세이프홀드 2026년 3분기 실적 발표: 금리 변동성으로 신규 취급액 둔화 속 EPS 0.41달러

세이프홀드(NYSE: SAFE)가 2026년 3분기 전년 동기 대비 안정적인 실적을 발표했다. 다만 급격한 금리 변동으로 거래 불확실성이 커지면서 토지임대 신규 계약 체결은 둔화됐다. 경영진은 어포더블 하우징, 다가구 주택 자본 재조정(리캡) 및 개발 기회에 지속적으로 집중하고 있다.

핵심 요약

• 3분기 매출은 1억 1,870만 달러, 순이익은 2,880만 달러, 주당순이익(EPS)은 0.41달러를 기록했다. EPS는 전년 동기 대비 보합을 나타냈다.
• 세이프홀드는 총 3,800만 달러 규모의 토지임대 계약 2건을 신규 체결해 연간 누적 실적을 약 2억 4,200만 달러로 끌어올렸다. 신규 임대 계약의 합산 경제적 수익률은 7.3%, 토지임대가치비율(GLTV)은 39%, 임대료 커버리지는 2.7배를 기록했다.
• 포트폴리오 총 장부가액은 분기 말 기준 74억 달러를 기록했다. 추정 미실현 자본이득은 전 분기 대비 약 1억 달러 증가한 99억 달러로 집계됐다.
• 가용 유동성은 13억 달러, 담보 미설정 자산은 약 50억 달러였다. 총부채는 51억 달러를 기록했으며, 레버리지는 2.01배에서 2.04배로 상승했다.
• 경영진은 8월 하순부터 10월 초까지 미국 10년물 국채 금리가 약 70bp(1bp=0.01%포인트) 상승하면서 부동산 거래에 차질이 빚어졌고, 가격 재산정과 거래 종결 지연이 늘어났다고 밝혔다.
• 세이프홀드는 4분기에도 자사주 매입을 지속했다. 경영진은 합작법인(JV) 및 기타 민간 자본 구조를 활용해 레버리지를 관리하는 한편, 장기적인 최우선 과제는 여전히 신규 계약 체결 규모를 확대하는 것이라고 밝혔다.

주요 재무 데이터

EPS의 안정세는 자산 자금 집행에 따른 순이익 증가(net accretion)와 보유 호텔의 긍정적인 기여가 반영된 결과다. 다만 이러한 요인은 스타 홀딩스(Star Holdings) 운용 수수료 감소, 비연결 합작법인 이익 감소, 비현금성 일반 대손충당금의 소폭 증가로 상쇄됐다.

세이프홀드는 이번 분기 중 경제적 수익률 7.4%로 1억 700만 달러 규모의 토지임대 자금을 집행했다. 또한 SOFR에 425bp를 가산한 금리로 500만 달러 규모의 차지권 대출을 집행했다.

사업 및 영업 실적

3분기 신규 체결 계약 2건은 모두 기존 고객과의 어포더블 하우징 거래였다. 한 건은 샌프란시스코 베이 에어리어에, 다른 한 건은 샌안토니오에 위치해 있다. 경영진은 연간 누적 어포더블 하우징 공급 실적이 2024년과 2025년 각각의 연간 완료 규모 대비 거의 두 배에 달했다고 밝혔다.

파이프라인은 어포더블 하우징, 일반 시세 다가구 주택 자본 재조정(리캡), 다가구 주택 개발 등 세 분야에 집중돼 있다. 세이프홀드는 유동성과 장기 펀더멘털, 토지임대 소유자 관점에서의 위험 조정 수익률을 이유로 다가구 주택을 선호한다.

경영진은 저금리 부동산 부채의 만기가 도래함에 따라 기회가 창출될 것으로 보고 있다. 토지임대를 활용하면 소유주가 경영권을 유지하면서 더 비싼 구제 자본(rescue capital) 조달을 피할 수 있다고 회사는 설명했다. 신규 개발 사업의 경우, 이 구조를 통해 개발사의 자기자본 부담과 전반적인 자본 비용을 낮출 수 있다.

다만 금리 변동성으로 인해 부채 및 자기자본을 토지임대와 조율하는 과정에서 조건 재협상(retrade) 및 가격 재산정의 빈도가 높아졌다. 경영진은 파이프라인 규모는 비교적 안정적으로 유지되고 있으나, 거래 종결의 확실성은 낮아졌다고 밝혔다.

대차대조표 및 자본 배분

세이프홀드는 3분기 말 기준 무담보 부채 28억 달러, 비소구 담보부 부채 13억 달러, 무담보 리볼빙 대출 인출액 7억 6,500만 달러, 비연결 토지임대 합작법인 부채 중 지분 해당액 2억 7,000만 달러를 기록했다.

장기 영구 부채의 가중평균 만기는 약 18년, 실효 비용은 4.4%이며, 2029년까지 대규모 만기 도래는 없다. 아울러 회사는 2028년 4월까지 3.0% 고정금리의 5억 달러 규모 SOFR 스왑을 유지하고 있다.

세이프홀드는 무디스(Moody's)로부터 'A3', S&P와 피치(Fitch)로부터 각각 'A-'의 투자적격 등급을 유지하고 있으며, 등급 전망은 모두 '안정적'이다.

경영진은 회사의 목표 레버리지를 2.0배로 제시하며, 약 2억 5,000만 달러의 추가 거래 자금이 집행될 때마다 레버리지가 약 0.1배 상승할 것이라고 밝혔다. 토지임대 미집행 약정액은 총 약 1억 2,000만 달러이며, 향후 수 분기에 걸쳐 자금이 집행될 것으로 예상된다.

리스크 및 주목할 점

• 금리 변동성: 장기 금리의 급격한 변동으로 거래가 지연되고 고객의 거래 확신이 약화되고 있다.
• 신규 계약 체결 속도: 3분기 신규 체결액은 3,800만 달러에 그쳤으며, 경영진은 현재 수준보다 규모가 확대되기를 기대하고 있다.
• 고객 수용성: 경영진은 최근 7%대 초중반의 수익률이 고객들이 유의미한 거래 규모에서 수용할 수 있는 상한선에 근접했을 가능성이 높다고 밝혔다.
• 자본 배분: 세이프홀드는 레버리지를 목표치인 2.0배 수준으로 유지하면서 신규 계약 체결과 자사주 매입 간의 균형을 맞추고 있다.
• 배당 정책: 현재 과세 소득이 낮아 배당금의 상당 부분이 재량에 달려 있다. 경영진은 이사회와 함께 해당 정책을 지속적으로 검토하고 있다고 밝혔다.
• 소송: 경영진은 맨해튼 미드타운의 오피스-주거 전환 건에 대한 진전이 없다고 보고했으며, 파크 호텔스(Park Hotels) 관련 절차는 더디게 진행되고 있다고 설명했다.

애널리스트 Q&A 주요 내용

경영진은 무차입 장기 크레디트 수익률에 대한 기준선이 6%대 초반이라고 밝혔다. 최근 거래에서는 7%대 초중반의 수익률을 달성했다. 세이프홀드는 소비자물가지수(CPI) 조정을 감안할 때 해당 수익률이 7%대 중반에서 8% 범위로 환산될 수 있으며, 여기에 잠재적인 캐럿(Caret) 수익 구조가 추가될 수 있을 것으로 기대하고 있다.

거래 가격 책정과 관련해 경영진은 계약 규모와 수익률 간의 상충 관계를 강조했다. 가격을 7%대 이상으로 크게 올릴 경우 특히 다가구 주택 부문에서 수요가 위축될 수 있다. 다만 다른 부동산 부문에서는 더 높은 수익률을 확보할 기회가 있을 수 있다.

합작법인은 여전히 선호되는 포트폴리오 재순환 구조다. 경영진은 이러한 방식을 통해 세이프홀드가 경영권, 경제적 실익 및 향후 잠재적 재매입 권리를 유지하는 동시에 매각 대금을 확보하고 레버리지를 관리할 수 있다고 설명했다. 단순 자산 매각보다는 2분기에 성사된 합작법인과 유사한 구조가 진행될 가능성이 더 높아 보인다.

경영진은 또한 전체 임대 포트폴리오의 90% 이상에서 인플레이션 방어 장치가 마련돼 있다는 점을 강조했다. 2018년과 2019년 무렵부터 체결된 임대 계약의 CPI 룩백(소급 조정) 조항이 향후 수년간 효력을 발휘하기 시작할 것으로 예상되며, 이에 따라 임대료가 재조정되어 더 높아진 기준선에서 향후 성장이 복리로 이어질 전망이다.

스타 홀딩스와 관련해 세이프홀드는 분기 말 소규모 대출 계약 수정에 합의했다. 경영진은 이번 수정을 통해 마진론(주식담보대출) 상환으로 신용 보호를 강화했으며, 4분기 일회성 수수료가 아닌 시간에 걸쳐 인식될 추가적인 경제적 실익을 확보했다고 밝혔다.

실적 발표 컨퍼런스콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good afternoon, and welcome to Safehold's Third Quarter Earnings Conference Call. [Operator Instructions] As a reminder, today's conference is being recorded.

At this time, for opening remarks and introductions, I would like to turn the conference over to Mr. Pearse Hoffmann, Senior Vice President of Capital Markets and Investor Relations. Please go ahead, sir.

Pearse Hoffmann

Good afternoon, everyone. Thank you for joining us today for Safehold's earnings call. On the call, we have Jay Sugarman, Chairman and Chief Executive Officer; Michael Trachtenberg, President; Brett Asnas, Chief Financial Officer; and Steve Wylder, Executive Vice President, Head of Investments.

This afternoon, we plan to walk through a presentation that details our third quarter results. The presentation can be found on our website at safeholdinc.com by clicking on the Investors link. There will be a replay of this conference call beginning at 8:00 p.m. Eastern Time today. The dial-in for the replay is (877) 481-4010 with a confirmation code of 54694. [Operator Instructions]

Before I turn the call over to Jay, I'd like to remind everyone that statements in this earnings call, which are not historical facts may be forward-looking. Our actual results may differ materially from these forward-looking statements, and the risk factors that could cause these differences are detailed in our SEC reports. Safehold disclaims any intent or obligation to update these forward-looking statements, except as expressly required by law.

Now with that, I'd like to turn it over to Chairman and CEO, Jay Sugarman.

Jay?

Jay Sugarman

Thanks, Pearse, and thanks to everyone joining us today. No question, our business gets tough during periods when long rates rise to 20-year highs. With some of the longest duration assets in the capital markets, we are naturally sensitive to long rates moving higher. But unlike straight fixed income instruments, Safehold ground leases typically include inflation kickers. Its balance sheet has long-term debt that becomes more valuable as rates rise, and its embedded upside from Caret can benefit over the long term if replacement costs increase and supply is suppressed due to higher interest rate levels.

Over the 99-year life of our ground leases, we should expect rates to rise and fall and cause asset values to go up and down. But the core strengths of the ground lease business have been historically proven, and the long-term compounding they can create should reward patience and enable shareholders to capture a combination of investment benefits that are hard to replicate anywhere else in the market. It may take time, and it's definitely rough right now, but we think all the work will pay off in the end.

With that in mind, let me have Michael and Brett recap the quarter and take you through the details.

Michael?

Michael Trachtenberg

Thank you, Jay, and good afternoon, everyone. I'll begin with our investment activity for the quarter, then discuss trends we're seeing in our pipeline before passing it to Brett to review the portfolio and financial results.

During the third quarter, we originated 2 ground leases for an aggregate commitment of $38 million, bringing year-to-date volume to approximately $242 million. Both closings were within our affordable housing subsector with repeat customers, with one located in the San Francisco Bay Area and the other in San Antonio. The deals combined carry a 7.3% economic yield, 39% GLTV and 2.7x rent coverage.

Turning to the broader market. There is no doubt the recent upward move in rates has been disruptive to transaction activity, at least in the short run. From late August to early October, the 10-year Treasury yield was up nearly 70 basis points. There has been some relief since then, but that sharp of a move is naturally going to have an impact on the real estate capital markets ecosystem. As it relates to Safehold, our pipeline is focused on areas that are most actionable over the next few quarters. We continue to see positive interest from customers in our growing affordable housing business, which is generally more insulated from day-to-day rate volatility.

There's a clear need for more affordable housing supply nationally, and we positioned our ground lease as a way to fill capital gaps and spur more development, which has been well received by both developers and municipalities. Year-to-date, we've nearly doubled annual production from both 2024 and 2025 and believe we're establishing lasting advantages in the sector, both in terms of product knowledge and relationships. We're also beginning to see opportunities emerge for both recapitalizations and high-quality developments. There's an entire vintage of assets with low-cost debt coming due.

And as lenders force more action, we believe ground leases can play a useful role in helping owners maintain control of their properties and avoid expensive rescue capital. For new development, capital costs and construction costs are each straining the economics and viability of certain projects. Ground leases can help solve that by lowering developer equity commitments and cost of capital. In terms of portfolio targets, we are evaluating opportunities across property sectors that generally favor multifamily for its liquidity, long-term fundamentals and attractive risk-adjusted returns with the ground lease owner.

I'll now hand it over to Brett for an overview of the portfolio and our financials.

Brett Asnas

Thank you, Michael. At quarter end, the portfolio stood at $7.4 billion of aggregate gross book value, and estimated unrealized capital appreciation was $9.9 billion, up approximately $100 million from last quarter. Portfolio GLTV and rent coverage were unchanged at 52% and 3.4x, respectively, and we finished the quarter with $1.3 billion of available liquidity. During the quarter, we funded $112 million, including $107 million of ground lease fundings at a 7.4% economic yield and $5 million of leasehold loans at SOFR+425 basis points.

Turning to earnings. Revenue for the third quarter was $118.7 million. Net income was $28.8 million and earnings per share was $0.41. EPS was flat year-over-year as net accretion from asset fundings and positive owned hotel contributions were offset by lower management fees from Star Holdings, lower unconsolidated JV earnings, along with modestly higher noncash general reserves.

Moving to the balance sheet. We maintain an A3 rating from Moody's and A- ratings from S&P and Fitch, all with stable outlooks. We have approximately $5 billion of unencumbered assets, which further enhances our flexibility. We ended the quarter with $5.1 billion of debt, consisting of $2.8 billion of unsecured debt, $1.3 billion of nonrecourse secured debt, $765 million drawn on our unsecured revolver and $270 million of our pro rata share of debt on ground leases that we own in unconsolidated joint ventures.

We maintain a $500 million SOFR swap at 3.0% through April 2028 to hedge our limited floating rate borrowings and have long-term Treasury locks at a mark-to-market gain position of approximately $4 million to be applied to future permanent debt. Our liability structure remains a strong source of value and differentiation for the company. Safehold's permanent debt has a weighted average maturity of approximately 18 years, locked at an effective cost of 4.4% with no significant maturities until 2029.

On a mark-to-market basis, we estimate our below-market debt has approximately $800 million of embedded value, which is roughly Safehold's market cap today. Leverage ticked up modestly from 2.01x to 2.04x, primarily due to investment fundings and share repurchases. We continued our share repurchases in the fourth quarter as the stock trades at what we believe is a significant discount to our estimate of NAV. Today's share price imputes little to no value of Caret, our liability structure and the CPI lookbacks embedded in the portfolio.

All of these value sources taken together suggest a market implied discount rate on our cash flows that is disconnected from the fundamentals of our portfolio. So to conclude, we have ample liquidity and a valuable long-term balance sheet. We're seeing positive customer engagement across several segments of the market, and we will remain disciplined in how we allocate capital and fund the business to maximize long-term value for our shareholders.

And with that, let me turn it back to Jay.

Jay Sugarman

Thanks, Brett. Right now, AI is driving the economy's demand curve higher, adding to inflationary pressures. But in the medium to long term, this may be as early as 2 to 3 years from now when massive capacity comes online, we believe AI drives the supply curve out to the right and becomes a powerful disinflationary force across a wide range of the economy. That's a part of the cycle we are well positioned for, and we'll continue to work towards.

So with that, let's go ahead and open up for questions.

Operator?

Operator

[Operator Instructions] Our first question today is coming from Anthony Paolone with JPMorgan.

질의응답

Anthony Paolone

My first question is just on the deal activity that you're out there seeing. Can you talk about just how much of it is that there's just not going to be a price that you all could afford with your cost of capital versus a gap in terms of what like a seller would want? I guess maybe a different way to ask it is like what would it have to be -- where would economics have to be for things to clear?

Michael Trachtenberg

Sure. So Tony, our focus is still on beating our benchmarks for unlevered long-term credit, which is in the low 6s. Recent transactions for us have been in the low to mid-7% range. And then if you include CPI, we expect that to translate to the mid-7s to 8% range plus Caret.

Anthony Paolone

Right. But understanding like SAFE's cost of capital right now is tough given where the equity is and where rates are. But are you saying that you can go and execute in the market and get people to sell you their land in the 5s today? Or I guess, like where do deals pencil?

Brett Asnas

Tony, it's Brett. So I'll take the first part of that, which was compared to our cost of capital, how are we thinking about the returns that we're getting on the assets, I would say that from a cost of debt capital standpoint, and as you know, we're levered 2:1. When you start looking at our benchmarks that we have out there where we're able to raise debt capital, there's still accretion there, right? Obviously, base rates are up. Spreads have stayed pretty resilient.

But overall, when we start looking at our maturity profile and laddering in different tenors, you've seen us do everything from 5-year debt to 10-year debt to 30-year debt. The last deal we did back in Q2 was a 30-year step rate deal. So again, comparing to where we've been in the past to today, obviously, elevated rates, but we've been getting that additional yield on the asset side. So from a debt standpoint, there's still accretion. Then from the equity side, obviously, as I mentioned in my remarks, there is a disconnect with our form of valuation and sum of the parts and where we think value should lie. And we're continuing to find ways to get credit for those other value components.

But on the equity side, we certainly, over the course of the quarter and into the fourth quarter have continued to buy back the stock. We feel like there is still that disconnect. And from the equity side, we've continued to find other solutions. As you recall, back in the second quarter, we did a joint venture. We were able to delever through that. So we're continuing to find private capital solutions instead of issuing stock at these levels to continue to find ways to create shareholder value and accretion for our financials.

The other part, I'll pass to you, Michael, you want to talk about the customers and their desire at these levels?

Michael Trachtenberg

Sure. So obviously, it is tougher in a higher interest rate environment to entice customers to want to take the product. And we think that where we've been transacting recently probably is the higher end of the range where we are likely to find market acceptance.

Jay Sugarman

Yes. There's more deals, obviously, Tony, in the mid- to high 4s than it will be in the 5s to low 5s. So it's a trade-off between volume and pricing. And so we're looking at that equation all the time.

Anthony Paolone

Okay. And then just my second one real quick is on the dividend. Do you -- what is your taxable net look like? And is it worth continuing to pay a dividend? Or could that be a source of retained earnings for you to kind of grow?

Brett Asnas

Tony, it's Brett. Yes, we constantly look at our dividend and our policy and meet intermittently and quarterly with our Board. As you know, since the merger back in 2023, a lot of growing out of the cost structure that we had was predicated on growing volume. Obviously, we want to be able to grow origination volume, and we think that accretion will certainly help. Our taxable income is quite low. So again, a lot of the dividend is discretionary. But for the moment, we feel like the tools and the toolkit that we have to continue to climb our way out of that are there.

But time will tell, right? The markets are -- have been volatile. There's obviously been, as we said in our remarks, a 50 to 70 basis point increase here over the last, call it, a couple of months. And we still feel like going forward, with the capital tools that we've been able to build with our investment-grade ratings, the bespoke structures that we've been able to do in the second quarter this year. Over time, we'll continue to evaluate that, but it certainly feels like there are tools to solve it over the longer term.

Operator

Our next question is coming from Caitlin Burrows with Goldman Sachs.

Caitlin Burrows

Maybe just on the origination side. It looks like that was relatively lower in the quarter, and I know we've touched on a couple of topics already. But I guess, would you attribute that to regular quarterly volatility or lumpiness that can come up? Or were the cadence of deals disrupted with volatile interest rates/ the impact that your higher cost of capital had on your kind of interest or ability to do more volume?

Michael Trachtenberg

Sure. So Caitlin, I'd say that the size of our pipeline has remained relatively constant over the last few quarters, and we're still seeing our interest mainly in 3 main categories, one being affordable, second is market rate multifamily recaps and the third is multifamily developments. But like you mentioned, given the recent interest rate volatility that we've been seeing, there's been a lot greater closing uncertainty, and we've seen in all of our deals where we need debt and equity aligned with our ground lease, higher propensity for retrades and repricing, which has just delayed and sometimes disrupted the transactions that we're working on.

Caitlin Burrows

Got it. Okay. And then I guess when you think of that disruption versus buying back stock today, I guess, is there any comment you can give on kind of future plans and how you weigh more origination volume versus buyback volume?

Jay Sugarman

Yes, Caitlin, it's Jay. We have done obviously both, and we think both are viable at different points in time. We've seen a lot of volume in the stock. And so taking advantage of that in a couple of instances. But again, our long-term goal here is to grow the business and establish it as a consistent regular way piece of the capital structure and as many deals and as many customers as possible. So it is a balancing act. As you know, we've said that before and continues to be.

I think right now, we're focused very much on this origination question on how do we break through with our customers as they deal with the uncertainties that they're being faced with. And I think Michael and the team are really focused right now on trying to get them what they need to solve their business problems. So always a topic of conversation internally, but I'd like to see the origination number obviously start back up again.

Operator

Our next question is coming from Rich Anderson with Cantor Fitzgerald.

Richard Anderson

So I had written down the question around recaps before you said it. And I'm wondering, you would think that there will at least be a conversation for a ground lease in some circumstances when an owner is facing a debt expiration. What's your chief competition for situations like that? Is it just basic fee simple, better cost of capital, REITs or whatever?

How are you losing those opportunities, I guess? I'm just trying to understand the cadence of why ground leases wouldn't be at least a little bit more part of the conversation in situations of recapitalization or debt expiration.

Steve Wylder

Sure. Rich, Steve Wylder. I would say, generally speaking, for our customer base, the primary alternative or competition for our capital is still fee simple financing, right? So we've got customers in a volatile rate environment that are evaluating their options vis-a-vis a refinance of existing debt, that could be a sale of an asset, that could be a conventional refinance. But we're, I would say, encouraged by the response and feedback we're getting from groups on the idea of a bifurcation as a way to drive a lower cost of capital.

Richard Anderson

I guess another layer of education for you as you go through this process. Second question is on cost of capital specifically, and maybe Jay or whoever, what about more in the way of dispositions? Are there any arbitrage opportunities where you could sell something that is a better cost of capital and something that you can buy a lower cost of capital? So I'm wondering if dispositions or even more in the way of joint ventures, partial sales type things could start to play an increasing role just to create more volume for Safehold?

Brett Asnas

Rich, it's Brett. I think the transaction that you saw us do in Q2, the joint venture is probably the best route of all worlds, right? Where we're able to -- the deals that we originate over time, able to contribute them into a partnership, have the ability to buy them back in, in the future, still own a lot of the economics, control them. As you heard in the remarks from Jay and Michael, our goal is to continue to scale this platform. We want to grow it. We want to do more deals.

So yes, disposing of assets or doing ventures. Those are all tools that we have to recycle proceeds and delever or keep our leverage in line. But it feels like if there are things to do within the existing portfolio, we'll probably look more like the structure we did back in Q2 as opposed to outright sales.

Richard Anderson

Okay. Last question, as long as I have you there, Brett. Your leverage ticked up a little bit, perhaps influenced by the buyback, not exactly sure, just a 3 basis point increase, but I'm just -- from second quarter. But I'm just curious how your conversations are with the rating agencies. Do they feel any sense of concern around the rate environment and what's happening to the pace of deal activity? Or do you feel you're in a comfort zone there in terms of your ratings?

Brett Asnas

I think we're in a good zone. If you look back historically and think back over the last 2, 3 years, we've ended each year at around 2x. Before that, we ended at 1.9 each year. So we're right in that zone. I think quarter-to-quarter, you might see a little bit of fluctuation. But again, as I've said in the past, it takes about $250 million of deal fundings to take leverage up 0.1x. So it feels like we have some good runway. I think the interesting part and made remarks about this earlier as well, is our liability structure. I think getting folks to really understand that the differentiator for the business is having a maturity profile that's 18 years locked in.

There's no buildup of maturities in any given year. There's no near-term maturities. The nearest term is really our -- of significance is our corporate revolver, which matures in 2029. So I think that's a big difference versus a lot of folks across real estate financials, et cetera, where you think about the amount of debt rolling and the rates at which they need to refinance them, we're not going to have that dilution here over the coming years, which is a big differentiator.

And again, just when you think about 18 years, primarily fixed, very durable laddered maturity profile, as I said, it's about an $800 million mark-to-market value of trying to replicate a 4.4% 18-year maturity profile. So I think that's going to be where we really need to make sure investors understand that math and understand that value component of the business because it really is something different than almost all companies you see out there.

Richard Anderson

Yes. And just really quick last one. What's any latest update on the Midtown office -- Midtown Manhattan office building conversion to resi? I know that you've talked about it in the past, but is there anything new on that front?

Jay Sugarman

I really can't talk about it, still in litigation, but the resi -- the office to resi market is still pretty strong in New York. So hopefully, that will get resolved sometime before -- we also want to stop talking about it, but no progress to report, Rich.

Operator

Our next question is coming from Mitch Germain with Citizens Bank.

Mitch Germain

Last time you guys monetized your Caret units, I think it was around the value that your pool is at today. Is that something that you guys are kind of considering again?

Jay Sugarman

Yes, look, what we've said in the past is we are trying to find ways to create a more liquid mark. Those private transactions take a long time, and they're not in large volumes. So we'd like to get more marks on those. It's tough with Caret. It's really predicated on long-term growth of the business. So I think we've got some short-term goals that will help drive Caret value in the future, but we've got to kind of put the cart before the horse or horse before the cart here and drive growth in Caret and UCA. And then I think you'll see us try to put some of those marks on the board either in a liquid transaction or more private transactions.

Mitch Germain

Got you. And then a couple of the management teams, other sectors have obviously suggested there was a pretty significant move in cap rates in a fairly short period of time given the volatility. Have you guys seen a meaningful change in -- I think Michael talked about re-trades, but have you seen a meaningful change in kind of where you're willing to do deals? And -- or is that kind of situation not as prevalent in the ground lease sector?

Michael Trachtenberg

So Mitch, like I touched on a little bit earlier, we're really focused on trying to beat our benchmarks. And we think that where we're transacting in the kind of 7-plus percent range really is the sweet spot for customers to want to take our capital to be able to try and do it at volume. I think if we were to push materially higher than that level, we would just see a drop-off in demand.

Operator

Our next question is coming from Harsh Hemnani with Green Street.

Harsh Hemnani

I guess just to pick up on that last question, right? A clarifying question, which is, am I hearing correctly that you're saying that roughly the bid that Safehold will originate new ground leases at is still in the roughly 100 basis point range over high-quality, long-duration bonds? And then on the flip side of that, where customers are willing to transact and sell their land is maybe closer to the low to mid-5% initial yield that we saw in the past couple of quarters. Is that a fair way to think about the range of ground lease pricing today?

Michael Trachtenberg

Harsh, I think if I understand your question correctly, yes, we're still trying to beat the benchmarks by about 100 basis points from that low 6s to the low 7s. And when we talk about the 5s, again, that's predicated predominantly on the asset class that we're focused on, which is multifamily. In other asset classes where there may be some incremental yield to go chase, we would be able to price higher. But as we've talked about over the last couple of quarters, we really have leaned into multifamily because we think that the characteristics of that asset class really are best suited to what we're trying to accomplish, but we will certainly entertain other asset classes and think that should we find opportunity in some of those areas, we'll be able to push for some incremental yield.

Harsh Hemnani

Got it. Okay. That's helpful. And then maybe thinking of the balance sheet sort of holistically, right? The debt to equity based on book value is at 2x, so at the higher end of your target. It seems like given where the stock is today, you guys are not the most comfortable issuing equity. I guess the only lever that you've talked about that at least on the balance sheet is the joint venture structure you did a couple of quarters ago. What's the maybe size of the potential deals you could do in that type of structure?

And the reason I ask is with dividend levels where they are, with leverage where it is, without pulling the equity lever, right? It feels like the longer we stay in a world where rates are unchanged, it is not a huge strain, but a nagging strain on Safehold's balance sheet. And I understand the structure you alluded to is maybe a way you can at least make it look like the balance sheet is doing better. But I guess, how long can that be sustained?

Brett Asnas

I mean, Harsh, 2 things. One, our debt to equity is at 2x. 2x is our target. That's what we set out 9.5 years ago. So we're there. It could fluctuate around there a little bit, as I mentioned. As we said, it's $250 million of deal fundings to take it up 0.1x. You've seen how much we funded quarter-by-quarter. I think when you look at our unfunded commits, which on the ground lease side, we have about $120 million that's going to take the next few quarters. It's going to take closing deals that we have in our pipeline, funding that and a few quarters' worth. So there's runway here.

So I think when talking about those structures, the magnitude that we can do and what we're seeking, these are pretty bite-sized, right? They're not -- some other ventures that have occurred here in the past quarters have been several times larger. I think, again, the size of our company and to your point, the size of our shareholder equity and our leverage point, we have quarters of runway here and then the deal sizes that we're talking about are bite-sized and probably more to the tune of what you saw in the second quarter.

And I think that gives us some nice runway to, again, originate deals, go tell the story and really, again, to hit on the key components of value that it seems like the market is not giving us full credit for. I touched on the liabilities. But even on the CPI side, right? We're -- think about all of the CPI lookbacks that we continue to talk about and the deals that we did starting, call it, 2018, 2019, those lookbacks will start to hit over the coming years. When you think about historical CPI over the last 100 years, it's been on an average annual basis, it's been about 3%.

When you think about over the last 50 years, it's been near 3.5%. When you think about over the last 5 years, it's been a little over 4%. So this notion that long-term inflation is closer to 2% has just not panned out when you think about the last 5, 50 or 100 years. And certainly, when you think about what we're going to start clipping in just a couple of years. And by the way, this exists on -- we have inflation protection on over 90% of our leases. It's going to be a material amount of value and driver for the company because not only does it reset the rent, but there's compounding off that higher rent. So we think that's a huge value component that the market is still not appreciating.

But as we get closer here, it certainly feels like when that flows through our P&L and we're getting that cash flow, the market hopefully should give us credit for it. So I think those components are going to help us bring it back to your leverage question. It also helps leverage, right? That's equity that people are not yet giving us credit for that's "in the bank" that's coming to us in the future. So all those components should help give us runway here over the coming quarters and coming years.

Operator

Our next question is coming from Caitlin Burrows with Goldman Sachs.

Caitlin Burrows

I just had a follow-up. It looked like there was a loan extension with Star Holdings at the end of the quarter. So I was wondering if you can discuss that, what drove the extension? How we should think about the earnings impact and if you'll be recognizing a onetime fee in 4Q?

Jay Sugarman

Caitlin. Sure. It was a small amendment, but it was a positive for both companies from a Star perspective or STHO, they were seeking some improved flexibility to optimize their sales processes as they get down to the end and an improved margin of safety by paying down their margin loans. So good things there. And then for SAFE, definitely felt like it improved the credit with that margin loan paydown at Star, and then also picked up some economics, as you said. I think in terms of recognizing those economics, Brett, they'll come in over time.

Brett Asnas

Yes, we just got them at quarter end at 9/30. So it's on the balance sheet and the income is coming.

Operator

Our next question is coming from Ronald Kamdem with Morgan Stanley.

Ronald Kamdem

I jumped on a little late. Just one -- I just had a quick one on the pipeline going back to it. I think we've been through these periods of sort of rate volatility before. And I guess I'm just curious if there were sort of any lesson learned, whether it's the type of product you sort of go after, whether it's markets, like what sort of do you do sort of differently when the vol sort of slows things down? Or are you sort of just reacting to what the sponsors are seeing?

Steve Wylder

Ronald, it's Steve Wylder. Look, I would say our investing and the transactions we're pursuing across all sectors would of course benefit from stability in rates. I think the rapid moves are not good for conviction around transacting across a range of situations. I think that we've been focused in the past couple of quarters you've seen on the affordable side of our business as well. Those developments, tax credit developments are not immune to large movements in rates that can pose a challenge and delay projects.

But the flip side of that is we know the demand for the product is there and that exists largely independent of macro cycles and the rate environment. So developers are still going to work hard to meet that demand. And in a lot of ways, our product is intended to solve the problem that higher rates creates in introducing capital structure gaps. So not ideal, but I think our value proposition depending on the situation, but depending on the sector still holds despite the rate environment.

Ronald Kamdem

Great. And then my quick one, obviously, you can't comment on the Park Hotel stuff, but any update on timing? And just like what -- any update on like the timing of when we should expect anything?

Jay Sugarman

Yes, unfortunately, pretty slow. So I don't have any good news there. It's just the process is grinding away.

Operator

Mr. Hoffmann, we currently have no further questions at this time.

Pearse Hoffmann

Thank you for joining us today. If you do have questions, please feel free to reach out to me directly.

Operator

Thank you. And thank you, ladies and gentlemen. This will conclude today's call. You may disconnect your lines at this time, and have a wonderful day. And we thank you for your participation.