Star Holdings Reports Second Quarter 2024 Results

Rhea-AI Summary

Star Holdings (NASDAQ: STHO) reported its Q2 2024 results, filing a Quarterly Report on Form 10-Q. The company experienced a net loss of $27.1 million, with earnings per share at ($2.04). This includes a non-cash adjustment of ($17.7 million), reducing EPS by ($1.33), related to its investment in SAFE shares. Star Holdings recorded $15.7 million in land revenues, primarily from a Coney Island parcel and 50 lots at Magnolia Green.

The company's portfolio includes interests in the Asbury Park Waterfront, Magnolia Green residential development projects, and other commercial real estate properties and loans intended for monetization. Star Holdings also owns shares of Safehold Inc. (NYSE: SAFE) and aims to maximize shareholder value through active asset management and sales.

Positive

• Recorded $15.7 million in land revenues from property sales
• Diverse portfolio including valuable real estate assets and development projects

Negative

• Net loss of $27.1 million for Q2 2024
• Negative earnings per share of ($2.04)
• Non-cash adjustment of ($17.7 million) related to SAFE shares investment

Insights

Financial Analyst

Star Holdings' Q2 2024 results reveal significant challenges. The company reported a net loss of $27.1 million, translating to a loss per share of $2.04. A key factor in this performance was a substantial non-cash adjustment of $17.7 million related to their investment in SAFE shares, impacting EPS by $1.33.

On a positive note, the company generated $15.7 million in land revenues, primarily from a Coney Island parcel and Magnolia Green lots. However, this wasn't enough to offset the losses. The company's strategy of monetizing its portfolio through asset management and sales will be important for future performance, especially given the current financial strain.

Investors should closely monitor the company's ability to generate cash from its real estate holdings and the performance of its SAFE shares investment, as these will be critical for Star Holdings' financial health moving forward.

Real Estate Expert

Star Holdings' Q2 results highlight the volatile nature of real estate investments. The $15.7 million land revenue from Coney Island and Magnolia Green demonstrates the company's ability to monetize its portfolio. However, this figure seems modest given the company's focus on high-value properties like the Asbury Park Waterfront.

The real estate market's current state is reflected in the $17.7 million non-cash adjustment related to SAFE shares. This suggests potential challenges in the broader real estate sector, particularly in ground lease investments.

Moving forward, Star Holdings' success will hinge on its ability to strategically time asset sales and maximize value from its remaining portfolio. The company's focus on cash flow maximization through active asset management is a prudent approach in the current market conditions, but execution will be key.

Investment Strategist

Star Holdings' Q2 2024 results present a mixed picture for investors. The $27.1 million net loss is concerning, but it's important to note that a significant portion ($17.7 million) stems from a non-cash adjustment related to SAFE shares. This highlights the volatility inherent in the company's investment strategy.

The $15.7 million in land revenues shows some progress in monetizing assets, but it's not enough to offset losses. Investors should focus on the company's ability to accelerate asset sales and improve cash flows. The success of Star Holdings' strategy to maximize shareholder value through portfolio monetization will be critical in the coming quarters.

Given the current financial position, the company's liquidity and its ability to manage debt obligations should be closely monitored. The performance of the Safehold Inc. shares held by Star Holdings will also be a key factor influencing future results.

NEW YORK, Aug. 6, 2024 /PRNewswire/ -- Star Holdings (NASDAQ: STHO) announced today that it has filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 with the Securities and Exchange Commission. 

Net income (loss) attributable to common shareholders for the second quarter was ($27.1 million) and earnings (loss) per share was ($2.04). These results reflect a non-cash adjustment of ($17.7 million) which reduced earnings per share by ($1.33) with respect to our investment in approximately 13.5 million shares of SAFE based on a mark-to-market SAFE share price of $19.29 at quarter end.

During the second quarter, the Company recorded $15.7 million of land revenues, which was primarily comprised of a land parcel in Coney Island and 50 lots at Magnolia Green.

Further details regarding the Company's results of operations, assets and activities are available in the Company's Form 10-Q for the quarter ended June 30, 2024 which is available for download at the Company's website www.starholdingsco.com or at the Securities and Exchange Commission website www.sec.gov.

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Star Holdings' (NASDAQ: STHO) portfolio is comprised primarily of interests in the Asbury Park Waterfront, the Magnolia Green residential development projects and other commercial real estate properties and loans that are for sale or otherwise plan to be monetized. Star Holdings also owns shares of Safehold Inc. (NYSE: SAFE). Star Holdings expects to focus on realizing value for shareholders from its portfolio primarily by maximizing cash flows through active asset management and asset sales.  Additional information on Star Holdings is available on its website at www.starholdingsco.com.

Company Contact:
Pearse Hoffmann
Senior Vice President
Capital Markets & Investor Relations
T 212.930.9400
E investors@starholdingsco.com 

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SOURCE Star Holdings

FAQ

What was Star Holdings (STHO) net income for Q2 2024?

Star Holdings (STHO) reported a net loss of $27.1 million for the second quarter of 2024.

How much land revenue did Star Holdings (STHO) record in Q2 2024?

Star Holdings (STHO) recorded $15.7 million in land revenues during the second quarter of 2024.

What caused the significant loss in Star Holdings' (STHO) Q2 2024 earnings?

A major factor in Star Holdings' (STHO) Q2 2024 loss was a non-cash adjustment of ($17.7 million) related to its investment in SAFE shares, which reduced earnings per share by ($1.33).

What are the main assets in Star Holdings' (STHO) portfolio?

Star Holdings' (STHO) portfolio primarily includes interests in the Asbury Park Waterfront, Magnolia Green residential development projects, other commercial real estate properties and loans, and shares of Safehold Inc. (NYSE: SAFE).