Safehold offers long-term ground leases that separate land ownership from building ownership, providing commercial property owners with cost-efficient capital to enhance their financial returns. This structure reduces upfront equity requirements and mitigates refinancing risks, enabling owners to maximize the value of their assets while maintaining predictable ground rent payments.
Funding
$400M raised to dateRaised to date based on public sources. This may differ from the amount the company actually raised and is based only on what is publicly available on the internet.
Founders
Product
Problem
Commercial property owners often face challenges in securing cost-efficient capital, leading to higher upfront equity requirements and increased refinancing risks. Traditional financing structures can limit financial returns and hinder the ability to maximize asset value.
Solution
Safehold provides long-term ground leases, separating land ownership from building ownership to offer commercial property owners a more efficient capital solution. This structure reduces the upfront equity needed for acquisitions, recapitalizations, and development projects. By mitigating interest rate and refinancing risks with ultra-long-term capital, Safehold enables owners to enhance cash-on-cash yields and overall internal rates of return (IRRs). Predictable ground rent payments and lender-friendly lease terms, approved by banks, CMBS, debt funds, life companies, and agencies, further reduce uncertainties and facilitate deal flow.
Target Audience
Safehold primarily serves commercial building owners, operators, and developers seeking to optimize their capital structures and improve financial returns through efficient, long-term ground leases.
Features
- Reduces upfront equity requirements by removing the land component from the capital stack.
- Offers a low cost of capital through long-term, flexible ground lease structures.
- Mitigates interest rate and refinancing risk with predictable ground rent payments and no fair market value resets.
- Enhances returns by generating higher cash-on-cash yields and overall IRRs with added tax benefits.
- Provides lender-friendly structures approved by various financial institutions.
- Targets transaction sizes between $15M and $500M, with ground lease values representing 30% to 45% of the total property value.
- Focuses on properties in the top 30 markets nationwide, including multifamily, office, hotel, retail, industrial, life science, and student & senior housing.