Safehold Inc. filed a Form 8-K on November 3, 2026, disclosing an estimated unrealized capital appreciation of $9,867 million in its owned residual ground lease portfolio as of September 30, 2026.

Key Highlights

  • Estimated UCA: As of September 30, 2026, the unrealized capital appreciation in Safehold's owned residual portfolio is $9,867 million in the aggregate, according to the filing.
  • Definition of UCA: The company defines UCA as the aggregate "Combined Property Value" of its Ground Lease portfolio in excess of the aggregate cost basis of that portfolio.
  • Independent valuation firm: CBRE, Inc. was engaged to prepare initial and periodic updated reports of the Combined Property Value associated with each Ground Lease.
  • Target investment range: The company disclosed that it generally targets Ground Lease investments where the initial cost represents 30% to 45% of the Combined Property Value.
  • Merger background: On March 31, 2023, Old Safehold Inc. merged with and into iStar Inc., with iStar surviving and changing its name to "Safehold."
  • Valuation methodology: CBRE uses a hypothetical fee simple value, applying the sales comparison approach and the income capitalization approach, without factoring in the in-place Ground Lease.

Safehold's Ground Lease Portfolio UCA Methodology and September 2026 Estimate

Safehold Inc. (NYSE:SAFE), a Maryland corporation headquartered in New York, filed this Form 8-K under Item 8.01 (Other Events) disclosing its latest estimate of unrealized capital appreciation in its owned residual portfolio. According to the filing, the company has a formal policy to periodically determine an estimate of the UCA in the real properties it has the right to acquire under the residual provisions of its Ground Leases. The filing states that as of September 30, 2026, that estimated UCA is $9,867 million in the aggregate.

The filing explains that Safehold's Ground Leases typically contain residual rights providing that, following expiration or earlier termination of a lease, the company regains possession of the underlying land and receives title to buildings and other improvements for no additional consideration. The company disclosed that it tracks this unrealized appreciation because it believes the metric provides relevant information about the safety of its position in a tenant's capital structure, the quality of long-term cash flows, and changes in Combined Property Value that revert to the company under those residual rights. The filing notes that where the initial cost of a Ground Lease equals 35% of the Combined Property Value, "the balance of 65% of the Combined Property Value represents potential value accretion to us upon the reversion of the property at lease expiration or upon an earlier uncured tenant default, assuming no intervening decline in the Combined Property Value."

To produce its Combined Property Value estimates, the company disclosed that it engaged CBRE, Inc., whose personnel hold the Member of Appraisal Institute (MAI) designation and follow Uniform Standards of Professional Appraisal Practices. CBRE's analysis uses a hypothetical fee simple value, applying both the sales comparison approach and the income capitalization approach. The filing notes that for newly acquired Ground Leases or those involving new construction, until CBRE's initial report is furnished, management's internal estimates are used in the Combined Property Value calculation. The filing also cautions that "the market value of each property may vary considerably from the hypothetical value presented in CBRE's report."

What Was Disclosed

Safehold Inc. disclosed its estimated unrealized capital appreciation of $9,867 million in its owned residual ground lease portfolio as of September 30, 2026, along with the methodology and valuation policy it uses to arrive at that figure.