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SAFE: Affordable Housing Ground Leases Will Support Positive Long-Term Upside

Urbanization And Densification Will Expand Ground Lease Market Opportunities

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SAFE
AnalystHighTarget
Not Invested
Published 22 Jul 2025

Update shared on 15 Dec 2025

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AnalystHighTarget's Fair Value
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1Y
-29.8%
7D
-2.8%

Analysts have modestly raised their price target on Safehold to $28.00, citing a slightly higher assumed future earnings multiple that more than offsets marginally softer long term growth and profitability expectations.

What's in the News

  • Safehold reports that, between July 1 and September 30, 2025, it repurchased 0 shares for $0 million, completing a previously announced buyback program without execution (Key Developments).
  • The company closed ground leases for six Affordable Housing communities in Los Angeles, expected to deliver more than 400 units by 2027 across West and Central Los Angeles and the San Fernando Valley (Key Developments).
  • Safehold entered a separate ground lease for a 275 unit Affordable Housing community in the San Fernando Valley, targeted for delivery in 2029 and developed by repeat partner The Pacific Companies (Key Developments).
  • Safehold established a dedicated Affordable Housing team in 2025 to support its growing pipeline of Low Income Tax Credit backed developments (Key Developments).

Valuation Changes

  • Fair Value Estimate: unchanged at $28.00 per share, reflecting no net change in the intrinsic value assessment.
  • Discount Rate: risen slightly from 12.32% to 12.50%, implying a modestly higher required return on equity.
  • Revenue Growth: reduced slightly from approximately 9.19% to 8.76%, signaling somewhat more conservative top line expectations.
  • Net Profit Margin: edged down from about 33.22% to 32.25%, indicating a minor anticipated compression in profitability.
  • Future P/E Multiple: increased slightly from 16.78x to 17.34x, supporting the maintained $28.00 fair value despite softer growth and margin assumptions.

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