Safehold Closes Ground Lease for Affordable Housing Development in San Diego

Rhea-AI Summary

Safehold (NYSE: SAFE), the pioneer of the modern ground lease industry, has secured a ground lease agreement for an affordable housing development in San Diego's Mission Valley area. The Low-Income Tax Credit (LIHTC) project will deliver 227 units by 2028, developed by The Pacific Companies.

This development adds to Safehold's growing portfolio in California, where they have already closed eight ground leases for LIHTC developments, contributing to over 1,600 affordable housing units. The company's innovative ground lease model serves as a low-cost gap filler to facilitate affordable housing development projects.

Positive

• Expansion of affordable housing portfolio with 227 new units in San Diego
• Strong track record with 8 ground leases and 1,600+ units in California LIHTC developments
• Partnership with experienced developer The Pacific Companies
• Strategic positioning in the growing LIHTC space with innovative financing solution

Negative

• Extended timeline with project completion not expected until 2028
• Concentration risk with multiple projects in California market

Insights

REIT Investment Analyst

Safehold expands affordable housing portfolio with new San Diego ground lease, strengthening its LIHTC investments and recurring revenue stream.

Safehold has executed another strategic ground lease transaction, this time for a 227-unit affordable housing development in San Diego's Mission Valley area. This Low-Income Housing Tax Credit (LIHTC) project, scheduled for completion in 2028, represents continued momentum in Safehold's affordable housing initiative. The company is partnering with The Pacific Companies, a repeat customer, indicating relationship strength and execution capability in this specialized sector.

This transaction aligns with Safehold's stated focus on expanding its affordable housing footprint. The company has now closed eight ground leases for LIHTC developments in California, which will deliver over 1,600 affordable units. The growing portfolio demonstrates Safehold's commitment to this defensive asset class while providing long-term, inflation-protected cash flows typical of ground lease investments.

Safehold's ground lease structure serves as what the company describes as a "low-cost gap filler" - effectively providing capital that helps make affordable housing projects financially viable. This positions Safehold advantageously in a sector with persistent supply-demand imbalance and governmental support. As a REIT specializing in ground leases across multiple property types, this transaction reinforces Safehold's diversification strategy while maintaining focus on long-duration, secured income streams from land ownership.

NEW YORK, July 24, 2025 /PRNewswire/ -- Safehold Inc. (NYSE: SAFE), the creator and leader of the modern ground lease industry, has closed on a ground lease for the development of an Affordable Housing community in the Mission Valley area of San Diego, CA. The Low-Income Tax Credit development will provide 227 total units upon delivery in 2028. The project will be developed by The Pacific Companies, a prolific developer of Affordable Housing and repeat Safehold customer.

"We're thrilled to expand our relationship with The Pacific Companies and our broader investment into the Affordable Housing sector," said Steve Wylder, Safehold's Head of Investments. "We are increasingly focused on the LIHTC space and are finding our capital—which functions as a low-cost gap filler—can be a very useful tool in moving projects forward and delivering much-needed Affordable Housing."

Safehold has closed on eight ground leases for LIHTC developments in California to date, providing over 1,600 units in total. Additional information on Safehold's Affordable Housing platform is available at www.safeholdaffordablehousing.com.

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, affordable housing, 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:  Steve Wylder Head of Investments T: 212.930.9433 E: swylder@safeholdinc.com     Ethan Torbati Vice President, Investments T: 310.315.5580 E: etorbati@safeholdinc.com

IR Contact: Pearse Hoffmann SVP, Head of Corporate Finance T: 212.930.9400 E: investors@safeholdinc.com

 

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SOURCE Safehold

FAQ

What is the size of Safehold's new affordable housing development in San Diego?

The new development in San Diego's Mission Valley area will provide 227 affordable housing units upon completion in 2028.

How many LIHTC developments does Safehold have in California?

Safehold has closed on eight ground leases for LIHTC developments in California, providing over 1,600 units in total.

Who is developing Safehold's new San Diego affordable housing project?

The project is being developed by The Pacific Companies, a prolific developer of Affordable Housing and repeat Safehold customer.

When will Safehold's Mission Valley affordable housing development be completed?

The affordable housing development is scheduled for delivery in 2028.

What is Safehold's role in affordable housing development?

Safehold provides ground lease capital that functions as a low-cost gap filler to help move affordable housing projects forward and facilitate development.