimated portfolio Ground Rent Coverage was 3.5x (see the "Risk Factors - Our estimated UCA, Combined Property Value and Ground Rent Coverage, may not reflect current market values, including the decline in office values, and may decline materially in future periods , - We rely on Property NOI as reported to us by our tenants, -Our estimates of Ground Rent Coverage for properties in development or transition, or for which we do not receive current tenant financial information, may prove to be incorrect " in our 2024 Annual Report for a discussion of our estimated Ground Rent Coverage).

Below is an overview of the top 10 Ground Leases in our portfolio as of June 30, 2025 (based on gross book value and excluding unfunded commitments):

The tenant under our Park Hotels Portfolio elected to extend the leases underlying three of the five hotels past the initial maturity of December 2025 (see the "Risk Factors - We may be unable to renew expiring Ground Leases, re-lease the land or sell the properties on favorable terms or at all , - Percentage rent

payable under our master lease relating to the Park Hotels Portfolio is calculated on an aggregate portfolio-wide basis , - We are the tenant of a Ground Lease underlying a majority of our Doubletree Seattle Airport property " in our 2024 Annual Report for a discussion of our Park Hotels Portfolio).

On October 22, 2025, we sent the tenant under the Park Hotels master lease a termination notice for all five hotels and commenced litigation against our tenant and Park Intermediate Holdings LLC, guarantor under the master lease, for certain breaches, among other things, related to the maintenance and operations of the hotels.

There are no assurances that we will be able to terminate the master lease or prevail in our litigation.

As of September 30, 2025, our estimated portfolio Ground Rent Coverage was 3.4x (see the "Risk Factors - Our estimated UCA, Combined Property Value and Ground Rent Coverage, may not reflect current market values, including the decline in office values, and may decline materially in future periods , - We rely on Property NOI as reported to us by our tenants, -Our estimates of Ground Rent Coverage for properties in development or transition, or for which we do not receive current tenant financial information, may prove to be incorrect " in our 2024 Annual Report for a discussion of our estimated Ground Rent Coverage).

Below is an overview of the top 10 Ground Leases in our portfolio as of September 30, 2025 (based on gross book value and excluding unfunded commitments):

Rent Escalation

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Fixed with Inflation Adjustments

Columbia Center

Washington, DC

1111 Pennsylvania Avenue

1 unchanged sentence

Fixed with Inflation Adjustments

Columbia Center

Washington, DC

100 Cambridgeside

7 unchanged sentences

however, our tenant at the property pays this cost directly to the third party.

The following tables show our portfolio by top 10 markets and property type as of June 30, 2025, excluding unfunded commitments:

There are no assurances that we will be able to terminate the master lease or prevail in our litigation.

The following tables show our portfolio by top 10 markets and property type as of September 30, 2025, excluding unfunded commitments:

Manhattan (1)

6 unchanged sentences

We have unfunded commitments to certain of our Ground Lease tenants related to leasehold improvement allowances that we expect to fund upon the completion of certain conditions.

As of June 30, 2025, we had $90.5 million of such commitments, excluding commitments to be funded by noncontrolling interests.

We also have an unfunded forward commitment of $35.0 million related to an agreement that we entered into for the addition to an existing Ground Lease if certain conditions are met (refer to Note 15 to the consolidated financial statements).

As of September 30, 2025, we had $84.5 million of such commitments, excluding commitments to be funded by noncontrolling interests.

There can be no assurance that the conditions for closing this transaction will be satisfied and that we will fund the addition to the Ground Lease.

1 unchanged sentence

We refer to these arrangements as performance-based commitments.

As of June 30, 2025, we had $195.9 million of such commitments.

As of September 30, 2025, we had $106.3 million of such commitments.

We also entered into a discretionary commitment to fund up to $9.0 million of preferred equity in an entity that owned the leasehold interest under one of our office Ground Leases located in Washington, DC and through March 31, 2025, we funded $1.5 million of the commitment amount.

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The write-off is included in “Other expense” in our consolidated statement of operations.

We recognized $3.4 million of interest income from sales-type leases from the Ground Lease in our consolidated statements of operations for the six months ended June 30, 2025.

Results of Operations for the Three Months Ended June 30, 2025 compared to the Three Months Ended June 30, 2024

We recognized $5.2 million of interest income from sales-type leases from the Ground Lease in our consolidated statements of operations for the nine months ended September 30, 2025.

Results of Operations for the Three Months Ended September 30, 2025 compared to the Three Months Ended September 30, 2024

For the Three Months Ended

September 30,

(in thousands)

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Net income (loss)

Interest income from sales-type leases increased to $70.6 million for the three months ended June 30, 2025 from $65.2 million for the same period in 2024.

Interest income from sales-type leases increased to $72.4 million for the three months ended September 30, 2025 from $67.1 million for the same period in 2024.

The increase was due primarily to originations of Ground Leases and additional fundings on existing Ground Leases classified as sales-type leases and Ground Lease receivables.

Operating lease income was $16.7 million for both the three months ended June 30, 2025 and 2024.

Operating lease income was $17.0 million and $16.7 million, respectively, for the three months ended September 30, 2025 and 2024.

Operating lease income consists of rent from our operating leases and percentage rent from certain properties, including our Park Hotels Portfolio.

Interest income relates to the Star Holdings Term Loan Facility (refer to Note 7 to the consolidated financial statements) and three leasehold loans we originated during the three months ended June 30, 2025 in connection with Ground Leases.

Interest income relates to the Star Holdings Term Loan Facility (refer to Note 7 to the consolidated financial statements) and leasehold loans we originated during 2025 in connection with Ground Leases.

The increase in 2025 was due primarily to the origination of leasehold loans.

Other income for the three months ended June 30, 2025 and 2024 includes $2.7 million and $4.4 million, respectively, of management fees from Star Holdings.

Other income for both the three months ended June 30, 2025 and 2024 also includes $0.1 million of other income relating to a Ground Lease in which we are the lessee but our tenant at the property pays this expense directly under the terms of a master lease.

Other income for the three months ended June 30, 2025 and 2024 also includes $1.0 million and 1.1 million, respectively, of other ancillary income from our investments.

Other income for the three months ended September 30, 2025 and 2024 includes $2.7 million and $3.7 million, respectively, of management fees from Star Holdings.

Other income for both the three months ended September 30, 2025 and 2024 also includes $0.1 million of other income relating to a Ground Lease in which we are the lessee but our tenant at the property pays this expense directly under the terms of a master lease.

Other income for the three months ended September 30, 2025 and 2024 also includes $0.9 million and 0.8 million, respectively, of other ancillary income from our investments.

Other ancillary income primarily includes sublease income, recoverable expenses and interest income earned on our cash balances.

During the three months ended June 30, 2025 and 2024, we incurred interest expense from our debt obligations of $51.3 million and $49.1 million, respectively.

During the three months ended September 30, 2025 and 2024, we incurred interest expense from our debt obligations of $52.5 million and $50.0 million, respectively.

The increase in 2025 was primarily the result of increased indebtedness to fund acquisition activity.

During the three months ended June 30, 2025 and 2024, we incurred real estate expense of $0.9 million and $1.0 million, respectively, which consisted primarily of the amortization of an operating lease right-of-use asset, legal fees, property taxes and insurance expense.

In addition, during both the three months ended June 30, 2025 and 2024, we also recorded $0.1 million of real estate expense relating to a Ground Lease in which we are the lessee but our tenant at the property pays this expense directly under the terms of a master lease.

Depreciation and amortization during the three months ended June 30, 2025 and 2024 was $2.1 million and $2.5 million, respectively.

During the three months ended September 30, 2025 and 2024, we incurred real estate expense of $1.4 million and $1.0 million, respectively, which consisted primarily of the amortization of an operating lease right-of-use asset, legal fees, property taxes and insurance expense.

In addition, during both the three months ended September 30, 2025 and 2024, we also recorded $0.1 million of real estate expense relating to a Ground Lease in which we are the lessee but our tenant at the property pays this expense directly under the terms of a master lease.

The increase in 2025 was due primarily to legal and consulting fees.

Depreciation and amortization during the three months ended September 30, 2025 and 2024 was $2.1 million and $2.5 million, respectively.

Depreciation and amortization primarily relates to our ownership of the Park Hotels Portfolio and a multi-family property, the amortization of in-place lease assets and depreciation of corporate fixed assets.

1 unchanged sentence

General and administrative expenses primarily includes public company costs such as compensation (including equity-based compensation), occupancy and other costs.

The following table presents our general and administrative expenses for the three months ended June 30, 2025 and 2024 ($ in thousands):

The following table presents our general and administrative expenses for the three months ended September 30, 2025 and 2024 ($ in thousands):

For the Three Months Ended

September 30,

Public company and other costs (1)

1 unchanged sentence

Total general and administrative expenses (2)

(1) For the three months ended June 30, 2025 and 2024, public company and other costs primarily includes compensation, legal, insurance and occupancy costs.

(2) For the three months ended June 30, 2025 and 2024, general and administrative expenses were partially offset by $2.7 million and $4.4 million, respectively, of management fees earned from Star Holdings, which are included in “Other income” in our consolidated statements of operations.

During the three months ended June 30, 2025, we recorded a provision for credit losses of $2.4 million.

The provision for credit losses was due primarily to the origination of three leasehold loans (refer to Note 6 to the consolidated financial statements) during the three months ended June 30, 2025 and current market conditions, including an increase in our Ground Lease cost to value ratios on certain of our assets, and growth in the carrying value of the Ground Lease portfolio during the period.

During the three months ended June 30, 2024, we recorded a provision for credit losses of $0.6 million.

The provision was primarily the result of current market conditions, including an increase in our Ground Lease cost to value ratios on our Ground Lease portfolio.

D uring the three months ended June 30, 2025, other expense consists primarily of legal fees.

During the three months ended June 30, 2024, other expense consists primarily of costs related to our debt obligations.

During the three months ended June 30, 2025, earnings from equity method investments (refer to Note 8 to the consolidated financial statements) decreased to $4.9 million from $6.5 million for the same period in 2024.

The decrease in 2025 was due primarily to a loan repayment at the Leasehold Loan Fund in March 2025.

During the three months ended June 30, 2025, we recorded consolidated income tax expense of $0.9 million, which was primarily attributable to a deferred tax expense at our taxable REIT subsidiary (“TRS”) and relates to equity-based compensation expense and utilization of net operating loss carryovers to which our TRS is a successor.

Included in our consolidated income tax expense for the three months ended June 30, 2025, our TRS recorded current and deferred income tax expense in the amounts of $0.2 million and $0.7 million, respectively.

During the three months ended June 30, 2024, we recorded consolidated income tax expense of $0.9 million, which was attributable to our TRS.

Included in our consolidated income tax expense for the three months ended June 30, 2024, our TRS recorded current and deferred tax expense in the amounts of $0.7 million and $0.2 million, respectively.

(1) For the three months ended September 30, 2025 and 2024, public company and other costs primarily includes compensation, legal, insurance and occupancy costs.

(2) For the three months ended September 30, 2025 and 2024, general and administrative expenses were partially offset by $2.7 million and $3.7 million, respectively, of management fees earned from Star Holdings, which are included in “Other income” in our consolidated statements of operations.

During the three months ended September 30, 2025, we recorded a provision for credit losses of $1.0 million.

The provision for credit losses was due primarily to current market conditions, including an increase in our Ground Lease cost to value ratios on certain of our assets, and growth in the carrying value of the Ground Lease portfolio during the period.

During the three months ended September 30, 2024, we recorded a provision for credit losses of $7.1 million.

The provision for credit losses for the three months ended September 30, 2024 was due primarily to enhancements to our general provision for credit loss methodology, current market conditions and growth in the portfolio during the period.

D uring the three months ended September 30, 2025, other expense consists primarily of fees incurred related to our debt obligations, legal fees and costs incurred with real estate available and held for sale.

During the three months ended September 30, 2024, other expense consists primarily of costs related to our debt obligations.

During both the three months ended September 30, 2025 and 2024, earnings from equity method investments (refer to Note 8 to the consolidated financial statements) was $4.7 million .

During the three months ended September 30, 2025, we recorded consolidated income tax expense of $0.2 million, which was primarily attributable to current and deferred tax expense at our taxable REIT subsidiary (“TRS”).

Included in our consolidated income tax expense for the three months ended September 30, 2025, our TRS recorded current income tax in the amount of $0.4 million and a deferred income tax benefit in the amount of $0.2 million .

During the three months ended September 30, 2024, we recorded consolidated income tax expense of $0.7 million, which was attributable to our TRS.

Included in our consolidated income tax expense, our TRS recorded current tax expense of $0.8 million and a deferred benefit of $0.1 million.

The deferred tax expense relates primarily to equity-based compensation expense and utilization of net operating loss carryovers to which our TRS is a successor.

Results of Operations for the Six Months Ended June 30, 2025 compared to the Six Months Ended June 30, 2024

For the Six Months Ended

Results of Operations for the Nine Months Ended September 30, 2025 compared to the Nine Months Ended September 30, 2024

For the Nine Months Ended

September 30,

(in thousands)

15 unchanged sentences

Net income (loss)

Interest income from sales-type leases increased to $140.3 million for the six months ended June 30, 2025 from $128.5 million for the same period in 2024.

Interest income from sales-type leases increased to $212.7 million for the nine months ended September 30, 2025 from $195.6 million for the same period in 2024.

The increase was due primarily to originations of Ground Leases and additional fundings on existing Ground Leases classified as sales-type leases and Ground Lease receivables.

Operating lease income increased to $38.1 million for the six months ended June 30, 2025 from $37.7 million for the same period in 2024.

Operating lease income increased to $55.1 million for the nine months ended September 30, 2025 from $54.3 million for the same period in 2024.

Operating lease income consists of rent from our operating leases and percentage rent from certain properties, including our Park Hotels Portfolio.

The increase was primarily the result of a $0.3 million increase in percentage rent at our Park Hotels Portfolio.

Interest income relates to the Star Holdings Term Loan Facility (refer to Note 7 to the consolidated financial statements) and three leasehold loans we originated during the six months ended June 30, 2025 in connection with Ground Leases.

Interest income relates to the Star Holdings Term Loan Facility (refer to Note 7 to the consolidated financial statements) and leasehold loans we originated during the nine months ended September 30, 2025 in connection with Ground Leases.

The increase in 2025 was due primarily to the origination of leasehold loans.

Other income for the six months ended June 30, 2025 and 2024 includes $6.3 million and $9.9 million, respectively, of management fees from Star Holdings.

Other income for both the six months ended June 30, 2025 and 2024 also includes $0.3 million of other income relating to a Ground Lease in which we are the lessee but our tenant at the property pays this expense directly under the terms of a master lease.

Other income for the six months ended June 30, 2025 and 2024 also includes $1.5 million and 2.0 million, respectively, of other ancillary income from our investments.

Other income for the nine months ended September 30, 2025 and 2024 includes $9.0 million and $13.6 million, respectively, of management fees from Star Holdings.

Other income for both the nine months ended September 30, 2025 and 2024 also includes $0.4 million of other income relating to a Ground Lease in which we are the lessee but our tenant at the property pays this expense directly under the terms of a master lease.

Other income for the nine months ended

September 30, 2025 and 2024 also includes $2.3 million and 2.8 million, respectively, of other ancillary income from our investments.

Other ancillary income primarily includes sublease income, recoverable expenses and interest income earned on our cash balances.

During the six months ended June 30, 2025 and 2024, we incurred interest expense from our debt obligations of $101.7 million and $97.7 million, respectively.

During the nine months ended September 30, 2025 and 2024, we incurred interest expense from our debt obligations of $154.2 million and $147.7 million, respectively.

The increase in 2025 was primarily the result of increased indebtedness to fund acquisition activity.

During the six months ended June 30, 2025 and 2024, we incurred real estate expense of $2.0 million and $2.1 million, respectively, which consisted primarily of the amortization of an operating lease right-of-use asset, legal fees, property taxes and insurance expense.

In addition, during both the six months ended June 30, 2025 and 2024, we also recorded $0.3 million of real estate expense relating to a Ground Lease in which we are the lessee but our tenant at the property pays this expense directly under the terms of a master lease.

Depreciation and amortization during the six months ended June 30, 2025 and 2024 was $4.3 million and $5.0 million, respectively.

During the nine months ended September 30, 2025 and 2024, we incurred real estate expense of $3.4 million and $3.2 million, respectively, which consisted primarily of the amortization of an operating lease right-of-use asset, legal fees, property taxes and insurance expense.

In addition, during both the nine months ended September 30, 2025 and 2024, we also recorded $0.4 million of real estate expense relating to a Ground Lease in which we are the lessee but our tenant at the property pays this expense directly under the terms of a master lease.

The increase in 2025 was due primarily to legal and consulting fees.

Depreciation and amortization during the nine months ended September 30, 2025 and 2024 was $6.4 million and $7.5 million, respectively.

1 unchanged sentence

General and administrative expenses primarily includes public company costs such as compensation (including equity-based compensation), occupancy and other costs.

The following table presents our general and administrative expenses for the six months ended June 30, 2025 and 2024 ($ in thousands):

For the Six Months Ended

The following table presents our general and administrative expenses for the nine months ended September 30, 2025 and 2024 ($ in thousands):

For the Nine Months Ended

September 30,

Public company and other costs (1)

1 unchanged sentence

Total general and administrative expenses (2)

(1) For the six months ended June 30, 2025 and 2024, public company and other costs primarily includes compensation, legal, insurance and occupancy costs.

(2) For the six months ended June 30, 2025 and 2024, general and administrative expenses were partially offset by $6.3 million and $9.9 million, respectively, of management fees earned from Star Holdings, which are included in “Other income” in our consolidated statements of operations.

During the six months ended June 30, 2025, we recorded a provision for credit losses of $4.6 million.

The provision for credit losses was due primarily to the origination of three leasehold loans (refer to Note 6 to the consolidated financial statements) during the six months ended June 30, 2025 and current market conditions, including an increase in our Ground Lease cost to value ratios on certain of our assets, and growth in the carrying value of the Ground Lease portfolio during the period.

During the six months ended June 30, 2024, we recorded a provision for credit losses of $1.3 million.

The provision in 2024 was primarily the result of current market conditions, including an increase in our Ground Lease to cost value ratios on our Ground Lease portfolio.

D uring the six months ended June 30, 2025, other expense consists primarily of a full write-off of a $1.9 million preferred equity investment in an entity that owned the leasehold interest under one of our Ground Leases (refer to Note 15 to the consolidated financial statements).

During the six months ended June 30, 2024, other expense consists primarily of costs related to our debt obligations.

During the six months ended June 30, 2025, earnings from equity method investments (refer to Note 8 to the consolidated financial statements) decreased to $9.9 million from $13.4 million for the same period in 2024.

in 2025 was due primarily to loan repayments at the Leasehold Loan Fund and us buying one asset from the Ground Lease Plus Fund in January 2024.

During the six months ended June 30, 2025, we recorded consolidated income tax expense of $1.7 million, which was primarily attributable to a deferred tax expense at our TRS and relates to equity-based compensation expense and utilization of net operating loss carryovers to which our TRS is a successor.

Included in our consolidated income tax expense for the six months ended June 30, 2025, our TRS recorded current and deferred tax expense in the amounts of $0.2 million and $1.5 million, respectively.

During the six months ended June 30, 2024, we recorded consolidated income tax expense of $1.4 million, of which $1.3 million was attributable to our TRS.

Included in our consolidated income tax expense for the six months ended June 30, 2024, our TRS recorded a deferred tax expense in the amount of $1.0 million.

The net deferred tax expense relates primarily to equity-based compensation expense and utilization of net operating loss carryovers to which our TRS is a successor.

(1) For the nine months ended September 30, 2025 and 2024, public company and other costs primarily includes compensation, legal, insurance and occupancy costs.

(2) For the nine months ended September 30, 2025 and 2024, general and administrative expenses were partially offset by $9.0 million and $13.6 million, respectively, of management fees earned from Star Holdings, which are included in “Other income” in our consolidated statements of operations.

During the nine months ended September 30, 2025, we recorded a provision for credit losses of $5.7 million.

The provision for credit losses was due primarily to the origination of leasehold loans (refer to Note 6 to the consolidated financial statements) during the nine months ended September 30, 2025 and current market conditions, including an increase in our Ground Lease cost to value ratios on certain of our assets, and growth in the carrying value of the Ground Lease portfolio during the period.

During the nine months ended September 30, 2024, we recorded a provision for credit losses of $8.4 million.

The provision for credit losses for the nine months ended September 30, 2024 was due primarily to enhancements to our general provision for credit loss methodology, current market conditions and growth in the portfolio during the period.

D uring the nine months ended September 30, 2025, other expense consists primarily of a full write-off of a $1.9 million preferred equity investment in an entity that owned the leasehold interest under one of our Ground Leases (refer to Note 15 to the consolidated financial statements) and costs related to our debt obligations.

During the nine months ended September 30, 2024, other expense consists primarily of costs related to our debt obligations.

During the nine months ended September 30, 2025, earnings from equity method investments (refer to Note 8 to the consolidated financial statements) decreased to $14.6 million from $18.1 million for the same period in 2024.

The decrease in 2025 was due primarily to loan repayments at the Leasehold Loan Fund and us buying one asset from the Ground Lease Plus Fund in January 2024.

During the nine months ended September 30, 2025, we recorded consolidated income tax expense of $2.0 million, which was primarily attributable to current and deferred tax expense at our TRS.

Included in our consolidated income tax expense for the nine months ended September 30, 2025, our TRS recorded current and deferred tax expense in the amounts of $0.6 million and $1.4 million, respectively.

During the nine months ended September 30, 2024, we recorded consolidated income tax expense of $2.0 million, which was attributable to our TRS.

Included in our consolidated income tax expense for the nine months ended September 30, 2024, our TRS recorded deferred tax expense in the amount of $0.9 million.

The net deferred tax expense relates primarily to equity-based compensation expense and utilization net operating loss carryovers to which our TRS is a successor.

Liquidity and Capital Resources

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The Commercial Paper Program is backed by our 2024 Unsecured Revolver (see below).

As of June 30, 2025, we had no outstanding balance under the Commercial Paper Program.

As of September 30, 2025, we had no outstanding balance under the Commercial Paper Program.

Borrowings under the Commercial Paper Program reduce amounts otherwise available under the 2024 Unsecured Revolver.

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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 our credit ratings,

with an extended maturity date of May 1, 2029, which includes two six-month extension options.

The 2024 Unsecured Revolver has an extended maturity date of May 1, 2029, which includes two six-month extension options.

On September 12, 2025, the Company entered into an amendment to the 2024 Unsecured Revolver that modified the applicable interest rate thereunder by removing the credit spread adjustment to SOFR.

As a result of that amendment, the 2024 Unsecured Revolver has a borrowing rate of SOFR plus 0.85%, subject to our credit ratings.

The 2024 Unsecured Revolver replaced our nearest term maturities, reduces the overall facility cost and increased our liquidity by $150 million.

Additionally, we gained greater financial flexibility through changes to certain financial covenants.

As of June 30, 2025, there was $1.2 billion of undrawn capacity on the 2024 Unsecured Revolver.

Additionally, we

gained greater financial flexibility through changes to certain financial covenants.

As of September 30, 2025, there was $1.1 billion of undrawn capacity on the 2024 Unsecured Revolver.

In April 2023, we entered into an at-the-market equity offering (the “ATM”) pursuant to which we may sell shares of our common stock up to an aggregate purchase price of $300.0 million.

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Actual sales, if any, will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of our common stock, capital needs, and our determinations of the appropriate sources of funding.

As of June 30, 2025, we had not sold any shares under the ATM.

As of June 30, 2025, we had $13.9 million of unrestricted cash.

As of September 30, 2025, we had not sold any shares under the ATM.

As of September 30, 2025, we had $12.1 million of unrestricted cash.

We also have an aggregate $1.1 billion of undrawn capacity on our 2024 Unsecured Revolver (refer to Note 10 to the consolidated financial statements).

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We expect that we will be able to meet our liquidity requirements over the next 12 months and beyond.

The following table outlines our cash flows provided by (used in) operating activities, cash flows used in investing activities and cash flows provided by financing activities for the six months ended June 30, 2025 and 2024 ($ in thousands):

For the Six Months Ended

The following table outlines our cash flows provided by (used in) operating activities, cash flows used in investing activities and cash flows provided by financing activities for the nine months ended September 30, 2025 and 2024 ($ in thousands):

For the Nine Months Ended

September 30,

Cash flows provided by (used in) operating activities

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Cash flows provided by (used in) financing activities

The increase in cash flows provided by operating activities during 2025 was due primarily to proceeds received from the settlement of derivatives and from an increase in accrued expenses, primarily interest expense, that were not yet paid as of June 30, 2025.

The decrease in cash flows used in investing activities during 2025 was due primarily to a decrease in the origination of Ground Leases in 2025 and the payment of temporary cash collateral for debt obligations in 2024, which was partially offset by the origination of leasehold loans in 2025 and a decrease in distributions from equity method investments in 2025.

The increase in cash flows provided by financing activities during 2025 was due primarily to activity in 2024, including the redemption of noncontrolling interests and the payment of finance costs, which was partially offset by a decrease in contributions from noncontrolling interests.

The decrease in cash flows used in investing activities during 2025 was due primarily to a decrease in the origination of Ground Leases in 2025, which was partially offset by the origination of leasehold loans in 2025 and a decrease in distributions from equity method investments in 2025.

The increase in cash flows provided by financing activities during 2025 was due primarily to activity in 2024, including the acquisition of a noncontrolling interest and the payment of finance costs, which was partially offset by a decrease in contributions from noncontrolling interests.

Supplemental Guarantor Disclosure

In March 2020, the Securities and Exchange Commission (“SEC”) adopted amendments to Rule 3-10 of Regulation S-X and created Rule 13-01 to simplify disclosure requirements related to certain registered securities.

The amendments became effective on January 4, 2021.

amendments became effective on January 4, 2021.

In April 2023, we and Portfolio Holdings filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of Portfolio Holdings, which will be fully and unconditionally guaranteed by us.

As of June 30, 2025, Portfolio Holdings had issued and outstanding four tranches of unsecured senior notes with varying fixed-rates and maturities ranging from June 2031 to January 2035, which were registered on the Form S-3 filed in April 2023 or on a Form S-3 filed by Safehold Inc.

As of September 30, 2025, Portfolio Holdings had issued and outstanding four tranches of unsecured senior notes with varying fixed-rates and maturities ranging from June 2031 to January 2035, which were registered on the Form S-3 filed in April 2023 or on a Form S-3 filed by Safehold Inc.

and Portfolio Holdings (then known as Safehold Operating Partnership LP) prior to its merger with the Company (then known as iStar Inc.).

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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-Q

Item 2. Management’s Discussion and Analysis