SAFE

Safehold Inc. Form 8-K Summary

Business Context and Reporting Period

This Current Report on Form 8-K was filed by Safehold Inc. on August 5, 2025, regarding events occurring as of June 30, 2025. Safehold Inc. (formerly iStar Inc. following a 2023 merger) operates as a ground lease investment company. It conducts business through Safehold GL Holdings LLC, holding long-term ground leases with residual rights to acquire the underlying properties upon lease expiration or tenant default.

Key Financial Metrics

The filing discloses specific metrics related to the company's "Owned Residual Portfolio" as of June 30, 2025. Standard financial statement items such as revenue, net income, operating cash flow, and debt levels are not provided in this specific filing.

Note: The Combined Property Value includes $291.1 million related to unfunded commitments. The Ground Lease Cost includes $90.5 million of unfunded commitments. These figures exclude term loans to Star Holdings, leasehold loan fund assets, and amounts attributable to noncontrolling interests.

Material Changes and Valuation Methodology

The filing details the methodology for calculating Unrealized Capital Appreciation (UCA), defined as the aggregate Combined Property Value in excess of the aggregate cost basis. Independent valuations are performed by CBRE, Inc., utilizing sales comparison and income capitalization approaches. Key valuation assumptions by property type include:

• Hotels: Stabilized occupancy 61.00% - 83.00%; Going-in cap rates 5.25% - 8.75%.
• Office: Stabilized occupancy 80.00% - 99.00%; Overall cap rates 5.25% - 11.00%.
• Multi-Family: Stabilized occupancy 92.00% - 98.00%; Overall cap rates 4.25% - 6.50%.
• Life Science: Stabilized occupancy 90.00% - 96.00%; Overall cap rates 5.50% - 7.25%.

The filing does not provide a comparative UCA figure for the prior period to calculate a specific percentage change, though it notes that rolling valuations may not reflect current market conditions.

Outlook, Risks, and Contingencies

Management emphasizes that UCA is a non-GAAP measure not subject to independent audit and may not reflect current market values. Significant risks and contingencies include:

• Realization Risk: There is no assurance that the estimated UCA will be realized, as properties are leased for long terms (30 to 99 years). Value realization depends on lease expiration, tenant default, or sale.
• Tenant Rights: Certain leases contain provisions that may limit UCA realization, including tenant rights to level buildings, purchase options, buy-out options (e.g., in year 49 of a lease), and preemptive rights.
• Third-Party Land Ownership: A majority of the land underlying one property is owned by a third party and leased to Safehold until 2044; UCA for this property is excluded from the total estimate.
• Market Volatility: Commercial real estate values are subject to market fluctuations, including potential declines in office values.

Regarding equity incentives, as of June 30, 2025, the Company owned 84.3% of outstanding Caret units. Certain executive awards are subject to cliff vesting on March 31, 2027, contingent on the stock price averaging $60.00 or more for 30 consecutive trading days.

Investor Verification Checklist

• Verify the specific valuation assumptions (cap rates, occupancy) used by CBRE for the company's largest properties to assess sensitivity to market changes.
• Review the "Risk Factors" in the most recent Form 10-K for details on tenant purchase options and buy-out clauses that could cap upside potential.
• Confirm the status of the $291.1 million in unfunded commitments included in the Combined Property Value and the likelihood of funding.
• Monitor the stock price trajectory relative to the $60.00 threshold required for the vesting of executive Caret units.
• Assess the impact of the 2044 expiration of the third-party ground lease on the specific property excluded from the UCA calculation.