Safehold Closes Four Ground Leases for Affordable Multifamily Assets
Safehold (NYSE: SAFE), a pioneer in the ground lease industry, has concluded ground leases to develop four affordable housing communities in Northern California. This expansion encompasses 781 units spread across three San Jose locations and one in Concord, California. Partnering with The Pacific Companies, a notable affordable housing developer, these projects aim to address significant demand for low-income housing. During Q2 2024, Safehold closed six ground lease transactions and has invested $6.5 billion in ground leases to date. Safehold leverages its strong balance sheet to drive innovation and meet market needs, enhancing its footprint in the affordable housing sector.
- Safehold closed ground leases for four affordable housing projects totaling 781 units in Northern California.
- Safehold has invested $6.5 billion in ground leases to date.
- Safehold closed six ground lease transactions in Q2 2024, demonstrating increased activity.
- Partnership with The Pacific Companies enhances Safehold's presence in the affordable housing market.
- No immediate financial metrics, such as revenue or profit changes, were disclosed.
Safehold Inc. has made significant strides in the real estate market by expanding its ground lease portfolio in Northern California. This move is substantial considering the affordable housing sector, which is not only a pressing social need but also a stable investment segment due to consistent demand.
The financial implications are noteworthy. Ground leases provide a steady income stream with lower risk compared to traditional real estate investments. This is particularly beneficial for Safehold, which operates as a REIT (Real Estate Investment Trust). REITs are mandated to distribute at least
Furthermore, the
From a market perspective, Safehold's expansion into the affordable housing sector is particularly timely. The affordable housing crisis in the U.S. has been exacerbated by rising construction costs and regulatory challenges, creating a significant supply-demand gap. By partnering with The Pacific Companies, an experienced developer, Safehold is strategically positioning itself to address this gap, potentially capturing a larger market share in a high-demand sector.
Moreover, the focus on Northern California—a region with one of the highest housing shortages—further underscores the strategic alignment. These projects are likely to attract favorable attention from both investors and policymakers, enhancing Safehold's reputation and possibly leading to more future opportunities in similar high-need areas.
Additionally, the company's innovative ground lease model, which offers long-term, low-cost capital, could be a game-changer in making affordable housing projects financially viable. This could set a precedent and encourage more developers to consider ground lease options, broadening Safehold's market influence.
"We are thrilled to expand our relationship with The Pacific Companies, and to play a role in meeting the significant unmet demand for affordable housing," said Safehold's EVP, Head of Investments Steve Wylder. "We have quickly expanded our presence in the affordable housing space, and are finding that our long-term, low-cost ground lease capital can help to fill gaps, drive a lower cost of capital, and help high-quality projects like these move forward."
Safehold closed a total of six ground lease transactions during the second quarter of 2024.
"We have closed
About Safehold:
Safehold Inc. (NYSE: SAFE) is revolutionizing real estate ownership by providing a new and better way for owners to unlock the value of the land beneath their buildings. Having created the modern ground lease industry in 2017, Safehold continues to help owners of high quality multifamily, office, industrial, hospitality, student housing, life science and mixed-use properties generate higher returns with less risk. The Company, which is taxed as a real estate investment trust (REIT), seeks to deliver safe, growing income and long-term capital appreciation to its shareholders. Additional information on Safehold is available on its website at www.safeholdinc.com.
Transaction Contacts: EVP, Head of Investments
Ethan Torbati Vice President, Investments
| Investment Team and IR Contacts:
Tim Doherty Chief Investment Officer
Pearse Hoffmann Senior Vice President Capital Markets & Investor Relations |
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SOURCE Safehold
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