Safehold (SAFE) Q2 FY26 earnings call: the analyst Q&A

Asked for more details on the Brookfield joint venture, including any fees and implications for Caret.

Brett Asnas explained the Brookfield JV's benefits: adding an institutional partner, attractive valuation, deleveraging, creating liquidity, and retaining a call option to repurchase Brookfield's 49% interest after 7 years. He confirmed there were customary fees and no Caret event.

“I think the feature in this deal of being able to have that call option after 7 years is an important one for us as we continue to build and scale the platform and continue to grow our UCA account.”

asked by Anthony Paolone · answered by Brett Asnas

Inquired about the investment pipeline and how the Brookfield JV proceeds impact capital availability.

Michael Trachtenberg noted the conversion of $150 million of pipeline in the quarter and continued replenishment. Brett Asnas added that with $620 million drawn on the revolver and JV proceeds offsetting recent capital deployment, they have sufficient runway and no near-term equity need.

“Clearly, our capital needs are going to be dependent mostly on creating new deals and looking at that pipeline and taking leverage down this past quarter has helped us get some runway here over the coming quarters, which we obviously don't see any equity need in the near future here.”

asked by Anthony Paolone · answered by Michael Trachtenberg

Asked about the reason for the decline in multifamily rent coverage from year-end.

Jay Sugarman attributed the decline to the natural migration of new development deals coming online, which are underwritten conservatively, indicating it's not a material concern.

“Yes, there's a natural migration in the portfolio as you bring new deals on and particularly in some of the development deals, we underwrite pretty conservatively. So nothing material to look at.”

asked by Mitch Germain · answered by Jay Sugarman

Asked if Safehold is open to business across multiple sectors, specifically office, or if multifamily remains the sole focus.

Michael Trachtenberg confirmed continued focus on multifamily as the core asset class but stated they are not closed for business in other asset classes. He noted that office would have the 'highest bar to clear' for new investments.

“Office will be the one that has the highest bar to clear to get us back to the table, but we are not closing the door on any particular asset class.”

asked by Mitch Germain · answered by Michael Trachtenberg

Inquired about progress in expanding affordable housing ground leases beyond California.

Steve Wylder confirmed continued focus on California but highlighted closing a second transaction in Texas and efforts to open new markets in the Southeast, Sunbelt, and Mid-Atlantic, acknowledging the time needed for regulatory study and customer profile building.

“We're working hard to open up other markets throughout the Southeast, the Sunbelt up in the Mid-Atlantic. It takes some time to study the regulatory regime and build a profile of customers. But I think in time, you'll see us continue to expand.”

asked by Jonathan Petersen · answered by Steve Wylder

Asked for an update on the remaining $100 million from last quarter's $255 million nonbinding LOI pipeline after $150 million was closed this quarter.

Steve Wylder stated they would continue to convert on those deals and replenish the pipeline over the next few quarters, expecting to execute most of the remaining pipeline in the next 2-3 quarters.

“So that pipeline that we talked about last quarter, we're going to continue to convert on those deals and replenish over the next coming few quarters. But we did a big chunk of it this quarter. And in the next 2, 3 quarters, we'll execute on most of that pipeline.”

asked by Unknown Analyst · answered by Steve Wylder