safe-20210331
0001688852FALSEDecember 312021Q1us-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrentus-gaap:AccountsPayableAndAccruedLiabilitiesCurrentAndNoncurrent30000016888522021-01-012021-03-31xbrli:shares00016888522021-04-20iso4217:USD00016888522021-03-3100016888522020-12-31iso4217:USDxbrli:shares0001688852safe:OtherLiabilityDueToRelatedPartyMember2021-03-310001688852safe:OtherLiabilityDueToRelatedPartyMember2020-12-3100016888522020-01-012020-03-310001688852safe:ExpensesWithRelatedPartyEquityBasedCompensationMember2021-01-012021-03-310001688852safe:ExpensesWithRelatedPartyEquityBasedCompensationMember2020-01-012020-03-310001688852us-gaap:CommonStockMember2020-12-310001688852us-gaap:AdditionalPaidInCapitalMember2020-12-310001688852us-gaap:RetainedEarningsMember2020-12-310001688852us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001688852us-gaap:NoncontrollingInterestMember2020-12-310001688852us-gaap:RetainedEarningsMember2021-01-012021-03-310001688852us-gaap:NoncontrollingInterestMember2021-01-012021-03-310001688852us-gaap:CommonStockMember2021-01-012021-03-310001688852us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001688852us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001688852us-gaap:CommonStockMember2021-03-310001688852us-gaap:AdditionalPaidInCapitalMember2021-03-310001688852us-gaap:RetainedEarningsMember2021-03-310001688852us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001688852us-gaap:NoncontrollingInterestMember2021-03-310001688852us-gaap:CommonStockMember2019-12-310001688852us-gaap:AdditionalPaidInCapitalMember2019-12-310001688852us-gaap:RetainedEarningsMember2019-12-310001688852us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001688852us-gaap:NoncontrollingInterestMember2019-12-3100016888522019-12-310001688852us-gaap:RetainedEarningsMember2020-01-012020-03-310001688852us-gaap:NoncontrollingInterestMember2020-01-012020-03-310001688852us-gaap:CommonStockMember2020-01-012020-03-310001688852us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001688852us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001688852us-gaap:CommonStockMember2020-03-310001688852us-gaap:AdditionalPaidInCapitalMember2020-03-310001688852us-gaap:RetainedEarningsMember2020-03-310001688852us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001688852us-gaap:NoncontrollingInterestMember2020-03-3100016888522020-03-31safe:segment0001688852srt:MinimumMember2021-01-012021-03-310001688852srt:MaximumMember2021-01-012021-03-31xbrli:pure0001688852safe:SafeholdOperatingPartnershipLPMember2021-01-012021-03-310001688852safe:RealEstateNetRealEstateRelatedIntangibleAssetsNetandDeferredOperatingLeaseIncomeReceivableNetMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-03-310001688852safe:DebtObligationsNetAccountsPayableAccruedExpensesandOtherLiabilitiesMemberus-gaap:VariableInterestEntityPrimaryBeneficiaryMember2021-03-310001688852us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-03-310001688852us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-03-310001688852us-gaap:CarryingReportedAmountFairValueDisclosureMember2020-12-310001688852us-gaap:FairValueInputsLevel3Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-12-310001688852us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2021-03-310001688852us-gaap:FairValueInputsLevel1Memberus-gaap:EstimateOfFairValueFairValueDisclosureMember2020-12-310001688852us-gaap:AboveMarketLeasesMember2021-03-310001688852us-gaap:LeasesAcquiredInPlaceMember2021-03-310001688852us-gaap:OtherIntangibleAssetsMember2021-03-310001688852us-gaap:AboveMarketLeasesMember2020-12-310001688852us-gaap:LeasesAcquiredInPlaceMember2020-12-310001688852us-gaap:OtherIntangibleAssetsMember2020-12-310001688852us-gaap:AboveMarketLeasesMembersafe:OperatingLeaseIncomeMember2021-01-012021-03-310001688852us-gaap:AboveMarketLeasesMembersafe:OperatingLeaseIncomeMember2020-01-012020-03-310001688852safe:DepreciationandAmortizationMemberus-gaap:LeasesAcquiredInPlaceMember2021-01-012021-03-310001688852safe:DepreciationandAmortizationMemberus-gaap:LeasesAcquiredInPlaceMember2020-01-012020-03-310001688852safe:OperatingLeaseIncomeMemberus-gaap:OtherIntangibleAssetsMember2021-01-012021-03-310001688852safe:OperatingLeaseIncomeMemberus-gaap:OtherIntangibleAssetsMember2020-01-012020-03-310001688852safe:BelowMarketLeasesMembersafe:OperatingLeaseIncomeMember2021-01-012021-03-310001688852safe:BelowMarketLeasesMembersafe:OperatingLeaseIncomeMember2020-01-012020-03-310001688852safe:InflationLinkedEscalationsMember2021-03-310001688852safe:FixedBumpswithInflationAdjustmentsMember2021-03-310001688852safe:FixedBumpsMember2021-03-310001688852safe:PercentageRentMember2021-03-310001688852safe:FixedBumpswithPercentageRentMember2021-03-31safe:lease0001688852safe:FixedBumpswithInflationAdjustmentsMember2021-03-310001688852safe:FixedBumpsMember2021-03-310001688852safe:FixedBumpswithPercentageRentMember2021-03-310001688852us-gaap:CashMembersafe:NetInvestmentinSalestypeLeasesMember2021-01-012021-03-310001688852us-gaap:CashMembersafe:GroundLeaseReceivablesNetMember2021-01-012021-03-310001688852us-gaap:CashMember2021-01-012021-03-310001688852safe:NoncashMembersafe:NetInvestmentinSalestypeLeasesMember2021-01-012021-03-310001688852safe:NoncashMembersafe:GroundLeaseReceivablesNetMember2021-01-012021-03-310001688852safe:NoncashMember2021-01-012021-03-310001688852safe:NetInvestmentinSalestypeLeasesMember2021-01-012021-03-310001688852safe:GroundLeaseReceivablesNetMember2021-01-012021-03-310001688852us-gaap:CashMembersafe:NetInvestmentinSalestypeLeasesMember2020-01-012020-03-310001688852us-gaap:CashMembersafe:GroundLeaseReceivablesNetMember2020-01-012020-03-310001688852us-gaap:CashMember2020-01-012020-03-310001688852safe:NoncashMembersafe:NetInvestmentinSalestypeLeasesMember2020-01-012020-03-310001688852safe:NoncashMembersafe:GroundLeaseReceivablesNetMember2020-01-012020-03-310001688852safe:NoncashMember2020-01-012020-03-310001688852safe:NetInvestmentinSalestypeLeasesMember2020-01-012020-03-310001688852safe:GroundLeaseReceivablesNetMember2020-01-012020-03-310001688852us-gaap:CorporateJointVentureMember2021-03-310001688852us-gaap:CorporateJointVentureMember2020-12-310001688852us-gaap:CorporateJointVentureMember2021-01-012021-03-310001688852us-gaap:CorporateJointVentureMember2020-01-012020-03-310001688852safe:BelowMarketLeasesMember2021-03-310001688852safe:RealEstateExpenseMember2021-01-012021-03-310001688852safe:RealEstateExpenseMember2020-01-012020-03-310001688852us-gaap:OtherIncomeMember2021-01-012021-03-310001688852us-gaap:OtherIncomeMember2020-01-012020-03-310001688852safe:PercentageRentArrangementMember2021-01-012021-03-310001688852safe:PercentageRentArrangementMember2020-01-012020-03-310001688852us-gaap:MortgagesMemberus-gaap:SecuredDebtMember2021-03-310001688852us-gaap:MortgagesMemberus-gaap:SecuredDebtMember2020-12-310001688852us-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredDebtMember2021-03-310001688852us-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredDebtMember2020-12-310001688852us-gaap:SecuredDebtMember2021-03-310001688852us-gaap:SecuredDebtMember2020-12-310001688852us-gaap:RevolvingCreditFacilityMemberus-gaap:UnsecuredDebtMember2021-03-310001688852us-gaap:RevolvingCreditFacilityMemberus-gaap:UnsecuredDebtMember2020-12-310001688852us-gaap:RevolvingCreditFacilityMemberus-gaap:UnsecuredDebtMember2021-01-012021-03-310001688852safe:PortfolioMortgageDebtMemberMember2021-03-310001688852us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2021-03-31safe:extension0001688852us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2021-01-012021-03-310001688852us-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2021-03-012021-03-310001688852us-gaap:UnsecuredDebtMemberus-gaap:RevolvingCreditFacilityMember2021-03-012021-03-310001688852us-gaap:RevolvingCreditFacilityMember2021-01-012021-03-310001688852us-gaap:RevolvingCreditFacilityMember2021-03-310001688852srt:MaximumMembersafe:MultiFamilyProjectUnderConstructionMemberus-gaap:LandMembersafe:IStarInc.Member2021-03-012021-03-310001688852safe:MultiFamilyProjectUnderConstructionMemberus-gaap:LandMembersafe:IStarInc.Member2021-03-012021-03-310001688852srt:MaximumMembersafe:MultiFamilyProjectUnderConstructionMemberus-gaap:LandMembersafe:IStarInc.Member2021-03-310001688852safe:OfficePropertyMember2021-01-012021-01-310001688852safe:OfficePropertyMemberus-gaap:LandMember2021-01-012021-01-310001688852safe:OfficePropertyMemberus-gaap:LeaseholdImprovementsMember2021-01-012021-01-310001688852safe:OfficePropertyMember2021-03-310001688852safe:MultiFamilyPropertyMember2020-02-012020-02-290001688852safe:MultiFamilyPropertyMemberus-gaap:LandMember2020-02-012020-02-290001688852us-gaap:LeaseholdImprovementsMembersafe:MultiFamilyPropertyMember2020-02-012020-02-290001688852safe:MultiFamilyPropertyMember2021-03-310001688852us-gaap:InterestRateSwapMemberus-gaap:NondesignatedMembersrt:MaximumMember2021-01-012021-03-310001688852us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMembersafe:AccountsPayableAccruedExpensesandOtherLiabilitiesMember2021-03-310001688852us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMembersafe:AccountsPayableAccruedExpensesandOtherLiabilitiesMember2020-12-310001688852us-gaap:DesignatedAsHedgingInstrumentMember2021-03-310001688852us-gaap:DesignatedAsHedgingInstrumentMember2020-12-310001688852us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001688852us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001688852us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMembersafe:AccountsPayableAccruedExpensesandOtherLiabilitiesMember2021-01-012021-03-310001688852safe:RestrictedCashMember2020-12-310001688852us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestExpenseMember2021-01-012021-03-310001688852us-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:InterestExpenseMember2020-01-012020-03-31safe:class_of_stock0001688852us-gaap:CommonStockMembersafe:IStarInc.Member2017-07-012021-03-310001688852us-gaap:CommonStockMembersafe:IStarInc.Member2021-03-3100016888522019-05-012019-05-310001688852safe:AtTheMarketEquityOfferingMember2021-02-012021-02-280001688852safe:AtTheMarketEquityOfferingMember2021-01-012021-03-310001688852safe:AtTheMarketEquityOfferingMember2021-03-310001688852us-gaap:PerformanceSharesMember2021-03-310001688852us-gaap:PerformanceSharesMember2021-01-012021-03-310001688852us-gaap:PerformanceSharesMember2018-09-300001688852us-gaap:CommonStockMembersrt:MaximumMemberus-gaap:PerformanceSharesMembersafe:EquityPlanMember2021-03-310001688852safe:ManagerMemberus-gaap:PerformanceSharesMember2020-02-280001688852safe:ManagerMemberus-gaap:PerformanceSharesMember2020-03-310001688852safe:ManagerMemberus-gaap:PerformanceSharesMember2021-01-012021-03-310001688852us-gaap:CommonStockMembersafe:ManagerMemberus-gaap:PerformanceSharesMemberus-gaap:GeneralAndAdministrativeExpenseMembersafe:EquityPlanMember2021-01-012021-03-310001688852us-gaap:CommonStockMembersafe:ManagerMemberus-gaap:PerformanceSharesMemberus-gaap:GeneralAndAdministrativeExpenseMembersafe:EquityPlanMember2020-01-012020-03-310001688852srt:DirectorMembersafe:A2017EquityIncentivePlanMemberus-gaap:GeneralAndAdministrativeExpenseMember2020-04-012020-06-300001688852srt:DirectorMembersafe:A2017EquityIncentivePlanMemberus-gaap:GeneralAndAdministrativeExpenseMember2020-06-300001688852us-gaap:RestrictedStockUnitsRSUMembersafe:A2017EquityIncentivePlanMemberus-gaap:GeneralAndAdministrativeExpenseMember2019-01-012019-03-310001688852us-gaap:RestrictedStockUnitsRSUMembersafe:A2017EquityIncentivePlanMemberus-gaap:GeneralAndAdministrativeExpenseMember2019-03-310001688852us-gaap:RestrictedStockUnitsRSUMembersafe:A2017EquityIncentivePlanMemberus-gaap:GeneralAndAdministrativeExpenseMember2021-03-310001688852safe:IStarInc.Member2021-01-012021-03-310001688852safe:IStarInc.Member2021-03-310001688852safe:IStarInc.Member2020-12-31safe:employee0001688852srt:MinimumMember2021-03-310001688852srt:MaximumMember2021-03-310001688852us-gaap:IPOMember2021-03-310001688852safe:ManagerMembersafe:IncentiveFeeMemberus-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-03-310001688852us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-03-310001688852us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-03-310001688852safe:IStarInc.Memberus-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-03-310001688852safe:IStarInc.Memberus-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-03-310001688852safe:GroundLeaseTenantForRecapitalizationOfAnExistingHotelPropertyMembersrt:HotelMembersafe:IStarInc.Member2021-02-012021-02-280001688852srt:MultifamilyMembersafe:MultiFamilyProjectUnderConstructionMembersafe:IStarInc.Member2021-03-012021-03-31
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________________________________________________________
FORM 10-Q
(Mark One) 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to            
Commission File No. 001-38122
_______________________________________________________________________________
Safehold Inc.
(Exact name of registrant as specified in its charter)
Maryland30-0971238
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
1114 Avenue of the Americas 
39th Floor
New York,NY10036
(Address of principal executive offices)(Zip code)
Registrant's telephone number, including area code: (212930-9400
_______________________________________________________________________________
Indicate by check mark whether the registrant: (i) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports); and (ii) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý    No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated filer Accelerated filer Non-accelerated filer Smaller reporting companyEmerging growth company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes     No ý
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   


Table of Contents
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock SAFE NYSE
As of April 20, 2021, there were 53,262,820 shares, $0.01 par value per share, of Safehold Inc. common stock outstanding.


Table of Contents
TABLE OF CONTENTS
  Page


Table of Contents
PART I. CONSOLIDATED FINANCIAL INFORMATION
Item 1.    Financial Statements
Safehold Inc.
Consolidated Balance Sheets(1)
(In thousands)
(unaudited)
 As of
 March 31,
2021
December 31,
2020
ASSETS
Real estate
Real estate, at cost$752,420 $752,420 
Less: accumulated depreciation(23,821)(22,314)
Real estate, net728,599 730,106 
Real estate-related intangible assets, net (refer to Note 4)240,642 242,166 
Total real estate, net and real estate-related intangible assets, net969,241 972,272 
Net investment in sales-type leases1,311,840 1,305,519 
Ground Lease receivables661,346 577,457 
Equity investments in Ground Leases130,011 129,614 
Cash and cash equivalents25,034 56,948 
Restricted cash8,215 39,519 
Deferred operating lease income receivable102,002 93,307 
Deferred expenses and other assets, net44,264 34,334 
Total assets$3,251,953 $3,208,970 
LIABILITIES AND EQUITY  
Liabilities:  
Accounts payable, accrued expenses and other liabilities(2)
$53,138 $76,673 
Real estate-related intangible liabilities, net (refer to Note 4)66,059 66,268 
Debt obligations, net1,724,884 1,684,726 
Total liabilities1,844,081 1,827,667 
Commitments and contingencies (refer to Note 9)
Equity:  
Safehold Inc. shareholders' equity:
Common stock, $0.01 par value, 400,000 shares authorized, 53,263 and 53,206 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
533 532 
Additional paid-in capital1,416,583 1,412,107 
Retained earnings32,208 23,945 
Accumulated other comprehensive loss(43,813)(57,461)
Total Safehold Inc. shareholders' equity1,405,511 1,379,123 
Noncontrolling interests2,361 2,180 
Total equity1,407,872 1,381,303 
Total liabilities and equity$3,251,953 $3,208,970 
_______________________________________________________________________________
(1)Refer to Note 2 for details on the Company's consolidated variable interest entities ("VIEs").
(2)As of March 31, 2021 and December 31, 2020, includes $5.4 million and $4.7 million, respectively, due to related parties.

The accompanying notes are an integral part of the consolidated financial statements.
1

Table of Contents
Safehold Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)

 For the Three Months
Ended March 31,
20212020
Revenues:
Operating lease income$17,410 $20,780 
Interest income from sales-type leases25,974 18,901 
Other income123 484 
Total revenues43,507 40,165 
Costs and expenses:
Interest expense17,167 15,148 
Real estate expense598 798 
Depreciation and amortization2,385 2,348 
General and administrative(1)
6,655 5,253 
Other expense369 40 
Total costs and expenses27,174 23,587 
Income from operations before other items16,333 16,578 
Loss on early extinguishment of debt(216) 
Earnings from equity method investments839 818 
Net income16,956 17,396 
Net income attributable to noncontrolling interests(48)(49)
Net income attributable to Safehold Inc. common shareholders$16,908 $17,347 
Per common share data:
Net income
Basic$0.32 $0.36 
Diluted$0.32 $0.36 
Weighted average number of common shares:
Basic 53,232 48,228 
Diluted53,244 48,228 
_______________________________________________________________________________
(1)For the three months ended March 31, 2021 and 2020, includes $5.5 million and $4.3 million, respectively, of general and administrative expenses incurred to related parties that includes management fees, expense reimbursements to the Company's Manager and equity-based compensation.


The accompanying notes are an integral part of the consolidated financial statements.
2

Table of Contents
Safehold Inc.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(unaudited)

 For the Three Months
Ended March 31,
20212020
Net income $16,956 $17,396 
Other comprehensive income (loss):
Reclassification of losses on derivatives into earnings358 344 
Unrealized gain (loss) on derivatives13,290 (23,000)
Other comprehensive gain (loss)13,648 (22,656)
Comprehensive income (loss)30,604 (5,260)
Comprehensive income attributable to noncontrolling interests(48)(49)
Comprehensive income (loss) attributable to Safehold Inc.$30,556 $(5,309)

The accompanying notes are an integral part of the consolidated financial statements.
3


Safehold Inc.
Consolidated Statements of Changes in Equity
(In thousands)
(unaudited)


Common
Stock at
Par
Additional
Paid-In
Capital
Retained
Earnings
(Accumulated Deficit)
Accumulated
Other
Comprehensive
Income (Loss)
Noncontrolling
Interests
Total
Equity
Balance at December 31, 2020$532 $1,412,107 $23,945 $(57,461)$2,180 $1,381,303 
Net income— — 16,908 — 48 16,956 
Issuance of common stock, net / amortization1 4,476 — — 143 4,620 
Dividends declared ($0.16224 per share)
— — (8,645)— — (8,645)
Change in accumulated other comprehensive income (loss) — — — 13,648  13,648 
Distributions to noncontrolling interests— — — — (10)(10)
Balance at March 31, 2021$533 $1,416,583 $32,208 $(43,813)$2,361 $1,407,872 
Balance at December 31, 2019$478 $1,132,603 $(2,146)$(39,123)$1,486 $1,093,298 
Net income— — 17,347 — 49 17,396 
Issuance of common stock, net / amortization 32 151,040 — — 104 151,176 
Dividends declared ($0.156 per share)
— — (7,965)— — (7,965)
Change in accumulated other comprehensive income (loss)— — — (22,656)— (22,656)
Distributions to noncontrolling interests— — — — (11)(11)
Balance at March 31, 2020$510 $1,283,643 $7,236 $(61,779)$1,628 $1,231,238 

The accompanying notes are an integral part of the consolidated financial statements.
4

Table of Contents
Safehold Inc.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
 For the Three Months
Ended March 31,
20212020
Cash flows from operating activities:  
Net income $16,956 $17,396 
Adjustments to reconcile net income to cash flows from operating activities:  
Depreciation and amortization2,385 2,348 
Stock-based compensation expense184 146 
Deferred operating lease income(8,695)(8,779)
Non-cash interest income from sales-type leases(9,490)(6,884)
Non-cash interest expense3,077 2,348 
Amortization of real estate-related intangibles, net620 667 
Loss on early extinguishment of debt216  
Earnings from equity method investments(839)(818)
Distributions from operations of equity method investments442 219 
Amortization of premium, discount and deferred financing costs on debt obligations, net655 527 
Non-cash management fees3,472 2,858 
Other operating activities896 532 
Changes in assets and liabilities: 
Changes in deferred expenses and other assets, net270 (3,065)
Changes in accounts payable, accrued expenses and other liabilities(15,005)(59)
Cash flows provided by (used in) operating activities(4,856)7,436 
Cash flows from investing activities:  
Origination/acquisition of net investment in sales-type leases and Ground Lease receivables(80,901)(62,627)
Deposits on Ground Lease investments(4,667)1,150 
Other investing activities593 121 
Cash flows used in investing activities(84,975)(61,356)
Cash flows from financing activities:  
Proceeds from issuance of common stock1,065 150,086 
Proceeds from debt obligations40,000 303,800 
Repayments of debt obligations (130,000)
Payments for deferred financing costs(5,594)(4,836)
Dividends paid to common shareholders(8,630)(7,452)
Payment of offering costs(218)(1,527)
Distributions to noncontrolling interests(10)(11)
Other financing activities (3,174)
Cash flows provided by financing activities26,613 306,886 
Changes in cash, cash equivalents and restricted cash(63,218)252,966 
Cash, cash equivalents and restricted cash at beginning of period96,467 46,782 
Cash, cash equivalents and restricted cash at end of period$33,249 $299,748 
Supplemental disclosure of non-cash investing and financing activity:
Dividends declared to common shareholders$8,645 $7,965 
Accrued finance costs375 282 
Accrued offering costs716 197 

The accompanying notes are an integral part of the consolidated financial statements.
5

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements
(unaudited)




Note 1—Business and Organization

    Business—Safehold Inc. (the "Company") operates its business through one reportable segment by acquiring, managing and capitalizing ground leases. Ground leases are long-term contracts between the landlord (the Company) and a tenant or leaseholder. The Company believes that it is the first publicly-traded company formed primarily to acquire, own, manage, finance and capitalize ground leases. Ground leases generally represent ownership of the land underlying commercial real estate projects that is net leased by the fee owner of the land to the owners/operators of the real estate projects built thereon ("Ground Leases"). Under a Ground Lease, the tenant is generally responsible for all property operating expenses, such as maintenance, real estate taxes and insurance and is also responsible for development costs and capital expenditures. Ground Leases are typically long-term (base terms ranging from 30 to 99 years, often with tenant renewal options) and have contractual base rent increases (either at a specified percentage or consumer price index ("CPI") based, or both) and sometimes include percentage rent participations.

    The Company intends to target investments in long-term Ground Leases in which: (i) the cost of its Ground Lease represents 30% to 45% of the combined value of the land and buildings and improvements thereon as if there was no Ground Lease on the land ("Combined Property Value"); (ii) the ratio of property net operating income to the Ground Lease payment due the Company ("Ground Rent Coverage") is between 2.0x to 4.5x, and for this purpose the Company uses estimates of the stabilized property net operating income if it does not receive current tenant information and for properties under construction or in transition, in each case based on leasing activity at the property and available market information, including leasing activity at comparable properties in the relevant market; and (iii) the Ground Lease contains contractual rent escalation clauses or percentage rent that participates in gross revenues generated by the commercial real estate on the land. A Ground Lease lessor (the Company) typically has the right to regain possession of its land and take ownership of the buildings and improvements thereon upon tenant default and the termination of the Ground Lease on account of such default. The Company believes that the Ground Lease structure provides an opportunity for potential value accretion through the reversion to the Company, as the Ground Lease owner, of the buildings and improvements on the land at the expiration or earlier termination of the lease, for no additional consideration from the Company.

    The Company is managed by SFTY Manager, LLC (the "Manager"), a wholly-owned subsidiary of iStar Inc. ("iStar"), the Company's largest shareholder, pursuant to a management agreement. The Company has no employees, as the Manager provides all services to it. The Company draws on the extensive investment origination and sourcing platform of its Manager to actively promote the benefits of the Ground Lease structure to prospective Ground Lease tenants.

    Organization—The Company is a Maryland corporation and completed its initial public offering in June 2017. The Company's common stock is listed on the New York Stock Exchange under the symbol "SAFE." The Company elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes, commencing with the tax year ended December 31, 2017. The Company is structured as an Umbrella Partnership REIT ("UPREIT"). As such, all of the Company's properties are owned through a subsidiary partnership, Safehold Operating Partnership LP (the "Operating Partnership"). As of March 31, 2021, the Company owned 100% of the limited partner interests and a subsidiary of the Company owned 100% of the general partner interests, in the Operating Partnership. The UPREIT structure may afford the Company certain benefits as it seeks to acquire properties from third parties who may want to defer taxes by contributing their Ground Leases to the Company.

Note 2—Basis of Presentation and Principles of Consolidation
Basis of Presentation—The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. These unaudited consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 (the "2020 Annual Report").
    The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

6

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

    In the opinion of management, the accompanying consolidated financial statements contain all adjustments consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. Such operating results may not be indicative of the expected results for any other interim periods or the entire year.

Principles of Consolidation—The consolidated financial statements include the accounts and operations of the Company, its wholly-owned subsidiaries and VIEs for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.
        Consolidated VIEs—The Company consolidates VIEs for which it is considered the primary beneficiary. As of March 31, 2021, the total assets of these consolidated VIEs were $64.1 million and total liabilities were $29.8 million. The classifications of these assets are primarily within "Real estate, net," "Real estate-related intangible assets, net" and "Deferred operating lease income receivable" on the Company's consolidated balance sheets. The classifications of liabilities are primarily within "Debt obligations, net" and "Accounts payable, accrued expenses and other liabilities" on the Company's consolidated balance sheets. The liabilities of these VIEs are non-recourse to the Company and can only be satisfied from each VIE's respective assets. The Company has provided no financial support to VIEs that it was not previously contractually required to provide and did not have any unfunded commitments related to consolidated VIEs as of March 31, 2021.

Note 3—Summary of Significant Accounting Policies

    Fair Values—The Company is required to disclose fair value information with regard to its financial instruments, whether or not recognized in the consolidated balance sheets, for which it is practical to estimate fair value. The Financial Accounting Standards Board ("FASB") guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value: Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The Company determines the estimated fair values of financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the Company and the Company’s own assumptions about market participant assumptions.

The following table presents the carrying value and fair value for the Company's financial instruments ($ in millions):
As of March 31, 2021As of December 31, 2020
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Net investment in sales-type leases(1)
$1,312 $1,312 $1,306 $1,306 
Ground Lease receivables(1)
661 661 577 577 
Cash and cash equivalents(1)
25 25 57 57 
Restricted cash(1)
8 8 40 40 
Debt obligations, net(2)
1,725 1,806 1,685 1,835 
_______________________________________________________________________________
(1)The Company determined the carrying values of its net investment in sales-type leases; Ground Lease receivables; cash and cash equivalents and restricted cash approximated their fair values. The fair value of the Company's net investment in sales-type leases and Ground Lease receivables are classified as Level 3 within the fair value hierarchy and the fair value of the Company's cash and cash equivalents and restricted cash are classified as Level 1 within the fair value hierarchy.
(2)The fair value of the Company's debt obligations is classified as Level 3 within the fair value hierarchy.

For the remainder of the Company's significant accounting policies, refer to the Company's 2020 Annual Report.

New Accounting PronouncementsIn June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") which was issued to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments held by a reporting entity. This amendment replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to
7

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

inform credit loss estimates. For public entities such as the Company that qualified as smaller reporting companies prior to December 31, 2019, ASU 2016-13 is effective for interim and annual reporting periods beginning after December 15, 2022. Early adoption is permitted. Management is currently evaluating the impact of ASU 2016-13 on the Company’s consolidated financial statements.
In May 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments ("ASU 2019-04") to clarify certain accounting topics from previously issued ASUs, including ASU 2016-13. ASU 2019-04 addresses certain aspects of ASU 2016-13, including but not limited to, accrued interest receivable, loan recoveries, interest rate projections for variable-rate financial instruments and expected prepayments. ASU 2019-04 provides alternatives that allow entities to measure credit losses on accrued interest separate from credit losses on the principal portion of a loan, clarifies that entities should include expected recoveries in the measurement of credit losses, allows entities to consider future interest rates when measuring credit losses and can elect to adjust effective interest rates used to discount expected cash flows for expected loan prepayments. ASU 2019-04 is effective upon the adoption of ASU 2016-13. Management is currently evaluating the impact of ASU 2019-04 on the Company’s consolidated financial statements.

8

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

Note 4—Real Estate and Real Estate-Related Intangibles
The Company's real estate assets consist of the following ($ in thousands):
As of
March 31, 2021December 31, 2020
Land and land improvements, at cost$559,188 $559,188 
Buildings and improvements, at cost193,232 193,232 
Less: accumulated depreciation(23,821)(22,314)
Total real estate, net$728,599 $730,106 
Real estate-related intangible assets, net240,642 242,166 
Total real estate, net and real estate-related intangible assets, net$969,241 $972,272 

Real estate-related intangible assets, net consist of the following items ($ in thousands):
As of March 31, 2021
Gross
Intangible
Accumulated
Amortization
Carrying
Value
Above-market lease assets, net(1)
$203,778 $(10,321)$193,457 
In-place lease assets, net(2)
59,360 (12,901)46,459 
Other intangible assets, net750 (24)726 
Total$263,888 $(23,246)$240,642 

As of December 31, 2020
Gross
Intangible
Accumulated
Amortization
Carrying
Value
Above-market lease assets, net(1)
$203,778 $(9,494)$194,284 
In-place lease assets, net(2)
59,179 (12,025)47,154 
Other intangible assets, net750 (22)728 
Total$263,707 $(21,541)$242,166 
_______________________________________________________________________________
(1)Above-market lease assets are recognized during business combinations and asset acquisitions when the present value of market rate rental cash flows over the term of a lease is less than the present value of the contractual in-place rental cash flows. Above-market lease assets are amortized over the non-cancelable term of the leases.
(2)In-place lease assets are recognized during business combinations and asset acquisitions and are estimated based on the value associated with the costs avoided in originating leases comparable to the acquired in-place leases as well as the value associated with lost rental revenue during the assumed lease-up period. In-place lease assets are amortized over the non-cancelable term of the leases.

9

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

The amortization of real estate-related intangible assets had the following impact on the Company's consolidated statements of operations for the three months ended March 31, 2021 and 2020 ($ in thousands):

Income StatementFor the Three Months Ended March 31,
Intangible assetLocation20212020
Above-market lease assets (decrease to income)Operating lease income$827 $826 
In-place lease assets (decrease to income)Depreciation and amortization875 838 
Other intangible assets (decrease to income)Operating lease income2 2 

The estimated amortization of real estate-related intangible assets for each of the five succeeding fiscal years is as follows ($ in thousands):(1)
YearAmount
2021 (remaining nine months)$5,117 
20226,823 
20236,807 
20246,759 
20256,759 
_______________________________________________________________________________
(1)As of March 31, 2021, the weighted average amortization period for the Company's real estate-related intangible assets was approximately 79.9 years.

10

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

Real estate-related intangible liabilities, net consist of the following items ($ in thousands):(1)
As of March 31, 2021
Gross
Intangible
Accumulated
Amortization
Carrying
Value
Below-market lease liabilities(1)
$68,618 $(2,559)$66,059 
As of December 31, 2020
Gross
Intangible
Accumulated
Amortization
Carrying
Value
Below-market lease liabilities(1)
$68,618 $(2,350)$66,268 
_______________________________________________________________________________
(1)Below-market lease liabilities are recognized during business combinations and asset acquisitions when the present value of market rate rental cash flows over the term of a lease exceeds the present value of the contractual in-place rental cash flows. Below-market lease liabilities are amortized over the non-cancelable term of the leases.

    The amortization of real estate-related intangible liabilities had the following impact on the Company's consolidated statements of operations for the three months ended March 31, 2021 and 2020 ($ in thousands):

Income StatementFor the Three Months Ended March 31,
Intangible liabilityLocation20212020
Below-market lease liabilities (increase to income)Operating lease income$209 $161 

Future Minimum Operating Lease PaymentsFuture minimum lease payments to be collected under non-cancelable operating leases, excluding lease payments that are not fixed and determinable, in effect as of March 31, 2021, are as follows by year ($ in thousands):
YearInflation-
Linked
Fixed Bumps with Inflation AdjustmentsFixed
Bumps
Percentage
Rent
Fixed Bumps with Percentage RentTotal
2021 (remaining nine months)$4,018 $13,561 $1,619 $8,264 $267 $27,729 
20225,357 18,384 2,185 11,018 356 37,300 
20235,357 18,833 2,213 11,018 281 37,702 
20245,357 19,192 2,248 11,018 51 37,866 
20255,357 19,549 2,314 11,018 51 38,289 
Thereafter412,698 4,745,803 437,853 17,799 128 5,614,281 
Note 5—Net Investment in Sales-type Leases and Ground Lease Receivables
The Company classifies certain of its Ground Leases as sales-type leases and records the leases within "Net investment in sales-type leases" on the Company's consolidated balance sheets and records interest income in "Interest income from sales-type leases" in the Company's consolidated statements of operations. In addition, the Company may enter into transactions whereby it acquires land and enters into Ground Leases directly with the seller. These Ground Leases qualify as sales-type leases and, as such, do not qualify for sale leaseback accounting and are accounted for as financing receivables in accordance with ASC 310 and are included in "Ground Lease receivables" on the Company's consolidated balance sheets. The Company records interest income from Ground Lease receivables in "Interest income from sales-type leases" in the Company's consolidated statements of operations.

11

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

The Company's net investment in sales-type leases were comprised of the following ($ in thousands):
March 31, 2021December 31, 2020
Total undiscounted cash flows$13,665,594 $13,676,701 
Unguaranteed estimated residual value1,243,110 1,243,292 
Present value discount(13,596,864)(13,614,474)
Net investment in sales-type leases$1,311,840 $1,305,519 

The following table presents a rollforward of the Company's net investment in sales-type leases and Ground Lease receivables for the three months ended March 31, 2021 and 2020 ($ in thousands):

Net Investment in Sales-type LeasesGround Lease
Receivables
Total
Three Months Ended March 31, 2021
Beginning balance$1,305,519 $577,457 $1,882,976 
Purchase price allocation adjustment(182) (182)
Origination/acquisition/fundings(1)
 80,902 80,902 
Accretion6,503 2,987 9,490 
Ending balance(2)
$1,311,840 $661,346 $1,973,186 
Three Months Ended March 31, 2020
Beginning balance$984,598 $397,087 $1,381,685 
Origination/acquisition/fundings(1)
39,439 23,189 62,628 
Accretion4,943 1,941 6,884 
Ending balance$1,028,980 $422,217 $1,451,197 
_______________________________________________________________________________
(1)The net investment in sales-type leases is initially measured at the present value of the fixed and determinable lease payments, including any guaranteed or unguaranteed estimated residual value of the asset at the end of the lease, discounted at the rate implicit in the lease. For newly originated or acquired Ground Leases, the Company's estimate of residual value equals the fair value of the land at lease commencement.
(2)As of March 31, 2021, the Company's weighted average accrual rate for its net investment in sales-type leases and Ground Lease receivables was 5.5% and 5.4%, respectively. As of March 31, 2021, the weighted average remaining life of the Company's 15 Ground Lease receivables was 100.1 years.


12

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

Future Minimum Lease Payments under Sales-type Leases—Future minimum lease payments to be collected under sales-type leases accounted for under ASC 842, excluding lease payments that are not fixed and determinable, in effect as of March 31, 2021, are as follows by year ($ in thousands):
Fixed Bumps with Inflation AdjustmentsFixed
Bumps
Fixed Bumps with
Percentage Rent
Total
2021 (remaining nine months)$32,129 $959 $399 $33,487 
202243,547 1,303 537 45,387 
202344,768 1,329 586 46,683 
202446,992 1,356 586 48,934 
202547,796 1,383 586 49,765 
Thereafter12,984,827 355,263 101,248 13,441,338 
Total undiscounted cash flows$13,200,059 $361,593 $103,942 $13,665,594 

During the three months ended March 31, 2021 and 2020, the Company recognized interest income from sales-type leases in its consolidated statements of operations as follows ($ in thousands):
Three Months Ended March 31, 2021Net Investment in Sales-type LeasesGround
Lease Receivables
Total
Cash$11,114 $5,370 $16,484 
Non-cash6,503 2,987 9,490 
Total interest income from sales-type leases$17,617 $8,357 $25,974 
Three Months Ended March 31, 2020Net Investment in Sales-type LeasesGround
Lease Receivables
Total
Cash$8,690 $3,327 $12,017 
Non-cash4,943 1,941 6,884 
Total interest income from sales-type leases$13,633 $5,268 $18,901 
Note 6—Equity Investments in Ground Leases
    In August 2019, the Company formed a venture with a sovereign wealth fund that is an existing shareholder of the Company to acquire the existing Ground Lease at 425 Park Avenue in New York City. The venture acquired the Ground Lease in November 2019. The Company has a 54.8% noncontrolling equity interest in the venture and iStar is the manager of the venture. As of March 31, 2021 and December 31, 2020, the Company's investment in the venture was $130.0 million and $129.6 million, respectively. During the three months ended March 31, 2021 and 2020, the Company recorded $0.8 million and $0.8 million, respectively, in earnings from equity method investments from the venture.

13

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

Note 7—Deferred Expenses and Other Assets, Net and Accounts Payable, Accrued Expenses and Other Liabilities
Deferred expenses and other assets, net, consist of the following items ($ in thousands):
As of
March 31, 2021December 31, 2020
Operating lease right-of-use asset(1)
$28,272 $28,550 
Other assets(2)
2,217 1,965 
Deferred finance costs, net(3)
8,646 3,354 
Leasing costs, net462 465 
Purchase deposits4,667  
Deferred expenses and other assets, net$44,264 $34,334 
_______________________________________________________________________________
(1)Operating lease right-of-use asset relates to a property that is majority-owned by a third party and is ground leased to the Company. The Company is obligated to pay the owner of the property $0.4 million, subject to adjustment for changes in the CPI, per year through 2044; however, the Company's ground lease tenant at the property pays this expense directly under the terms of a master lease. Operating lease right-of-use asset is amortized on a straight-line basis over the term of the lease and is recorded in "Real estate expense" in the Company's consolidated statements of operations. During the three months ended March 31, 2021 and 2020, the Company recognized $0.1 million and $0.1 million, respectively, in "Real estate expense" and $0.1 million and $0.1 million, respectively, in "Other income" from its operating lease right-of-use asset. The related operating lease liability (see table below) equals the present value of the minimum rental payments due under the lease discounted at the Company's incremental secured borrowing rate for a similar asset estimated to be 5.5%.
(2)During the three months ended March 31, 2021 and 2020, the Company recognized $0.1 million and $3.8 million, respectively, of percentage rent in "Operating lease income" in the Company's consolidated statement of operations.
(3)The Company entered into a new Unsecured Revolver on March 31, 2021 (see Note 8). Accumulated amortization of deferred finance costs was zero  and $2.0 million as of March 31, 2021 and December 31, 2020, respectively.

Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands):
As of
March 31, 2021December 31, 2020
Interest rate hedge liabilities$ $33,215 
Interest payable20,585 17,890 
Dividends declared and payable8,688 8,673 
Operating lease liability5,701 5,732 
Other liabilities(1)
12,305 6,236 
Management fee payable3,472 3,402 
Accrued expenses(2)
2,387 1,525 
Accounts payable, accrued expenses and other liabilities$53,138 $76,673 
_______________________________________________________________________________
(1)As of March 31, 2021 and December 31, 2020, other liabilities includes $1.9 million and $1.3 million, respectively, due to the Manager for allocated payroll costs and costs it paid on the Company's behalf.
(2)As of March 31, 2021 and December 31, 2020, accrued expenses primarily includes accrued legal and audit expenses and accrued property expenses.

14

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

Note 8—Debt Obligations, net

The Company's outstanding debt obligations consist of the following ($ in thousands):
 As of
Interest
Rate
(1)
 
Scheduled
Maturity Date
(2)
 March 31, 2021December 31, 2020 
Secured credit financing:     
Mortgages$1,498,113 $1,498,113 3.99%April 2027 to November 2069
Revolver(3)
 215,000 N/AN/A
Total secured credit financing(4)
1,498,113 1,713,113    
Unsecured Revolver255,000  
LIBOR plus 1.00%
March 2026
Total debt obligations1,753,113 1,713,113    
Debt premium, discount and deferred financing costs, net(28,229)(28,387)   
Total debt obligations, net$1,724,884 $1,684,726    
_______________________________________________________________________________
(1)Represents the weighted average interest rate of consolidated mortgage debt in effect over the life of the mortgage debt and excludes the effect of debt premium, discount and deferred financing costs. As of March 31, 2021, the weighted average cash interest rate for the Company's consolidated mortgage debt, based on interest rates in effect at that date, was 3.20%. The difference between the weighted average interest rate and the weighted average cash interest rate is recorded to interest payable within "Accounts payable, accrued expenses, and other liabilities" on the Company's consolidated balance sheets. As of March 31, 2021, the Company's combined weighted average interest rate and combined weighted average cash interest rate of the Company's consolidated mortgage debt and the mortgage debt of the Company's unconsolidated venture (applying the Company's percentage interest in the venture - refer to Note 6) were 3.96% and 3.11%, respectively.
(2)Represents the extended maturity date for all debt obligations.
(3)This revolver was replaced in March 2021 with the Company's new Unsecured Revolver.
(4)As of March 31, 2021, $1.9 billion of real estate, at cost, net investment in sales-type leases and Ground Lease receivables served as collateral for the Company's debt obligations.

Mortgages—Mortgages consist of asset specific non-recourse borrowings that are secured by the Company's Ground Leases. As of March 31, 2021, the Company's mortgages are full term interest only, bear interest at a weighted average interest rate of 3.99% and have maturities between April 2027 and November 2069.
Unsecured Revolver—In March 2021, the Operating Partnership (as borrower) and the Company (as guarantor), entered into an unsecured revolving credit facility with an initial maximum aggregate principal amount of up to $1.0 billion (the "Unsecured Revolver"). The Unsecured Revolver provides an accordion feature to increase, subject to certain conditions (including the obtainment of additional lender commitments), the maximum availability up to $1.35 billion. The Unsecured Revolver has an initial maturity of March 2024 with two 12-month extension options exercisable by the Company, subject to certain conditions, and bears interest at an annual rate of applicable LIBOR plus 1.00%, subject to the Company's credit ratings. The Company also pays a facility fee of 0.125%, subject to the Company's credit ratings. As of March 31, 2021, there was $745.0 million of undrawn capacity on the Unsecured Revolver.

    Debt Covenants—The Company is subject to financial covenants under the Unsecured Revolver, including maintaining: (i) a ratio of unencumbered assets to unsecured debt of at least 1.33x; and (ii) a consolidated fixed charge coverage ratio of at least 1.15x, as such terms are defined in the documents governing the Unsecured Revolver. In addition, the Unsecured Revolver contains customary affirmative and negative covenants. Among other things, these covenants may restrict the Company or certain of its subsidiaries' ability to incur additional debt or liens, engage in certain mergers, consolidations and other fundamental changes, make other investments or pay dividends. The Company's mortgages contain no significant maintenance or ongoing financial covenants. As of March 31, 2021, the Company was in compliance with all of its financial covenants.
15

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

Future Scheduled Maturities—As of March 31, 2021, future scheduled maturities of outstanding debt obligations, assuming all extensions that can be exercised at the Company's option, are as follows ($ in thousands):

2021 (remaining nine months)$ 
2022 
2023 
2024 
2025 
Thereafter(1)
1,753,113 
Total principal maturities1,753,113 
Debt premium, discount and deferred financing costs, net(28,229)
Total debt obligations, net$1,724,884 
______________________________________________________________________________
(1)As of March 31, 2021, the Company's weighted average maturity for its mortgages was 30.3 years.
Note 9—Commitments and Contingencies

Unfunded Commitments—In March 2021, the Company entered into an agreement pursuant to which, subject to certain conditions being met, it would acquire 100% of the limited liability company interests in the owner of a fee estate subject to a Ground Lease on which a multi-family project is currently being constructed. As consideration for the transfer, the Company will acquire the ground lessor from iStar for approximately $16.1 million plus any additional amounts funded by iStar pursuant to the Ground Lease documents prior to the transfer (refer to Note 13). The Ground Lease documents provide for future funding obligations of approximately $11.9 million of deferred purchase price and $52.0 million of leasehold improvement allowance upon achievement of certain milestones.

In January 2021, the Company entered into an aggregate $36.0 million commitment to acquire land for $18.0 million and provide a $18.0 million leasehold improvement allowance for the Ground Lease tenant's conversion of an office property into a multi-family property. As of March 31, 2021, the Company had acquired the land and funded $5.7 million of the leasehold improvement allowance. The Company expects to fund the remaining commitment upon the completion of certain conditions.

In February 2020, the Company entered into an aggregate $37.0 million commitment to acquire land for $10.0 million and provide a $27.0 million leasehold improvement allowance for the Ground Lease tenant's construction of a multi-family property. As of March 31, 2021, the Company had acquired the land and funded $18.9 million of the leasehold improvement allowance. The Company expects to fund the remaining commitment upon the completion of certain conditions.

Legal Proceedings—The Company evaluates developments in legal proceedings that could require a liability to be accrued and/or disclosed. Based on its current knowledge, and after consultation with legal counsel, the Company believes it is not a party to, nor are any of its properties the subject of, any pending legal proceeding that would have a material adverse effect on the Company’s consolidated financial statements.

Note 10—Risk Management and Derivatives
    In the normal course of its ongoing business operations, the Company encounters credit risk. Credit risk is the risk of default on the Company’s leases that result from a tenant’s inability or unwillingness to make contractually required payments.

    Risk concentrations—Concentrations of credit risks arise when the Company has multiple leases with a particular tenant or credit party, or a number of the Company’s tenants are engaged in similar business activities, or activities in the same geographic region, or have similar economic features, such that their ability to meet contractual obligations, including those to the Company, could be similarly affected by changes in economic conditions.

    Although the Company’s Ground Leases are geographically diverse and the tenants operate in a variety of industries and property types, to the extent the Company has a significant concentration of operating lease income from any tenant, the inability of that tenant to make its payment could have a material adverse effect on the Company.
16

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)


    Derivative instruments and hedging activity—The Company's use of derivative financial instruments has been associated with debt issuances and primarily limited to the utilization of interest rate swaps and interest rate caps to manage interest rate risk exposure. The Company does not enter into derivatives for trading purposes.

    The Company recognizes derivatives as either assets or liabilities on the Company's consolidated balance sheets at fair value. Interest rate hedge assets are recorded in "Deferred expenses and other assets, net" and interest rate hedge liabilities are recorded in "Accounts payable, accrued expenses and other liabilities" on the Company's consolidated balance sheets. If certain conditions are met, a derivative may be specifically designated as a hedge of the exposure to changes in the fair value of a recognized asset or liability, a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability.

    For the Company's derivatives designated and qualifying as cash flow hedges, changes in the fair value of the derivatives are reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified into interest expense in the same periods during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s debt. The Company is hedging its exposure to the variability in future cash flows for forecasted transactions that the Company expects to occur over the next 9 months (excluding forecasted transactions related to the payment of variable interest on existing financial instruments).

    For the Company's derivatives not designated as hedges, the changes in the fair value of the derivatives are reported in "Interest expense" in the Company's consolidated statements of operations. Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements and other identified risks but do not meet the strict hedge accounting requirements.

    The table below presents the Company's derivatives as well as their classification on the consolidated balance sheets as of March 31, 2021 and December 31, 2020 ($ in thousands):(1)
March 31, 2021December 31, 2020
Derivative Type
Fair
Value(2)
Fair
Value(2)
Balance Sheet
Location
Liabilities
Interest rate swaps(3)
$ $33,215 Accounts payable, accrued expenses and other liabilities
$ $33,215 
____________________________________________________________________________
(1)During the three months ended March 31, 2021 and 2020, the Company recorded $13.3 million and $(23.0) million, respectively, of unrealized gains (losses) in accumulated other comprehensive income (loss).
(2)The fair value of the Company's derivatives are based upon widely accepted valuation techniques utilized by a third-party specialist using observable inputs such as interest rates and contractual cash flow and are classified as Level 2 within the fair value hierarchy. Over the next 12 months, the Company expects that $3.8 million related to cash flow hedges will be reclassified from "Accumulated other comprehensive income (loss)" as an increase to interest expense.
(3)During the three months ended March 31, 2021, the Company terminated its interest rate hedges for $19.9 million.
    
    Credit Risk-Related Contingent Features—The Company reports derivative instruments on a gross basis in its consolidated financial statements. The Company has agreements with each of its derivative counterparties that contain a provision whereby if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. In connection with its interest rate derivatives which were in a liability position as of December 31, 2020, the Company posted collateral of $35.5 million, which is included in "Restricted cash" on the Company's consolidated balance sheets. As of December 31, 2020, the Company would not have been required to post any additional collateral to settle these contracts had the Company been declared in default on its derivative obligations.

17

Table of Contents
Safehold Inc.
Notes to Consolidated Financial Statements (Continued)
(unaudited)

    The table below presents the effect of the Company's derivative financial instruments in the consolidated statements of operations and the consolidated statements of comprehensive income (loss) for the three months ended March 31, 2021 and 2020 ($ in thousands):
Derivatives Designated in Hedging RelationshipsLocation of Gain (Loss)
When Recognized in Income
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive IncomeAmount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income into Earnings
For the Three Months Ended March 31, 2021
Interest rate swapsInterest expense$13,290 $(358)
For the Three Months Ended March 31, 2020
Interest rate swapsInterest expense$(23,000)$(344)
Note 11—Equity

Common Stock—The Company has