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Safehold Inc. (NYSE:SAFE), a real estate investment trust currently trading at a price-to-book ratio of 0.55, has amended its credit and management agreements with Star Holdings, according to a recent SEC filing. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 40.02, indicating robust ability to meet its obligations. The amendments, effective as of Thursday, involve extending a term loan’s maturity date and adjusting management fees and termination payments.
The term loan credit agreement, initially dated March 31, 2023, and first amended on October 4, 2023, received its second amendment on March 28, 2025. The new terms extend the maturity of the term loan facilities to March 31, 2028, from their previous due date. Additionally, Star Holdings now has the option to re-borrow repaid amounts on the $25 million incremental facility for approved uses. The amendment also allows Star to buy back up to $10 million of its common shares in cash. This comes as Safehold’s stock has experienced a significant 30.33% decline over the past six months, though InvestingPro analysis indicates the stock is currently trading near its Fair Value.
As of the amendment date, the term loan’s outstanding principal was $115 million, with no borrowings on the incremental facility.
Furthermore, Safehold Management Services Inc., a wholly-owned subsidiary of Safehold Inc., has also amended its management agreement with Star Holdings. The annual management fee for the period from April 1, 2026, to March 31, 2027, has increased from $5 million to $7.5 million. In certain termination scenarios, the "Termination Fee" due to the Manager has risen from $50 million to $55 million, less any management fees previously paid.
These amendments reflect adjustments in the ongoing financial and managerial relationship between Safehold Inc. and Star Holdings. The details of the amendments are available in the exhibits attached to the SEC filing.
This report is based on a press release statement and the SEC filing by Safehold Inc.
In other recent news, Safehold Inc. announced a significant unrealized capital appreciation (UCA) in its portfolio, amounting to approximately $9.128 billion as of December 31, 2024. This UCA reflects the excess of the Combined Property Value over the cost basis of the company’s ground lease investments, with the Combined Property Value estimated at $15.523 billion against a ground lease cost of $6.395 billion. Additionally, Safehold declared a quarterly dividend of $0.177 per common share for the first quarter of 2025, maintaining its commitment to providing shareholders with consistent income.
JMP Securities adjusted its outlook on Safehold, lowering the price target from $35.00 to $32.00 while maintaining a Market Outperform rating. This revision was influenced by the current volatile interest rate environment and uncertainties surrounding Safehold’s Capitalization Rate Enhancement Terms (CARET) program. Meanwhile, Safehold’s board will see a reduction in size as board member Jesse Hom will resign, decreasing the number of directors from six to five.
In related developments, Star Holdings authorized a $10 million share repurchase program and amended several financial agreements, including extending the maturity of its term loan facilities to March 31, 2028. These recent developments highlight ongoing strategic adjustments and financial maneuvers by both Safehold Inc. and Star Holdings.
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