Safehold announced that its operating company, Safehold GL Holdings, has signed a definitive note purchase agreement for a private placement of $225 million in aggregate principal amount of senior unsecured notes due August 1, 2056.
The notes were priced on May 28, 2026, based on the 30-year Treasury rate of 4.99% plus a spread of 162.5 basis points, resulting in an all-in coupon of 6.615%.
The notes feature a stairstep coupon structure, with a starting cash interest rate of 4.00%. The rate increases to 4.50% in year 5, 5.00% in year 9, 5.50% in year 13, 6.00% in year 17, and 6.615% in year 21.
The difference between the stated rate of 6.615% and the cash interest rate will accrue during each semi-annual payment period and be paid in kind by adding the accrued interest to the outstanding principal balance. That amount will be repaid at maturity in August 2056, subject to maintaining certain credit ratings.
Safehold also recently terminated hedges and realized a cash settlement gain of approximately $30 million. After giving effect to that gain, the company expects to recognize an effective semi-annual yield to maturity of approximately 5.83% on the notes.
Safehold plans to use the net proceeds from the offering for general corporate purposes. These may include repaying borrowings under its unsecured revolver, making additional investments in ground leases, providing working capital, and funding obligations under existing commitments.
Morgan Stanley served as lead placement agent for the offering, while RBC Capital Markets served as co-placement agent.
Safehold is a real estate investment trust focused on modern ground leases. The company works with owners of multifamily, affordable housing, office, industrial, hospitality, student housing, life science, and mixed-use properties to help unlock the value of the land beneath their buildings.
KEY QUOTES:
“We’re pleased to execute another structured 30-year unsecured debt offering. This capital is well suited to match our assets at an attractive cash and net effective cost with our in-the-money hedges, while also lengthening Safehold’s maturity profile. We are pleased to have both U.K. and U.S. investors participate in this offering.”
Brett Asnas, Chief Financial Officer of Safehold
