Q2 2025 Safehold Inc Earnings Call
Good afternoon and welcome to Safe. Holds second quarter 2025 earnings conference call.
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At this time for opening remarks and introductions, I would like to turn the conference over to pierce Hoffman senior vice president head of corporate finance.
Please go ahead, sir.
Good afternoon, everyone. Thank you for joining us today for Safehold's Q2 2025 earnings call. On the call today, we have Jay Sugarman, Chairman and Chief Executive Officer; Brett Asnas, Chief Financial Officer; and Tim Dardi, Chief Investment Officer.
This afternoon, we plan to walk through a presentation detailing our second quarter 2025 results.
The presentation can be found on our website at safehold.com by clicking on the investors link.
Eastern time today.
The dial in for the replay is 8774814010 with a confirmation code of 52799.
In order to accommodate all those who want to ask questions, we ask that participants limit themselves to 2 questions during Q&A.
If you'd like to ask additional questions, you may re-enter the queue.
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 J.
Thanks Pierce and good afternoon to all of you joining us today.
We saw a better traction in the second quarter as we rolled out a test program in certain markets for 1, Stop.
We also continue our efforts to use safehold ground leases to enhance, affordable multifamily projects and enable top players in that market to maximize their opportunities.
On the flip side market conditions, remain challenging as larger customers, try to figure out the cross currents and uncertainty that characterize the first half of the year.
Our goal as always is to help them assess our low-cost long-term and efficient capital.
and enable them to focus more on improving property operations, and less on figuring out the ever evolving Capital markets,
We were pleased a number of customers found our ground lease, a better solution for their needs this quarter, and we will continue innovating to find the best ways to help grow safehold and the ground lease industry as a whole.
All right, let me turn it over to Brett, to review the quarter and full year in more detail. Brett.
Thank you Jay. Good morning, everyone.
Let's begin on, slide 2.
During the quarter, new origination activity was approximately 220 million including 4 grand leases for 123 million and 3 lease hold loans for 97 million.
Of the 4 new ground. Leases 3 were market rate. Multi Family Assets and 1 was a hotel asset.
Markets include Boston, San Diego, Salt Lake City and the Space Coast of Florida.
Credit metrics are in line with our portfolio targets, with the gltv of 33% rent, coverage of 3.2 times and an economic yield of 7.2%.
Overall, we are pleased to begin converting. Several of our previously announced Louis into closings. Particularly at what we believe are very attractive risk. Adjusted returns.
Importantly, we added 4 new customers to our platform as all ground. Leases were closed with the first time sponsor.
as a reminder approximately 40% of our existing customers have done, repeat business with us,
So every new customer. We add to the platform is a highly valuable source for potential future deals.
Moving to the pipeline. We can continue to see positive engagement from both new and existing customers particularly within the multi family asset class.
The pace of signed leases has steadily increased over the course of the year and currently sits at its highest level since 2022.
This is largely been driven by success within our growing affordable housing segment which we expect to more actively contribute to closing later this year and into 2026.
Macro volatility, of course, remains a highly influential factor in getting these deals over the line, but we're optimistic that the sectors were focusing on and the product enhancements were piloting. With customers can add a layer of resiliency for the new business,
At quarter end, the total portfolio was 6.9 billion and UCA was estimated at 9.1 billion, which was an approximately 200 million increase from last quarter primarily driven by new Investments.
Gltv was 52% and rent coverage was 3.5 times.
We ended the quarter with approximately 1.2 billion of liquidity, which is further supported by the potential available capacity in our joint venture.
Slide 3 provides a, snapshot of our portfolio growth.
In the second quarter, we funded a total of 114 million including 61 million of ground lease fundings on new originations that have a 7.0% economic yield.
4 million of ground lease funding on pre-existing commitments. That have a 5.8% economic yield.
43 million of new lease hold loans, that are an interest that an approximate rate of soaper plus 249 basis points.
And 6 million on existing lease hold loans related to our share of the leasehold Loan Fund, which earned interest at a rate of. So for plus 398 basis points,
Has 151 assets and has grown 20 times by Book value. Since our IPO while estimated unrealized capital appreciation has grown 21 times
We have 88 multifamily ground leases in the portfolio and have increased our exposure from 8% at the time of the IPO to 58% today.
In total, the unrealized capital appreciation portfolio is comprised of approximately 37, million square feet of institutional quality commercial. Real estate consisting of approximately 21,000 multi-family units 12 and a half million square feet of office over 5,000 Hotel keys and 2 million square feet of life science and other property types.
Continuing on slide 4. Let me detail, our quarterly earnings results.
For the second quarter, GAAP revenue was $93.8 million, net income was $27.9 million, and earnings per share were $0.39.
The decline in gaap earnings year-over-year was primarily due to a 1.7 million increase in our non-cash. General provision for credit losses.
New lease, hold loan. Originations were the primary contributor to the increase as these assets carry a higher General provision rate versus typical ground. Leases
And the provision is taken on the full loan commitment. Not necessarily. What has been funded?
For example, in Q2 approximately 1 million of the total 2.4 million non-cash, General provision can be attributed to the unfunded loan commitments.
Excluding the 3-cent impact from non-cash General Provisions, Q2 earnings per share was 42 cents.
On slide 5, we detail our portfolios yields.
For gaap earnings. The portfolio currently earns a 3.7% cash yield and a 5.4% annualized deal.
Annualized deals includes non-cash adjustments within rent depreciation and amortization, which is primarily from the accounting methodology on IPO assets, but excludes all future, contractual variable, rent, such as fair market value resets percentage rent, or CPI based escalators, which are all significant economic drivers.
On an economic basis. The portfolio generates a 5.8% economic yield, which is an irr based calculation that conforms with how we've underwritten these Investments.
This economic yield has additional upside including periodic CPI look-backs, which we have an 81% of our ground leases
Using the Federal Reserve's current long-term break-even inflation rate of 2.28%, the 5.8% economic yield increases to a 6.0% inflation-adjusted yield.
That 6.0%, inflation adjusted yield then increases to 7.5% after layering in an estimate for unrealized capital. Appreciation. Using safe holds 84% ownership interest in carrot at its most recent 2 billion valuation.
We believe unrealized capital appreciation in our app is to be a significant source of value for the company that remains largely unrecognized by the market today.
Turning to slide 6. We highlight the diversification of our portfolio by location and underlying property type
Our top 10 markets by gross Book value are called out on the right representing, approximately 65% of the portfolio.
We include key metrics such as rent coverage and gltv for each of these markets.
And we have additional detail at the bottom of the page by region and property type.
Portfolio. Gltv, which is based on an annual asset appraisal from CB remained flat quarter over quarter at 52%, and rent coverage on the portfolio was unchanged at 3.5 times.
We continue to believe that investing in well-located institutional quality. Ground leases in the top 30 markets that have attractive risk. Adjusted returns will benefit the company and its stakeholders over long periods of time.
Lastly on slide 7. We provide an overview of our capital structure.
At quarter end, we had approximately 4.8 billion of debt comprised of 2.2 billion of unsecured notes, 1.5 billion of non-recourse secured debt.
812 million drawn on our unsecured revolver and 270 million of our pirata share of debt on ground leases which we own and joint ventures.
Our weighted average debt maturity is approximately 19 years and we have no corporate maturities, due until 2027
At quarter end, we had approximately 1.2 billion of cash and credit facility availability.
We are rated A3, stable Outlook by Moody's. A minus stable Outlook by Fitch and Triple B plus positive outlook by S&P.
We have benefited from an active hedging strategy.
And remain. Well, hedged on our limited floating rate. Borrowings
12 million revolver balance outstanding, 500 million is swapped to fix. So for a 3% through April 2028
We received swap payments on a current Cash basis, each month. And for the second quarter that produced cash interest Savings of approximately 1.7 million that flowed through the p&l.
We also have 250 million of long-term treasury locks at a weighted average rate of approximately 4.0% and current game position of approximately 31 million.
Of this 250 million. 100 million notional was Unwound in April for a 13 million cash gain and the remaining 150 million notional is active and outstanding with a mark-to-market gain of 18 million,
These treasury locks are marked to Market instruments currently recognized on the balance sheet but not the p&l.
They can be Unwound for cash at any point through their designated term. However, only when they are applied to long-term debt would they then be recognized in our p&l over time?
We are levered 1.98 times on a total debt to equity basis. The effective interest rate on permanent debt is 4.2% and the portfolio's cash interest rate on permanent debt is 3.8%.
So to conclude we're customer engagement and seeing that translate into more Louis and closings.
The balance sheet is well positioned with ample liquidity, no near-term maturities and valuable in place, hedges.
We remain focused on delivering a highly efficient Capital solution for customers and expanding our Market leading position.
And with that, let me turn it back to J.
Thanks Brett. Let's go ahead and open it up for questions.
Thank you to ask a question. Please press star 1 at this time, we will take as many questions as time, permits once again, please press star 1 to ask a question, we will pause a moment to assemble the roster.
First question comes from Mitch, Germaine with Citizens Capital markets, please proceed.
Uh, thank you very much. Um,
J. I'm curious about
Um, new sponsor conversion, obviously for Investments, this quarter, all with new sponsors. So I'm curious
When the discussions with many of those parties began and how long did it take to finally get them over the finish line?
Tim, you want to take that? Sure. Um, hey Mitch uh, it it varies. I think look, our timeline of of converting clients is has gotten shorter and shorter. Um, but some of these clients, the next actually 1 of the deals. Um, I mean, because of where the market is, this was a development deal. We've been talking at sponsor about that deal for a couple of years. And finally, the market is turned for them, um, uh, so that they could actually erase more equity and, and develop the project, um, versus 1 of the projects that we closed. Um, was a recapitalization, uh, in the market turbulence in the first and second quarter, uh, they came to us and that was converted in 4 weeks, so they, it can range. Um, but again, our conversion over the years is, is gotten shorter and shorter, as you know, we've seen um more activity in our portfolio.
That's super helpful. And last 1 for me. Um, I think you guys talked about affordable housing. Uh transactions, possibly picking up in the back part of this year, into next year.
I think most of the ones you've done so far were somewhat Geographic centralized is that going to continue to be the case or have you been able to
Grow um you know, the different states and regions that this uh that your products available, you know, to help fund some of those transactions.
Well, that that it has grown uh, in terms of our exposure into the other areas of the country. Um, I think when we first started uh was more geographically focused, uh, but as we've expanded our reach and our team on that approach, it's, uh, you know, we we're seeing transactions, uh, in other states obviously, that's the litec program is a, a federal program. So um, we're expanding the reach of us with as, as our experience grows and um, uh, you know, the traction is, is being seen in our pipeline for sure.
yeah, I'd say Mitch you know, we we
Think it takes about 12 months to do the homework to meet the players to understand a new market. So we expect to see some of that, uh, work. Come to fruition later this year, early next year,
Great. Thanks a lot.
The next question comes from Anthony pallone with JP Morgan please proceed.
In terms of the pipeline uh last quarter, you guys articulated 386 million in letters of intent and you, you did 220, I guess here and so maybe can you just help roll that forward as to where it sits today?
Uh, sure, Anthony. It's Tim again. Um,
Yeah, the remainder of those deals obviously still remain and we've grown as you heard from from Brett uh increased the LOI amount um significantly and and obviously that with the dollar amount and it's still as Brett mentioned. It's uh heavily weighted towards multi and uh a good split of the affordable and and market rate side. So we're we're pretty uh encouraged by not just the deal volume we're seeing but actually the conversion into DeLuise. So we're pretty pleased with where we sit.
Oh because it's still up in that you know it was million dollars, I guess it's still like this kind of pace.
Yeah, look, I I I think we're right now. We're not going to say that the actual number, I think it was right now. It's just the encouragement of of how many of those deals are still there. Plus the increase in in volume and where, where we are today compared to where we were last year. We're ahead of last year's Pace. We can't control when these are going to close, uh, but we're we're really encouraged on on what we have today.
Okay. And then just my my second 1 just on the lease hold, uh, loans that you're doing. Can you just talk about? Uh, the are those like longer duration are the uh, borrowers using these as transitional loans where they're going to look for something else down the road. Just 1 to understand sort of the intent and nature of those loans. And um,
Uh yeah, that that would be helpful.
Sure Anthony is Joe. So you know, think of this as a test program at this point we're really trying to find
Ways to shorten the time frame and increase the closing probability. So uh, most of these are meant to be accelerators. They are not meant to be permanent Capital Solutions. Um, we we, you know, prefer to get them in place and help customers get to the Finish Line. Um, but the average, you know term, we're hoping is 3 years or less.
Um, just in terms of how long uh, our customers use that Capital. So they are again, not intended to be long-term solutions for our customers, but they give them the time to not only close the deal, but also to execute on their business plans.
Okay. Thanks. And you know, the only other thing I'd say on the, you know, we're still trying to figure out what is the, the, you know, best way to execute on these. But the, the majority, in fact, the vast majority of the pipeline um, is not going to be using leasehold loans. So we're still doing the work, we need to do to make sure that, you know, we get bang for the buck.
Okay. Thanks. Jay
The next question comes from Hondo St. Just with mizuho, please proceed
Hi there. This is Ravi on the line for andelle. Hope you guys are doing well.
Maybe if we could talk about the Cadence of capital deployment and whether the current quarterly or origination this is a good run rate. Uh, looking forward, uh, I think on the last call you had mentioned that the, the volatility with Liberation day might have delayed, uh, some deals and some volatility and interest rates also, um, leads to further delay. So, maybe, how are you thinking about the Cadence of future, Capital deployment in the back, half of 25 and 26. Thanks,
Sure. This is Tim. Um, the Cadence obviously, it's dictated by the market. You've seen that in our 80 year history, right? Uh we've been pretty heavily weighted towards fourth quarter closings. Um, just how the market works. I think this year in the previous probably 3 or 4 quarters, the market was pretty choppy and volatile,
I think we've seen it uh especially in the last couple of weeks and months months here settle out a bit and things are starting to really move in the market. You've seen that through you know, some of the the other companies that have have reported and hearing how the capital flows are. Um so we feel that that Trend still continues right heavily weighted towards year end closings as as things. Uh, most of these deals take anywhere from, you know, 2 to 6 months to close and our affordable business. You're seeing those deals have a lot longer lead time sometimes 12 plus months to close. Uh so I think the Cadence is is coming back to more of a normal real estate market. Where, you know, you see the the uh, it's lumpy quarter to quarter but on a whole year basis. It's it's a pretty consistent.
Got it. That's helpful and maybe just 1 more here.
Passing of the the 1, big beautiful, bill act, an impact.
the demand for for ground leases and your product, and in terms of an alternative financing source and a number of Provisions in that
And that bills. I just wanted to hear your um thoughts on that. Thanks.
Yeah, might might be a little too early to know the full impact, you know, directionally we think, uh, you know, development is going to be tricky until people figure out where the tariffs settle out. Um, so pipelines, I think you've probably heard across a number of Industries pipelines are down, as people have not been able to figure out how to pencil, um, you know, new projects. So, there seems to be a little window here of uncertainty that is probably good for existing assets and a little trickier for development assets. But, uh, we're navigating our way through that reasonably successfully, um, you know, some of the bigger themes. Um, you know, probably don't impact us as much as other companies. Uh, we're looking for good dirt. Uh, there's nothing in the bill that dramatically changes, um, you know, what we're looking for. I do think, you know, we very much focus on flow of funds and, um, certainly hope economic growth and International Investment in the US.
Uh, eventually get back to where we'd like to see them. So
Uh this is more intangible stuff to us I think than than to some others but it those intangibles matter uh and we we don't know how to handicap that just yet.
Understood makes sense. Thank you.
Up. Next is Ronald Camden with Morgan. Stanley. Please proceed.
Hey, uh, couple just 2, quick ones for me, just on back to the, the foreign use sponsors. Uh, you know, I think 1 of the deals was sort of a hotel deal which is, which is interesting. Uh, just wondering if you can comment a little bit more on the potential for repeat businesses down the line with with these situations are they sort of more 1 off and uh, also a little bit more commentary on the, on the hotel deal.
Um, and how that came about, thanks?
Uh, sure the yeah, the 4.
Free up from old, uh leverage. Um, so we're we have some good dialogue going on, both the office and the hospitality side. Um as those are obviously uh you know have seen cap rates Gap out um and our Capital can really you know that monetizing the land in those positions can really help out those Capital Stacks. So we're seeing um good increase in our pipeline for those uh types of transactions. And this is, you know, we hope to be the first of of many
Helpful. And then just on the just, the economic yield. Um, you know, I, I guess for the groundies like we should, we should be thinking about that just as a, as a spread to the 30 year.
Um, following and what how do I think about the yield on the leasehold loans? How does that differ from the economic yield of the new ground lease? Thanks,
Yeah, I think 2 things 1 we you know we continue to try to shoot for a 100 basis points over the nearest Benchmark which is the 100-year bond complex.
We're seeing that uh Market sort of settle in at the 56 range right now so but we think the economic yields in the quarter were quite attractive relative to that that's before inflation and before the carrot value. Um so we quite like where you know, the most recent deals we're getting done.
um,
You know, what was the second part? Yeah, the loans? Uh, you know, it's really again, it's, it's meant to be an accelerator, not a, not a business line, so we're trying to keep the returns reasonable and the, I don't know, where are we? So for plus 250 to 300. Um, again I I I don't want to make that a, a big deal. Yet we're still evaluating how to best to use it, but you know, with so far still in the low fours, it's probably not a very different Roa.
Makes sense. Thanks so much. That's it for me.
Burroughs with Goldman Sachs, please proceed.
Hi, this is Jeremy cule on for Caitlyn. Um, so my question is um, thinking about future originations, how does safe plan to fund those for the rest of the year?
Hey, it's Brett.
Uh, as we've noted to the market right now, uh, the way we're thinking about our Capital sources and thinking about our leverage at the moment, there's a few, uh, things that we've endeavored on. Uh, 1 is any of the deals that we we've announced. There's, you know, typically a upfront funding component in a future funding component. And when we think about every call it a little more than a hundred million dollars funded, uh it takes leverage up by 0.05 times, so not a real big move and leverage the way uh that we and the agencies and investors think about it. So we have some Runway here uh over the coming quarters in terms of uh true Equity need um from the debt standpoint you see that our revolvers drawn a little over 800 million dollars? Uh we are appropriately hedged at at some point, we'll look to term out some of those borrowings. And what we're really focused on is the shape of the curve and thinking about duration, and
Pricing Dynamics.
Uh, but when we think about our hedging program, it's certainly been a benefit. Last year, we had over $40 million in gains through our hedges, and this year, over $30 million. So,
Think about the last 18 months and $75 million of hedging; locking in our margins is super important. So again, we'll look to term out some of those borrowings hopefully over the remainder of the year. And then on the equity side, it's going to be, you know, pretty much dependent on those funding needs and what the pipeline originations look like over the remainder of the year.
Great. Thank you. Um, and then just 1 follow up for me. Is there any update on the Park Hotels portfolio? Um, I think the tenant mentioned, they might not renew 2 of the hotels past the rest of this year. Thanks.
Yeah, uh, for those who don't know the park, you know, portfolio was, uh, purchased, it's almost 30 years ago. It was 16 assets. Uh, it we whittled it down selling those off over time. It's down to 5 assets. Um, we believe the, the 3 of those assets have significant value in them. Uh, the 2 that uh, they are not renewing. 1 is a a true anomaly. It sits on a a ground lease. We own part of that ground lease. So we've got some work to do to figure out. Uh, if we can extend that uh uh partner ground lease, um, the other 1 is
An asset that we will likely uh look forward to selling, it's a small asset. There's there's not a ton of upside in those 2 assets. Most of the upside sits in the other 3,
got it. Thank you.
The next question is from Key bin Kim with truist please proceed.
Thank you. Good evening uh just to follow up on that last question. The reason that disclosure is that the coverage was 3 and a half times for this Master Lease. I'm assuming, you know, the 2 that they're not renewing our lower but I just curious why a tenant would choose to not renew assuming that coverage were still
Profitable or maybe I'm wrong. Um yeah, if you can walk through that, thank you.
Yeah, obviously, uh, uh, historically, this has been a really well performing portfolio. I think postco uh, certainly the the tenant here has, you know, looked at their strategy and has begun to move away from some of the things historically that have been part of their portfolio. Um, you know, the the portfolio is definitely a, a mix of really high performers and not as good performers. And so, um, not surprised these These are the 2 assets uh, that probably had the lowest coverage of the portfolio and so,
You know, we're not that surprised, but we do uh, think, um, you know, there's a lot of value in the other 3.
Okay, and is there should there be a income impact? Um as you look for, as these assets, transition to different owners or um some other home,
Yeah, look historically. As I said, these have been well performing assets, certainly preco, they were strong performers, the transition years are never great. Keep in, as you might suspect in a Hospitality context, uh, getting everything resettled, um, but I think long term, we certainly expect to, you know, not suffer uh any any significant change.
The loans that you're making do those come with stipulations that those loans as assuming some of those are development loans. If the borrower finish the project do those come up stipulations that those become ground Leaf steals at some point. Potentially
All those loans that we've done are uh, already have our ground lease in place, so that's the only way we make those loans is if we have the ground lease first, there's no, we're not doing loans on on fee, simple assets. These are with staple ground laces.
Okay, thank you.
Up next is Harsh. Hanani with Green Street. Please proceed.
Thank you. Uh maybe 1 on the hotel origination from this quarter uh did the check size on that origination and the yield very materially from sort of the average 5.2 initial cash yield this quarter.
Um, that 1. Well, the this hotel deal was actually an acquisition of a hotel deal. So it's not our form lease um, the uh so cash yield versus Roi, you know, varies, obviously we we acquired it uh, based on, you know, metrics of what we want to achieve on an Roi um because it has, you know, Provisions that aren't as clean as as our typical lease of our, you know, our bumps um, and CPI resets. Uh, so you know how we acquired that was uh, based on you know what we believe.
The equivalent, um, return and taking it to account, um, you know, any inflation or other adjustments in the deal.
Yeah, it it was a very interesting deal. Low LTV great coverage, great Market. We have experience in that market, actually, 1 of the park assets is not far from this 1. Um, so we have lots of good, uh, knowledge there and, um, you know, it was a little bit tighter because of the the very solid credit metrics, but, uh, certainly met the Roa targets. We were shooting for
Corded that's head please. Uh, and then maybe 1 on the park assets, right? You've seen this coming for a little bit, not not too much of a surprise, uh, and sounds like there. There's 2 assets and the 1. You're planning to sell, is it fair to assume that perhaps conversations around that have begun. And and, and if so, then once sort of the assets come back in December uh or around December. You know, how, how how long do you think that lag is to be able to sell that asset? And then, similarly, on the other 1, to be able to negotiate, uh, an extension with the partner of ground lease holders,
Yeah, I might be a little premature to focus on it, but we do have folks getting ready for a transition. As I said, you need to transition.
These properties um and it takes quite a bit of operating uh expertise. So uh we're going to have help doing that and then uh prepared for sale.
But I I wouldn't, I wouldn't say we're, you know, we don't control the asset today, so, um, little little bit early still harsh.
Cord. Thank you.
Our next question comes from John Peterson with Jefferies. Please proceed.
Oh, great. Uh, thank you. I wanted to ask about your office portfolio and maybe specifically Manhattan. So, the Manhattan office Market has been doing particularly well as office markets go, um, over the last year or so. So, I'm curious if you had any commentary on what that means in terms of how land values have changed, and if there's maybe any opportunity to, um, to kind of realize some of that value as you focus more on, multi family and de-emphasize office a bit
Yeah, look Manhattan's a great Market, long term. It's 1 of, you know, the the long-term cities we want to have exposure to. Uh I think the the good news is both the office Market seems to be recovering but you've also had a
This, uh, tax-driven uh, resi conversion incentive 467 M, come into place. So Supply is slowly being drained out of the market and demand has increased so those are good things. Um you know, I'm not sure how how big an impact that's going to have on land in the near term. But certainly those are the kind of Dynamics long term that have always made New York land, very valuable. Um, so we like seeing that economic, you know, sort of pick up across both multi-family and office, uh, and we're actually seeing it in retail as well. So, uh, New York's 1 of those markets that turns quickly, when when people, uh, you know, get back to work and that's what happened. We're not seeing quite that same Dynamic and some of the other Gateway cities yet.
Opportunities in New York because it seems to be a little bit ahead of the market.
Okay, all right. Um, well, I guess maybe more broadly, are there markets or property types where you are?
Where you would, you know, be interested in selling, um, some of your land. I know you mentioned the 2 hotel assets, but beyond that.
No, we we're always looking at, you know, where we can deploy capital and, and potentially where we can recycle Capital. Um, it's hard to get ground leases. As you know, um, they rarely come up for sale. So creating them is really the, the, the focus of the company. But, you know, Brett's team is always looking at the overall portfolio and looking to execute the best, you know, Capital plans, we can and that has to include looking at existing assets, but I'd say right now, you know, multi family for us has been, uh, very much, uh, an active Market. We can play in, uh, we have not seen a lot of opportunities in office, um, either to play new or to sell existing, but you know, the there are there are always conversations going on about how do we fine-tune the portfolio, um, and figure out ways to to, you know, really get to the next generation of owners. So,
Um, can't say we're jumping in with two feet, but we do have our eyes on it.
Okay. Uh, and maybe last question for me on on affordable housing, I guess I'm going to ask a political question here, but I think affordable housing is certainly a political issue. So, you know, in the New York election with Mom Donnie, there was certainly a, a focus on affordable housing, um, is like when you, when you kind of see that narrative, uh, switch, um, out there in politics, is that a net positive for stakeholders, as you guys are trying to create more opportunities there?
Look I I'll speak and then maybe Tim can fill in because he's on the ground. But, you know, our our our, our affordable team is doing a great job of, of solving a major problem, which is there's more demand than there is Supply. And the supply takes a long time to put on the ground. It is a political process.
Um you have to know the ins and outs uh and you have to be you know, credible with the key players. I think we've done a good job of building that credibility over the past 24 months. Um I think the overall housing market remains under supplied. It you know I think politically you know, everybody is focused on how they can solve it. New York is a tough 1.
there there's a lot of different, uh, players in in that conversation, uh, we've had more success in some other states but
You know, the, the the truth of the matter is, you know, when they talk about supplying these markets, they're talking about, you know, 1% additions to the stock or 2 or 3. Um, it's going to take a lot of effort on a lot of part people's parts to actually change the dynamic. Uh, and that has proven very difficult. Um, so we think we're we're a helpful piece of the equation. Uh, again, wherever, uh, affordables build being built on Good Dirt. We think we can play a role. I'd love to be able to say we could do it in New York. Um, I we, we have proposed a lot of ideas that we think make sense, but they have not fit within the constraints of the New York System. Um, but there is definitely, uh, uh, we think there's a better way and we'd love to be part of it.
I think but that, that, that pretty much sums up. I think it's the biggest thing is, you know, looking Beyond, you know, the micro Market of New York City. It's that, you know,
Our capital is is an extraordinarily cheap cost of capital and it's a very large system that you need to build a lot more affordable and we're helping you know, folks get those bills. So I think for us it's uh we found it to be, you know, a great place to to partner up with these affordable developers to to help increase the amount of affordable housing out there.
That's great. Thank you.
Mr. Hoffman, we have no further questions.
Great. If there are any additional questions on today's release, please feel free to reach out to me directly. Operator, would you please give the conference call replay instructions once again, thank you.
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