Safehold Inc. Reports 4.4% Revenue Growth in Q2 2025, Net Income Declines

Safehold Inc. reported its financial results for the second quarter of 2025, revealing total revenues of $93.8 million, a 4.4% increase from $89.9 million in the same period last year. The growth was primarily driven by a rise in interest income from sales-type leases, which increased to $70.6 million from $65.2 million. However, net income attributable to Safehold Inc. common shareholders decreased to $27.9 million, or $0.39 per share, compared to $29.7 million, or $0.42 per share, in the prior year. For the first half of 2025, total revenues reached $191.5 million, up from $183.1 million, while net income fell to $57.4 million from $60.6 million.

The company’s balance sheet as of June 30, 2025, showed total assets of $7.1 billion, an increase from $6.9 billion at the end of 2024. Notably, the net investment in sales-type leases rose to $3.5 billion, up from $3.5 billion, while ground lease receivables also increased to $1.9 billion from $1.8 billion. Total liabilities increased to $4.7 billion, primarily due to higher debt obligations, which rose to $4.4 billion from $4.3 billion. Shareholders' equity increased to $2.4 billion, reflecting retained earnings growth.

Strategically, Safehold has focused on expanding its portfolio of ground leases, which it views as a stable source of income. The company has also engaged in joint ventures, including a partnership with a sovereign wealth fund to acquire new ground lease investments. As of June 30, 2025, the company had $90.5 million in unfunded commitments related to leasehold improvement allowances, indicating ongoing investment in its properties.

Operationally, Safehold's portfolio remains diversified, with 41% in multifamily, 40% in office, and 11% in hotel properties. The company reported a Ground Rent Coverage ratio of 3.5x, indicating strong cash flow relative to its ground lease obligations. Looking ahead, Safehold anticipates continued growth in its ground lease investments, although it acknowledges potential challenges from rising interest rates and market conditions affecting the commercial real estate sector. The company remains committed to maintaining its dividend policy while pursuing strategic acquisitions to enhance its portfolio.