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What changed in Star Holdings's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Star Holdings's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+139 added−155 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-27)

Top changes in Star Holdings's 2024 10-K

139 paragraphs added · 155 removed · 126 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

26 edited+2 added−5 removed36 unchanged
Biggest changeWhile we do not currently expect to incur material new indebtedness, our governing documents do not limit the amount of debt that we may incur and we may consider future refinancing and new financing opportunities, depending upon our liquidity and capital needs, the availability and costs of financing, economic conditions and other factors. 3 Table of Contents Competition We face competition from numerous real estate and lodging companies and other owners of real properties, both private and public, in attracting guests to our hotel properties, buyers of our residential home sites and condominiums, tenants for our space available for lease and buyers of our assets.
Biggest changeWhile we do not currently expect to incur material new indebtedness, our governing documents do not limit the amount of debt that we may incur and we may consider future refinancing and new financing opportunities, depending upon our liquidity and capital needs, the availability and costs of financing, economic conditions and other factors.
The hotel was completed in 2016 and is managed by a third party. ● Asbury Lanes: a 12,000 square foot music and entertainment venue. The venue was completed in 2018, connected to The Asbury, and is managed by a third party.
The hotel was completed in 2016 and is managed by a third party. ● Asbury Lanes: a 12,000 square foot music and entertainment venue. The venue was completed in 2018, is connected to The Asbury, and is managed by a third party.
We anticipate selling our remaining residential lots to homebuilders either upon completion of horizontal lot development or in bulk as unimproved lots over the next three years and it could take substantially longer. We anticipate selling the golf course operations to a third party upon completion of residential lot sellout.
We anticipate selling our remaining residential lots to homebuilders either upon completion of horizontal lot development or in bulk as unimproved lots over the next two years and it could take substantially longer. We anticipate selling the golf course operations to a third party upon completion of residential lot sellout.
There can be no assurance, however, that these sales will be completed. Our Monetizing Portfolio ​ As of December 31 , 2023, we owned assets that we expect to monetize primarily through asset sales, loan repayments or active asset management.
There can be no assurance, however, that these sales will be completed. Our Monetizing Portfolio ​ As of December 31, 2024 , we owned assets that we expect to monetize primarily through asset sales, loan repayments or active asset management.
Additional information on our portfolio as of December 31, 2023 is set forth below. ​ Our Development Portfolio ​ Asbury Park Waterfront ​ We are the managing member in Asbury Partners, LLC, which is the joint venture that owns the Asbury Park Waterfront investment.
Additional information on our portfolio as of December 31, 2024 is set forth below. ​ Our Development Portfolio ​ Asbury Park Waterfront ​ We are the managing member in Asbury Partners, LLC, which is the joint venture that owns the Asbury Park Waterfront investment.
However, we have chosen to “opt out” of this extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required 4 Table of Contents for all public companies that are not emerging growth companies.
However, we have chosen to “opt out” of this extended transition period, and as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for all public companies that are not emerging growth companies.
We compete with our competitors in terms of the quality of our assets, sale prices, rental rates, location, availability of alternative space and maintenance. Regulation General ​ Our properties are subject to various covenants, laws, ordinances and regulations, including regulations relating to common areas and fire and safety requirements.
We compete with our competitors in terms of the quality of our assets, sale prices, rental rates, location, availability of alternative space and maintenance. 3 Table of Contents Regulation General ​ Our properties are subject to various covenants, laws, ordinances and regulations, including regulations relating to common areas and fire and safety requirements.
Financing Strategy As of December 31, 2023 our principal financing sources are the Safe Credit Facility and the Margin Loan Facility (refer to Note 9 to the combined and consolidated financial statements).
Financing Strategy As of December 31, 2024, our principal financing sources are the Safe Credit Facility and the Margin Loan Facility (refer to Note 9 to the combined and consolidated financial statements).
The remainder of the monetizing assets primarily consist of two short term leases that we have subleased to third parties, which had an aggregate carrying value of $3.6 million as of December 31 , 2023, and a group of loans and equity interests that are recorded as having no carrying value in our financial statements.
The remainder of the monetizing assets primarily consist of two short term leases that we have subleased to third parties, which had an aggregate carrying value of $3.2 million as of December 31, 2024, and a group of loans and equity interests that are recorded as having no carrying value in our financial statements.
We also entered into a credit facility with Safe (the "Safe Credit Facility") and a margin loan facility with a third-party lender (the "Margin Loan Facility"). ​ The Company operates its business as one segment that focuses on realizing value for shareholders primarily by generating cash flows through active asset management and sales of its existing loans, operating properties and land and development properties. ​ 1 Table of Contents Company Portfolio At the time of the Spin-Off, our real estate portfolio was comprised of legacy assets from iStar’s historical real estate finance, operating properties and land and development businesses and the Safe Shares.
We also entered into a credit facility with Safe (the "Safe Credit Facility") and a margin loan facility with a third-party lender (the "Margin Loan Facility"). ​ The Company operates its business as one segment that focuses on realizing value for shareholders primarily by generating cash flows through active asset management and sales of its existing loans, operating properties and land and development properties. ​ 1 Table of Contents Company Portfolio Our real estate portfolio is comprised of legacy assets from iStar’s historical real estate finance, operating properties and land and development businesses and the Safe Shares.
We reimburse our Manager for the salaries and other compensation of two accounting personnel who are fully dedicated to providing accounting services to us. Our Manager has advised us that it had 86 employees as of December 31, 2023, substantially all of whom are full time employees.
We reimburse our Manager for the salaries and other compensation of two accounting personnel who are fully dedicated to providing accounting services to us. Our Manager has advised us that it had 74 employees as of December 31, 2024, substantially all of whom are full time employees.
These assets had an aggregate carrying value of approximately $71.1 million 2 Table of Contents and were comprised primarily of loans, operating properties, land and other assets. Summarized information regarding these assets is set forth below. Loans and other lending investments .
These assets had an aggregate carrying value of approximately 2 Table of Contents $120.3 million and were comprised primarily of loans, operating properties, land and other assets. Summarized information regarding these assets is set forth below. Loans and other lending investments .
These documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval system via electronic means, including on the SEC’s homepage, which can be found at www.sec.gov . 5 Table of Contents
These documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval system via electronic means, including on the SEC’s homepage, which can be found at www.sec.gov .
The land assets included in our portfolio as of December 31 , 2023 include two assets with an aggregate carrying value of approximately $35.2 million. Our general strategy is to seek to sell the land assets to third party developers.
The land assets included in our portfolio as of December 31, 2024 include two assets with an aggregate carrying value of approximately $15.0 million. Our general strategy is to seek to sell the land assets to third party developers.
Our current strategy for the Asbury Park Waterfront investment is to sell the two remaining residential condominium units at Asbury Ocean Club, actively asset manage our operating assets, strategically monetize the remaining development sites and our operating assets through sales to third party developers and operators while meeting our obligations under the redevelopment agreement with the city of Asbury Park.
Our current strategy for the Asbury Park Waterfront investment is to actively asset manage our operating assets, and strategically monetize the remaining development sites and our operating assets through sales to third party developers and operators while meeting our obligations under the redevelopment agreement with the city of Asbury Park.
We also rely on the personnel of a local property manager for certain services at our Asbury and Magnolia Green properties. Our Manager has reported that in its recruiting efforts, our Manager generally strives to have a diverse group of candidates to consider for roles.
We also rely on the personnel of a local property manager for certain services at our Asbury and Magnolia Green properties. Our Manager has reported that in its recruiting efforts, it generally strives to draw from the largest feasible pool of candidates to consider for roles.
The hotel is managed by a third party. As of December 31, 2023, two residential condominium units remain unsold. ● The Asbury: a 110-key independent boutique hotel with indoor and outdoor event spaces, and a rooftop bar.
The hotel is managed by a third party. As of December 31, 2024, all residential condominium units have been sold. ● The Asbury: a 110-key independent boutique hotel with indoor and outdoor event spaces, and a rooftop bar.
We will remain an emerging growth company until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1.235 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of the Spin-Off, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act.
We will remain an emerging growth company until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1.235 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of the Spin-Off, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act. 4 Table of Contents Code of Conduct The Company has adopted a code of business conduct and ethics that sets forth the principles of conduct and ethics to be followed by our trustees, officers and asset level consultants (the "Code of Ethics").
The aggregate carrying value of our Magnolia Green assets as of December 31, 2023 was $65.9 million. As of December 31, 2023, 1,975 residential lots have been sold to homebuilders.
The aggregate carrying value of our Magnolia Green assets as of December 31, 2024 was $47.9 million. As of December 31, 2024, 2,108 residential lots have been sold to homebuilders.
The loans and other lending investments included in our monetizing portfolio as of December 31 , 2023 include two loans with an aggregate carrying value of $16.3 million and two available-for-sale debt securities with an aggregate carrying value of $4.6 million. ​ Land .
The loans and other lending investments included in our monetizing portfolio as of December 31, 2024 include three loans with an aggregate carrying value of $34.9 million and seven available-for-sale debt securities with an aggregate carrying value of $15.4 million. ​ Land .
The aggregate carrying value of the Asbury Park Waterfront investment was approximately $140.6 million as of December 31, 2023.
The aggregate carrying value of the Asbury Park Waterfront investment was approximately $131.3 million as of December 31, 2024.
In addition, we have another land asset related to a venture at Asbury Park with a carrying value of $11.4 million (refer to Note 5 to the combined and consolidated financial statements). ​ Other .
In addition, another land asset at Asbury Park with a carrying value of $51.8 million is held by a venture to which we have provided a loan and certain credit support (refer to Note 5 to the combined and consolidated financial statements). ​ Other .
Further declines in the market value of the Safe Shares could require us to make additional prepayments of some or all of the outstanding borrowings under the Margin Loan Facility.
The net proceeds from the sale of any Safe Shares must be applied in accordance with the terms of the Margin Loan Facility. ​ Declines in the market value of the Safe Shares could require us to make prepayments of some or all of the outstanding borrowings under the Margin Loan Facility or post additional cash collateral.
Accessing incremental borrowings under the Safe Credit Facility will increase our interest expense because the interest rate on all borrowings increases to 10.0% per annum while incremental borrowings remain outstanding. ​ Investment Strategy We expect to focus on realizing value for shareholders primarily by maximizing cash flows through active asset management and asset sales.
Accessing incremental borrowings under the Safe Credit Facility will increase our interest expense because the interest rate on all borrowings increases to 10.0% per annum while incremental borrowings remain outstanding.
In addition to the assets described above, we also own the Safe Shares which had a fair value of $316.4 million based on the closing price of $23.40 as of December 29 , 2023. ​ The Safe Shares collateralize our Margin Loan Facility and the net proceeds from the sale of any Safe Shares must be applied first to repay the Margin Loan Facility.
In addition to the assets described above, we also own the Safe Shares which had a fair value of $249.9 million based on the closing price of $18.48 as of December 31 , 2024. ​ Our Margin Loan Facility is collateralized by the Safe Shares as of the date of this filing.
As of December 31, 2023, there have been no amendments to the Code of Ethics and the Company has not granted any waivers from any provision of the Code of Ethics to any trustees or officers. Employees and Human Capital Resources We have no employees and primarily rely on our Manager for our human capital resources.
The Company will post on its website all disclosures that are required under the Exchange Act or Nasdaq listing standards concerning any amendments to, or waivers from, any provision of the Code of Ethics. Employees and Human Capital Resources We have no employees and primarily rely on our Manager for our human capital resources.
Removed
Our Governance Agreement with Safe prohibited us from transferring any Safe Shares for nine months following the closing of the Merger, except as required under the terms of the Margin Loan Facility.
Added
Subsequent to December 31, 2024, we paid down $5.0 million of the outstanding balance of the Margin Loan Facility to a principal balance of $84.2 million. ​ Investment Strategy We expect to focus on realizing value for shareholders primarily by maximizing cash flows through active asset management and asset sales.
Removed
That nine-month period expired on December 31, 2023. ​ In the second half of 2023, we took certain steps intended to address declines in the market value of the Safe Shares. We paid down the outstanding balance of the Margin Loan Facility to $81.9 million as of December 31 , 2023.
Added
Competition We face competition from numerous real estate and lodging companies and other owners of real properties, both private and public, in attracting guests to our hotel properties, buyers of our residential home sites, tenants for our space available for lease and buyers of our assets.
Removed
We also entered into amendments to the Margin Loan Facility and the Safe Credit Facility to, among other things, reduce the floor price of the Safe Shares that would trigger a mandatory prepayment in full of the Margin Loan Facility and enable us to access incremental borrowings under the Safe Credit Facility to replenish funds used to voluntarily prepay the Margin Loan Facility.
Removed
Code of Conduct The Company has adopted a code of business conduct and ethics that sets forth the principles of conduct and ethics to be followed by our trustees, officers and asset level consultants (the "Code of Ethics").
Removed
The Company will disclose to shareholders material changes to its Code of Ethics, or any waivers for trustees or officers, if any, within four business days of any such event.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

51 edited+5 added−14 removed151 unchanged
Biggest changeAs noted above, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies. We do not intend to take advantage of such extended transition period. 20 Table of Contents ​ Item 1B.
Biggest changeIf some investors find our common shares less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common shares and our share price may be more volatile. 19 Table of Contents As noted above, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards that have different effective dates for public and private companies until such time as those standards apply to private companies.
Development assets expose us to additional risks, including, without limitation: ● delays in obtaining, or an inability to obtain, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, which could result in completion delays and increased development costs; 7 Table of Contents ● incurrence of development costs for a property that exceed original estimates due to increased materials, labor or other costs, changes in development plans or unforeseen environmental conditions, which could make completion of the property more costly or uneconomical; ​ ● abandonment of contemplated development projects or projects in which we have started development, and the failure to recover expenses and costs incurred through the time of abandonment which could result in significant expenses; ​ ● risk of loss of periodic progress payments or advances to builders prior to completion; ​ ● termination of leases by customers due to completion delays; ​ ● failure to achieve expected occupancy levels, as the lease-up of space at our development projects may be slower than estimated; ​ ● other risks related to the lease-up of newly constructed properties; ​ ● costs to carry these assets and complete them, which requires additional liquidity and results in additional expenses that could exceed our original estimates and impact our operating results; ​ ● costs overruns on development, which could be material; and ​ ● uncertainty associated with rezoning, obtaining governmental permits and approvals, concerns of community associations, reliance on third party contractors, increasing commodity costs and threatened or pending litigation may materially delay our completion of rehabilitation and development activities and materially increase their cost to us. ​ ​ Demand for homes and apartment rentals may be adversely affected by a variety of macroeconomic factors beyond our control.
Development assets expose us to additional risks, including, without limitation: ● delays in obtaining, or an inability to obtain, necessary zoning, land-use, building, occupancy and other required governmental permits and authorizations, which could result in completion delays and increased development costs; ● incurrence of development costs for a property that exceed original estimates due to increased materials, labor or other costs, changes in development plans or unforeseen environmental conditions, which could make completion of the property more costly or uneconomical; ​ ● abandonment of contemplated development projects or projects in which we have started development, and the failure to recover expenses and costs incurred through the time of abandonment which could result in significant expenses; ​ ● risk of loss of periodic progress payments or advances to builders prior to completion; ​ ● termination of leases by customers due to completion delays; ​ ● failure to achieve expected occupancy levels, as the lease-up of space at our development projects may be slower than estimated; ​ 7 Table of Contents ● other risks related to the lease-up of newly constructed properties; ​ ● costs to carry these assets and complete them, which requires additional liquidity and results in additional expenses that could exceed our original estimates and impact our operating results; ​ ● costs overruns on development, which could be material; and ​ ● uncertainty associated with rezoning, obtaining governmental permits and approvals, concerns of community associations, reliance on third party contractors, increasing commodity costs and threatened or pending litigation may materially delay our completion of rehabilitation and development activities and materially increase their cost to us. ​ ​ Demand for homes and apartment rentals may be adversely affected by a variety of macroeconomic factors beyond our control.
Weak economic conditions generally or locally, sustained uncertainty about global or local economic conditions, inflation, rising and sustained higher interest rates, a tightening of credit markets, business layoffs, downsizing, industry slowdowns, international hostilities and other similar factors could negatively impact commercial real estate fundamentals and result in lower occupancy, lower demand for homes, lower demand for lodging, lower rental rates, lower activity, lower availability of financing and declining values in our real estate portfolio, and make it more difficult to complete the development of our development properties and to sell our properties at attractive prices or at all.
Weak economic conditions generally or locally, sustained uncertainty about global or local economic conditions, inflation, rising and sustained higher interest rates, a tightening of credit markets, business layoffs, downsizing, industry slowdowns, international hostilities, tariffs and other similar factors could negatively impact commercial real estate fundamentals and result in lower occupancy, lower demand for homes, lower demand for lodging, lower rental rates, lower activity, lower availability of financing and declining values in our real estate portfolio, and make it more difficult to complete the development of our development properties and to sell our properties at attractive prices or at all.
Slowing residential demand would likely adversely affect, among other things, demand and pricing for lots at Magnolia Green and condominiums and apartment rentals at Asbury Park’s multifamily assets. These factors affecting demand, in particular consumer confidence, can be significantly adversely affected by a variety of factors beyond our control.
Slowing residential demand would likely adversely affect, among other things, demand and pricing for lots at Magnolia Green and apartment rentals at Asbury Park’s multifamily assets. These factors affecting demand, in particular consumer confidence, can be significantly adversely affected by a variety of factors beyond our control.
Through provisions in our declaration of trust and bylaws, we (1) require a two-thirds vote for the removal of any trustee from the board, which removal will be allowed only for cause, (2) vest in the board the exclusive power to fix the number of trusteeships, subject to limitations set forth in our declaration of trust and bylaws, (3) require that a vacancy on the board be filled only by the affirmative vote of a majority of the remaining trustees in office, even if the remaining trustees do not constitute a quorum, and for the remainder of the full term of class of trusteeship in which such vacancy occurred, and (4) require, unless called by the lead trustee of our board of trustees, our president, our chief executive officer or our board of trustees, the request of shareholders entitled to cast not less than a majority of all votes entitled to be cast on a matter at such meeting to call a special meeting to consider and vote on any matter that may properly be considered at a meeting of shareholders and containing the information required in our bylaws.
Through provisions in our declaration of trust and bylaws, we (1) require a two-thirds vote for the removal of any trustee from the board, which removal will be allowed only for cause, (2) vest in the board the exclusive power to fix the number of trusteeships, subject to limitations set forth in our declaration of trust and bylaws, (3) require that a vacancy on the board be filled only by the affirmative vote of a majority of the remaining trustees in office, even if the remaining trustees do not constitute a quorum, and for the remainder of the full term of class of trusteeship in which such vacancy occurred, and (4) require, unless called by the lead trustee of our board of trustees, our chief executive officer or our board of trustees, the request of shareholders entitled to cast not less than a majority of all votes entitled to be cast on a matter at such meeting to call a special meeting to consider and vote on any matter that may properly be considered at a meeting of 18 Table of Contents shareholders and containing the information required in our bylaws.
Leases and subleases representing approximately 82% of our in-place operating lease income are scheduled to expire during the next five years. Our expenses may remain constant or increase, even if our revenues decrease, which may have a material adverse effect on our business, financial condition and results of operations.
Leases and subleases representing approximately 100% of our in-place operating lease income are scheduled to expire during the next five years. Our expenses may remain constant or increase, even if our revenues decrease, which may have a material adverse effect on our business, financial condition and results of operations.
The terms of these agreements were agreed while portions of our business were still owned by iStar (now Safe) and were negotiated by persons who were employees, officers or 18 Table of Contents directors of iStar or their respective subsidiaries, and, accordingly, may have conflicts of interest.
The terms of these agreements were agreed while portions of 17 Table of Contents our business were still owned by iStar (now Safe) and were negotiated by persons who were employees, officers or directors of iStar or their respective subsidiaries, and, accordingly, may have conflicts of interest.
Our Manager does not assume any responsibility under the Management Agreement other than to render the services called for and is not responsible for any action of our board of directors in following or declining to follow its advice or recommendations.
Our Manager does not assume any responsibility under the Management Agreement other than to render the services called for and is not responsible for any action of our board of trustees in following or declining to follow its advice or recommendations.
A continuing significant reduction in occupancy for room rates would continue to adversely impact our revenues and have a negative effect on our profitability. We are subject to various operating risks common to the lodging industry.
A continuing significant reduction in occupancy and/or room rates would continue to adversely impact our revenues and have a negative effect on our profitability. We are subject to various operating risks common to the lodging industry.
Under various U.S. federal, state and local environmental laws, ordinances and regulations, a current or previous owner of real estate (including, in certain circumstances, a secured lender that succeeds to ownership or control of a 11 Table of Contents property) may become liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, under or in its property.
Under various U.S. federal, state and local environmental laws, ordinances and regulations, a current or previous owner of real estate (including, in certain circumstances, a secured lender that succeeds to ownership or control of a property) may become liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, under or in its property.
These provisions may have 19 Table of Contents the effect of limiting or precluding a third party from making an unsolicited acquisition proposal or of delaying, deferring or preventing a change in control of us under circumstances that otherwise could provide our shareholders with the opportunity to realize a premium over the then current market price.
These provisions may have the effect of limiting or precluding a third party from making an unsolicited acquisition proposal or of delaying, deferring or preventing a change in control of us under circumstances that otherwise could provide our shareholders with the opportunity to realize a premium over the then current market price.
Certain forms of terrorism including, but not limited to, nuclear, biological and chemical terrorism, political risks, environmental hazards and/or Acts of God may be deemed to fall completely outside the general coverage limits of our insurance policies or may be uninsurable or cost prohibitive to justify insuring against. Furthermore, if the U.S.
Certain forms of terrorism including, but not limited to, nuclear, biological and chemical terrorism, political 11 Table of Contents risks, environmental hazards and/or Acts of God may be deemed to fall completely outside the general coverage limits of our insurance policies or may be uninsurable or cost prohibitive to justify insuring against. Furthermore, if the U.S.
If we are unable to sell assets at anticipated times or prices, we may not have sufficient cash to pay the management fee to our manager or repay our debt, we may be unable to pay distributions to our shareholders and our business, financial condition and results of operations may be materially and adversely affected.
If we are unable to sell assets at anticipated times or prices, we may not have sufficient cash to pay the management fee to our manager or repay our debt, we may be unable to pay distributions 6 Table of Contents to our shareholders and our business, financial condition and results of operations may be materially and adversely affected.
In the ordinary course of our business, our Manager and the local operators of our properties collect and store sensitive data relating to our business and assets, including intellectual property, our proprietary business and asset information and personally identifiable information of our tenants, buyers of residential lots, personnel and other parties involved with our properties.
In the ordinary course of our business, our Manager and the local operators of our properties collect and store sensitive data relating to our business and assets, including intellectual property, our proprietary business and asset 12 Table of Contents information and personally identifiable information of our tenants, buyers of residential lots, personnel and other parties involved with our properties.
Some of these claims may result in significant defense costs and potentially significant 12 Table of Contents judgments against us, some of which we may not be insured against. While we generally intend to vigorously defend ourselves against such claims, we cannot be certain of the ultimate outcomes of claims that may be asserted against us.
Some of these claims may result in significant defense costs and potentially significant judgments against us, some of which we may not be insured against. While we generally intend to vigorously defend ourselves against such claims, we cannot be certain of the ultimate outcomes of claims that may be asserted against us.
Any foreclosure on the assets securing our secured debt or any acceleration or mandatory prepayment of amounts due under such debt could materially and adversely affect our assets, our liquidity and financial position and the market price of our securities. Financial covenants could materially adversely affect our ability to conduct our business.
Any foreclosure on the assets securing our secured debt or any acceleration or mandatory 14 Table of Contents prepayment of amounts due under such debt could materially and adversely affect our assets, our liquidity and financial position and the market price of our securities. Financial covenants could materially adversely affect our ability to conduct our business.
In particular, certain members of the management team have significant historical experience with our legacy real estate assets and have developed relationships with local governments, developers, brokers and others that are important to the success of our asset management and disposition strategy.
In particular, certain members of the management team have significant historical experience with our legacy real estate assets and have developed relationships with local governments, developers, brokers and others that are 15 Table of Contents important to the success of our asset management and disposition strategy.
Hotels where our managers have collective bargaining agreements with employees could be affected more significantly by labor force activities and additional hotels or groups of employees may become subject to additional collective bargaining agreements in the future.
Hotels where our managers 10 Table of Contents have collective bargaining agreements with employees could be affected more significantly by labor force activities and additional hotels or groups of employees may become subject to additional collective bargaining agreements in the future.
We expect to monetize or otherwise dispose of all of our assets over time. While we expect to make certain investments to complete developments at Asbury and Magnolia Green, we do not otherwise currently expect to make material new investments or acquire material new assets.
Our corporate strategy is to monetize or otherwise dispose of all of our assets over time. While we expect to make certain investments to complete developments at Asbury and Magnolia Green, we do not otherwise currently expect to make material new investments or acquire material new assets.
In addition, our board of trustees has adopted a policy restricting disclosure by our Manager and its personnel, including personnel who provide services to us, of material non-public information regarding Safe and 16 Table of Contents its securities to us and our trustees.
In addition, our board of trustees has adopted a policy restricting disclosure by our Manager and its personnel, including personnel who provide services to us, of material non-public information regarding Safe and its securities to us and our trustees.
The management fee payable to our Manager is fixed for the first four annual terms of the Management Agreement, regardless of our performance. Significant management fees could be payable to our Manager despite the fact that we could experience losses.
The management fee payable to our Manager is fixed for the first four annual terms of the Management Agreement, regardless of our performance. Significant management fees could be payable to our Manager despite the fact 16 Table of Contents that we could experience losses.
These risks include: ​ ● changes in supply of or demand for properties in our market or sub-markets; ​ ● higher interest rates that affect the cost and availability of mortgage financing and, in turn, demand for residential properties; ​ ● competition for homebuyers, hotel guests, tenants and users and purchasers of properties in our market or sub-markets; ​ ● the ongoing need for capital improvements at our significant development properties; ​ ● increased operating costs, which may not necessarily be offset by increased revenues, including insurance premiums, utilities and real estate taxes, due to inflation and other factors; ​ ● changes in tax, real estate and zoning laws; ​ ● changes in governmental rules and fiscal policies; ​ ● inability of potential purchasers of our properties to obtain financing; ​ ● competition from other assets in our markets or sub-markets and the quality of competition, such as the attractiveness of our properties as compared to other properties available for hotel stays, sale or rent based on considerations such as quality of property, convenience of location, rental rates, amenities and safety record; and ​ ● civil unrest, acts of war, terrorism, acts of God, including earthquakes, hurricanes and other natural disasters (which may result in uninsured losses) and other factors beyond our control. ​ ​ Should any of the foregoing occur, it may have a material adverse effect on our business, financial condition and results of operations. 6 Table of Contents We will be materially dependent on sales of assets to generate cash flows.
These risks include: ​ ● changes in supply of or demand for properties in our market or sub-markets; ​ ● higher interest rates that affect the cost and availability of mortgage financing and, in turn, demand for real properties; ​ ● competition for homebuyers, hotel guests, tenants and users and purchasers of properties in our market or sub-markets; ​ ● the ongoing need for capital improvements at our significant development properties; ​ ● increased operating costs, which may not necessarily be offset by increased revenues, including insurance premiums, utilities and real estate taxes, due to inflation and other factors; ​ ● changes in tax, real estate and zoning laws; ​ ● changes in governmental rules and fiscal policies; ​ ● inability of potential purchasers of our properties to obtain financing; ​ ● competition from other assets in our markets or sub-markets and the quality of competition, such as the attractiveness of our properties as compared to other properties available for hotel stays, sale or rent based on considerations such as quality of property, convenience of location, rental rates, amenities and safety record; and ​ ● civil unrest, acts of war, terrorism, acts of God, including earthquakes, hurricanes and other natural disasters (which may result in uninsured losses), the imposition of tariffs and other factors beyond our control. ​ ​ Should any of the foregoing occur, it may have a material adverse effect on our business, financial condition and results of operations.
Two of our assets, Asbury Park Waterfront and Magnolia Green, accounted for 74% of the carrying value of the legacy portfolio on a consolidated basis at December 31, 2023, and our Safe Shares are also a material asset.
Two of our assets, Asbury Park Waterfront and Magnolia Green, accounted for 63% of the carrying value of the legacy portfolio on a consolidated basis at December 31, 2024, and our Safe Shares are also a material asset.
It is possible that an economic downturn resulting from concerns about a potential economic recession, rising interest rates, corporate layoffs, geopolitical instability, a resurgence of the COVID-19 pandemic or other factors would result in a decline in demand for new homes and apartment rentals which would negatively impact our business, results of operations and financial condition.
It is possible that an economic downturn resulting from concerns about a potential economic recession, rising interest rates, corporate layoffs, geopolitical instability, tariff policy, pandemic other factors would result in a decline in demand for new homes and apartment rentals which would negatively impact our business, results of operations and financial condition.
A tenant’s ability to pay rent is determined by its creditworthiness, among other factors. If a tenant’s credit deteriorates, the tenant may default on its obligations under our lease and may also become bankrupt. The bankruptcy or insolvency of our tenants or other failure to pay is likely to adversely affect the income produced by our real estate assets.
If a tenant’s credit deteriorates, the tenant may default on its obligations under our lease and may also become bankrupt. The bankruptcy or insolvency of our tenants or other failure to pay is likely to adversely affect the income produced by our real estate assets.
The Margin Loan Facility is secured by our Safe Shares. Under the terms of the margin loan, if the market value of our Safe Shares drops below specified levels, we will have to post additional collateral with the lender.
Under the terms of the margin loan, if the market value of our Safe Shares drops below specified levels, we will have to post additional collateral with the lender.
After the initial annual term of the Management Agreement expires on March 31, 2024, the agreement may be terminated without cause upon the affirmative vote of at least two-thirds of our independent trustees on six months' prior notice, subject to the payment of a termination fee if the termination occurs before March 31, 2027.
The Management Agreement may be terminated without cause upon the affirmative vote of at least two-thirds of our independent trustees on six months' prior notice, subject to the payment of a termination fee if the termination occurs before March 31, 2027.
Certain future sales of additional development parcels at Asbury Park Waterfront and Magnolia Green will be subject to receipt of approvals from relevant local municipalities. The requirements we will need to fulfill to obtain such approvals are subject to change.
Certain future sales of additional development parcels at Asbury Park Waterfront and Magnolia Green will be subject to receipt of approvals from relevant local municipalities. The requirements we will need to fulfill to obtain such approvals are subject to change. We may not receive such approvals in a timely manner or at all.
Joint venture investments could be adversely affected by the capital markets, lack of sole decision-making authority, changes in priorities or approvals by government agencies, reliance on joint venture partners’ financial condition and any disputes that may arise between us and our joint venture partners. We co-invest with third parties in certain of our assets, including the Asbury Park Waterfront assets.
Some of our assets are held in joint ventures with third parties. Joint venture investments could be adversely affected by the capital markets, lack of sole decision-making authority, changes in priorities or approvals by government agencies, reliance on joint venture partners’ financial condition and any disputes that may arise between us and our joint venture partners.
Conflicts may include, without limitation: ● conflicts arising from the enforcement of agreements between us and our Manager and its affiliates, including the Management Agreement, the Governance Agreement, the Safe Credit Facility, the Separation and Distribution Agreement and the Registration Rights Agreement; ● conflicts in the amount of time that officers and employees of Safe will spend on our affairs versus Safe’s other affairs; ● conflicts in decisions regarding the sale of our Safe Shares which, as of December 31,2023, represented approximately 19.0% of Safe’s outstanding common stock; and ● conflicts in taking actions that could adversely affect our or Safe's interests under the Safe Credit Facility.
Conflicts may include, without limitation: ● conflicts arising from the enforcement of agreements between us and our Manager and its affiliates, including the Management Agreement, the Governance Agreement, the Safe Credit Facility, the Separation and Distribution Agreement and the Registration Rights Agreement; ● conflicts in the amount of time that officers and employees of Safe will spend on our affairs versus Safe’s other affairs; ● conflicts arising from the fact that each of our trustees is a former director or officer of iStar and continues to own shares of Safe common stock; ● conflicts in decisions regarding the sale of our Safe Shares which, as of December 31,2024, represented approximately 18.9% of Safe’s outstanding common stock; and ● conflicts in taking actions that could adversely affect our or Safe's interests under the Safe Credit Facility.
If the property taxes we pay increase, our financial condition, results of operations, cash flows, trading price of our common shares and our ability to satisfy our principal and interest obligations and to pay dividends to our shareholders could be adversely affected, which may have a material adverse effect on our business, financial condition and results of operations. 9 Table of Contents Some of our assets are held in joint ventures with third parties.
If the property taxes we pay increase, our financial condition, results of operations, cash flows, trading price of our common shares and our ability to satisfy our principal and interest obligations and to pay dividends to our shareholders could be adversely affected, which may have a material adverse effect on our business, financial condition and results of operations.
If we are required to indemnify Safe under the circumstances set forth in the Separation and Distribution Agreement, we may be subject to substantial liabilities, which may have a material adverse effect on our business, financial condition and results of operations.
If we are required to indemnify Safe under the circumstances set forth in the Separation and Distribution Agreement, we may be subject to substantial liabilities, which may have a material adverse effect on our business, financial condition and results of operations. The Spin-Off may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws.
We have a significant amount of indebtedness. Our governing documents do not limit the amount of indebtedness we may incur and we may become more highly leveraged. As of December 31, 2023, we have in place the Safe Credit Facility and the Margin Loan Facility. Our governing documents do not prohibit us from incurring additional indebtedness.
We have a significant amount of indebtedness, some of which matures in 2026. Our governing documents do not limit the amount of indebtedness we may incur and we may become more highly leveraged. As of December 31, 2024, we have in place the Safe Credit Facility and the Margin Loan Facility.
If we must sell an asset, we cannot provide assurances that we will be able to dispose of the asset in the time period we desire or that the sales price of the asset will recoup or exceed our cost for the asset.
Our ability to sell assets may therefore be limited and could take longer than we anticipate. If we must sell an asset, we cannot provide assurances that we will be able to dispose of the asset in the time period we desire or that the sales price of the asset will recoup or exceed our cost for the asset.
There can be no assurance that we will be able to continue to satisfy the 40 Test in the future. 13 Table of Contents Our ability to satisfy the 40% Test will depend on several factors, including the values of our real estate assets and the market value of the Safe Shares, the timing of sales of our real estate assets and sales of Safe Shares and the balance of the Margin Loan Facility or any other indebtedness secured by Safe Shares.
Our ability to satisfy the 40% Test will depend on several factors, including the values of our real estate assets and the market value of the Safe Shares, the timing of sales of our real estate assets and sales of Safe Shares and the balance of the Margin Loan Facility or any other indebtedness secured by Safe Shares.
Risks Related to Our Relationship with Our Manager and its Affiliates (See also, “Risks Related to the Spin-Off” below) Termination of the Management Agreement would be costly. 15 Table of Contents Termination of the Management Agreement without cause by us would be costly.
Risks Related to Our Relationship with Our Manager and its Affiliates Termination of the Management Agreement would be costly. Termination of the Management Agreement without cause by us would be costly.
In addition to general 10 Table of Contents economic conditions, new hotel room supply is an important factor that can affect the lodging industry’s performance, and over-building has the potential to further exacerbate the negative impact of an economic recession.
In addition to general economic conditions, new hotel room supply is an important factor that can affect the lodging industry’s performance, and over-building has the potential to further exacerbate the negative impact of an economic recession. Room rates and occupancy, and thus revenue per available room, or “RevPAR”, tend to increase when demand growth exceeds supply growth.
If it were established that we were an unregistered investment company, there would be a risk that we would be subject to monetary penalties and injunctive relief in an action brought by the SEC, that we would be unable to enforce contracts with third parties, or that third parties could seek to obtain rescission of transactions.
No issuer may rely on the safe harbor provided by Rule 3a-2 more frequently than once during any three-year period. 13 Table of Contents If it were established that we were an unregistered investment company, there would be a risk that we would be subject to monetary penalties and injunctive relief in an action brought by the SEC, that we would be unable to enforce contracts with third parties, or that third parties could seek to obtain rescission of transactions.
In such a case, our claim against the tenant for unpaid, future rent would be subject to a statutory cap that might be substantially less than the remaining rent owed under the lease. In addition, certain amounts paid to us within 90 days prior to the tenant’s bankruptcy filing could be required to be returned to the tenant’s bankruptcy estate.
In such a case, our claim against the tenant for unpaid, future rent would be subject to a statutory cap that might be substantially less than the remaining rent owed under the lease.
We will need to monitor our assets to ensure that we continue to satisfy the 40% Test.
We will need to monitor our assets to ensure that we continue to satisfy the 40% Test. There can be no assurance that we will be able to continue to satisfy the 40% Test in the future.
The significant amount of our indebtedness could have material adverse consequences for us, including: ● hindering our ability to adjust to changing market, industry or economic conditions; ​ ​ ● limiting the amount of free cash flow available for future dividends or other uses; ● requiring us to sell Safe Shares to satisfy margin calls; ​ ● making us more vulnerable to economic, market or industry downturns, including interest rate increases; and ● limiting our ability to refinance maturing debt on favorable terms. ​ ​ Our ability to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control. 14 Table of Contents We are subject to risks associated with secured debt.
The significant amount of our indebtedness could have material adverse consequences for us, including: ● hindering our ability to adjust to changing market, industry or economic conditions; ​ ​ ● limiting the amount of free cash flow available for future dividends or other uses; ● requiring us to sell Safe Shares to satisfy margin calls; ​ ● making us more vulnerable to economic, market or industry downturns, including interest rate increases; and ● limiting our ability to refinance maturing debt on favorable terms. ​ ​ The Margin Loan Facility matures on March 31, 2026 and the Safe Credit Facility matures on March 31, 2027.
We may not receive such approvals in a timely manner or at all. 8 Table of Contents We may experience losses if the creditworthiness of our tenants deteriorates and they are unable to meet their lease obligations. We own or lease properties leased or subleased to tenants and receive rents from tenants during the contracted term of such leases.
We may experience losses if the creditworthiness of our tenants deteriorates and they are unable to meet their lease obligations. We own or lease properties leased or subleased to tenants and receive rents from tenants during the contracted term of such leases. A tenant’s ability to pay rent is determined by its creditworthiness, among other factors.
We may, in specific circumstances, be liable for the actions of our joint venture partners. The joint venture may be impacted by the changes in the priorities, approvals, funding, zoning or other actions by government agencies. In addition, any disputes that may arise between us and joint venture partners may result in litigation or arbitration that would increase our expenses.
We may, in specific circumstances, be liable for the actions of our joint venture partners. The joint venture may be impacted by the changes in 9 Table of Contents the priorities, approvals, funding, zoning or other actions by government agencies.
Some of these investments are noncontrolling interests, and in others we share responsibility for managing the affairs of the venture.
We co-invest with third parties in certain of our assets, including the Asbury Park Waterfront assets. Some of these investments are noncontrolling interests, and in others we share responsibility for managing the affairs of the venture.
Our primary strategy is to generate cash flows and realize value through active asset management and asset sales. Asset sales are unpredictable and highly affected by economic conditions in the markets where the assets are located, the cost and availability of mortgage financing and competition from other properties available on the market.
Asset sales are unpredictable and highly affected by economic conditions in the markets where the assets are located, the cost and availability of mortgage financing and competition from other properties available on the market. Our ability to sell Safe Shares will be affected by conditions in the capital markets, market prices of the shares and demand for the shares.
The performance of the lodging industry has historically been closely linked to the performance of the general economy and, specifically, growth in U.S. gross domestic product. The lodging industry is also sensitive to business and personal discretionary spending levels. The COVID-19 pandemic has materially and adversely affected corporate budgets and consumer demand for travel and lodging.
For the year ended December 31, 2024, 19% of our total revenues were generated by our hotel assets. The performance of the lodging industry has historically been closely linked to the performance of the general economy and, specifically, growth in U.S. gross domestic product. The lodging industry is also sensitive to business and personal discretionary spending levels.
The risks set forth below speak only as of the date of this report and the Company disclaims any duty to update them except as required by law. For purposes of these risk factors, the terms "our Company," "we," "our" and "us" refer to Star Holdings and its consolidated subsidiaries, unless the context indicates otherwise.
The risks set forth below speak only as of the date of this report and the Company disclaims any duty to update them except as required by law.
In any event, it is highly unlikely that a bankrupt or insolvent tenant would pay in full amounts it owes us under a lease that it intends to reject.
In addition, certain amounts paid to us within 90 days prior to the tenant’s bankruptcy filing could be 8 Table of Contents required to be returned to the tenant’s bankruptcy estate. In any event, it is highly unlikely that a bankrupt or insolvent tenant would pay in full amounts it owes us under a lease that it intends to reject.
Risks Related to Our Properties and Business ​ If global or local market and economic conditions deteriorate, our business, financial condition and results of operations could be materially and adversely affected.
For purposes of these risk factors, the terms "our Company," "we," "our" and "us" refer to Star Holdings and its consolidated subsidiaries, unless the context indicates otherwise. 5 Table of Contents Risks Related to Our Properties and Business ​ If global or local market and economic conditions deteriorate, our business, financial condition and results of operations could be materially and adversely affected.
Any of the foregoing may have a material adverse effect on our business, financial condition and results of operations. The lodging industry is highly sensitive to trends in business and personal travel. For the year ended December 31, 2023, 18% of our total revenues were generated by our hotel assets.
In addition, any disputes that may arise between us and joint venture partners may result in litigation or arbitration that would increase our expenses. Any of the foregoing may have a material adverse effect on our business, financial condition and results of operations. The lodging industry is highly sensitive to trends in business and personal travel.
We cannot predict if investors will find our common shares less attractive if we choose to rely on these exemptions. If some investors find our common shares less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common shares and our share price may be more volatile.
We cannot predict if investors will find our common shares less attractive if we choose to rely on these exemptions.
Removed
Our ability to sell Safe Shares will be affected by conditions in the capital markets and market prices of the shares. Our ability to sell assets may therefore be limited and could take longer than we anticipate.
Added
We will be materially dependent on sales of assets to generate cash flows. Our primary strategy is to generate cash flows and realize value through active asset management and asset sales.
Removed
We cannot predict how long reduced demand will continue or its effect on occupancy levels and room rates. Significant increases in fuel prices and the outbreak of hostilities in Ukraine may also adversely affect business and personal travel demand.
Added
The COVID-19 pandemic materially and adversely affected corporate budgets and consumer demand for travel and lodging and corporate travel demand remains below pre-pandemic levels. Significant increases in fuel prices and geopolitical instability may also adversely affect business and personal travel demand.
Removed
Room rates and occupancy, and thus revenue per available room, or “RevPAR”, tend to increase when demand growth exceeds supply growth.
Added
Our governing documents do not prohibit us from incurring additional indebtedness.
Removed
No issuer may rely on the safe harbor provided by Rule 3a-2 more frequently than once during any three-year period.
Added
Our ability to refinance maturing indebtedness and to arrange additional financing will depend on, among other factors, our financial position and performance, as well as prevailing market conditions and other factors beyond our control. We are subject to risks associated with secured debt. The Margin Loan Facility is secured by our Safe Shares as of the date of this filing.
Removed
Risks Related to the Spin-Off We have a limited operating history as an independent company, and our historical and pro forma financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results.
Added
We do not intend to take advantage of such extended transition period. ​ Item 1B. Unresolved Staff Comments None.
Removed
The historical information prior to the Spin-Off refers to our assets as operated by iStar and integrated with iStar’s other businesses. Our historical information prior to the Spin-Off included in the consolidated financial statements is derived from the consolidated financial statements and accounting records of iStar.
Removed
Accordingly, the historical financial information does not necessarily reflect the financial condition, results of operations or cash flows that we would have achieved as a separate, publicly traded company during those periods, or those that we will achieve in the future.
Removed
Factors which could cause our results to materially differ from those reflected in such historical financial information and which may adversely impact our ability to achieve similar results in the future may include, but are not limited to, the following: ● the financial results prior to the Spin-Off do not reflect all of our expenses as an independent public company, including, but not limited to, legal, accounting, compliance and other costs associated with being a public company with equity securities traded on the NASDAQ; ​ ● prior to the Spin-Off, our business was operated by iStar as part of its corporate organization.
Removed
After the Spin-Off, we pay fees and reimburse expenses under the Management Agreement and local asset-related agreements, which are costly; ​ ● after the Spin-Off, we may be unable to use Safe’s economies of scope and scale in procuring various goods and services and in maintaining vendor and customer relationships.
Removed
Although we entered into the Separation and Distribution Agreement and the Management Agreement, these arrangements may not fully capture the benefits we have previously enjoyed as a result of our business being integrated within the businesses of iStar and may result in us paying higher charges than in the past for necessary services; and ​ ● prior to the Spin-Off, our working capital requirements and capital for our general corporate purposes, including capital expenditures, were satisfied as part of the corporation-wide cash management policies of iStar.
Removed
Following the Spin-Off, we rely on resources from our operations and our financing arrangements, which have terms that may not be as favorable as those obtained by iStar, and the cost of capital for our business may be higher than iStar’s cost of capital prior to the separation and the Spin-Off, which may have a material adverse effect on our business, financial condition and results of operations. 17 Table of Contents ​ Other significant changes may occur in our cost structure, management, financing and business operations as a result of our status as an independent company.
Removed
Our trustees may have actual or potential conflicts of interest because of their previous or continuing equity interests in, or positions at, Safe. Each of our trustees has served as a director or officer of iStar prior to the Spin-Off and owns Safe common stock.
Removed
Even though our trustees qualify as independent trustees under applicable stock exchange rules, they each continue to have a financial interest in Safe through the ownership of Safe common stock.
Removed
Continued ownership of Safe common stock could create, or appear to create, potential conflicts of interest, which may have a material adverse effect on our business, financial condition and results of operations. The Spin-Off may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeBoard members receive presentations on cybersecurity topics from our Manager’s Head of IT, internal technology staff or external experts as part of the Board’s continuing education on topics that impact public companies. ​ Our Manager’s team, including its Head of IT, Head of Risk Management and Chief Legal Officer, are responsible for assessing and managing our material risks from cybersecurity threats.
Biggest changeBoard members receive presentations on cybersecurity topics from our Manager’s Head of IT, internal technology staff or external experts as part of the Board’s continuing education on topics that impact public companies. ​ Our Manager’s team, including its Head of Risk Management and General Counsel, are responsible for assessing and managing our material risks from cybersecurity threats.
In addition, our Manager updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. ​ 21 Table of Contents The Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from our Manager on our cyber risk management program.
In addition, our Manager updates the Committee, as necessary, regarding any material cybersecurity incidents, as well as any incidents with lesser impact potential. ​ The Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from our Manager on our cyber risk management program.
The Committee is responsible for reviewing our Manager’s implementation of our cybersecurity risk management program and evaluating its adequacy. ​ The Committee receives periodic reports from our Manager on our cybersecurity risks.
The Committee is responsible for reviewing our Manager’s implementation of our cybersecurity risk management program and evaluating its adequacy. ​ 20 Table of Contents The Committee receives periodic reports from our Manager on our cybersecurity risks.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 22 PART II ​ 22 Item 5. Market for Registrant’s Equity and Related Stock Matters 22 Item 6. RESERVED 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 28 Item 8. Financial Statements and Supplementary Data 30
Biggest changeItem 4. Mine Safety Disclosures 21 PART II ​ 21 Item 5. Market for Registrant’s Equity, Related Stock Matters and Issuer Purchase of Equity Securities 21 Item 6. RESERVED 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 28 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Equity and Related Stock Matters The Company’s common stock trades on the Nasdaq Global Market under the symbol "STHO." The Company had 977 holders of record of common stock as of February 26, 2024.
Biggest changeItem 5. Market for Registrant’s Equity, Related Stock Matters and Issuer Purchase of Equity Securities The Company’s common stock trades on the Nasdaq Global Market under the symbol "STHO." The Company had 934 holders of record of common stock as of February 13, 2025.
Issuer Purchases of Equity Securities We did not purchase any shares of our common stock during the three months ended December 31, 2023.
Issuer Purchases of Equity Securities We did not purchase any shares of our common stock during the three months ended December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

40 edited+6 added−9 removed30 unchanged
Biggest changeResults of Operations for the Year Ended December 31, 2023 compared to the Year Ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ ​ ​ ​ 2023 2022 $ Change ​ ​ ​ (in thousands) ​ Operating lease income ​ $ 6,738 ​ $ 12,859 ​ $ (6,121) ​ Interest income ​ 2,135 ​ 12,340 ​ (10,205) ​ Other income ​ 41,745 ​ 37,125 ​ 4,620 ​ Land development revenue ​ 72,435 ​ 61,753 ​ 10,682 ​ Total revenue ​ 123,053 ​ 124,077 ​ (1,024) ​ Interest expense ​ 16,672 ​ 42,042 ​ (25,370) ​ Interest expense - related party ​ ​ 6,300 ​ — ​ 6,300 ​ Real estate expense ​ 47,753 ​ 49,902 ​ (2,149) ​ Land development cost of sales ​ 62,657 ​ 63,441 ​ (784) ​ Depreciation and amortization ​ 4,572 ​ 4,910 ​ (338) ​ General and administrative ​ 36,199 ​ 10,937 ​ 25,262 ​ Provision for loan losses ​ 1,740 ​ 44,998 ​ (43,258) ​ Impairment of assets ​ — ​ 14,476 ​ (14,476) ​ Other expense ​ 791 ​ 494 ​ 297 ​ Total costs and expenses ​ 176,684 ​ 231,200 ​ (54,516) ​ Unrealized and realized gains (losses) on equity investments ​ ​ (171,394) ​ — ​ (171,394) ​ Income from sales of real estate ​ — ​ 25,186 ​ (25,186) ​ Loss on early extinguishment of debt, net ​ (2,090) ​ — ​ (2,090) ​ Earnings from equity method investments ​ 30,825 ​ 45,626 ​ (14,801) ​ Net income (loss) ​ $ (196,290) ​ $ (36,311) ​ $ (159,979) ​ ​ Revenue —Operating lease income, which primarily includes income from commercial operating properties, decreased to $6.7 million in 2023 from $12.9 million in 2022.
Biggest changeResults of Operations for the Year Ended December 31, 2024 compared to the Year Ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ ​ ​ ​ 2024 2023 $ Change ​ ​ ​ (in thousands) ​ Operating lease income ​ $ 6,900 ​ $ 6,738 ​ $ 162 ​ Interest income ​ 2,344 ​ 2,135 ​ 209 ​ Other income ​ 44,091 ​ 41,745 ​ 2,346 ​ Land development revenue ​ 59,962 ​ 72,435 ​ (12,473) ​ Total revenue ​ 113,297 ​ 123,053 ​ (9,756) ​ Interest expense ​ 7,002 ​ 16,672 ​ (9,670) ​ Interest expense - related party ​ ​ 8,750 ​ 6,300 ​ 2,450 ​ Real estate expense ​ 48,263 ​ 47,753 ​ 510 ​ Land development cost of sales ​ 48,674 ​ 62,657 ​ (13,983) ​ Depreciation and amortization ​ 4,328 ​ 4,572 ​ (244) ​ General and administrative ​ 21,123 ​ 36,199 ​ (15,076) ​ Provision for loan losses ​ 621 ​ 1,740 ​ (1,119) ​ Other expense ​ 64 ​ 791 ​ (727) ​ Total costs and expenses ​ 138,825 ​ 176,684 ​ (37,859) ​ Unrealized gains (losses) on equity investments ​ ​ (66,531) ​ (171,394) ​ 104,863 ​ Income from sales of real estate ​ 3,699 ​ — ​ 3,699 ​ Loss on early extinguishment of debt, net ​ — ​ (2,090) ​ 2,090 ​ Earnings from equity method investments ​ — ​ 30,825 ​ (30,825) ​ Income tax expense ​ (2) ​ — ​ (2) ​ Net income (loss) ​ $ (88,362) ​ $ (196,290) ​ $ 107,928 ​ ​ Revenue —Operating lease income, which primarily includes income from commercial operating properties, increased to $6.9 million in 2024 from $6.7 million in 2023. ​ Interest income increased to $2.3 million in 2024 from $2.1 million in 2023.
Real estate assets to be disposed of are reported at the lower of their carrying amount or estimated fair value less costs to sell and are included in "Real estate available and held for sale" on our combined and consolidated balance sheets.
Real estate assets to be disposed of are reported at the lower of their carrying amount or estimated fair value less costs to sell and are included in "Real estate available and held for sale" on our consolidated balance sheets.
Certain prior year amounts have been reclassified in our consolidated financial statements and the related notes to conform to the current period presentation. Executive Overview During 2023, we continued to develop our properties at Asbury Park and Magnolia Green while also monetizing certain development sites at Asbury Park and residential lots at Magnolia Green.
Certain prior year amounts have been reclassified in our consolidated financial statements and the related notes to conform to the current period presentation. Executive Overview During 2024, we continued to develop our properties at Asbury Park and Magnolia Green while also monetizing certain development sites at Asbury Park and residential lots at Magnolia Green.
The uncertainty related to macroeconomic factors such as inflation, interest rate increases, market volatility, disruptions in the banking sector and the availability of financing, and the effects of these factors on the economy generally and on the commercial real estate markets in which we operate, make it impossible for us to predict or to quantify the impact of these or other trends on our financial results or liquidity.
The uncertainty related to macroeconomic factors such as inflation, interest rate increases, market volatility, disruptions in the banking sector, tariff policy, geopolitical uncertainty and the availability of financing, and the effects of these factors on the economy generally and on the commercial real estate markets in which we operate, make it impossible for us to predict or to quantify the impact of these or other trends on our financial results or liquidity.
For all of these estimates, we caution that future events rarely develop exactly as forecasted, and, therefore, routinely require adjustment. During 2023, management reviewed and evaluated these critical accounting estimates and believes they are appropriate.
For all of these estimates, we caution that future events rarely develop exactly as forecasted, and, therefore, routinely require adjustment. During 2024, management reviewed and evaluated these critical accounting estimates and believes they are appropriate.
The unrealized loss represents the difference between the fair value of our investment in the Safe Shares as of December 31, 2023 and iStar’s historical carrying amount of the Safe Shares at the time of the Spin-Off.
The unrealized loss for the year ended December 31, 2023 represents the difference between the fair value of our investment in the Safe Shares as of December 31, 2023 and iStar’s historical carrying amount of the Safe Shares at the time of the Spin-Off.
A subsidiary of ours provided a completion and carry guaranty on the Loan (refer to Note 9 to the combined and consolidated financial statements) and is required to maintain a minimum net worth and a minimum liquidity amount both prior to and after the completion of the Project while the Loan is outstanding.
A subsidiary of ours provided a completion and carry guaranty on the Loan (refer to Note 9 to the combined and consolidated financial statements) and is required to maintain a minimum net worth and a minimum liquidity amount both 25 Table of Contents prior to and after the completion of the Project (refer to Note 5 to the combined and consolidated financial statements) while the Loan is outstanding.
We expect our short-term and long-term liquidity requirements to include: ● capital expenditures on our Asbury Park Waterfront and Magnolia Green development projects; ● debt service on the Safe Credit Facility and the Margin Loan Facility (refer to Note 9 to the combined and consolidated financial statements), and any other indebtedness including any repurchase agreements; ● management fees and expense reimbursements payable to our manager; ● operating expenses; and 25 Table of Contents ● distributions to shareholders if we have any excess cash on hand from asset sales after the repayment of our debt obligations. ​ ​ We expect to meet our short-term liquidity requirements through any cash flows from operations, proceeds from asset sales, borrowings on the incremental facility under the Safe Credit Facility and our unrestricted cash.
We expect our short-term and long-term liquidity requirements to include: ● capital expenditures on our Asbury Park Waterfront and Magnolia Green development projects; ● debt service on the Safe Credit Facility and the Margin Loan Facility (refer to Note 9 to the combined and consolidated financial statements), and any other indebtedness including any repurchase agreements; ● repayment or refinancing of the Margin Loan Facility and the Safe Credit Facility at their respective maturities; ● management fees and expense reimbursements payable to our Manager (refer to Note 7 to the combined and consolidated financial statements) ; ● operating expenses; and ● distributions to shareholders if we have any excess cash on hand from asset sales after the repayment of our debt obligations. ​ ​ 24 Table of Contents We expect to meet our short-term liquidity requirements through any cash flows from operations, proceeds from asset sales, borrowings on the incremental facility under the Safe Credit Facility and our unrestricted cash.
We consider circumstances such as the foregoing to be indicators that the final steps in the loan collection process have 27 Table of Contents occurred and that a loan is uncollectible. At this point, a loss is confirmed and the loan and related allowance will be charged off.
We consider circumstances such as the foregoing to be indicators that the final steps in the loan collection process have occurred and that a loan is uncollectible. At this point, a loss is confirmed and the loan and related allowance will be charged off.
In October 2023, we entered into an 26 Table of Contents amendment to the Safe Credit Facility primarily to enable us to access the $25.0 million incremental facility to replenish funds that we use to make voluntary prepayments under the Margin Loan Facility.
In October 2023, we entered into an amendment to the Safe Credit Facility primarily to enable us to access the $25.0 million incremental facility to replenish funds that we use to make voluntary prepayments under the Margin Loan Facility.
We expect to meet our long-term liquidity requirements through any cash flows from operations and proceeds from asset sales. Our future cash sources will be largely dependent on proceeds from asset sales.
We expect to meet our long-term liquidity requirements through any cash flows from operations and proceeds from asset sales and possibly through refinancing maturing debt. Our future cash sources will be largely dependent on proceeds from asset sales.
This methodology results in loans being risk rated, with ratings ranging from “1” to “5” with “1” representing the lowest risk of loss and “5” representing the highest risk of loss. ​ Upon the adoption of ASU 2016-13 on January 1, 2020, we implemented procedures to estimate our expected loss (“Expected Loss”) on our loans (including unfunded loan commitments) and held-to-maturity debt securities based on relevant information including historical realized loss rates, current market conditions and reasonable and supportable forecasts that affect the collectability of our investments.
This methodology results in loans being risk rated, with ratings ranging from “1” to “5” with “1” representing the lowest risk of loss and “5” representing the highest risk of loss. ​ We have procedures to estimate our expected loss (“Expected Loss”) on our loans (including unfunded loan commitments) and held-to-maturity debt securities based on relevant information including historical realized loss rates, current market conditions and reasonable and supportable forecasts that affect the collectability of our investments.
Subsequent to the Spin-Off, interest expense represents the interest cost on our Margin Loan Facility. For the year ended December 31, 2023, we incurred $6.2 million of interest expense from our Margin Loan Facility, net of amounts capitalized.
Subsequent to the Spin-Off, interest expense represents the interest cost on our Margin Loan Facility. For the years ended December 31, 2024 and 2023, we incurred $6.9 million and $6.2 million, respectively, of interest expense from our Margin Loan Facility, net of amounts capitalized.
Liquidity and Capital Resources Liquidity is a measure of our ability to meet potential cash requirements, including to pay interest and repay borrowings, develop our assets and maintain our operations, make distributions to our shareholders and meet other general business needs. We are a recently formed company and, as a result, we have not paid any dividends.
Liquidity and Capital Resources Liquidity is a measure of our ability to meet potential cash requirements, including to pay interest and repay borrowings, develop our assets and maintain our operations, make distributions to our shareholders and meet other general business needs. We were formed in 2023 and we have not paid any dividends.
Earnings from equity method investments —Earnings from equity method investments decreased to $30.8 million in 2023 from $45.6 million in 2022. In 2023, we recognized $1.1 million of income from our historical equity method investment in Safe and $29.7 million of net aggregate income from our remaining equity method investments due to asset sales at the ventures.
In 2023, we recognized $1.1 million of income from our historical equity method investment in Safe and $29.7 million of net aggregate income from our remaining equity method investments due to asset sales at the ventures.
Loss on early extinguishment of debt, net — During the year ended December 31, 2023, we incurred losses on early extinguishment of debt from partial repayments of our Margin Loan Facility (refer to Note 9 to the consolidated financial statements).
Loss on early extinguishment of debt, net — During the year ended December 31, 2023, we incurred losses on early extinguishment of debt from partial repayments of our Margin Loan Facility (refer to Note 9 to the consolidated financial statements). Earnings from equity method investments —Earnings from equity method investments was $30.8 million in 2023.
Other income consists primarily of dividend income from our investment in Safe, income from our loan portfolio, hotel properties and other operating properties, including Asbury Lanes and the Magnolia Green Golf Club. The increase in 2023 was due primarily to $7.3 million of dividend income from Safe.
Other income consists primarily of dividend income from our investment in Safe, income from our loan portfolio, hotel properties and other operating properties, including Asbury Lanes and the Magnolia Green Golf Club.
The decrease in cash flows used in financing activities during 2023 was due primarily to borrowings from debt obligations in 2023, which was partially offset by greater distributions to iStar in 2023 from asset liquidations and an increase in the repayment of debt obligations. ​ Debt Covenants —The Margin Loan Facility requires that we comply with various covenants, including, without limitation, covenants restricting, subject to certain exceptions, indebtedness, liens, investments and the payment of dividends.
Cash flows provided by financing activities during 2024 represents borrowings from a construction loan and cash flows used in financing activities during 2023 was due primarily to distributions to iStar in 2023 prior to the Spin-Off, which was partially offset by net borrowings from debt obligations in 2023. ​ Debt Covenants —The Margin Loan Facility requires that we comply with various covenants, including, without limitation, covenants restricting, subject to certain exceptions, indebtedness, liens, investments and the payment of dividends.
The provision for loan losses for the year ended December 31, 2023 resulted primarily from the sale of a non-performing loan, which was partially offset by a reversal of Expected Loss allowances on loans that repaid in full during 24 Table of Contents 2023.
The provision for loan losses for the year ended December 31, 2023 resulted primarily from the sale of a non-performing loan, which was partially offset by a reversal of loss allowances on loans that repaid in full during 2023. 23 Table of Contents Other expense decreased to $0.1 million in 2024 from $0.8 million in 2023.
For the year ended December 31, 2023, interest expense also included amounts payable to iStar prior to the Spin-Off. Interest expense -related party represents the interest cost on our Safe Credit Facility, net of amounts capitalized. Real estate expense decreased to $47.8 million in 2023 from $49.9 million in 2022.
For the year ended December 31, 2023, we were allocated $8.0 million of interest expense and interest expense also included amounts payable to iStar prior to the Spin-Off. Interest expense -related party represents the interest cost on our Safe Credit Facility, net of amounts capitalized. Real estate expense increased to $48.3 million in 2024 from $47.8 million in 2023.
Subsequent to the Spin-Off, general and administrative expense includes management fees to our Manager and other costs of operating as a public company. During the year ended December 31, 2023, we incurred $36.2 million of general and administrative expense, primarily resulting from management fees to Safe, audit and legal fees and a $14.1 million allocation from iStar.
Subsequent to the Spin-Off, general and administrative expense includes management fees to our Manager and other costs of operating as a public company. During the year ended December 31, 2024, we incurred $21.1 million of general and administrative expense, primarily resulting from $18.0 million of management fees to Safe and director fees.
We also continued to sell residential condominium units at Asbury Ocean Cub and two units remain unsold as of December 31, 2023. As of December 31, 2023, we also owned assets that we expect to monetize primarily through asset sales, loan repayments or active asset management.
We also continued to sell residential condominium units at Asbury Ocean Cub and all units had been sold as of December 31, 2024. We also continued to monetize our land and development assets. As of December 31, 2024, we also owned assets that we expect to monetize primarily through asset sales, loan repayments or active asset management.
Land development revenue and cost of sales — In 2023, we sold residential lots and units and recognized land development revenue of $72.4 million which had associated cost of sales of $62.7 million. In 2022, we sold residential lots and units and recognized land development revenue of $61.8 million which had associated cost of sales of $63.4 million.
Land development revenue and cost of sales —In 2024, we had bulk sales and sold residential lots and recognized land development revenue of $60.0 million which had associated cost of sales of $48.7 million. In 2023, we sold residential lots and units and recognized land development revenue of $72.4 million which had associated cost of sales of $62.7 million.
The difference between the estimated fair value less costs to sell and the carrying value will be recorded as an impairment charge. Once the asset is classified as held for sale, depreciation expense is no longer recorded. We did not record any impairments during the year ended December 31, 2023.
The difference between the estimated fair value less costs to sell and the carrying value will be recorded as an impairment charge. Once the asset is classified as held for sale, depreciation expense is no longer recorded.
During the year ended December 31, 2022, we recognized an impairment of $12.7 million on a land property and a $1.8 million impairment on an operating property. During the year ended December 31, 2021, we recorded an impairment of $0.7 million in connection with the sale of residential condominiums. ​
During the year ended December 31, 2022, we recognized an impairment of $12.7 million on a land property and a $1.8 million impairment on an operating property. ​ 27 Table of Contents
The applicable margin on the Margin Loan Facility increases by 25 basis points for the entirety of the interest period immediately succeeding any interest period with respect to which we make a PIK election. For the years ended December 31, 2023 and 2022, we were allocated $8.0 million and $42.0 million, respectively, of interest expense.
The applicable margin on the Margin Loan Facility increases by 25 basis points for the entirety of the interest period immediately succeeding any interest period with respect to which we make a PIK election.
The following table outlines our cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities and cash flows provided by (used in) financing activities for the years ended December 31, 2023 and 2022 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2023 2022 ​ Cash flows provided by (used in) operating activities ​ $ (18,719) ​ $ (27,358) ​ Cash flows provided by (used in) investing activities ​ ​ 186,020 ​ ​ 236,063 ​ Cash flows provided by (used in) financing activities ​ ​ (114,061) ​ ​ (218,305) ​ ​ The decrease in cash flows used in operating activities during 2023 was due primarily to the timing of payments on accrued expenses, which was partially offset by a decrease in distributions from equity method investments.
The following table outlines our cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities and cash flows provided by (used in) financing activities for the years ended December 31, 2024 and 2023 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2024 2023 ​ Cash flows used in operating activities ​ $ (31,289) ​ $ (18,719) ​ Cash flows provided by investing activities ​ ​ 306 ​ ​ 186,020 ​ Cash flows provided by (used in) financing activities ​ ​ 15,815 ​ ​ (114,061) ​ ​ The increase in cash flows used in operating activities during 2024 was due primarily to a decrease in distributions from other investments.
Impairment or disposal of long-lived assets — We periodically review real estate to be held for use and land and development assets for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
The provision for (recovery of) loan losses for the years ended December 31, 2024, 2023 and 2022 were $0.6 million, $1.7 million and $45.0 million, respectively. 26 Table of Contents Impairment or disposal of long-lived assets — We periodically review real estate to be held for use and land and development assets for impairment in value whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
Real estate expense primarily represents expenses at our hotel and retail operating properties and land properties. The decrease in 2023 was due primarily to asset sales, which was partially offset by an increase in expense at our hotel properties. Depreciation and amortization was $4.6 million in 2023 and $4.9 million in 2022 and relates primarily to our operating properties portfolio.
Real estate expense primarily represents expenses at our hotel and retail operating properties and land properties. The increase in 2024 was due primarily to an increase in expenses at certain properties in our monetizing portfolio, which was partially offset by a decrease in expenses at our Asbury Park properties.
Our discussion related to the results of operations and changes in financial condition for 2022 compared to 2021 is included in Exhibit 99.1 to our Form 10 filed with the SEC on March 20, 2023 . Our historical results may not be indicative of our future performance.
Our discussion related to the results of operations and changes in financial condition for 2023 compared to 2022 is included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 . Our historical results may not be indicative of our future performance.
We elected to pay interest in kind ("PIK") on the Margin Loan Facility in respect of the $1.7 million interest payment payable for the fourth quarter of 2023. That amount was added to the principal balance of the loan.
We elected to pay interest in kind ("PIK") on the Margin Loan Facility in respect of interest payments payable for each quarter of 2024. These amounts were added to the principal balance of the loan.
Prior to the Spin-Off, general and administrative expense represented an allocation of costs, including performance-based compensation, to us from iStar.
Depreciation and amortization was $4.3 million in 2024 and $4.6 million in 2023 and relates primarily to our operating properties portfolio. Prior to the Spin-Off, general and administrative expense represented an allocation of costs, including performance-based compensation, to us from iStar.
The decrease in interest income was due primarily to a decrease in the average balance of our performing loans and other lending investments due to loan sales and the repayment of loans during 2023 and 2022. Other income increased to $41.7 million in 2023 from $37.1 million in 2022.
The increase in interest income was due primarily to an increase in the average balance of our performing loans and other lending investments due to loan originations and the acquisition of available for sale securities. 22 Table of Contents Other income increased to $44.1 million in 2024 from $41.7 million in 2023.
The decrease in cash flows provided by investing activities during 2023 was due primarily to a decrease in proceeds from the repayment and sales of loans receivable and a decrease in proceeds from the sale of real estate assets, which was partially offset by an increase in distributions from other investments, an increase from cash acquired from the consolidation of a venture (refer to Note 5 to the consolidated financial statements) and a decrease in contributions to other investments.
The decrease in cash flows provided by investing activities during 2024 was due primarily to a decrease in proceeds from the repayment and sale of loans receivable, a decrease in distributions from other investments and a decrease in proceeds from the sale of land and development assets.
The increase in land development revenue in 2023 was due primarily to bulk parcel sales at our Asbury Park and Magnolia Green properties, which was partially offset by a decrease in revenues from condo sales at our Asbury Park properties and our Naples Reserve property (fully sold out in 2022).
The decrease in land development revenue in 2024 was due primarily to a decrease in revenues from bulk sales and condominium sales at our Asbury properties and a decrease in lot sales at our Magnolia Green property, which was partially offset by a bulk sale at our Coney Island property and the sale of a land parcel to a third party (refer to Note 5 to the combined and consolidated financial statements) .
These assets included in our portfolio as of December 31, 2023 had an aggregate carrying value of approximately $71.1 million and were comprised primarily of land, loans and other assets. In the second half of the year, we also took certain steps intended to address declines in the market value of the Safe Shares.
These assets included in our portfolio as of December 31, 2024 had an aggregate carrying value of approximately $120.3 million and were comprised primarily of land, loans and other assets. We used the proceeds from asset sales in 2024 primarily to fund our operations.
Income from sales of real estate —During the year ended December 31, 2022, we recorded $25.2 million of income from sales of real estate from the sale of an operating property.
Income from sales of real estate — During the year ended December 31, 2024, we sold residential condominiums and recognized income from sales of real estate of $3.7 million.
During the year ended December 31, 2022, we were allocated $10.9 million of general and administrative expense from iStar. The increase in the allocation from iStar in 2023 was due primarily to an increase in general and administrative expense at iStar resulting from an increase in performance-based compensation at iStar.
During the year ended December 31, 2023, we incurred $36.2 million of general and administrative expense, primarily resulting from management fees to Safe, audit and legal fees and a $14.1 million allocation from iStar.
The provision for loan losses was $1.7 million in 2023 as compared to a provision for loan losses of $45.0 million in 2022.
The annual management fee payable to our Manager under the Management Agreement declined from $25.0 million to $15.0 million for the second annual term of the Management Agreement which began on March 31, 2024. The provision for loan losses was $0.6 million in 2024 as compared to a provision for loan losses of $1.7 million in 2023.
The increase in other expenses for the year ended December 31, 2023 was due primarily to legal and consulting costs in connection with the sale and repayments of non-performing loans. Unrealized and realized gains (losses) on equity investments —Unrealized and realized loss on equity investments represents the unrealized loss on our Safe Shares.
The decrease in 2024 was due primarily to professional fees incurred in 2023 in connection with the Spin-Off. Unrealized gains (losses) on equity investments —Unrealized gain (loss) on equity investments represents the unrealized gain or loss on our Safe Shares.
Removed
We paid down the outstanding balance of the Margin Loan Facility to $81.9 million as of December 31, 2023.
Added
The increase was due primarily to an additional $2.4 million of dividend income from Safe for the year ended December 31, 2024 as compared to the same period in 2023.
Removed
We also entered into amendments to the Margin Loan Facility and the Safe Credit Facility to, among other things, reduce the floor price of the Safe Shares that would trigger a mandatory prepayment in full of the Margin Loan Facility and enable us to access incremental borrowings under the Safe Credit Facility to replenish funds used to voluntarily prepay the Margin Loan Facility.
Added
The provision for loan losses for the year ended December 31, 2024 resulted primarily from the addition to a loan during the year and a new loan origination (refer to Note 5 to the combined and consolidated financial statements) .
Removed
Further declines in the market value of the Safe Shares could require us to make additional prepayments of some or all of the outstanding borrowings under the Margin Loan Facility.
Added
The unrealized loss for the year ended December 31, 2024 represents the difference between the fair value of our investment in the Safe Shares as of December 31, 2024 and December 31, 2023.
Removed
The decrease was primarily due to the sale of assets. ​ 23 Table of Contents Interest income decreased to $2.1 million in 2023 from $12.3 million in 2022.
Added
The Margin Loan Facility matures in March 2026 and the Safe Credit Facility matures in March 2027. As of December 31, 2024, the outstanding balance on the Margin Loan Facility was $89.2 million and the outstanding balance on the Safe Credit Facility was $115.0 million.
Removed
The decrease in interest expense allocated to us in 2023 was due primarily to us not receiving an allocation subsequent to the Spin-Off and a decrease in our average net assets as well as a decrease in iStar’s average outstanding debt and average cost of debt as compared to 2022.
Added
We classify our real estate assets as held for sale in the period in which all of the following conditions are met: (i) we commit to a plan and have the authority to sell the asset; (ii) the asset is available for sale in its current condition; (iii) we have initiated an active marketing plan to locate a buyer for the asset; (iv) the sale of the asset is both probable and expected to qualify for full sales recognition within a period of 12 months; (v) the asset is being actively marketed for sale at a price that is reflective of its current fair value; and (vi) we do not anticipate changes to its plan to sell the asset.
Removed
The provision for loan losses in 2022 resulted primarily from a $22.2 million provision on our held-to-maturity security, which was repaid in December 2022 and a $23.8 million provision on a loan prior to it being classified as held for sale.
Added
Assets held for sale may qualify as a discontinued operation if certain conditions exist. ​ We did not record any impairments during the years ended December 31, 2024 and 2023.
Removed
During the year ended December 31, 2022, we recognized an impairment of $12.7 million on a land property and a $1.8 million impairment on an operating property. The impairments were based on the expected cash flows to be received. Other expense increased to $0.8 million in 2023 from $0.5 million in 2022.
Removed
In 2022, we recognized $33.3 million of income from our equity method investment in Safe, $11.5 million primarily from the sale of a multifamily property at one of our venturers, $5.0 million primarily from the settlement of our interest in a venture and $4.2 million of net aggregate losses from our remaining equity method investments.
Removed
The provision for (recovery of) loan losses for the years ended December 31, 2023, 2022 and 2021 were $1.7 million, $45.0 million and $(8.1) million, respectively.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−1 removed6 unchanged
Biggest changeWe do not enter into derivative contracts for speculative purposes or as a hedge against changes in our credit risk or the credit risk of our borrowers. 28 Table of Contents The following table quantifies the potential changes in annual net income, assuming no change in our interest earning assets or interest-bearing liabilities, should interest rates decrease or increase by 10, 50 or 100 basis points, assuming no change in the shape of the yield curve (i.e., relative interest rates).
Biggest changeThe following table quantifies the potential changes in annual net income, assuming no change in our interest earning assets or interest-bearing liabilities, should interest rates decrease or increase by 10, 50 or 100 basis points, assuming no change in the shape of the yield curve (i.e., relative interest rates). Actual results could differ significantly from those estimated in the table.
Estimated Change In Net Income ($ in thousands) ​ ​ ​ ​ ​ Change in Interest Rates ​ Net Income (1) -100 Basis Points ​ $ 212 -50 Basis Points ​ 106 -10 Basis Points ​ ​ 21 Base Interest Rate ​ — +10 Basis Points ​ (21) +50 Basis Points ​ (106) +100 Basis Points ​ (212) (1) As of December 31, 2023, we had $81.9 million principal amount of floating-rate debt obligations outstanding and $60.7 million of cash and cash equivalents and restricted cash. ​ 29 Table of Contents
Estimated Change In Net Income ($ in thousands) ​ ​ ​ ​ ​ Change in Interest Rates ​ Net Income (1) -100 Basis Points ​ $ 436 -50 Basis Points ​ 218 -10 Basis Points ​ ​ 44 Base Interest Rate ​ — +10 Basis Points ​ (44) +50 Basis Points ​ (218) +100 Basis Points ​ (436) (1) As of December 31, 2024, we had $105.0 million principal amount of floating-rate debt obligations outstanding and $45.5 million of cash and cash equivalents and restricted cash. ​ 28 Table of Contents
Such strategies are designed to reduce our exposure, on specific transactions or on a portfolio basis, to changes in cash flows as a result of interest rate movements in the market.
Such strategies are designed to reduce our exposure, on specific transactions or on a portfolio basis, to changes in cash flows as a result of interest rate movements in the market. We do not enter into derivative contracts for speculative purposes or as a hedge against changes in our credit risk or the credit risk of our borrowers.
Removed
Actual results could differ significantly from those estimated in the table.

Other STHO 10-K year-over-year comparisons