Safehold (SAFE) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $97.7 million, with net income of $29.4 million and EPS of $0.41, or $0.44 excluding a $1.9 million non-recurring loss on a preferred equity investment; no new investments closed, but the pipeline of signed LOIs reached $386 million across 11 ground leases and 4 loans.

• Revenues grew 5% year-over-year, driven by higher asset-related revenue from investments, while net income and EPS declined due to the non-recurring loss.

• Multifamily ground leases now represent 58% of the portfolio by count, up from 8% at IPO and 41% a year ago, reflecting a strategic focus.

• Management is focused on scaling, expanding the customer base in affordable housing and multifamily, and exploring capital recycling, joint ventures, and asset sales to address the public-private market valuation gap.

• Portfolio aggregate gross book value reached $6.8 billion, with estimated unrealized capital appreciation at $8.9 billion.

Financial highlights

• Q1 GAAP revenue was $97.7 million, net income was $29.4 million, and EPS was $0.41; excluding non-recurring items, net income was $31.3 million and EPS was $0.44.

• Year-over-year GAAP earnings declined due to a $1.9 million non-recurring loss; excluding this, EPS increased slightly year-over-year.

• Portfolio at quarter end: $6.8 billion, with $1.3 billion in liquidity.

• Funded $20 million in Q1, including $16 million in ground lease fundings at a 6.7% yield and $4 million in leasehold loan fund at SOFR + 386 bps.

• Diluted share count increased 1% to 71.6 million.

Outlook and guidance

• Management expects increasing investment activity as market volatility subsides and sponsors gain clarity on long-term capital costs.

• Most deals in the current pipeline are expected to close within the year, with a focus on multifamily and affordable housing.

• $400 million in remaining capital for a JV with a leading sovereign wealth fund supports future investment capacity.

• The company continues to target Ground Lease investments representing 30%-45% of combined property value, with a focus on long-term, inflation-protected income streams.

• Management expects to meet liquidity requirements over the next 12 months and beyond, supported by $1.3 billion undrawn on the 2024 Unsecured Revolver.