Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 | FORM 10-Q | | | --- | --- | | (Mark One) | | | ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | For the quarterly period ended | | | September 30, 2023 | | | OR | | | ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | For the transition period from to | | | Commission File No. 001-15371 | | | Safehold Inc. | | | (Exact name o ...

Financial Data and Key Metrics Changes - For Q3 2023, GAAP revenue was $85.6 million, net income was negative $123.0 million, and earnings per share was negative $1.81 [49] - Excluding non-recurring items, net income was positive $22.5 million, and earnings per share was positive $0.33 [19][21] - The total portfolio at quarter end was valued at $6.4 billion, with an unrealized capital appreciation of $10 billion [7][18] Business Line Data and Key Metrics Changes - The ground lease portfolio now consists of 135 assets, having grown 19 times since the IPO, with estimated unrealized capital appreciation increasing 23 times since the IPO [17] - In Q3, the company funded a total of $88 million, earning a blended yield of 6.6% across three categories [16] - The portfolio's cash yield is currently 3.5%, with an annualized GAAP yield of 5.2% [24][63] Market Data and Key Metrics Changes - The company noted that commercial real estate investment activity remains muted, with a significant gap between buyers and sellers due to volatility in rates and liquidity issues [12] - The geographic breakdown of the portfolio shows diversification, with the top 10 markets representing approximately 70% of the portfolio [29] Company Strategy and Development Direction - The company aims to expand its ground lease ecosystem and explore new sources of capital and product initiatives to adapt to the current environment [6][41] - The management expressed confidence in the durability of the asset base and balance sheet, planning to be opportunistic yet disciplined in capital allocation [12][35] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging interest rate cycle, indicating that this has been one of the worst markets for fixed income investments on record [4] - The company received a credit rating upgrade from Moody's to A3 with a stable outlook, which is expected to provide long-term benefits [33] Other Important Information - The company raised $152 million in new equity at a gross price of $21.40 per share, which was viewed favorably by creditors and rating agencies [43][44] - The company ended the quarter with $858 million of liquidity, enhanced by unused capacity in its joint venture [14][30] Q&A Session Summary Question: What is the current deal flow pipeline? - Management indicated that there is less confidence in the pipeline due to recent market conditions, with some transactions falling apart at the closing table [68][89] Question: How does the company view its value proposition to sponsors in the current rate environment? - Management stated that the company remains the most efficient source of capital, despite changes in the cost of capital [72] Question: What is the impact of the recent credit rating upgrade on debt costs? - The upgrade is expected to save approximately 30 to 50 basis points on debt costs once a second A rating is achieved [91] Question: What is the company's approach to underwriting and rent coverage? - The company takes a conservative approach in underwriting, with a focus on maintaining consistent credit metrics [94][133] Question: Are there plans to explore other asset classes beyond multifamily? - Management confirmed that while multifamily remains a focus, they are also exploring other asset classes, though these may have less liquidity [134]

15 A P P E N D I X Unrealized Capital Appreciation Details Refer to the Glossany in the Appendix (or a clefinition of Denedized Captal Appreciation ("UCA"), and "Combinet Propedy Value" ("CPV"). SAFE relies in part on OBRE: svalusi our portblio in calculating UCA S4FE may ultize management's essimate of CPV for ground lease investments recently acquired that O3RE has nd yet evaluated. For corstruction bild inclusive of the land. OPV is a hypothetical value of the as-improved subject property, based on an as ...

Q2'23 Earnings Results Q2'23 Highlights | --- | --- | --- | |----------------------------------------------------|--------------------------------------|---------------------------------------------------------| | | | | | $500 Million | $816 Million | $2.0 Billion | | Joint Venture with Leading Sovereign Wealth Fund4 | Cash & Credit Facility Availability5 | Caret Valuation Based on Most Recent Investment Round6 | Aggregate GBV (Ground Leases) $73m Earnings Results Portfolio Yields Portfolio Diversification ...

Financial Data and Key Metrics Changes - Revenue for the quarter was $85.7 million, with net income at $22.1 million and earnings per share at $0.35, both figures reflecting similar performance to pre-merger levels [71][72] - The company ended the quarter with over $800 million in liquidity and a total debt of approximately $4.3 billion, which includes $1.5 billion in unsecured notes and $1 billion drawn on the unsecured revolver [44][55] - The effective interest rate on permanent debt is 3.8%, with a cash interest rate of 3.3%, indicating a spread to the portfolio's GAAP annualized yield of 5.2% [78] Business Line Data and Key Metrics Changes - The company originated three new ground leases totaling $129 million, with $73 million funded during the quarter [68][45] - The weighted average GLTV (Ground Lease to Value) for the new originations was 31%, with a ground rate coverage of 2.5 times [46] - The portfolio consists of approximately 34 million square feet of institutional quality commercial real estate, including 17,300 multifamily units and 12.6 million square feet of office space [47] Market Data and Key Metrics Changes - The company reported a stable GLTV at 42% and noted no significant changes in appraisals for properties in its portfolio [10][67] - The market remains dislocated, with volumes significantly lower than previous highs, but there are signs of improvement in the ground lease capital solution [42][40] - Approximately 70% of gross book value is diversified across the top 10 markets, emphasizing the focus on institutional quality ground leases [17] Company Strategy and Development Direction - The company aims to expand its leadership position in the ground lease industry and is focused on building a deal pipeline in a higher rate environment [40][56] - The management is optimistic about the potential for growth as the market stabilizes and believes that the company could benefit from the end of the current tightening cycle [43] - The company is exploring various asset classes, including multifamily and hospitality, while remaining selective in its investments [30][45] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of a functioning financing market and noted that a complete pullback from commercial real estate would be detrimental [11] - The company is encouraged by recent momentum in its pipeline, particularly in the housing sector, and is optimistic about future transactions [99][100] - Management acknowledged the challenges posed by elevated short-term borrowing rates but remains focused on capital allocation and maintaining liquidity [74][96] Other Important Information - The company has executed $500 million in floating to fixed swaps to mitigate adverse earnings effects from Fed rate hikes [52] - Stock-based compensation for the quarter was approximately $8 million, reflecting the company's new long-term incentive plans [51] - The company has a weighted average debt maturity of approximately 23 years, with no corporate maturities due until 2026 [96] Q&A Session Summary Question: What does the pipeline look like right now? - Management indicated that the pipeline is showing signs of improvement, with several transactions in the closing process, primarily in the housing space [99] Question: Can you discuss the allocation of new investments? - The company clarified that most of the recent activity was on balance sheet rather than through the joint venture, with future transactions likely to be funneled through the venture [84] Question: How are you thinking about equity needs over the next year? - Management acknowledged the current stock price challenges but emphasized the importance of maintaining sufficient liquidity and capital allocation strategies [116]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q | (Mark One) | | | --- | --- | | ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | For the quarterly period ended | | | June 30, 2023 | | | OR | | ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | | For the transition period from to | | | Commission File No. 001-15371 | | | Safehold Inc. | | | (Exact name of registr ...

[PART I: Consolidated Financial Information](index=3&type=section&id=PART%20I%20Consolidated%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements%3A) This section presents Safehold Inc.'s unaudited consolidated financial statements for Q1 2023 and 2022, detailing the impact of the iStar merger and significant accounting policies [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $6.29 billion as of March 31, 2023, primarily due to higher debt obligations and the iStar merger, which also slightly increased total equity Consolidated Balance Sheet Highlights (In thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$6,290,562** | **$5,850,922** | | Net investment in sales-type leases | $3,139,831 | $3,106,599 | | Ground Lease receivables, net | $1,431,478 | $1,374,716 | | Goodwill | $155,797 | $0 | | **Total Liabilities** | **$4,092,424** | **$3,686,307** | | Debt obligations, net | $3,901,838 | $3,521,359 | | **Total Equity** | **$2,179,127** | **$2,145,604** | - The merger with iStar resulted in the recognition of **$155.8 million** in goodwill and a new **$112.2 million** net loan receivable to a related party (Star Holdings)[8](index=8&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Total revenues grew 29.8% year-over-year to $78.3 million in Q1 2023, but net income significantly declined due to increased costs and merger-related expenses Quarterly Operating Results (In thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total Revenues | $78,329 | $60,363 | | Total Costs and Expenses | $75,875 | $37,732 | | Net Income | $4,716 | $24,907 | | Net Income Attributable to Common Shareholders | $4,682 | $24,873 | | Diluted EPS | $0.07 | $0.42 | - General and administrative expenses increased to **$15.1 million** from **$9.2 million**, and other expenses rose to **$14.1 million** from **$0.1 million**, mainly due to costs associated with the iStar merger[13](index=13&type=chunk)[14](index=14&type=chunk) [Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The company reported a comprehensive loss of $22.8 million for Q1 2023, primarily driven by a significant unrealized loss on derivatives Comprehensive Income (Loss) (In thousands) | Description | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net Income | $4,716 | $24,907 | | Other Comprehensive Income (Loss) | $(27,481) | $5,289 | | - Unrealized gain (loss) on derivatives | $(28,424) | $4,256 | | **Comprehensive Income (Loss) Attributable to Safehold Inc.** | **$(22,799)** | **$30,162** | [Consolidated Statements of Changes in Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased to $2.179 billion in Q1 2023, influenced by net income, dividends, AOCI changes, and merger-related considerations - Key changes in equity for Q1 2023 include net income of **$4.7 million**, dividends of **$11.1 million** (**$0.177 per share**), a **$27.5 million** loss in AOCI, and **$35.6 million** in merger consideration[20](index=20&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash used in operating activities was $6.8 million in Q1 2023, while financing activities provided $276.6 million, primarily from debt proceeds Summary of Cash Flows (In thousands) | Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Cash flows (used in) provided by operating activities | $(6,813) | $24,599 | | Cash flows used in investing activities | $(269,933) | $(435,185) | | Cash flows provided by financing activities | $276,645 | $528,339 | | **Change in Cash** | **$(101)** | **$117,753** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail the reverse merger with iStar, adoption of new accounting standards, portfolio specifics, debt structure, equity plans, and related-party transactions - On March 31, 2023, Old SAFE merged with iStar in a reverse acquisition, with Old SAFE as the accounting acquirer[27](index=27&type=chunk)[30](index=30&type=chunk)[35](index=35&type=chunk) - The combined company is now internally managed and named Safehold Inc[27](index=27&type=chunk)[30](index=30&type=chunk)[35](index=35&type=chunk) - The company adopted the new credit loss standard (ASU 2016-13) on January 1, 2023, recording a cumulative effect adjustment to retained earnings and establishing an initial allowance for credit losses[91](index=91&type=chunk) - In connection with the merger, the company originated a **$115.0 million**, **8.00%** four-year term loan to Star Holdings, the entity spun off with iStar's legacy assets[41](index=41&type=chunk)[106](index=106&type=chunk) - Subsequent to the quarter end, in April 2023, the company established a **$300 million** at-the-market (ATM) equity offering program and entered a new **$500 million** joint venture with a sovereign wealth fund[228](index=228&type=chunk)[232](index=232&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the iStar merger's impact, portfolio composition, and Q1 2023 financial results, highlighting revenue growth, net income decline, and strong liquidity - The merger with iStar was completed on March 31, 2023, creating an internally-managed, pure-play Ground Lease company[236](index=236&type=chunk) - The historical financial statements of Old SAFE are now the historical statements of the combined company[236](index=236&type=chunk) - As of March 31, 2023, the portfolio's gross book value was diversified by property type: **44%** office, **37%** multi-family, **12%** hotels, **4%** life science, and **3%** other[241](index=241&type=chunk) Unrealized Capital Appreciation (UCA) (In millions) | | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Combined Property Value | $16,034 | $16,529 | | Ground Lease Cost | $6,008 | $6,008 | | **Unrealized Capital Appreciation** | **$10,026** | **$10,521** | - The company has total unfunded commitments of **$697.7 million**, comprising **$238.3 million** for leasehold improvements, **$319.6 million** for forward acquisitions, and **$139.8 million** through the Leasehold Loan Fund[270](index=270&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate volatility on its floating-rate debt, with a 100 basis point increase potentially decreasing annual net income by $10.7 million - The company's main market risk is interest rate volatility on its **$1.1 billion** of floating-rate debt as of March 31, 2023[306](index=306&type=chunk)[309](index=309&type=chunk) Estimated Annual Change in Net Income from Interest Rate Shifts (In thousands) | Change in Interest Rates | Net Income (Loss) | | :--- | :--- | | +100 Basis Points | $(10,700) | | +50 Basis Points | $(5,350) | | -50 Basis Points | $5,350 | | -100 Basis Points | $10,700 | [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2023[312](index=312&type=chunk) - No material changes were made to the company's internal control over financial reporting during the first quarter of 2023[313](index=313&type=chunk) [PART II: Other Information](index=56&type=section&id=PART%20II%20Other%20Information) [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) Stockholder complaints related to the merger were voluntarily dismissed without consideration, and no other material legal proceedings are currently pending - Lawsuits filed by two purported stockholders in connection with the merger were voluntarily dismissed by the plaintiffs without any consideration from the company[317](index=317&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported for the period, consistent with prior SEC filings - No material changes to risk factors were reported for the period[320](index=320&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued unregistered common stock to its Former Manager for management fees in Q1 2023, with no common stock repurchases during the quarter - In Q1 2023, the company issued a total of **330,772 shares** of common stock to its Former Manager as payment for management fees, relying on a registration exemption under the Securities Act[322](index=322&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) None [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including merger agreements, corporate governance documents, and various material contracts

Financial Data and Key Metrics - Net income for Q1 2023 was $26.3 million, with earnings per share at $0.41, reflecting a year-over-year decline primarily due to increased interest expenses on borrowings under the revolving credit facility [2] - Revenue for Q1 2023 was $78.3 million, with net income of $4.7 million and earnings per share of $0.07 [67] - The portfolio's cash yield is 3.4%, with an annualized yield of 5.2% assuming a 0% inflation environment [80] - The inflation-adjusted yield, including CPI escalators and CARET value, is approximately 7.2% [81][102] Business Line Data and Key Metrics - Approximately 70% of the gross book value is diversified across the top 10 markets, with 68 out of 131 ground leases in these markets [4] - Multi-family properties now represent over 50% of the portfolio by count, reflecting significant diversification efforts [103] - The company closed on $500 million incremental unsecured revolver, increasing total revolving credit lines to $1.85 billion [5] Market Data and Key Metrics - The company's portfolio is diversified across top 30 MSAs, with a focus on long-term benefits from ground leases [4] - The weighted average debt maturity is approximately 23 years, with no corporate maturities due until 2026 [82] - The company has $900 million of cash and credit facility availability at the end of Q1 2023 [94] Company Strategy and Industry Competition - The company aims to diversify its portfolio by market and asset class, with a focus on multi-family properties and expanding into markets like the Southeast and Boston [65] - The company believes ground leases offer one of the best risk-adjusted opportunities in real estate, with long-term low-risk contractual cash flows and inflation kickers [76] - The company is leveraging its capital structure, with a weighted average debt maturity of 23 years and no near-term maturities, to navigate market uncertainty [83] Management Commentary on Operating Environment and Future Outlook - Management highlighted the challenging market backdrop, with transaction activity slowing due to liquidity issues and bank challenges [94] - The company remains optimistic about the multi-family space and expects transaction activity to pick up once liquidity reemerges [101] - Management emphasized the importance of long-term low-cost capital provided by ground leases, especially in a volatile market environment [75] Other Important Information - The company completed a $500 million joint venture with Sovereign Wealth Funds to pursue ground lease investment opportunities, diversifying capital sources [66] - The company received a positive outlook change from Fitch and Moody's, moving closer to a Single-A rating [44] - The company has $4.2 billion of debt, with a weighted average interest rate of 3.8% on permanent debt [104] Q&A Session Summary Question: Impact of the merger on future earnings - The merger is expected to provide operating leverage over time, with a potential $2-3 million pickup in net G&A from Q1 to Q2 [31] Question: Pricing and yield expectations for future transactions - The company targets cash yields in the low-4s to mid-4s and inflation-adjusted yields in the mid-6s to high-6s [90] Question: Geographic diversification and market exposure - The company is looking to increase exposure in markets like the Southeast and Boston, while maintaining a diversified portfolio [65][116] Question: Financing strategy and debt structure - The company is exploring various financing options, including different tenors and structures, to optimize debt costs [14][110] Question: Impact of bank lending environment on ground leases - The company believes the bank pullback could increase demand for ground leases as owners seek long-term, low-cost capital [124] Question: Valuation and portfolio revaluation - Approximately 40% of the portfolio was revalued by CBRE, with potential for further adjustments due to market conditions [64]

Safehold Q1'23 Earnings Results Forward-Looking Statements and Other Matters This presentation may contain forward-looking statements. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements can be identified by the use of words such as "illustrative", "representative", "expect", "plan", "will", "estimate", "project", "intend", "believe", and other similar expressions that do not relate to historical matters, and include estimates of UCA and I ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-15371 iStar Inc. (Exact name of registrant as specified in its charter) | Maryland | 95-6881527 | | --- | --- | | (State ...