SAFEMEDIUM SIGNALFINANCIAL10-K

SAFE substantially increased its interest expense while improving operational performance and reducing credit loss provisions.

The company's interest costs nearly doubled, indicating significant new borrowing or higher rates on existing debt, which could pressure future profitability despite current operational improvements. However, the meaningful reduction in credit loss provisions suggests improving asset quality in the ground lease portfolio.

Comparing 2026-02-12 vs 2025-02-06View on EDGAR →
FINANCIAL ANALYSIS

SAFE showed mixed financial results with operating income growing 15.9% to $100.9M and operating cash flow increasing 26.3% to $47.8M, demonstrating solid operational performance. The provision for credit losses declined substantially from $16.9M to $6.5M, indicating better portfolio quality. However, interest expense nearly doubled to $181.0M, representing a significant financing cost increase that could impact future margins and cash flow generation.

FINANCIAL STATEMENT CHANGES
Interest Expense
P&L
+84.6%
$98.1M→$181.0M

Interest expense surged 84.6% — significant debt increase or rising rates materially impacting earnings.

Provision for Credit Losses
P&L
-61.7%
$16.9M→$6.5M

Provisions reduced 61.7% — improving credit quality or reserve release boosting reported earnings.

Operating Cash Flow
Cash Flow
+26.3%
$37.9M→$47.8M

Operating cash flow grew 26.3% — strong conversion of earnings to cash, healthy business fundamentals.

Operating Income
P&L
+15.9%
$87.1M→$100.9M

Operating income improving — cost discipline or growing revenue base absorbing fixed costs.

LANGUAGE CHANGES
NEW — 2026-02-12
PRIOR — 2025-02-06
ADDED
As of February 10, 2026, there were 71,756,731 shares of common stock outstanding.
Ground Leases typically provide that at the end of the lease term or upon tenant default and the termination of the Ground Lease upon such default, the land, building and all improvements revert to the landlord.
As of December 31, 2025, our portfolio is comprised of Ground Leases that provide for contractual periodic rent escalations and in some cases percentage rent participations in gross revenues generated at the relevant properties.
We believe that, similar to a loan to value metric, tracking changes in the value of our owned residual portfolio is useful as an indicator of the quality of our cash flows and the safety of our position in a tenant s capital structure, which, in turn, supports our objective to pay and grow dividends over time.
The table below shows the current estimated UCA in our owned residual portfolio as of December 31, 2025 and 2024 ($ in millions): (1) December 31, 2025 December 31, 2024 Combined Property Value (2) $ 15,947 $ 15,523 Ground Lease Cost (2) 6,675 6,395 Unrealized Capital Appreciation in Our Owned Residual Portfolio 9,272 9,128 (1) Please review our Current Report on Form 8-K filed on February 11, 2026 for a discussion of the valuation methodology used and important limitations and qualifications of the calculation of UCA.
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REMOVED
As of February 5, 2025, there were 71,449,014 shares of common stock outstanding.
Merger Transaction and Spin-Off On August 10, 2022, Safehold Inc.
For accounting purposes, the Merger is treated as a reverse acquisition in which iStar is considered the legal acquirer and Old SAFE is considered the accounting acquirer.
As a result, the historical financial statements of Old SAFE became the historical financial statements of Safehold Inc.
Unless the context otherwise requires, references to iStar refer to iStar prior to the Merger, and references to we, our and the Company refer to the business and operations of Old SAFE and its consolidated subsidiaries prior to the Merger and to Safehold Inc.
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