Key Highlights

  • Revenue rose 23% to USD 118.7 million, and Net Income to common shareholders was USD 28.8 million.
  • Originations were USD 38 million across two new ground leases at a 7.3% economic yield.
  • Estimated unrealized Capital appreciation increased to USD 9.9 billion against total portfolio gross Book Value of USD 7.4 billion.
  • Cash and Credit Facility availability was USD 1.3 billion, and remaining joint Venture Capital was USD 400 million.

Earnings Per Share Unchanged

Safehold Inc. (NYSE:SAFE), the New York-based ground Lease company, reported third-quarter 2026 Revenue of USD 118.7 million, up 23% from USD 96.2 million. Net income attributable to common shareholders was USD 28.8 million, compared with USD 29.3 million, a decline of 2%, and Earnings Per Share were USD 0.41 in both periods. The company attributes the flat result to net accretion from asset fundings and new originations, offset by lower management fee revenue from Star Holdings and higher non-cash general provisions.

For the nine months, revenue was USD 344.2 million versus USD 287.7 million, net income was USD 87.8 million versus USD 86.6 million, and earnings per share were USD 1.23 versus USD 1.21. The diluted share count was 71.0 million versus 71.8 million. Chairman and Chief Executive Officer Jay Sugarman said the company converted additional multifamily ground leases in the quarter at low ground lease to value ratios, and that recent higher rates have added Volatility to transaction markets.

Analyst estimates were EPS of USD 0.43 against reported EPS of USD 0.41, and revenue of USD 117.4 million against reported revenue of USD 118.7 million.

Originations and Fundings

Originations in the quarter were USD 38 million, made up of two new ground leases with a ground lease to value of 39%, underwritten rent coverage of 2.7 times and an economic Yield of 7.3%. Of that amount, USD 25 million was funded and USD 13 million was unfunded forward commitments, which remain subject to conditions. Total fundings were USD 112 million, comprising USD 25 million of new ground leases at a 7.2% economic yield, USD 82 million of fundings on existing ground leases at a 7.4% economic yield and USD 5 million of leasehold loans at SOFR plus 425 basis points.

The total portfolio had aggregate gross book value of USD 7.4 billion across 174 assets, with a ground lease to value of 52% and rent coverage of 3.4 times. Multifamily was 113 of those assets, 45% of the portfolio, with a ground lease to value of 38% and rent coverage of 3.3 times. The core ground lease portfolio had gross book value of USD 7.3 billion on a 92-year weighted average lease term including extensions, with yields of 3.9% annualized cash, 5.5% annualized and 6.1% economic.

Capital and Debt

Debt consisted of USD 2.8 billion of unsecured debt, USD 1.3 billion of non-recourse secured debt, a USD 765 million unsecured revolver balance and USD 270 million of pro rata joint venture debt, for a total of USD 5.1 billion, reflecting USD 5.12 billion of outstanding Debt less USD 30 million of unrestricted cash. The chief executive described the company as having liquidity, no significant near-term maturities and an 18-year Liability structure. Of the remaining USD 400 million of joint venture capital with a leading sovereign Wealth fund, USD 220 million comes from the company and USD 180 million from its partner. A forward commitment of USD 120 million is excluded from the core portfolio gross book value. Manhattan was the largest market at 21% of gross book value.

Items to Follow

The pace of new originations, the funding of forward commitments and rates in transaction markets are the items to follow.