Safehold Originations Fall After a $150 Million Second Quarter

The Tip Desk · November 10, 2026 · 3 min read

Third-quarter revenue was $118.7 million and GAAP earnings were $0.41 a share as new ground-lease closings dropped to $38 million.

Safehold Inc. (SAFE) closed $38 million of new ground lease originations in the third quarter of 2026, a sharp step-down from $150 million of new ground lease originations in the second quarter and $68 million of new originations in the first quarter.

The ground-lease REIT said the $38 million comprised two ground leases in two markets with two sponsors, including $25 million funded and $13 million of unfunded forward commitments. Chairman and Chief Executive Officer Jay Sugarman said the company was pleased to convert additional multifamily ground leases at attractive yields and low GLTVs, and that a recent rise in rates had added incremental volatility to transaction markets.

Revenue was $118.7 million, up 23% from $96.2 million a year earlier. Net income attributable to common shareholders was $28.8 million, down 2% from $29.3 million in the third quarter of 2025. GAAP earnings were $0.41 a share, unchanged from $0.41 a year earlier. The company said GAAP net income and EPS were flat year over year primarily due to net accretion from asset fundings and new originations offset by lower management fee revenue from Star Holdings and higher non-cash general provisions.

Fundings totaled $112 million: $25 million of new ground leases at a 7.2% economic yield, $82 million of existing ground leases at a 7.4% economic yield, and $5 million of leasehold loans at SOFR plus 425. Interest income from sales-type leases was $78.8 million, versus $72.4 million a year earlier. Operating lease income was $15.8 million, versus $17.0 million.

Hotel revenues of $18.0 million appeared after Safehold became responsible for operating two Park Hotels properties following a December 2025 master-lease non-extension. Hotel expenses were $14.7 million and Park Hotels cash NOI was $4.4 million, versus $2.2 million in the third quarter of 2025. Interest expense was $55.9 million, versus $52.5 million a year earlier. The provision for credit losses was $1.7 million, versus $1.0 million.

Estimated unrealized capital appreciation increased to $9.9 billion from $9.8 billion in the second quarter and $9.5 billion in the first quarter. Total portfolio aggregate GBV was $7.4 billion. The core ground lease portfolio had a $7.3 billion GBV and a 92-year weighted-average lease term with extensions. Gross book value of the core portfolio was $7.26 billion and aggregate GBV $7.38 billion as of September 30, 2026, versus $6.92 billion and $7.01 billion a year earlier.

The portfolio held 174 assets, including 113 multifamily properties, 65% of the portfolio by count and 62% of estimated UCA. Cash and credit facility availability was $1.3 billion. Debt was $5.09 billion with corporate leverage of 2.04x, a cash interest rate of 3.9% and an effective interest rate of 4.4%. Unencumbered assets were $5.13 billion and cash and credit facility availability $1.26 billion. Net investment in sales-type leases was $3.73 billion and ground lease receivables, net $2.21 billion as of September 30, 2026, versus $3.56 billion and $2.00 billion at year-end 2025.

Sugarman said the company is well-positioned with ample liquidity, no significant near-term maturities and an 18-year liability structure to capitalize on opportunities. Remaining capital for a joint venture with a leading sovereign wealth fund was $400 million, with Safehold contributing $220 million and the partner $180 million.