Star Holdings Reports 37.7% Revenue Growth but $39.7 Million Net Loss in Q2 2025

Star Holdings reported its financial results for the second quarter of 2025, revealing total revenues of $42.1 million, a significant increase of 37.7% compared to $30.6 million in the same period of 2024. The growth was primarily driven by a notable rise in land development revenue, which surged to $26.6 million from $15.7 million year-over-year. Operating lease income also saw an uptick, reaching $1.9 million, up from $1.7 million. However, the company recorded a net loss of $39.7 million for the quarter, compared to a loss of $28.0 million in the prior year, reflecting challenges in managing unrealized losses on equity investments.

In terms of operational metrics, Star Holdings experienced a decline in total assets, which decreased to $589.9 million as of June 30, 2025, from $608.7 million at the end of 2024. The company's liabilities increased to $294.0 million, up from $263.7 million, largely due to rising debt obligations, which now total $245.4 million, compared to $217.3 million previously. The increase in debt was attributed to the company's ongoing financing activities, including borrowings under its Safe Credit Facility and Margin Loan Facility.

Strategically, Star Holdings has focused on asset management and monetization of its existing properties. The company has not made significant new investments but continues to manage its development projects, including the Asbury Park Waterfront and Magnolia Green. As of June 30, 2025, the company reported a carrying value of $134.6 million for the Asbury Park investment and $28.7 million for Magnolia Green. The company also holds a substantial investment in Safehold Inc., valued at $210.4 million, which represents 18.9% of Safe's outstanding common stock.

Star Holdings' operational performance indicators reflect a mixed outlook. The company reported a decrease in general and administrative expenses, which fell to $3.3 million from $4.6 million, primarily due to reduced management fees. However, the unrealized losses on equity investments were significant, amounting to $42.7 million for the quarter. The company anticipates that its land development revenue may decline in the future as it has fewer remaining residential and development assets to sell.

Looking ahead, Star Holdings expects to meet its liquidity needs through cash flows from operations and proceeds from asset sales. The company remains cautious about the macroeconomic environment, which could impact its financial performance and liquidity. The management indicated that while they are positioned to manage their existing assets effectively, the timing and amount of future asset sales remain uncertain due to market conditions.