Safehold Closes $225 Million Private Placement of Structured Senior Unsecured Notes Due 2056

Safehold Inc. (NYSE: SAFE) has successfully completed a private placement of $225 million in senior unsecured notes due August 1, 2056. The transaction, announced on June 15, 2026, is part of Safehold's strategy to enhance its capital structure and fund various corporate purposes. The notes feature a starting cash interest rate of 4.00%, with an effective semi-annual yield to maturity expected to be approximately 5.83%.

The structure of the notes includes a stairstep coupon, which increases over time, reaching a maximum cash interest rate of 6.615% in year 21. This innovative design allows Safehold to align its debt obligations with its asset profile, while also benefiting from the recent termination of hedges that yielded a cash settlement gain of approximately $30 million. The proceeds from this offering will be utilized for general corporate purposes, including repaying existing borrowings, funding investments in ground leases, and providing working capital.

Safehold operates in the real estate sector, specifically focusing on ground leases, a relatively new concept that the company pioneered in 2017. By offering owners of various property types—including multifamily, office, and industrial—the ability to unlock the value of the land beneath their buildings, Safehold aims to generate higher returns with reduced risk. The company is structured as a real estate investment trust (REIT), which positions it to deliver stable income and long-term capital appreciation to its shareholders.

The demand for the notes from both U.K. and U.S. investors underscores the growing interest in Safehold's unique business model and its potential for long-term growth. The successful placement of these notes not only strengthens Safehold's balance sheet but also reflects broader trends in the real estate market, where innovative financing solutions are increasingly sought after by property owners looking to optimize their capital structures.

Overall, this transaction highlights Safehold's commitment to maintaining a robust capital position while pursuing strategic investments in the ground lease sector. As the real estate market continues to evolve, the ability to secure long-term financing at favorable rates will be crucial for companies looking to navigate the complexities of property ownership and capitalize on emerging opportunities.