Safehold recently released its 10-Q report. The company acquires, manages and finances ground leases, primarily on multifamily, office, hotel, life science and mixed-use properties. It is structured as a REIT and was incorporated in 2016, with headquarters in New York.
In Item 2, Safehold said its core business is built around ground leases because they sit senior in a property’s capital structure and can generate rent that rises over time through contractual escalators. As of June 30, 2026, the gross book value of its ground lease portfolio was 44% multifamily, 39% office, 9% hotels, 6% life science and 2% mixed use and other. The company said its portfolio is diversified by geography, property type and sponsor, and that many leases include CPI lookbacks that generally begin between years 11 and 21 and are typically capped at 3.0% to 3.5%.
Safehold reported estimated unrealized capital appreciation in its owned residual portfolio of $9.770 billion at June 30, 2026, up from $9.272 billion at December 31, 2025. The estimated combined property value rose to $16.676 billion from $15.947 billion over the same period, while ground lease cost increased to $6.906 billion from $6.675 billion. The company said its gross book value as a percentage of combined property value was 52% at June 30, 2026.
The filing also pointed to pressure from higher interest rates and weaker conditions in office real estate. Safehold said elevated rates have reduced leasehold financing availability and increased costs for ground lease tenants, while higher spreads in the ground lease market could attract more competitors and pressure returns. It also noted that office vacancies and lower market liquidity could hurt tenants, ground rent coverages and estimated combined property values.
Safehold highlighted one significant office asset in New York where a tenant failed to pay property taxes, defaulted on a forbearance agreement and received a lease termination notice in May 2026. The tenant filed a countersuit, and a temporary restraining order was granted against Safehold’s lease termination efforts. The company said this could delay enforcement of landlord rights and increase costs.
The company said its Caret Program is designed to separate the bond-like income stream from the residual value of its ground leases. Portfolio Holdings’ two classes of LLC interests are intended to track those two components: GL units for the bond component and Caret units for the residual component. Safehold said it holds all issued and outstanding GL units of Portfolio Holdings. The market has reacted to these announcements by moving the company's shares 1.77% to a price of $16.12. Check out the company's full 10-Q submission here.
