Safehold

Safehold buys the land beneath a commercial property and leases it back to the operator on a 99-year, triple-net basis. The building owner pays monthly ground rent — typically set at a yield of 4% to 6% of Safehold’s land purchase price — while Safehold funds its acquisitions with corporate debt at a lower blended cost. The spread between the lease yield and Safehold’s cost of capital constitutes its core earnings, with ground leases structured to include periodic rent escalations tied to CPI or fixed schedules.

Jay Sugarman, the founder and CEO, leads all investment decisions as Chairman of the board and the largest individual shareholder. He previously built iStar Financial into one of the largest publicly traded commercial real estate finance companies in the US. The investment committee operates within a single corporate structure without external limited partners, giving Sugarman and his senior team full discretion over capital allocation without fundraising cycles or LP constraints.

No. Safehold elected to be taxed as a taxable REIT subsidiary, which means it pays corporate income tax and retains earnings rather than being required to distribute 90% of taxable income as dividends. This structure lets the company compound capital internally — building equity through retained earnings rather than dilutive equity raises — which is unusual among public real estate companies. iStar, the firm’s largest shareholder, was a REIT until its merger with Safehold in 2024.

Jay Sugarman created Safehold as a subsidiary of iStar Inc. in 2017, then spun it off as a separate public company. iStar remained Safehold’s largest shareholder and external manager until re-merging the two entities in March 2024 — effectively collapsing the external management structure into a unified public company. Sugarman continues to serve as CEO of the combined entity, which kept the Safehold name and NYSE ticker SAFE.

No — that is the core structural feature. Safehold owns only the land, not the building, and all ground leases are triple-net, meaning the tenant (the building owner) bears all costs of property taxes, insurance, and maintenance. Even if the building is foreclosed by the building owner’s lender, Safehold’s ground lease remains senior to the mortgage, making it structurally insulated from both development delays and property-level operating risk.

The firm writes ground leases across multifamily, office, life sciences, hospitality, and industrial assets in major coastal and high-growth Sun Belt markets. Deals typically range from $30M to over $300M in land value, with an increasing share of smaller-balance originations run through the Caret unit launched in 2022. Safehold targets institutional-quality buildings operated by established sponsors, maintaining an average ground lease yield above 5% across the portfolio.

Safehold funds its ground lease acquisitions through a combination of unsecured corporate bonds, term loans, preferred stock, and retained earnings — it does not operate commingled funds or charge management fees. The firm has investment-grade credit ratings from Moody’s and S&P, giving it access to public debt markets. In 2023, Safehold raised equity capital from a sovereign wealth fund partner to accelerate originations, but the vehicle remains a single corporate balance sheet rather than a series of blind-pool funds.