Safehold Inc. Commitments Disclosure
Note 11—Commitments and Contingencies
Lease Commitments—Future minimum lease obligations under non-cancelable operating leases as of December 31, 2025 are as follows ($ in thousands):(1)
2026 | $ | 668 | |
2027 |
| 745 | |
2028 |
| 752 | |
2029 |
| 772 | |
2030 |
| 788 | |
Thereafter |
| 7,190 | |
Total undiscounted cash flows(1) |
| 10,915 | |
Present value discount(2) |
| (5,293) | |
Lease liabilities | $ | 5,622 |
| (1) | Includes cash flows that relate 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 $0.5 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. |
| (2) | The lease liability equals the present value of the minimum rental payments due under the lease discounted at the rate implicit in the lease or the Company’s incremental secured borrowing rate for similar collateral. For operating leases, lease liabilities were discounted at the Company’s weighted average incremental secured borrowing rate for similar collateral estimated to be 5.5% and the weighted average remaining lease term is 17.0 years. The Company assumed its operating leases from iStar in connection with the Merger and therefore did not directly make any payments under its operating leases for the three months ended March 31, 2023. During the years ended December 31, 2025 and 2024 and the nine months ended December 31, 2023, the Company made payments of $5.7 million, $5.7 million and $4.3 million, respectively, related to its operating leases. |
Unfunded Commitments— The Company has unfunded commitments to certain of its Ground Lease tenants related to leasehold improvement allowances that it expects to fund upon the completion of certain conditions. As of December 31, 2025, the Company had $142.3 million of such commitments, excluding commitments to be funded by noncontrolling interests.
Other Commitments—The Company funds construction and development loans and build-outs of space in real estate assets over a period of time, both individually and through the Leasehold Loan Fund, if and when the borrowers and tenants meet established milestones and other performance criteria. We refer to these arrangements as performance-based commitments. As of December 31, 2025, the Company had $154.8 million of such commitments.
Legal Proceedings—The Company evaluates developments in legal proceedings that could require a liability to be accrued and/or disclosed.
On October 22, 2025, the Company sent the tenant under the Park Hotels master lease (“Park Tenant”) a termination notice for all five hotels and commenced litigation against the Park Tenant and Park Intermediate Holdings LLC, guarantor under the master lease, for certain breaches, among other things, related to the maintenance and operations of the hotels. The litigation is captioned In re Park Hotels Litigation, C.A. No. 2025-1210-LWW, pending in the Delaware Court of Chancery. The Park Tenant has disputed the Company’s right to terminate the lease, and that issue, among others, is subject to the litigation, which includes counterclaims filed by the Park Tenant. Although the Company believes its claims are meritorious, there are no assurances that it will prevail in its litigation.
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 other pending legal proceeding that would have a material adverse effect on the Company’s consolidated financial statements.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 6, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 26, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 26, 2016 | |
About Commitments Disclosures
Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.
Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.