tm2230753-7_1012ba_DIV_51-ex99_1 - block

Exhibit 99.1

iStar Inc.

, 2023

Dear iStar Stockholder:

On August 11, 2022, we announced that we and Safehold Inc. (“Safe”) entered into a definitive merger agreement. The combination of the companies in the merger will create a self-managed pure-play ground lease company operating under the name “Safehold Inc.” and trading on the New York Stock Exchange as “SAFE.” The merger is the next step in the corporate strategy that we announced in 2019 to transition iStar’s business focus and resources primarily to the ground lease ecosystem and to monetize our non-core legacy assets. With the sale of our net lease portfolio in March 2022, we have largely completed this transition. Our material assets as of December 31, 2022 consist of our approximately 54.3% ownership interest in Safe common stock, our interests in two ground lease-related funds, cash and approximately $426.9 million (based on carrying value as of December 31, 2022) of assets remaining from our historical non-ground lease related commercial real estate businesses, which we refer to as our “legacy assets.” Our board of directors, based upon the recommendation of an independent committee of iStar’s board of directors comprised solely of independent directors, has approved a plan to spin off our remaining legacy assets and a portion of our interest in Safe prior to the merger through a distribution of our interests in Star Holdings (“Star Holdings”).

Our board’s determination to approve the spin-off in conjunction with the merger was based on a number of factors, including that:

•

the transactions will separate iStar stockholders’ existing interests in iStar into investments in two public companies that are focused solely on their respective strategies — Safe will continue to focus on driving the growth of its ground lease business and Star Holdings will focus on opportunities to maximize value from iStar’s legacy assets and to realize upside from Star Holdings’ meaningful investment in Safe; and

•

the spin-off provides a solution for iStar to monetize long-term assets in an orderly fashion while retiring its unsecured debt in full using proceeds from financings being obtained in connection with the spin-off, together with proceeds from asset sales and repayments.

Following the completion of the spin-off, Star Holdings will be an independent publicly traded company with a portfolio comprised primarily of interests in two significant residential development properties, a portfolio of commercial properties and loans that are being marketed for sale or otherwise monetized and shares of Safe. Star Holdings will be externally managed by iStar pursuant to a management agreement, to which Safe will succeed in the merger. We expect that iStar will complete its merger with Safe shortly after the completion of the spin-off and that former iStar personnel with deep knowledge of Star Holdings’ assets will continue to manage the assets. The spin-off will be completed by way of a pro rata distribution of 100% of the common shares of Star Holdings to iStar common stockholders of record as of the close of business on March 27, 2023, the record date of the spin-off. Each iStar common stockholder will receive 0.153 common shares of Star Holdings for every share of iStar common stock held on the record date for the spin-off.

We expect that the spin-off will be treated, for U.S. federal income tax purposes, as a taxable distribution to iStar stockholders, equal to the fair market value of the distributed Star Holdings common shares on the date of the spin-off.

iStar stockholders are not required to approve the spin-off, and you are not required to take any action to receive your common shares of Star Holdings. Completion of the spin-off is a condition to the closing of the merger, and if the merger agreement is terminated for any reason, we do not intend to proceed with the spin-off. Following the spin-off and the merger, you will own shares in both Safe and Star Holdings. Safe common stock will continue to trade on the New York Stock Exchange under the symbol “SAFE.” Star Holdings’ common shares have been approved for listing on the Nasdaq Global Market under the symbol “STHO”, subject only to official notice of the issuance thereof.

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Star Holdings

, 2023

Dear Future Star Holdings Shareholder:

It is our pleasure to welcome you as a shareholder of our company, Star Holdings, a Maryland statutory trust (“Star Holdings”). We have been formed to succeed to the remaining assets of iStar Inc.’s (“iStar”) historical non-ground lease related commercial real estate businesses. Following the distribution of all of Star Holdings’ common shares by iStar in a spin-off transaction, we will be an independent, externally managed publicly traded company. Our portfolio will be comprised primarily of our interests in our Asbury and Magnolia Green residential development projects, a portfolio of commercial real estate properties and loans that are being marketed for sale or otherwise monetized and shares of Safehold Inc. (“Safe”). We expect to focus on realizing value for shareholders from the legacy portfolio primarily by maximizing cash flows through active asset management and asset sales. We will be externally managed by iStar pursuant to a management agreement. We expect that shortly after the completion of the spin-off, iStar will complete its previously-announced merger with Safe, following which the combined company will be named Safehold Inc. We expect that former iStar personnel with deep knowledge of our assets will continue to manage the assets.

Star Holdings’ common shares have been approved for listing on the Nasdaq Global Market under the symbol “STHO”, subject only to official notice of the issuance thereof.

We invite you to learn more about Star Holdings by carefully reviewing the enclosed information statement, which contains important information about Star Holdings, our assets, financial condition and results of operations, as well as certain risks related to an investment in our common shares. The information statement also explains how you will receive your common shares of Star Holdings. We look forward to your support as a shareholder of Star Holdings.

Sincerely,

President
Star Holdings

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Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the U.S. Securities and Exchange Commission under the U.S. Securities Exchange Act of 1934, as amended.

PRELIMINARY AND SUBJECT TO COMPLETION, DATED MARCH 13, 2023

INFORMATION STATEMENT

STAR HOLDINGS

This information statement is being furnished in connection with the pro rata distribution (the “spin-off”) by iStar Inc., a Maryland corporation (“iStar”), to its common stockholders, as of the close of business on March 31, 2023, of all of the outstanding common shares of beneficial interest of Star Holdings, a Maryland statutory trust (“Star Holdings”), which will be, immediately prior to the spin-off, a wholly owned subsidiary of iStar. We have been formed to succeed to the assets of iStar remaining from its historical non-ground lease related commercial real estate businesses.

You will receive 0.153 common shares of Star Holdings for every share of iStar common stock held of record by you as of the close of business on March 27, 2023 (the “record date”). You will receive cash in lieu of any fractional shares of Star Holdings which you otherwise would have received. The date on which the common shares of Star Holdings will be distributed to you (the “distribution date”) is expected to be March 31, 2023. After the spin-off is completed, Star Holdings will be an independent, externally managed publicly traded company. Star Holdings will be externally managed by iStar, which will be renamed Safehold Inc. (“Safe”) in the pending merger of iStar and Safehold Inc (the “merger”). Following the spin-off and the merger, you will own shares in both Safe and Star Holdings. Safe common stock will continue to trade on the New York Stock Exchange (the “NYSE”) under the symbol “SAFE.” Completion of the spin-off is a condition to the closing of the merger, and if the merger agreement is terminated for any reason, we do not intend to proceed with the spin-off.

There is no current trading market for Star Holdings common shares, although we expect that a limited market, commonly known as a “when-issued” trading market, will develop on or shortly before the record date for the distribution, and we expect “regular-way” trading of Star Holdings common shares to begin on the first trading day following the completion of the distribution. Our common shares have been approved for listing on the Nasdaq Global Market (the "NASDAQ") under the symbol “STHO”, subject to official notice of the issuance thereof. As discussed under “The Spin-Off — Trading Before the Spin-Off Date,” if you sell your shares of iStar common stock in the “regular-way” market beginning on or shortly before the record date and up to and through the distribution date, you also will be selling your right to receive common shares of Star Holdings in connection with the distribution. However, if you sell your shares of iStar common stock in the “ex-distribution” market during the same period, you will retain your right to receive common shares of Star Holdings in connection with the distribution.

Star Holdings is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and, as such, is allowed to provide in this information statement more limited disclosure than an issuer that would not so qualify. In addition, for so long as we remain an emerging growth company, we may also take advantage of certain limited exceptions from investor protection laws such as the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), and the Investor Protection and Securities Reform Act of 2010, for limited periods.

In reviewing this information statement, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 17.

Neither the U.S. Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this information statement is March , 2023.

This information statement was first mailed to iStar stockholders on or about March , 2023.

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Presentation of Information

Unless the context otherwise requires, references in this information statement to “Star Holdings,” “our company,” “the company,” “us,” “our” and “we” refer to Star Holdings, a Maryland statutory trust, and its consolidated subsidiaries. References in this information statement to (i) “iStar” generally refer to iStar Inc., a Maryland corporation, and its consolidated subsidiaries (other than Star Holdings and its consolidated subsidiaries after the spin-off), (ii) “Safe” refer to Safehold Inc. before the closing of the pending merger, or the “merger,” between iStar and Safe, and refer to the combined company (which will also be named Safehold Inc.) after the merger and (iii) “carrying value” refers to (x) in the case of land, development and operating properties, the basis assigned to physical real estate property (net investment in leases, land and building), net of any impairments taken after the acquisition date and net of basis reductions associated with unit/parcel sales, net of accumulated depreciation and amortization, plus basis in equity method investments and (y) in the case of real estate loans, the gross book value reduced for current expected credit loss allowance, in each case unless the context otherwise indicated or requires.

Except as otherwise indicated or unless the context otherwise requires, all references to Star Holdings per share data assume a distribution ratio of 0.153 common shares of Star Holdings, par value $0.001 per share (“Star Holdings common shares”), for every share of iStar common stock, par value $0.001 per share (the “spin-off ratio”).

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INFORMATION STATEMENT SUMMARY

The following is a summary of material information discussed in this information statement. This summary may not contain all of the details concerning the spin-off or other information that may be important to you. To better understand the spin-off and Star Holdings’ business and financial position, you should carefully review this entire information statement. Except as otherwise indicated or unless the context otherwise requires, the information included in this information statement assumes the completion of the spin-off, the merger and all of the transactions referred to in this information statement related to the spin-off. There can be no assurance, however, that any or all of these transactions will occur or will occur as contemplated.

References in this information statement to Star Holdings’ historical assets, liabilities, businesses or activities are generally intended to refer to the historical assets, liabilities, businesses or activities as they were conducted as part of iStar and its subsidiaries.

Our Company

Our company will succeed to the assets owned by iStar immediately prior to the completion of the spin-off that remain from its historical non-ground lease related businesses, including real estate finance, operating properties and land and development. The legacy assets included in our portfolio as of December 31, 2022 had an aggregate carrying value of approximately $426.9 million as of that date, and we refer to these assets as our “legacy portfolio.” We intend to focus on realizing value from the legacy portfolio primarily by maximizing cash flows from active asset management and asset sales. As discussed in this information statement, our legacy portfolio will include interests in two significant residential development properties and a portfolio of commercial properties and loans that are being marketed for sale or otherwise monetized. In addition to the legacy portfolio, we will own shares of common stock of Safe that have a value of $400 million based on trading prices at the time of the spin-off, which we refer to in this information statement as our “Safe Shares.”

We will be externally managed by iStar, which will be re-named Safehold Inc., or “Safe,” in the pending merger of iStar and Safe. We expect that the merger will close shortly after the completion of the spin-off and that former employees of iStar who had primary responsibility for the oversight of our assets will continue to provide services to us.

Our Portfolio

Development Portfolio. Upon completion of the spin-off, our legacy portfolio is expected to include interests in two significant residential developments, the Asbury Park Waterfront and Magnolia Green. Information about these properties is set forth below.

Asbury Park Waterfront

We are the managing member of a residential joint venture that owns approximately 30 acres of land and acts as the master developer of the Waterfront Redevelopment Area of Asbury Park, New Jersey. The existing redeveloper agreement with the city permits up to approximately 2,500 additional units, comprised of for-sale residential homes, hotel keys and multi-family apartments to be developed in Asbury Park, subject to the local approval process for each individual project. Our Asbury Park assets had an aggregate carrying value of approximately $175.0 million as of December 31, 2022. The development includes certain improvements that are already completed, including the following:

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Asbury Ocean Club Surfside Resort and Residences: a 16-story mixed use project featuring 130 residential condominium units, a 54-key luxury boutique hotel, 24,000 square feet of retail space, 410 structured parking spaces and a 15,000 square foot gym and spa amenity area. The property was completed in 2019. The hotel is managed by a third party. As of the date of this information statement, 9 residential condo units remain unsold.

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The Asbury: a 110-key independent boutique hotel with indoor and outdoor event spaces, and a rooftop bar. The hotel was completed in 2016 and is managed by a third party.

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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.

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In addition to the assets that are operating and completed, the joint venture owns approximately 18 development sites which it intends to sell to third parties for residential development. As of December 31, 2022, the joint venture has entered into agreements to sell three properties, subject to certain closing conditions. There can be no assurance, however, that these sales will be completed.

Our current strategy for the Asbury Park Waterfront project is to sell the remaining residential condominium units at Asbury Ocean Club, 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 capital funding and other obligations under the redevelopment agreement with the city of Asbury Park. We anticipate it will take at least four years to execute our strategy and it could take substantially longer. These current plans are subject to change based on many factors, including those described in “Risk Factors,” and we may decide to sell some or all of our interests sooner or later than currently expected.

Magnolia Green

Magnolia Green is an approximately 1,900 acre multi-generational master planned residential community that is entitled for 3,550 single and multifamily dwelling units and approximately 193 acres of land for commercial development. The community is located 19 miles southwest of Richmond, Virginia and offers distinct phases designed for people in different life stages, from first home buyers to empty nesters in single family and townhomes built by the area’s top homebuilders. The project is anchored by the Magnolia Green Golf Club, a semi-private 18-hole Nicklaus Design championship golf course with full-service clubhouse and driving range. There are also numerous community amenities, including the Aquatic Center, featuring multiple pools and a snack bar, Arbor Walk, featuring a junior Olympic competition pool, water slide and sports courts, the Tennis Center, featuring tennis and pickleball courts and a pro shop, and miles of paved trails. Our Magnolia Green assets had an aggregate value of $89.8 million as of December 31, 2022.

As of December 31, 2022, 1,784 residential lots have been sold to homebuilders, approximately 93 developed lots are under contract for sale to homebuilders subject to certain closing conditions, 126 lots are under horizontal development and 93 of such lots are under contract to be sold to homebuilders subject to certain closing conditions. There can be no assurance, however, that these sales will be completed. There are also approximately 460 planned lots not yet under development. 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.

As of December 31, 2022, we have sold 4 acres of our commercial land which has been developed into a day care facility. As of the date of this information statement, we have a 14-acre parcel of commercial land under contract to be developed as multi-family apartments, and another 100-acre parcel of commercial land zoned for senior multi-family under contract. There can be no assurance, however, that these sales will be completed. We are marketing portions of the remaining commercial land for sale, but timing for those sales remains uncertain and any sales to third party developers or owner/operators may not be completed until closer to the sellout of our residential development or later. These current plans are subject to change based on many factors, including those described in “Risk Factors,” and we may decide to sell some or all of our interests sooner or later than currently expected.

Monetizing Portfolio. As of December 31, 2022, iStar owns 12 legacy assets (that have a basis above zero) that it expects to monetize primarily through asset sales, loan repayments or active asset management. In addition to the development portfolio, we will own whichever of these assets iStar has not sold as of the date of the completion of the spin-off. These assets included in our portfolio as of December 31, 2022 had an aggregate carrying value of approximately $162.2 million at that date, and were comprised primarily of loans, operating properties, land and development and other assets. Summarized information regarding these assets is set forth below.

Loans and Other Finance Assets. The loans and other finance assets included in our portfolio as of December 31, 2022 include four assets with an aggregate carrying value of $86.3 million at that date. The assets are secured by real properties. The properties underlying the loan and other finance assets include hotels, entertainment center, residential and other property types.

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Our general strategy is to seek to sell the loans and other finance assets, but we may hold certain loans through repayment.

Operating Properties. The operating properties included in our portfolio as of December 31, 2022 include 2 assets with an aggregate carrying value of approximately $32.1 million at that date. These assets are held directly or through interests in joint ventures, and are primarily active adult residential properties. Our general strategy is to seek to sell the operating properties.

Land. The land assets included in our portfolio as of December 31, 2022 include four assets with an aggregate carrying value of approximately $39.8 million at that date, the largest of which is a development site in Coney Island, New York, as described in “Business and Properties — Our Development Portfolio.” Our general strategy is to seek to sell the land assets to third party developers.

Other. 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 $3.9 million as of December 31, 2022, and a group of loans and equity interests that are recorded as having no carrying value in our financial statements. Our general strategy is to seek to sell these assets, although we may hold one or both leases until they expire. For the assets with no carrying value, we may seek to sell these assets but can give no assurance that we will recover any value from them.

If iStar sells any of the monetizing assets described above prior to the completion of the spin-off, then iStar will pay to Star Holdings any cash proceeds in excess of amounts needed for iStar to retire its unsecured senior notes, cash out its preferred stock in connection with the merger and pay other liabilities.

Investment in Safe and Other. In addition to the legacy portfolio, we will own shares of Safe common stock having a value of $400 million based on market trading prices at the time of the spin-off. If the $400 million of Safe common stock was calculated based on the closing price of Safe’s common stock on March 10, 2023 of $27.75, we would own approximately 14,414,414 Safe Shares which would represent an approximately 23.0% ownership interest in Safe, on a pro forma basis after giving effect to the closing of the merger. Our Safe Shares will collateralize an up to $140 million margin loan that we expect to enter into on or about the date of completion of the spin-off with a third-party commercial bank. We are prohibited from transferring our Safe Shares for nine months following the closing of the merger, except as may be required under the terms of the margin loan. After the expiration of the 9 month lockup and repayment of the margin loan, the Safe Shares would be available to us as a source of liquidity to address future capital needs, subject to market conditions. We intend to operate in a manner so as to remain exempt from registration as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act” or the “1940 Act”), and, as a result, we may invest available cash in certain real estate securities, including residential mortgage-backed securities guaranteed by the Governmental National Mortgage Association, known as “Ginnie Mae.” We may enter into one or more repurchase agreements with commercial lenders to finance the purchase of such securities.

The following table presents a summary of our portfolio, based on carrying values, as of December 31, 2022.

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Summary of Legacy Portfolio as of December 31, 2022

	Asbury Park			Magnolia Green			Coney Island Bath Site			Other			Total
Total real estate		$	72,552		$	—		$	—		$	3,945		$	76,497
Land and development, net			102,417			89,758			26,300			13,539			232,014
Loans receivable and other lending investments, net			—			—			—			48,655			48,655
Loans receivable held for sale			—			—			—			37,650			37,650
Other investments			—			—			—			32,405			32,405
Total portfolio			174,969			89,758			26,300			136,194			427,221
Other assets(1)			—			—			—			—			23,417
Total legacy assets			174,969			89,758			26,300			136,194			450,638
Investment in Safe at book value			—			—			—			554,733			554,733
Star Holdings total assets		$	174,969		$	89,758		$	26,300		$	690,927		$	1,005,371

(1)

Other assets includes $4.2 million of cash and cash equivalents, $3.2 million of restricted cash, $2.3 million of accounts receivable and deferred operating lease income receivable and $13.7 million of other assets related to real estate properties. Star Holdings will hold at least $50.0 million of cash and cash equivalents at the time of the spin off.

Overview of the Spin-Off

On August 11, 2022, iStar announced its plans to merge with Safe to create a self-managed pure-play ground lease company. iStar is required to complete the spin-off in order to separate its non-ground lease related assets from iStar prior to the closing of the merger with Safe.

iStar will accomplish the separation by transferring to us interests in the assets that will comprise our portfolio at the time of the spin-off, at least $50.0 million in cash and the Safe Shares. We will assume all liabilities and obligations related to these assets and iStar’s operations prior to the spin-off that do not relate to its ground lease business. In consideration for these assets, we will issue common shares of Star Holdings to iStar, that iStar will distribute to its stockholders on a pro rata basis, and also distribute to iStar the net proceeds of an up to $140.0 million margin loan that we intend to enter into in connection with the spin-off. iStar will retain all of the assets and liabilities related to its ground lease business. We estimate that the expenses of completing the spin-off will be approximately $1.5 million, and these expenses will be paid either directly by iStar prior to the spin-off or by us using the cash contributed to us by iStar. These expenses are comprised primarily of non-recurring business separation expenses and stand-up costs related to operating as a new public company.

The spin-off is expected to occur on March 31, 2023 (the “distribution date”), by way of a distribution to iStar stockholders. In the distribution, each iStar common stockholder will be entitled to receive, on a pro rata basis, 0.153 common shares of Star Holdings for each share of iStar common stock held at the close of business on the spin-off record date. iStar stockholders will not be required to make any payment to surrender or exchange their iStar common stock, or to take any other action to receive their Star Holdings common shares in the spin-off. The spin-off as described in this information statement is subject to the satisfaction or waiver of certain conditions. In addition, iStar has reserved the right, in its sole discretion, to amend, modify or abandon the spin-off or any related transaction at any time prior to the distribution date; provided that, any waiver, amendment, supplement or modification of any provisions of the separation and distribution agreement prior to the closing of the merger may only be made with the prior written consent of an independent committee of Safe’s board of directors comprised solely of independent directors (the “Safe special committee”). The completion of the spin-off is a condition to the closing of the merger of iStar and Safe.

Following completion of the spin-off (and prior to the closing of the merger), each iStar common stockholder immediately prior to the spin-off record date will continue to hold the shares of iStar common

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stock held immediately prior to the spin-off record date and 0.153 Star Holdings common shares for each share of iStar common stock held immediately prior to the spin-off record date. iStar plans to do a reverse stock split of its common stock in connection with the merger, which will change the number of shares of iStar common stock held by iStar stockholders into a different number of shares based on the reverse split ratio. The final spin-off ratio was set by the board of directors of iStar. The foregoing assumes that the holder does not transfer any shares prior to the effectiveness of the spin-off and the merger. For more information, see “The Spin-Off — Trading Before the Spin-Off Date.”

iStar and Star Holdings will separate their respective liabilities as set forth in a separation and distribution agreement (the “separation and distribution agreement”). In addition to the separation and distribution agreement, we and iStar will enter into a management agreement (the “management agreement”) and we and Safe will enter into a governance agreement (the “governance agreement”) and a registration rights agreement (“registration rights agreement”). We have signed commitment letters for a senior secured term loan facility having a principal amount of up to $115 million (which principal amount may be increased or decreased from time to time with the approval of both parties, including prior to the spin-off) and an up to $140 million margin loan facility that we expect to enter into on or about the date of completion of the spin-off. Additional information about the secured term loan and the margin loan referenced above may be found under “Description of Material Indebtedness.”

Background and iStar’s Reasons for the Spin-Off

iStar sponsored Safe’s initial public offering in 2017. Safe has grown its portfolio from approximately $340 million of ground leases at the time of the initial public offering to approximately $5.9 billion of ground leases as of December 31, 2022, and iStar’s ownership interest in Safe has increased from approximately 27% at the time of the IPO to approximately 54.3% as of the date of this information statement.

In 2019, iStar announced its plans to materially increase its investment in Safe and expand the relationship between the two companies because iStar believed that the ground lease business offered greater opportunities for attractive risk adjusted returns when compared to iStar’s traditional lending and net lease businesses, which faced greater competition and more commoditized pricing. Since 2019, iStar’s strategy has been to monetize the assets from its legacy businesses, strengthen its balance sheet and reinvest available proceeds into the ground lease ecosystem, both by making additional investments in Safe, and by creating ground lease financing programs and new ground lease-adjacent investment opportunities.

With the sale of its net lease portfolio in March 2022, iStar largely completed its transition to being primarily focused on the ground lease ecosystem. In March 2022, iStar’s board of directors formed a special committee comprised solely of independent directors (the "iStar special committee") and delegated to the iStar special committee the exclusive power and authority of the full board of directors to review, consider and take actions with respect to possible internalization, business combination and other strategic transactions involving iStar and Safe. Between April 2022 and August 2022, the iStar special committee, together with its advisors, engaged in discussions and negotiations with the Safe special committee and its advisors regarding a potential transaction. Through this process, the parties agreed that it was in the best interests of their respective stockholders to combine iStar and Safe into a self-managed, pure play ground lease REIT that will focus on driving growth as a market leader. In order to accomplish this result, the parties agreed that iStar would contribute its remaining legacy non-ground lease assets to Star Holdings and complete the spin-off of Star Holdings to iStar’s stockholders prior to the closing of the merger. As part of the negotiation process, the iStar special committee and its advisors and the Safe special committee and its advisors discussed and negotiated the terms of several agreements to be entered into between iStar and/or the combined company, on the one hand, and Star Holdings, on the other hand, including the separation and distribution agreement, the management agreement, the governance agreement, the registration rights agreement and the secured term loan.

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and liabilities would reside with Star Holdings and the merged company would be a pure play ground lease company. With respect to the management agreement, the parties negotiated an annual management fee that is “gross” of most manager personnel and overhead expenses, other than the costs of two financial reporting personnel, and scales down annually to account for anticipated monetizations of assets. With respect to the governance agreement and registration rights agreement, the negotiations focused on Star Holdings’ ownership interest in Safe common stock and Safe’s desire that Star Holdings agree to certain standstill covenants, voting covenants and transfer restrictions on the shares, while Star Holdings desired Safe’s cooperation in certain future distributions of the Safe shares owned by Star Holdings. With respect to the secured term loan, the parties negotiated the interest rate and other material terms based on their respective views of then-current market conditions for companies of a similar credit quality to Star Holdings and Star Holdings’ business plan.

On August 10, 2022, iStar and Safe entered into a definitive merger agreement and agreed on the forms of the material agreements that will be entered into between them, as well as between iStar and/or the combined company, on the one hand, and Star Holdings, on the other hand. The merger agreement includes a closing condition that iStar must first complete the spin-off.

Upon careful review and consideration, iStar’s board of directors, based upon the recommendation of the iStar special committee, determined that Star Holdings’ separation from iStar, the merger and the terms of the separation and distribution agreement, the management agreement, the governance agreement, the secured term loan and the other material agreements and arrangements related to the merger and the spin-off are in the best interests of iStar. This determination was based on a number of factors, including those set forth below.

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Provides stockholders with a direct and indirect investment in an internally-managed, growth-oriented REIT. iStar believes that the company formed by the merger will provide a more compelling investment opportunity for its stockholders. In the merger, iStar’s stockholders will receive shares of the combined company by way of a reverse stock split. Upon completing the merger and the spin-off, the combined company, which will keep the name of Safehold Inc. and NYSE ticker symbol of “SAFE,” will be internally-managed and will be solely focused on growth in the new (for public REITs) and dynamic asset class of ground leases.

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Creates a company with value-realization opportunity. Several of our assets present uncertain future cash flows because they are still in varying stages of development. We believe the separation will create a value realization opportunity through maximizing cash flows from active asset management and sales of legacy assets, the proceeds of which are expected to be used for repayment of indebtedness, payment of management fees, payment of asset-level operating expenses, corporate expenses, capital expenditures and distributions to holders of common shares of Star Holdings.

•

Provides a solution for iStar to monetize long-term assets in an orderly fashion while retiring its unsecured debt in full. The financing being obtained from the margin loan and the secured term loan, together with proceeds from asset sales and repayments, are expected to enable iStar to repay its unsecured senior notes in full and monetize assets in an orderly fashion.

The anticipated benefits of the separation are based on a number of assumptions, and there can be no assurance that the benefits will materialize to the extent anticipated, or at all. In addition, we will incur costs associated with the management agreement, as discussed below. For more information about the risks associated with the separation, see “Risk Factors.”

Our Manager and the Management Agreement

We will enter into a management agreement with iStar effective upon the completion of the spin-off. Safe will assume the management agreement in the merger. When we refer to “our manager,” we are referring to iStar before the closing of the merger and Safe after the closing of the merger. Our manager will manage the day-to-day operations of our company under the supervision of our board of trustees.

We will pay our manager fixed cash management fees of $25.0 million, $15.0 million, $10.0 million and $5.0 million, respectively, in each of the initial four annual terms of the management agreement and 2.0% of the gross book value of our assets, excluding the Safe Shares, as of the end of each fiscal quarter as

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reported in our SEC filings. The management agreement may be terminated by either party and in certain circumstances, we may be required to pay our manager a termination fee. We will reimburse our manager for third party expenses incurred by our manager in providing services under the management agreement and for the compensation costs of up to two accounting personnel that will be dedicated to servicing us. Expenses will be reimbursed on a quarterly basis.

If we terminate the management agreement without cause prior to the fourth anniversary of the spin-off, we will pay our manager a termination fee of $50.0 million minus the aggregate amount of management fees actually paid to the manager prior to the termination date; provided, however, that if we have completed the liquidation of our assets on or before the termination date, the termination fee will consist of any portion of the annual management fee that remained unpaid for the remainder of the then current annual term plus, if the termination date occurs on or before the third anniversary of the spin-off, the amount of the management fee that would have been payable for the next succeeding annual term, or if the termination date occurs after the third anniversary of the spin-off, zero.

If our manager terminates the management agreement because the gross book value, determined in accordance with iStar’s historical practices, of our consolidated assets as of the end of a fiscal quarter is less than the applicable threshold amount for the relevant annual term that includes such quarter, we will pay our manager a termination fee of $30.0 million if the termination occurs in the first year, $15.0 million if the termination occurs in the second year and $5.0 million if the termination occurs in the third year, in each case, plus the balance of any unpaid portion of the annual management fee for the applicable year. For more information about the management agreement, see “Our Manager and the Management Agreement — Management Agreement.”

In addition to the management agreement, we will enter into a separation and distribution agreement with iStar in connection with the spin-off, that will be assumed by Safe in the merger, and we will enter into the governance agreement with Safe. These agreements will provide for the allocation between us and iStar of iStar’s assets, liabilities and obligations (including its investments, property, employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the spin-off, and will govern certain relationships between us and iStar after the spin-off and Safe after the merger. For additional information regarding the separation and distribution agreement, the management agreement, the governance agreement, the registration rights agreement and other transaction agreements, please refer to the sections entitled “Risk Factors — Risks Related to the Spin-Off,” “Certain Relationships and Related Person Transactions” and “Our Manager and the Management Agreement.”

We have signed a commitment letter with Safe for Safe to provide us a senior secured term loan facility having a principal amount of up to $115 million (which principal amount may be increased or decreased from time to time with the approval of both parties, including prior to the spin-off). Additional information about the secured term loan referenced above may be found under “Description of Material Indebtedness.”

Conflicts of Interest

Conflicts of interest may exist or could arise in the future with iStar, Safe (after the merger) and their respective affiliates, including our manager and our officers who are also officers of iStar or Safe. Conflicts may include, without limitation: conflicts arising from the enforcement of agreements between us and iStar, Safe or our manager; and conflicts in the amount of time that officers and employees of our manager will spend on our affairs versus iStar’s or Safe’s other affairs. Our manager is a wholly-owned subsidiary of iStar and will become a wholly-owned subsidiary of Safe after the merger.

The terms of our agreements with iStar and Safe, including the separation and distribution agreement, the management agreement, the governance agreement, the registration rights agreement and the senior secured term loan, were negotiated between related parties and may not be as favorable to us as if it had been negotiated at arm’s length with an unaffiliated third party.

Risks Associated with Star Holdings’ Businesses and the Spin-Off

An investment in Star Holdings common shares is subject to a number of risks, including risks relating to the spin-off. The following list of risk factors is not exhaustive. Please read the information in the section

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captioned “Risk Factors,” beginning on page 17 for a more thorough description of these and other risks, including the risks that:

•

we will have significant concentrations in two development assets, Asbury Park Waterfront and Magnolia Green, and the amounts that we are ultimately able to realize and distribute to our shareholders will be significantly dependent on the costs to complete their development and the sale prices we achieve at these properties;

•

our cash flows will be significantly dependent on asset sales which are difficult to predict in terms of timing and amount and, if we are unable to manage our cash flows successfully, we could default on our indebtedness and be unable to pay management fees which could cause our manager to terminate the management agreement;

•

economic conditions in the markets where our assets are located, as well as general economic conditions in the United States and conditions in the U.S. capital markets, will affect the values we are able to realize on our assets and the timing of sales of assets;

•

we face risks associated with the development of properties, including cost overruns, disputes with our joint venture partner, government approvals and litigation;

•

we face competition for purchasers of assets that could affect our ability to maximize returns;

•

we will not own the monetizing assets that are sold prior to the completion of the spin-off, will only receive certain proceeds of any assets that are sold before the completion of the spin-off, and, if any of the monetizing assets are sold prior to the completion of the spin off, our development assets will represent an even greater concentration of our assets;

•

if our manager loses key management personnel, our manager may not be able to successfully achieve our objectives;

•

we will have an up to $140.0 million margin loan outstanding at the time of the spin-off that will be collateralized by our Safe Shares and may enter into future secured debt arrangements, and if the market price of the Safe Shares or other assets collateralizing such indebtedness declines materially, we may be required to sell the shares and other assets to satisfy margin calls;

•

we will record our investment in the Safe Shares at their fair value based on the market price of the Safe Shares each quarter; therefore, volatility in the market value of the Safe Shares will result in volatility in our reported financial results;

•

covenants in our indebtedness may limit our operational flexibility, and a covenant breach or default could materially and adversely affect our business, financial position or results of operations;

•

we will have a debt burden that could materially and adversely affect our future cash flows and operations, and we may incur additional indebtedness in the future;

•

we have no 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;

•

the spin-off will be treated as a taxable distribution to iStar stockholders for U.S. federal income tax purposes. An amount equal to the fair market value of our common shares received by you will be treated as a taxable dividend to the extent of your ratable share of any current or accumulated earnings and profits of iStar (including any gain recognized by iStar in connection with the spin-off), with the excess treated as a nontaxable return of capital to the extent of your tax basis in your shares of iStar common stock and any remaining excess treated as capital gain;

•

after the spin-off, our officers and the individuals performing services for us under the management agreement may have actual or potential conflicts of interest because of their equity interest in, or positions at, our manager’s parent company;

•

we may not achieve some or all of the expected benefits of the spin-off, and the spin-off may adversely affect our business;

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•

we are entirely dependent on the manager and on key personnel who provide services to us, and we may not find a suitable replacement for the manager if the management agreement is terminated, or for key personnel if they leave the manager or otherwise become unavailable;

•

our separation and distribution agreement, management agreement, governance agreement, registration rights agreement and senior secured term loan were not negotiated on an arm’s-length basis and may not be as favorable to us as if these agreements had been negotiated with an unaffiliated third-party and may be difficult to terminate;

•

after the spin-off, we will be subject to regulatory and reporting requirements that will have legal accounting and financial compliance costs;

•

no public market currently exists for our common shares and if an active trading market does not develop or is not sustained, your ability to sell shares when desired and the prices obtained will be adversely affected;

•

we cannot assure you of our ability to make distributions in the future;

•

substantial sales of our common shares may occur in connection with the spin-off, which could cause our common share price to decline; and

•

we are an “emerging growth company,” and it cannot be certain if the reduced disclosure requirements applicable to emerging growth companies make our securities less attractive to investors.

Corporate Information

We were formed on October 7, 2022 in Maryland as a wholly owned subsidiary of iStar. Prior to the contribution of our assets and business to us by iStar in connection with the spin-off, we will have no operations and no assets other than nominal cash from our initial capitalization. The address of our principal executive office is 1114 Avenue of the Americas, 39th Floor, New York, New York 10036. Our telephone number is (212) 930-9400.

Star Holdings has not yet commenced operations and has no assets, liabilities, commitments or contingent liabilities. We will provide Star Holdings’ financial statements in a subsequent amendment to this information statement.

Commencing shortly prior to the spin-off, we will also maintain a website at www.starholdingsco.com. Our website and the information contained therein or connected thereto will not be deemed to be incorporated by reference herein, and you should not rely on any such information in making an investment decision.

Reason for Furnishing this Information Statement

This information statement is being furnished solely to provide information to stockholders of iStar who will receive Star Holdings shares in the spin-off. It is not and should not be construed as an inducement or encouragement to buy or sell any of Star Holdings’ securities. The information contained in this information statement is believed by us to be accurate as of the date set forth on its cover. Changes may occur after that date. In particular, as noted herein, iStar is actively marketing the monetizing assets for sale and some or all of them may be sold prior to the time of the spin-off. Neither we nor iStar will update the information except in the normal course of our and its respective disclosure obligations and practices.

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QUESTIONS AND ANSWERS ABOUT THE DISTRIBUTION

What is Star Holdings and why is iStar separating Star Holdings’ businesses and distributing Star Holdings’ shares?

Star Holdings was formed primarily to hold iStar’s remaining legacy portfolio and to separate them from iStar in advance of the closing of its merger with Safe. For more information, see “The Spin-off — Background” and “The Spin-Off — Reasons for the Separation and the Spin-Off.”

Why am I receiving this
document?

You are receiving this document because you are a holder of shares of iStar common stock. If you are a holder of iStar common stock as of the close of business on March 27, 2023, which is the record date for the spin-off, you will be entitled to receive 0.153 Star Holdings common shares for every share of iStar common stock that you hold at the close of business on such date. The spin-off is expected to occur on March 31, 2023.

What will Star Holdings’ initial portfolio consist of?

Star Holdings’ portfolio initially will consist of the legacy portfolio, the Safe Shares and cash. See “Business and Properties” for more information about the assets.

What is the spin-off and how will the spin-off work?

To accomplish the spin-off, iStar will distribute all of the outstanding common shares of Star Holdings to iStar common stockholders on a pro rata basis. Each iStar common stockholder will be entitled to receive 0.153 common shares of Star Holdings for each share of iStar common stock held at the close of business on the record date.

What is the record date for the spin-off?

The record date for the spin-off is March 27, 2023.

When will the spin-off occur?

It is expected that all of the common shares of Star Holdings will be distributed by iStar on March 31, 2023 to holders of record of iStar common stock at the close of business on the record date, subject to satisfaction or waiver of the conditions to the spin-off.

What do iStar stockholders need to do to participate in the spin-off?

No action is required on the part of stockholders to receive common shares of Star Holdings in the spin-off. You do not need to pay any consideration, exchange or surrender your existing shares of iStar common stock or take any other action to receive your common shares of Star Holdings. Please do not send in your iStar stock certificates. The spin-off will not affect the number of outstanding shares of iStar common stock or any rights of iStar stockholders, although it will affect the market value of each outstanding share of iStar common stock.

How will common shares of Star Holdings be issued?

You will receive common shares of Star Holdings through the same channels that you currently use, to hold or trade shares of iStar common stock whether through a brokerage account, 401(k) plan or other channels. Receipt of common shares of Star Holdings will be documented for you in the same manner that you typically receive

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shareholder updates, such as monthly broker statements and 401(k) statements.

If you own shares of iStar common stock as of the close of business on the record date, including shares in certificated form, iStar, with the assistance of Computershare, the settlement and distribution agent, will electronically distribute common shares of Star Holdings to you or to your brokerage firm on your behalf in book-entry form. Computershare will mail to you a book-entry account statement that reflects your common shares of Star Holdings, or your bank or brokerage firm will credit your account for the shares.

How many Star Holdings shares will I receive in the spin-off?

For each share of iStar common stock held of record by you as of the close of business on the record date, you will receive 0.153 common shares of Star Holdings. iStar will not distribute any fractional shares of Star Holdings. iStar common stockholders will receive cash in lieu of any fractional shares of Star Holdings that would have been received after application of the spin-off ratio.

Based on approximately 86.8 million shares of iStar common stock outstanding as of March 10, 2023, a total of approximately 13.3 million common shares of Star Holdings will be distributed.

Will I be taxed on the common shares of Star Holdings that I receive in the spin-off?

Yes. The distribution of common shares of Star Holdings in the spin-off will be treated as a taxable distribution to iStar common stockholders for U.S. federal income tax purposes. An amount equal to the fair market value of the shares of Star Holdings received by you in the spin-off will generally be treated as a taxable dividend to the extent of your ratable share of any current or accumulated earnings and profits of iStar (including any gain recognized by iStar in connection with the spin-off), with the excess treated first as a non-taxable return of capital to the extent of your tax basis in iStar common stock and any remaining excess treated as capital gain.

Although iStar will be ascribing a value to the common shares of Star Holdings in the spin-off for tax purposes, this valuation is not binding on the United States Internal Revenue Service (the “IRS”) or any other tax authority. These tax authorities could ascribe a higher valuation to those shares, particularly if shares of Star Holdings trade at prices significantly above the value ascribed to those shares by iStar in the period following the spin-off. Such higher valuation may cause a larger reduction in the tax basis of your iStar shares or may cause you to recognize additional dividend or capital gain income.

iStar will not be able to advise you of the amount of earnings and profits of iStar until after the end of the calendar year in which the spin-off occurs. However, iStar anticipates that it could recognize a capital gain for U.S. federal income tax purposes in connection with the spin-off that would have the effect of increasing its earnings and profits for the year in which the spin-off occurs.

The particular consequences of the spin-off to each iStar stockholder depend on such holder’s particular facts and circumstances, and

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thus you are urged to consult your tax advisor to understand fully the consequences to you of the spin-off. For more information, see “Certain Material U.S. Federal Income Tax Consequences — Certain Material U.S. Federal Income Tax Consequences of the Spin-Off to U.S. Stockholders.”

How will the spin-off affect my tax basis and holding period in shares of iStar common
stock?

Your tax basis in shares of iStar common stock held at the time of the spin-off will be reduced (but not below zero) to the extent the fair market value of common shares of Star Holdings distributed by iStar to you in the spin-off exceeds your ratable share of iStar’s current and accumulated earnings and profits. Your holding period for such iStar shares will not be affected by the spin-off. See “Certain Material U.S. Federal Income Tax Consequences — Certain Material U.S. Federal Income Tax Consequences of the Spin-Off to U.S. Stockholders.”

What will my tax basis and holding period be for common shares of Star Holdings that I receive in the spin-off?

Your tax basis in common shares of Star Holdings received in the spin-off will equal the fair market value of such shares on the spin-off date. Your holding period for such shares will begin the day after the spin-off date. See “Certain Material U.S. Federal Income Tax Consequences — Certain Material U.S. Federal Income Tax Consequences of the Spin-Off to U.S. Stockholders.”

You should consult your tax advisor as to the particular tax consequences of the spin-off to you, including the applicability of any U.S. federal, state, local and non-U.S. tax laws.

What is the accounting treatment of the spin-off?

The applicable accounting guidance states that a presumption shall exist that a spin-off transaction will be accounted for based on its legal form, and therefore; the legal spinnor will also be considered the accounting spinnor. That presumption may be overcome. However, based on our evaluation of several qualitative and quantitative indicators in accordance with the accounting guidance, including the relative sizes of the legal spinnor and the legal spinnee (iStar and Star Holdings, respectively), their relative fair values, the external management structure of Star Holdings and Star Holdings’ business plan, we have determined that the presumption is not overcome. Accordingly, iStar will be treated as both the legal spinnor and the accounting spinnor and Star Holdings will be treated as both the legal spinnee and accounting spinnee, as this provides the most accurate depiction of the transaction to shareholders and other users of the financial statements.

What are the conditions to the spin-off?

The spin-off is subject to a number of conditions, including, among others:

•

the agreements pertaining to the loans described more fully below in the section entitled “Description of Material Indebtedness” have been executed or be ready to be executed, subject only to the completion of the spin-off and the merger;

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•

the SEC declaring effective the registration statement of which this information statement forms a part, with no stop order in effect with respect thereto, and no proceeding for such purpose pending before, or threatened by, the SEC;

•

the mailing of this information statement;

•

no order, injunction, or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the separation, the spin-off or any of the related transactions are in effect;

•

the Star Holdings common shares to be distributed have been approved for listing on a designated exchange, subject to official notice of distribution;

•

the parties to the merger agreement have confirmed that the conditions to the closing of the merger have been satisfied or waived, other than the spin-off, the filing of the articles of merger and any other conditions that by their nature are satisfied at the closing of the merger; and

•

the execution of ancillary agreements by us and iStar, including the management agreement.

iStar and Star Holdings cannot assure you that any or all of these conditions will be met. For a complete discussion of all of the conditions to the spin-off, please refer to “The Spin-Off — The Separation and Distribution Agreement — Conditions to the Spin-Off.” Completion of the spin-off is a condition to the closing of the merger, and if the merger agreement is terminated for any reason, we do not intend to proceed with the spin-off.

What is the expected date of completion of the spin-off?

The completion and timing of the spin-off are dependent upon a number of conditions, including the conditions listed above. It is expected that the Star Holdings common shares will be distributed by iStar on March 31, 2023 to the holders of record of shares of iStar common stock at the close of business on the record date. However, no assurance can be provided as to the timing of the spin-off or that all conditions to the spin-off will be met.

What if I want to sell my iStar common stock or my Star Holdings common shares?

If you would like to sell your iStar common stock or Star Holdings common shares, you should consult with your financial advisors, such as your broker, bank or tax advisor.

What is “regular-way” and “ex-distribution” trading of iStar stock?

Beginning shortly before the record date and continuing up to and through the spin-off date, it is expected that there will be two markets in iStar common stock: a “regular-way” market and an “ex-distribution” market.

Shares of iStar common stock that trade on the “regular-way” market will trade with an entitlement to common shares of Star Holdings distributed in the spin-off. Shares of iStar common stock that trade on the “ex-distribution” market will trade without an

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entitlement to common shares of Star Holdings distributed pursuant to the spin-off.

If you decide to sell any iStar common stock before the spin-off date, you should make sure your broker, bank or other nominee understands whether you want to sell your iStar common stock with or without your entitlement to common shares of Star Holdings in the spin-off.

Will the common shares of Star Holdings be listed on an exchange?

Our common shares have been approved for listing on the NASDAQ under the symbol “STHO”, subject only to official notice of the issuance thereof. Star Holdings anticipates that trading in its common shares will begin on a “when-issued” basis on or shortly before the record date and will continue up to and through the spin-off date and that “regular-way” trading in Star Holdings common shares will begin on the first trading day following the completion of the spin-off. If trading begins on a “when-issued” basis, you may purchase or sell Star Holdings common shares up to and through the spin-off date, but your transaction will not settle until after the spin-off date. Star Holdings cannot predict the trading prices for its common shares before, on or after the spin-off date.

What will happen to the listing of iStar common stock?

iStar common stock will continue to trade on the NYSE after the merger under the ticker “SAFE.”

Will the number of shares of iStar common stock that I own change as a result of the spin-off?

No. The number of shares of iStar common stock that you own will not change as a result of the spin-off; however, iStar plans to do a reverse stock split of its common stock in connection with the merger, which will change your shares of iStar common stock into a different number of shares based on the reverse split ratio. The final spin-off ratio was set by the board of directors of iStar.

Will the spin-off affect the market price of my shares of iStar stock?

Yes. As a result of the spin-off, iStar expects the trading price of shares of iStar common stock immediately following the spin-off to be lower than the “regular-way” trading price of such shares immediately prior to the spin-off because the trading price of shares of iStar common stock will no longer reflect the value of Star Holdings’ businesses. However, iStar expects to complete the merger with Safe as promptly as practicable after the spin-off. In the merger iStar stockholders will receive shares of common stock of the combined company by way of a reverse stock split and those shares will trade as Safe Shares immediately after the closing of the merger. There can be no assurance as to the prices at which Star Holdings, iStar and Safe Shares will trade after the spin-off or the merger.

What debt will Star Holdings have after the spin-off?

Immediately following the spin-off and the merger, Star Holdings expects to have approximately $255.0 million of indebtedness. This indebtedness will be comprised of up to $140.0 million of debt under

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the margin loan that will be secured by the Safe Shares and the up to $115.0 million secured term loan that will generally be secured by Star Holdings’ equity interests in its subsidiaries, subject to any restrictions under the margin loan. The secured term loan also includes an additional commitment amount of up to $25.0 million at Star Holdings’ election, the proceeds of which may only be used to satisfy Star Holdings’ “soft call” obligations under the margin loan. The principal amount of the secured term loan may be increased or decreased from time to time by agreement of the parties, including prior to the spin-off. In addition, we may enter into one or more debt arrangements, including repurchase agreements, from time to time to finance our assets.

What will Star Holdings’ relationship be with iStar and Safe following the spin-off?

Star Holdings and iStar will be separate companies following the spin-off. As of or prior to the effective time of the spin-off, Star Holdings will enter into the separation and distribution agreement with iStar, which will be assumed by Safe in the merger. In addition, Star Holdings will enter into various other agreements with iStar and Safe in connection with the spin-off, such as the management agreement, the governance agreement, the registration rights agreement and the secured term loan.

For additional information regarding the separation and distribution agreement and other transaction agreements, please refer to the sections entitled “Risk Factors — Risks Related to the Spin-Off” and “Certain Relationships and Related Person Transactions.”

Who will manage Star Holdings after the spin-off?

Star Holdings will be managed by iStar, which will be renamed Safe in the merger of the companies. For more information regarding Star Holdings’ management, please refer to “Our Manager and the Management Agreement.”

Are there risks associated with owning Star Holdings common shares?

Yes. Ownership of common shares of Star Holdings is subject to both general and specific risks related to Star Holdings’ business, the industry in which it operates, trading risk and market volatility associated with holding the Safe Shares, Star Holdings’ ongoing contractual relationships with iStar and its status as a separate, publicly traded company. These risks are described in the “Risk Factors” section of this information statement beginning on page 17. You are encouraged to read that section carefully.

Does Star Holdings plan to pay dividends?

Star Holdings will not pay regular dividends. Star Holdings expects to distribute available cash proceeds from time to time, depending on the occurrence of asset sales and the prices at which assets are sold.

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Who will be the distribution agent for the Star Holdings common shares?

The distribution agent for the Star Holdings common shares will be Computershare. For questions relating to the transfer or mechanics of the spin-off, you should contact:

Computershare
P.O. Box 43006
Providence RI 02940-3006
(800)-317-4445

Courier Delivery:
150 Royall St., Suite 101
Canton, MA 02021

Who will be the transfer agent for Star Holdings common
shares?

The transfer agent for the Star Holdings common shares will be Computershare.

Where can I find more information about iStar and Star
Holdings?

Before the spin-off, if you have any questions relating to iStar’s business performance, you should contact:

iStar Inc.
1114 Avenue of the Americas, 39th Floor
New York, New York 10036
Attention: Investor Relations
(212) 940-9400
http://iStar.com/content/investor-relations

After the spin-off, Star Holdings shareholders who have any questions relating to Star Holdings’ business performance should contact Star Holdings at:

Computershare
P.O. Box 43006
Providence RI 02940-3006
(800)-317-4445

Courier Delivery:
150 Royall St., Suite 101
Canton, MA 02021

Star Holdings
1114 Avenue of the Americas, 39th Floor
New York, New York 10036
Attention: Investor Relations
(212) 930-9400
Website: www.starholdingsco.com

The Star Holdings investor website will be operational as of the date of the spin-off.

The websites of iStar and Star Holdings are not incorporated by reference into this information statement.

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RISK FACTORS

You should carefully consider the following risks and other information in this information statement in evaluating our company and our common shares. Any of the following risks could materially and adversely affect our business, results of operations, financial condition, cash flows, liquidity, the market price of our securities, our ability to service indebtedness and our ability to make distributions, which could cause you to lose all or a significant part of your investment for our common shares.

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.

Weak economic conditions generally or locally, sustained uncertainty about global or local economic conditions, inflation, rising 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 and declining values in our real estate portfolio, and make it more difficult to sell our properties at attractive prices or at all. They may also adversely affect the market value of our Safe Shares. Additionally, these factors and conditions could have an impact on our customers, tenants, lenders and purchasers of our properties. No assurances can be given regarding such macroeconomic factors or conditions, and our ability to sell assets and generate cash flows from our properties may be negatively impacted, which may have a material adverse effect on our business, financial condition and results of operations.

Our performance is subject to risks inherent in owning real estate investments.

We are generally subject to risks related to the ownership of real estate. These risks include:

•

changes in supply of or demand for properties in our market or sub-markets;

•

increases in 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.

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. Asset sales are unpredictable and highly affected by economic conditions in the markets where

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the assets are located, the cost and availability of mortgage financing and competition from other properties available on the market. Our ability to sell properties 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. 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.

Our portfolio is concentrated in certain assets and, as a result, any adverse changes impacting any of these assets 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 62.0% of the carrying value of the legacy portfolio on a consolidated basis at December 31, 2022, and our Safe Shares are also a material asset. We would be materially and adversely affected by adverse developments at either of these properties or in the market price of Safe’s common stock. The properties may experience adverse developments such as slowing business conditions, rising interest rates, material damage or delays in completion or increased competition. The value of our Safe Shares may be adversely affected by a slowdown in the growth of Safe’s portfolio, declines in Safe’s earnings growth, rising interest rates, declines in Safe’s dividend rate and other adverse developments. The occurrence of any of these or other adverse developments could weaken our financial condition. The significance of these properties and our Safe Shares to our portfolio means that any adverse change in any of these assets may have a material adverse effect on our business, financial condition and results of operations.

If either of these properties or Safe suffers adverse business conditions, if either of them or our Safe Shares declines in value, if we experience material cost overruns in completing the development of either property or if we are unable to sell either property or our Safe Shares at an attractive price or at all, we could be materially and adversely affected.

iStar is actively marketing legacy assets for sale, and we will only receive certain proceeds of any assets that are sold before the date of the spin-off.

iStar is actively marketing legacy assets for sale and may sell many of them before the date of the spin-off. We will only receive any cash proceeds from the sale of such assets in excess of amounts needed for iStar to retire its unsecured senior notes, cash out its preferred stock in connection with the merger and pay other liabilities. If legacy assets are sold before the date of the spin-off, our portfolio will be smaller and individual assets that remain will represent greater concentrations than if our portfolio were larger. Our results may be more affected by the performance of any one asset than if our portfolio were larger and more diversified.

The residential market has experienced significant downturns that could recur and adversely affect us.

Certain of our properties, including Magnolia Green and Asbury Park Waterfront, are residential development properties and we may make future direct or indirect investments in residential mortgage loans and mortgage-backed securities. The housing market in the United States has previously been affected by weakness in the economy, high unemployment levels, rising interest rates, inflation and low consumer confidence. Interest rates have been rising recently, resulting in increases in the costs of obtaining and refinancing a mortgage. It is possible another downturn could occur again in the near future and adversely impact our residential properties and the residential properties underlying investments we may make in the future, and accordingly our financial performance. Rising interest rates tend to negatively impact the residential mortgage market, which in turn may adversely affect the value of and demand for our land assets including our residential development projects, and the value of residential real estate-related investments we may make in the future.

We may be unable to complete the development of our properties successfully, which could materially and adversely affect our results of operations due to unexpected costs, delays and other contingencies.

Our Asbury Park Waterfront and Magnolia Green assets are still under development and may take several years to complete. Development assets expose us to additional risks, including, without limitation:

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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;

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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;

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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;

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risk of loss of periodic progress payments or advances to builders prior to completion;

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termination of leases by customers due to completion delays;

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failure to achieve expected occupancy levels, as the lease-up of space at our development projects may be slower than estimated;

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other risks related to the lease-up of newly constructed properties;

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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;

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costs overruns on development, which could be material; and

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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.

Demand for homes and apartment rentals is dependent on a variety of macroeconomic factors, such as employment levels, interest rates, changes in stock market valuations, consumer confidence, housing demand, availability of mortgage financing, availability and prices of new homes compared to existing inventory, and demographic trends. 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.

A downturn in the residential market could adversely affect our ability to sell our assets

The homebuilding industry has experienced periods of strength and weakness since the onset of the COVID-19 pandemic in 2020. The prior economic downturn in 2007-2010 severely affected demand for homes and pricing of homes for more than two years. It is possible that another 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.

An increase in mortgage rates could reduce potential buyers’ ability or desire to obtain financing with which to buy lots for new homes.

The Federal Reserve has tightened monetary policy, including multiple interest rate increases. When interest rates increase, the cost of constructing new homes and owning a new home increases, which usually reduces the number of potential builders who can afford, or are willing, to purchase lots from us to build new homes.

We are subject to the risk of our manager losing key personnel, and we may be unable to retain key asset-level consultants.

Former iStar personnel who are knowledgeable about our assets will be employees of our manager or asset-level consultants to us. None of such individuals will be exclusively dedicated to us. Such individuals

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may depart and to the extent they are replaced their replacements will not have similar experience with, or knowledge of, our assets.

Future sales of parcels at Asbury Park Waterfront and Magnolia Green will be subject to receipt of approvals from local municipalities.

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.

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. 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 defaults, we may experience delays and incur substantial costs in enforcing our rights as landlord. If a tenant files for bankruptcy, we may not be able to evict the tenant solely because of such bankruptcy or failure to pay. A court, however, may authorize a tenant to reject and terminate its lease with us. 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 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 other circumstances, where a tenant’s financial condition has become impaired, we may agree to partially or wholly terminate the lease in advance of the termination date in consideration for a lease termination fee that is likely less than the total contractual rental amount. Without regard to the manner in which the lease termination occurs, we are likely to incur additional costs in the form of tenant improvements and leasing commissions in our efforts to lease the space to a new tenant. In addition, the value of our properties may be negatively impacted and the proceeds from the sale of our properties may be reduced in the event of a deterioration in our tenants’ credit. In any of the foregoing circumstances, our financial performance could be materially adversely affected.

Lease and sublease expirations, defaults and terminations may adversely affect our revenue.

Lease and sublease expirations and terminations may result in reduced revenues if the rental payments received from replacement tenants are less than the rental payments received from the expiring or terminating tenants and subtenants. In addition, lease and sublease defaults or terminations by one or more significant tenants and subtenants or the failure of tenants and subtenants under expiring leases and subleases to elect to renew their leases and subleases could cause us to experience long periods of vacancy with no revenue from a facility and to incur substantial capital expenditures and/or concessions in order to obtain replacement tenants. Leases and subleases representing approximately 77% 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.

Costs associated with our business, such as real estate taxes, insurance premiums and maintenance costs, are relatively inelastic and generally do not decrease, and may increase, when a property is not fully occupied, occupancy rates decrease, a customer fails to pay rent, or other costs, or other circumstances cause a reduction in property revenues. As a result, if revenues drop, we may not be able to reduce our expenses accordingly, which may have a material adverse effect on our business, financial condition and results of operations.

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Our property taxes could increase due to a change in property tax rates or a reassessment, which could impact our cash flows.

We are required to pay state and local taxes on our properties. The real property taxes on our properties may increase as property tax rates change or as our properties are assessed or reassessed by taxing authorities. Therefore, the amount of property taxes we pay in the future may increase substantially. 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.

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.

We co-invest with third parties in nine 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. Investments in joint ventures may, under certain circumstances, involve risks not present when a third party is not involved, including potential deadlocks in making major decisions, restrictions on our ability to exit the joint venture, reliance on joint venture partners and the possibility that a joint venture partner might become bankrupt or fail to fund its share of required capital contributions, thus exposing us to liabilities in excess of our share of the joint venture. The funding of our capital contributions to such joint ventures may be dependent on proceeds from asset sales, credit facility advances or sales of equity securities. Joint venture partners may have business interests or goals that are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives. 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. 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, 2022, 18% of our 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 COVID-19 pandemic has materially and adversely affected corporate budgets and consumer demand for travel and lodging. We cannot predict how long reduced demand will continue or its effect on occupancy levels and room rates. Significant recent increases in fuel prices and the outbreak of hostilities in Ukraine may also adversely affect business and personal travel demand. 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.

Our hotel properties and lodging facilities are subject to various operating risks common to the lodging industry, many of which are beyond our control, including the following:

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competition from other hotel properties or lodging facilities in our markets;

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adverse effects of international, national, regional and local economic and market conditions;

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unforeseen events beyond our control, such as terrorist attacks, travel related health concerns (including pandemics and epidemics such as COVID-19), political instability, governmental restrictions on travel, regional hostilities, imposition of taxes or surcharges by regulatory authorities, travel related accidents, climate change and unusual weather patterns (including natural disasters such as hurricanes, wildfires, tsunamis or earthquakes);

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adverse effects of a downturn in the global or local lodging industry;

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the seasonal nature of resort properties, which may cause fluctuations in our quarterly results; and

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risks generally associated with the ownership of hotel properties and real estate, as discussed in other risk factors.

These risks could reduce our net operating profits and the value of assets held for sale, which in turn could adversely affect our ability to meet our obligations and make distributions to our shareholders.

The cyclical nature of the lodging industry may cause fluctuations in our operating performance.

The lodging industry is highly cyclical in nature. Fluctuations in operating performance are caused largely by general economic and local market conditions, which affect business and leisure travel levels. 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. A decline in lodging demand, a substantial growth in lodging supply or a deterioration in the improvement of lodging fundamentals as forecast by industry analysts could result in returns that are substantially below expectations, or result in losses, which could have a material adverse effect on our business, financial condition, results of operations, the value of assets and our ability to make distributions to our shareholders.

We are subject to general risks associated with the employment of hotel personnel, including competition for labor.

While third-party hotel managers are responsible for hiring and maintaining the labor force at each of our hotels, we are subject to many of the costs and risks generally associated with the hotel labor force. Increased labor costs due to tightened labor market conditions, collective bargaining activity, minimum wage initiatives and additional taxes or requirements to incur additional employee benefits costs may adversely impact our operating costs. We may also incur increased legal costs and indirect labor costs as a result of contract disputes or other events. 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. Increased labor organizational efforts or changes in labor laws could lead to disruptions in our operations, increase our labor costs, or interfere with the ability of our management to focus on executing our business strategies (e.g., by consuming management’s time and attention, limiting the ability of hotel managers to reduce workforces during economic downturns, etc.). In addition, from time to time, strikes, lockouts, boycotts, public demonstrations or other negative actions and publicity may disrupt hotel operations at any of our hotels, negatively impact our reputation or the reputation of our brands, cause us to lose guests, or harm relationships with the labor forces at our hotels.

We and our independent hotel operators rely on information technology in our operations, and any material failure, inadequacy, interruption or security failure of that technology could harm our business.

We and our independent hotel operators rely on information technology networks and systems to process, transmit and store electronic information, and to manage or support a variety of business processes, including financial transactions and records, personal identifying information, reservations, billing and operating data. We and our independent hotel operators purchase some of our information technology from third-party vendors. Although we and our independent hotel operators have taken steps to protect the security of our information systems and the data maintained in those systems, our independent hotel operators may have encountered information technology issues in the past and it is possible that such safety and security measures will not be able to prevent improper system functions, damage or the improper access or disclosure of personally identifiable information. Security breaches, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, can create system disruptions, shutdowns or unauthorized disclosure of confidential information. Any failure to maintain proper function, security and availability of information systems could interrupt our operations, damage our reputation,

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subject us to liability claims or regulatory penalties and could have a material adverse effect on our business, financial condition and results of operations.

We depend on the ability of the independent hotel operators to operate and manage our hotels.

We contract with independent hotel operators that manage the day-to-day operations of our properties. We may be limited in our ability to direct the actions of the independent hotel operators, particularly with respect to daily operations. Thus, even if we believe that our lodging properties are being operated in an unsatisfactory manner, we may not have sufficient rights under a particular property operating agreement to force the property operator to change its method of operation. Our results of operations, financial position, cash flows and ability to service debt and to make distributions to shareholders are, therefore, substantially dependent on the ability of the property operators to successfully operate our hotels. Some of our operating agreements may have lengthy terms, may not be terminable by us before the agreement’s expiration and may require the payment of substantial termination fees. Replacing a property operator may also result in significant disruptions at the affected hotels.

Our hotel management agreements limit operating flexibility.

We have entered into management or license agreements for our hotels. These management agreements contain specific standards for, and restrictions and limitations on, the operation and maintenance of our properties and our ability to make property improvements. The managers may also periodically inspect our properties to ensure that we maintain the standards specified in the management agreement. A manager could also require us to make capital expenditures, even if we do not believe the improvements are necessary or desirable. A breach of the standards or other terms and conditions of the management agreements could result in the termination of a management agreement. In addition, when terminating or changing the manager of a property, we may be required to incur significant expenses or capital expenditures.

The loss of a manager could have a material adverse effect upon the operations or the underlying value of the property and could materially and adversely affect our results of operations, financial position and cash flows, including our ability to service debt and make distributions to our shareholders.

We are subject to certain risks associated with potential liabilities under environmental laws and risks of loss from weather conditions, man-made or natural disasters, climate change and terrorism.

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. Those laws typically impose clean-up responsibility and liability without regard to whether the owner or control party knew of or was responsible for the release or presence of such hazardous or toxic substances. The costs of investigation, remediation or removal of those substances may be substantial. The owner or control party of a site may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site. Certain environmental laws also impose liability in connection with the handling of or exposure to asbestos-containing materials, pursuant to which third parties may seek recovery from owners of real properties for personal injuries associated with asbestos-containing materials.

Weather conditions and man-made or natural disasters such as hurricanes, tornadoes, earthquakes, floods, droughts, fires and other environmental conditions can damage properties we own. Additionally, the value of our properties will potentially be subject to the risks associated with long-term effects of climate change. Certain of our properties are located in major urban areas which, in recent years, have been high risk geographical areas for terrorism and threats of terrorism. 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. Terrorism Risk Insurance Program Reauthorization Act is repealed or not extended or renewed upon its expiration, the cost for terrorism insurance coverage may increase and/or the terms, conditions, exclusions, retentions, limits and sublimits of such insurance may be materially amended and may effectively decrease the scope and availability of such insurance to the point where it is effectively unavailable. Future weather conditions, man-made or

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natural disasters, effects of climate change or acts of terrorism could adversely impact the demand for, and value of, our assets and could also directly impact the value of our assets through damage, destruction or loss, and could thereafter materially impact the availability or cost of insurance to protect against these events. Although we believe our owned real estate are adequately covered by insurance, we cannot predict at this time if we or our borrowers will be able to obtain appropriate coverage at a reasonable cost in the future, or if we will be able to continue to pass along all of the costs of insurance to our tenants. Any weather conditions, man-made or natural disasters, terrorist attack or effect of climate change, whether or not insured, could have a material adverse effect on our financial performance, liquidity and the market price of our common shares. In addition, there is a risk that one or more of our property insurers may not be able to fulfil their obligations with respect to claims payments due to a deterioration in its financial condition.

Compliance or failure to comply with the Americans with Disabilities Act could result in substantial costs.

Our properties must comply with the Americans with Disabilities Act of 1990, as amended (the “ADA”), and any equivalent state or local laws, to the extent that our properties are public accommodations as defined under such laws. Under the ADA, all public accommodations must meet federal requirements related to access and use by disabled persons. If one or more of our properties is not in compliance with the ADA or any equivalent state or local laws, we may be required to incur additional costs to bring such property into compliance with the ADA or similar state or local laws. Noncompliance with the ADA or similar state and local laws could also result in the imposition of fines or an award of damages to private litigants. We cannot predict the ultimate amount of the cost of compliance with the ADA or any equivalent state or local laws. If we incur substantial costs to comply with the ADA or any equivalent state or local laws, it may have a material adverse effect on our business, financial condition and results of operations.

Our assets may be subject to impairment charges.

We regularly review our real estate and securities assets for impairment, and based on these reviews, we may record impairment losses that have a material adverse effect on our business, financial condition and results of operations. Negative or uncertain market and economic conditions, as well as market volatility, increase the likelihood of incurring impairment losses. Such impairment losses may have a material adverse effect on our business, financial condition and results of operations.

We may be subject to litigation, which could have a material adverse effect on our financial condition.

We may be subject to litigation, including claims related to our assets and operations that are otherwise in the ordinary course of business. 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. Unfavorable resolution of such litigation may result in our having to pay significant fines, judgments, or settlements, which, if uninsured — or if the fines, judgments and settlements exceed insured levels — would adversely impact our earnings and cash flows, thereby negatively impacting our ability to service debt and pay dividends to our shareholders, which may have a material adverse effect on our business, financial condition and results of operations. Certain litigation, or the resolution of certain litigation, may affect the availability or cost of some of our insurance coverage, expose us to increased risks that would be uninsured, or adversely impact our ability to attract officers and trustees, each of which may have a material adverse effect on our business, financial condition and results of operations.

Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our customers, tenants and other parties, and personally identifiable information of our customers, employees and other parties, in our data centers and on our networks. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could

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be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations and the services we provide to customers, and damage our reputation, which could have a material adverse effect on our business.

Our Investment Company Act exemption limits our investment discretion and loss of the exemption would adversely affect us.

We believe that we currently are not, and we intend to operate our company so that we will not be, regulated as an investment company under the Investment Company Act. We believe we are not an investment company under Section 3(a)(1)(A) of the Investment Company Act because we do not engage primarily, or hold ourselves out as being engaged primarily, in the business of investing, reinvesting or trading in securities. We will primarily be in the non-investment company businesses of owning, developing and asset managing real estate. Maintaining our exemption from regulation as an investment company under the 1940 Act limits our ability to invest in assets that otherwise would meet our investment strategies. In addition, in order to maintain our exemption under the 1940 Act, we may need to use available cash to acquire additional real estate assets, including residential mortgage bonds, in lieu of distributing such available cash to shareholders.

We will need to monitor our investments and income to ensure that we continue to satisfy our exemption from the 1940 Act, but there can be no assurance that we will be able to avoid the need to register as an investment company. 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 and that we would be subject to limitations on corporate leverage that would have an adverse impact on our investment returns. This would have a material adverse effect on our financial performance and the market price of our securities.

If we are unable to satisfy the regulatory requirements of the Sarbanes-Oxley Act, or if our disclosure controls or internal control over financial reporting is not effective, investors could lose confidence in our reported financial information, which could adversely affect the perception of our business and the trading price of our common shares.

As a public company, we will become subject to the reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act and will be required to prepare our financial statements in accordance with the rules and regulations promulgated by the SEC. The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. Although management will continue to review the effectiveness of our disclosure controls and procedures and internal controls over financial reporting, there can be no guarantee that our internal controls over financial reporting will be effective in accomplishing all of our control objectives. If we are not able to comply with these and other requirements in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses, the market price of our common shares could decline and we could be subject to sanctions or investigations by the stock exchange, the SEC or other regulatory authorities, which may have a material adverse effect on our business, financial condition and results of operations.

We have a significant amount of indebtedness and may need to incur more in the future.

On or about the completion date of the spin-off, we expect to have in place the senior secured term loan from Safe. In addition, in connection with executing our business strategies going forward, we may incur additional indebtedness in connection with our development activities and for other purposes. The amount of such indebtedness could have material adverse consequences for us, including:

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hindering our ability to adjust to changing market, industry or economic conditions;

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limiting our ability to refinance maturing debt on favorable terms;

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limiting the amount of free cash flow available for future dividends or other uses; and

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making us more vulnerable to economic or industry downturns, including interest rate increases.

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.

We are subject to risks associated with our margin loan.

On or about the completion date of the spin-off, we expect to enter into an up to $140.0 million margin loan that will be 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. Furthermore, if the closing price of our Safe Shares falls below (a) prior to the funding date of the Margin Loan Facility, $14 or (b) after the funding date, the higher of (i) $14 and (ii) 45% of its official closing price on the funding date, we will have to repay the outstanding margin loan amount as well as all accrued and unpaid interest, and a make whole amount, if applicable. If we fail to satisfy any collateral calls, the lender may foreclose on our Safe Shares. The margin loan will have a maturity of three years from the funding date and is subject to mandatory prepayment upon the occurrence of certain events, including a decrease in the price of the Safe common stock below a threshold, a change of control or merger.

If a counterparty to a repurchase transaction defaults on its obligation to resell the underlying security back to us at the end of the transaction term or if we default on our obligations under the repurchase agreement, we could incur losses.

We may make future investments in real estate securities that we finance using repurchase agreements. When we engage in repurchase transactions, we will generally transfer the securities to lenders (i.e., repurchase agreement counterparties) and receive cash from such lenders. Because the cash/financing we receive from the lender is less than the value of the securities we pledge (this difference is referred to as the “haircut”), if the lender defaults on its obligation to transfer the same securities back to us, we would incur a loss on the transaction equal to the amount of the haircut (assuming there was no change in the value of the securities). Our exposure to defaults by counterparties may be more pronounced during periods of significant volatility in the market conditions for mortgages and mortgage-related assets as well as the broader financial markets. In addition, generally, if we default on one of our obligations under a repurchase transaction with a particular lender, that lender can elect to terminate the transaction and cease entering into additional repurchase transactions with us. In addition, some of our repurchase agreements contain cross-default provisions, so that if a default occurs under any one agreement, the lenders under our other repurchase agreements could also declare a default. Any losses we incur on our repurchase transactions could materially adversely affect our earnings and thus our cash available for dividends to our shareholders.

The margin loan and the other collateralized debt arrangements that we may enter into may require us to provide additional collateral and may restrict us from leveraging our assets as fully as desired.

If the market value of the Safe Shares or other securities we may acquire in the future and pledge to a funding source decline in value, the lending institution may have the right to initiate a margin call in its sole discretion, which would require us to provide additional collateral or pay down a portion of the funds advanced, but we may not have the funds available to do so. Posting additional collateral will reduce our liquidity and may reduce our ability to pay dividends to our shareholders and limit our ability to leverage our assets, which could adversely affect our business and could cause the value of our capital stock to decline.

We may be forced to sell assets at significantly depressed prices to meet margin calls to post additional collateral and/or to maintain adequate liquidity, which could cause us to incur losses. Moreover, to the extent we are forced to sell assets at such time, given market conditions, we may be selling at the same time as others facing similar pressures, which could exacerbate a difficult market environment and which could result in us incurring significantly greater losses on our sale of such assets. In an extreme case of market duress, a market may not even be present for certain of our assets at any price. In the event we do not have sufficient liquidity to meet margin calls and post additional collateral, lending institutions can accelerate repayment of our indebtedness, increase our borrowing rates, liquidate our collateral or terminate our ability to borrow.

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Such a situation would likely result in a rapid deterioration of our financial condition and possibly necessitate a filing for protection under the United States Bankruptcy Code.

Our governing documents do not limit the amount of indebtedness we may incur and we may become more highly leveraged.

Our declaration of trust and bylaws do not limit the amount of indebtedness we may incur. Accordingly, our board of trustees may permit us to incur additional debt. We might become more highly leveraged as a result, and our financial condition, results of operations and funds available for distribution to shareholders might be negatively affected, and the risk of default on our indebtedness could increase, which may have a material adverse effect on our business, financial condition and results of operations.

Financial covenants could materially adversely affect our ability to conduct our business.

Our senior secured term loan will contain restrictions on the amount of debt we may incur, our ability to pay dividends and distributions and other restrictions and requirements on our operations. Our senior secured term loan will contain (i) negative covenants relating to investments, indebtedness and liens, fundamental changes, asset dispositions, repayments, distributions and affiliate transactions, and (ii) customary events of default, including payment defaults, failure to perform covenants, cross-default and cross acceleration to other indebtedness, impairment of security interests and change of control. These restrictions, as well as any additional restrictions to which we may become subject in connection with additional financings or refinancings, could restrict our ability to effect certain transactions or take other actions that may otherwise be beneficial to us, which could adversely affect our results of operations. In addition, violations of these covenants could cause declarations of default under, and acceleration of, other indebtedness, which would result in adverse consequences to our financial condition. Our senior secured term loan will contain cross-default provisions that give Safe the right to declare a default if we are in default resulting in (or permitting the) acceleration of such other debt in excess of certain amounts. In the event of a default, we may be required to repay such debt with capital from other sources, which may not be available to us on attractive terms, or at all, which may have a material adverse effect on our business, financial condition and results of operations.

Our indebtedness exposes us to the possibility of foreclosure, which could result in the loss of our assets.

Our margin loan and our secured term loan are secured debt. Secured debt obligations increase our risk of losses because defaults on secured indebtedness may result in foreclosure actions initiated by the lenders and ultimately our loss of the assets securing the loans for which we are in default. Any foreclosure on one or more assets securing our indebtedness could materially and adversely affect us.

We may change our business strategy and business policies without shareholder approval.

Our strategy is to generate cash flows from asset management and asset sales. Notwithstanding the foregoing, our board of trustees may change our business strategy or any of our financing strategy, leverage policies, distributions plans and other policies and strategies at any time without the consent of our shareholders, which could result in an investment portfolio with a different risk profile. Such a change in our strategy may increase our exposure to interest rate risk, default risk and real estate market fluctuations, among other risks. These changes could adversely affect our ability to pay dividends to our shareholders and may have a material adverse effect on our business, financial condition and results of operations.

We may sell all or substantially all of our assets and dissolve without shareholder approval.

Our declaration of trust provides that our board of trustees may sell all or substantially all of our assets and dissolve without having to obtain the approval of our shareholders. This is consistent with our business strategy to seek to generate cash flows through asset management and asset sales. Our board is empowered to sell all of our assets, wind up our business and dissolve and our shareholders are not empowered to change this strategy through an approval right.

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We may recognize losses when a borrower defaults on a loan and the underlying collateral value is not sufficient.

We may recognize losses arising from borrower defaults on our loan assets. In the event of a default by a borrower on a non-recourse loan, we will only have recourse to the real estate-related assets collateralizing the loan. If the underlying collateral value is less than the loan amount, we will suffer a loss. Conversely, we hold loans that are unsecured or are secured only by equity interests in the borrowing entities. These loans are subject to the risk that other lenders may be directly secured by the real estate assets of the borrower. In the event of a default, those collateralized lenders would have priority over us with respect to the proceeds of a sale of the underlying real estate. In cases described above, we may lack control over the underlying asset collateralizing our loan or the underlying assets of the borrower prior to a default, and as a result the value of the collateral may be reduced by acts or omissions by owners or managers of the assets. We own a $50 million participation in a $1.2 billion first mortgage loan collateralized by a retail and entertainment center and our participation interest has limited rights. We reflect this loan as non-performing in our financial statements and may not realize any value from it for a significant time or at all.

In certain cases, we have obtained individual or corporate guarantees from borrowers or their affiliates. In cases where guarantees are not fully or partially secured, we typically rely on financial covenants from borrowers and guarantors which are designed to require the borrower or guarantor to maintain certain levels of creditworthiness. Where we do not have recourse to specific collateral pledged to satisfy such guarantees or recourse loans, or where the value of the collateral proves insufficient, we will only have recourse as an unsecured creditor to the general assets of the borrower or guarantor, some or all of which may be pledged to satisfy other lenders. There can be no assurance that a borrower or guarantor will comply with its financial covenants, or that sufficient assets will be available to pay amounts owed to us under our loans and guarantees. As a result of these factors, we may suffer additional losses which could have a material adverse effect on our financial performance, liquidity and the market price of our common shares.

In the event of a borrower bankruptcy, we may not have full recourse to the assets of the borrower in order to satisfy our loan. In addition, certain of our loans are subordinate to other debts of the borrower. If a borrower defaults on our loan or on debt senior to our loan, or in the event of a borrower bankruptcy, our loan will be satisfied only after the senior debt receives payment. Where debt senior to our loan exists, the presence of intercreditor arrangements may limit our ability to amend our loan documents, assign our loans, accept prepayments, exercise our remedies (through “standstill” periods) and control decisions made in bankruptcy proceedings relating to borrowers. Bankruptcy and borrower litigation can significantly increase collection costs and losses and the time necessary to acquire title to the underlying collateral, during which time the collateral may decline in value, causing us to suffer additional losses.

If the value of collateral underlying our loan declines or interest rates increase during the term of our loan, a borrower may not be able to obtain the necessary funds to repay our loan at maturity through refinancing. Decreasing collateral value and/or increasing interest rates may hinder a borrower’s ability to refinance our loan because the underlying property cannot satisfy the debt service coverage requirements necessary to obtain new financing. If a borrower is unable to repay our loan at maturity, we could suffer additional loss which may adversely impact our financial performance.

Risks Related to the Spin-Off

We have no 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.

The historical information about our business in this information statement refers to the iStar Included Assets as operated by iStar and integrated with iStar’s other businesses. Our historical and pro forma financial information included in this information statement is derived from the consolidated financial statements and accounting records of iStar. Accordingly, the historical and pro forma financial information included in this information statement 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 the periods presented, or those that we will achieve in the future. Factors which could cause our results to materially differ from

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those reflected in such historical and pro forma 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:

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the financial results in this information statement do not reflect all of the expenses we will incur as a public company;

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prior to the spin-off, our business has been operated by iStar as part of its corporate organization. We will need to make investments to replicate or outsource from other providers certain facilities, systems, infrastructure, and personnel to which we will no longer have access after the spin-off, which will be costly;

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after the spin-off, we will be unable to use iStar’s economies of scope and scale in procuring various goods and services and in maintaining vendor and customer relationships. Although we will enter into the separation and distribution agreement and the management agreement, which provide for certain transition-related arrangements between us and iStar, 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;

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prior to the spin-off, our working capital requirements and capital for our general corporate purposes, including capital expenditures, have been satisfied as part of the corporation-wide cash management policies of iStar. Following the spin-off, we may need to obtain additional financing, which may not be on terms 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; and

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our cost structure, management, financing and business operations will be significantly different as a result of operating as an independent public company. These changes will result in increased costs, including, but not limited to, legal, accounting, compliance and other costs associated with being a public company with equity securities traded on the NASDAQ.

Other significant changes may occur in our cost structure, management, financing and business operations as a result of our status as an independent company. For additional information about the past financial performance of our business and the basis of presentation of the historical combined and consolidated financial statements and the unaudited pro forma combined and consolidated financial statements of our business, please see “Unaudited Pro Forma Combined And Consolidated Financial Statements,” “Selected Historical Combined and Consolidated Financial Data — iStar Included Assets,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and accompanying notes included elsewhere in this information statement.

iStar and Safe may fail to perform under various transaction agreements that will be executed as part of the spin-off, or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.

As of or prior to the effective time of the spin-off, we will enter into agreements with iStar and/or Safe in connection with the separation and the spin-off, including the separation and distribution agreement, the management agreement, the governance agreement and the registration rights agreement. Safe will assume these agreements from iStar in the merger and will enter into the senior secured term loan with us. Certain of these agreements will provide for the performance of services by each company for the benefit of the other for a period of time after the spin-off. We will rely on iStar or Safe to satisfy its performance and payment obligations under such agreements. If iStar or Safe is unable to satisfy such obligations, including its indemnification obligations, we could incur operational difficulties or losses, which may have a material adverse effect on our business, financial condition and results of operations.

If we do not have in place similar agreements with other providers of these services when the transaction agreements terminate and we are not able to provide these services internally, we may not be able to operate our business effectively and our profitability may decline, which may have a material adverse effect on our business, financial condition and results of operations. For more information, see “Certain Relationships and Related Person Transactions.”

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The spin-off will not qualify for tax-free treatment and will be treated as a taxable distribution to you for U.S. federal income tax purposes.

The distribution of Star Holdings common shares will not qualify for tax-deferred treatment and will be treated as a taxable distribution to iStar stockholders for U.S. federal income tax purposes. An amount equal to the fair market value of the Star Holdings common shares received by you on the spin-off date in the spin-off will generally be treated as a taxable dividend to the extent of your ratable share of any current or accumulated earnings and profits of iStar (including gain recognized by iStar in connection with the separation and the spin-off), with the excess treated first as a non-taxable return of capital to the extent of your tax basis in iStar common stock and any remaining excess treated as capital gain. Your tax basis in shares of iStar common stock held at the time of the spin-off will be reduced (but not below zero) to the extent the fair market value of Star Holdings common shares distributed by iStar to you in the spin-off exceeds your ratable share of iStar’s current and accumulated earnings and profits. Your holding period for such iStar shares will not be affected by the spin-off. iStar will not be able to advise you of the amount of earnings and profits of iStar until after the end of the calendar year in which the spin-off occurs. However, iStar anticipates that it could recognize a capital gain for U.S. federal income tax purposes in connection with the separation, which would have the effect of substantially increasing its earnings and profits for the year in which the spin-off occurs. In addition, iStar or another applicable withholding agents may be required or permitted to withhold at the applicable rate on all or a portion of the spin-off payable to non-U.S. stockholders, and any such withholding would be satisfied by iStar or such agent by withholding and selling a portion of the Star Holdings common shares that otherwise would be distributable to non-U.S. stockholders or by withholding from other property held in the non-U.S. stockholder’s account with the withholding agent.

Although iStar will be ascribing a value to the Star Holdings common shares in the spin-off for tax purposes, this valuation is not binding on the IRS or any other tax authority. These tax authorities could ascribe a higher valuation to those shares, particularly if Star Holdings common shares trade at prices significantly above the value ascribed to those shares by iStar in the period following the spin-off. Such a higher valuation may cause a larger reduction in the tax basis of your iStar shares or may cause you to recognize additional dividend or capital gain income. You should consult your own tax advisor as to the particular consequences of the spin-off to you.

Potential indemnification liabilities owed to iStar pursuant to the separation and distribution agreement may have a material adverse effect on our business, financial condition and results of operations.

The separation and distribution agreement provides for, among other things, the principal corporate transactions required to effect the separation and the spin-off, certain conditions to the separation and the spin-off and provisions governing our relationship with iStar with respect to and following the spin-off. Among other things, the separation and distribution agreement provides for indemnification obligations designed to make us financially responsible for substantially all liabilities that may exist related to our assets and activities, whether incurred prior to or after the spin-off, as well as certain obligations of iStar that we will assume pursuant to the separation and distribution agreement. If we are required to indemnify iStar 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.

iStar may not be able to transfer its interests in certain properties in the spin-off pursuant to certain agreements, due to the need to obtain the consent of third parties.

The co-owned nature of some of iStar’s properties, along with certain covenants and other restrictions contained in debt agreements secured by certain of iStar’s properties, may require iStar to obtain co-venturer or lender consent in order to transfer such properties to us in the separation. There is no assurance that iStar will be able to obtain such consents on terms that it determines to be reasonable, or at all. Failure to obtain such consents could require iStar to retain properties subject to these consents, which may have a material adverse effect on our business, financial condition, cash flows and results of operations.

After the spin-off, certain of our trustees may have actual or potential conflicts of interest because of their previous or continuing equity interests in, or positions at, iStar and Safe.

Certain of our trustees will be persons who are or have served as directors of iStar or who may own iStar common stock or other equity awards. Following the spin-off, even though our board of trustees will

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consist of independent trustees, we expect that certain of our trustees will continue to have a financial interest in iStar common stock and Safe common stock after the merger. Continued ownership of iStar or Safe common stock and equity awards 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.

We may not achieve some or all of the expected benefits of the separation and the spin-off, and the separation and the spin-off may have a material adverse effect on our business, financial condition and results of operations.

We may not be able to achieve the full strategic and financial benefits expected to result from the spin-off, or such benefits may be delayed due to a variety of circumstances, not all of which may be under our control.

We may not achieve the anticipated benefits of the spin-off for a variety of reasons, including, among others: (i) diversion of management’s attention from operating and maintaining our business; (ii) disruption of our ongoing business or inconsistencies in our services, standards, controls, procedures and policies, which could adversely affect our ability to maintain relationships with customers; (iii) increased susceptibility to market fluctuations and other adverse events following the spin-off; and (iv) lack of diversification in our business, compared to iStar’s businesses prior to the spin-off. Failure to achieve some or all of the benefits expected to result from the spin-off, or a delay in realizing such benefits, 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.

If Safe files for insolvency or bankruptcy within certain timeframes following the spin-off, a court could deem the spin-off or certain internal restructuring transactions undertaken by iStar in connection therewith to be a fraudulent conveyance or transfer. Fraudulent conveyances or transfers are defined to include transfers made or obligations incurred with the actual intent to hinder, delay or defraud current or future creditors or transfers made or obligations incurred for less than reasonably equivalent value when the debtor was insolvent, or that rendered the debtor insolvent, inadequately capitalized or unable to pay its debts as they become due. In such circumstances, a court could void the transactions that occurred between iStar and us, which could adversely affect our financial condition and our results of operations. Whether a transaction is a fraudulent conveyance or transfer will vary depending upon the jurisdiction whose law is being applied.

Our agreements with iStar and Safe in connection with the spin-off involve conflicts of interest, and we may have received better terms from unaffiliated third parties than the terms we will receive in these agreements.

Because the spin-off involves the division of certain of iStar’s existing businesses into two separate companies, we expect to enter into certain agreements with iStar to provide a framework for our relationship with iStar following the spin-off, including the separation and distribution agreement and the management agreement. Safe will assume these agreements from iStar in the merger. In addition, we expect to enter into the governance agreement and the registration rights agreement with Safe concurrently upon the completion of the spin-off. The terms of these agreements were agreed while portions of our business were still owned by iStar and were negotiated by persons who were employees, officers or directors of iStar or their respective subsidiaries, and, accordingly, may have conflicts of interest. For example, during the period in which the terms of these agreements were negotiated, our board of trustees was not independent of iStar. As a result, the terms of those agreements may not reflect terms that would have resulted from arm’s-length negotiations between unaffiliated third parties, which may have a material adverse effect on our business, financial condition and results of operations.

No vote of the iStar stockholders is required in connection with the spin-off, so stockholder recourse is limited to divestiture.

No vote of the iStar stockholders is required in connection with the spin-off. Accordingly, if the spin-off occurs and you do not want to receive Star Holdings common shares in the spin-off, your only recourse will be to divest your shares of iStar common stock prior to the record date for the spin-off.

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Pursuant to the separation and distribution agreement, iStar will indemnify us for certain pre-spin-off liabilities and liabilities related to iStar’s assets. However, there can be no assurance that these indemnities will be sufficient to insure us against the full amount of such liabilities, or that iStar’s ability to satisfy its indemnification obligation will not be impaired in the future.

Pursuant to the separation and distribution agreement, iStar will indemnify us for certain liabilities. However, third parties could seek to hold us responsible for any of the liabilities that iStar retains, and there can be no assurance that iStar will be able to fully satisfy its indemnification obligations to us. Moreover, even if we ultimately succeed in recovering from iStar any amounts for which we were held liable by such third parties, any indemnification received may be insufficient to fully offset the financial impact of such liabilities or we may be temporarily required to bear these losses while seeking recovery from iStar, which may have a material adverse effect on our business, financial condition and results of operations. Safe will assume iStar’s indemnification obligations in the merger.

Substantial sales of our common shares may occur in connection with the spin-off, which could cause our share price to decline.

The common shares of Star Holdings that iStar intends to distribute to its stockholders generally may be sold immediately in the public market. Upon completion of the spin-off, we expect that we will have an aggregate of approximately 13.3 million common shares issued and outstanding, based on the spin-off ratio and the number of issued and outstanding shares of iStar common stock as of the record date. Star Holdings common shares following the spin-off will be freely tradable without restriction or further registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”), unless the shares are owned by one of our “affiliates,” as that term is defined in Rule 405 under the Securities Act.

Although we have no actual knowledge of any plan or intention on the part of any of our 5% or greater shareholders to sell their common shares of Star Holdings following the spin-off, it is possible that some of our large shareholders will sell our common shares that they receive in the spin-off. For example, our shareholders may sell our common shares because our concentration in residential land development, our business profile or our market capitalization as an independent company does not fit their investment objectives, or because our shares are not included in certain indices after the spin-off. A portion of iStar common stock is held by index funds, and if we are not included in these indices at the time of the spin-off, these index funds may be required to sell our shares. The sales of significant amounts of our common shares, or the perception in the market that this may occur, may result in the lowering of the market price of our shares, which may have a material adverse effect on our business, financial condition and results of operations.

The combined post-spin-off value of iStar or Safe common stock and our common shares may not equal or exceed the value of iStar common stock prior to the spin-off, and the price of our common shares may be volatile or may decline.

The market price of our common shares may fluctuate widely as a result of a number of factors, many of which are outside of our control. In addition, the stock market is subject to fluctuations in share prices and trading volumes that affect the market prices of the shares of many companies. These fluctuations in the stock market may adversely affect the market price of our common shares. Among the factors that could affect the market price of our common shares are:

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actual or anticipated fluctuations in our business, financial condition and operating results;

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delays in our ability to execute our business strategy;

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adverse developments in respect of any of our material assets;

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changes in revenues or cash flow estimates or publication of research reports and recommendations by financial analysts with respect to our securities or those of other companies;

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the ability of our tenants and borrowers to pay amounts due to us and the ability of buyers of our assets to meet their payment obligations to us;

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our inability to pay amounts due under our indebtedness or our management agreement;

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any future issuances of equity securities;

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strategic actions by us or our competitors;

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general market conditions and, in particular, developments related to market conditions for the real estate industry and the availability of financing for real estate purchasers; and

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domestic and international economic factors unrelated to our performance.

Additionally, we cannot assure you that the combined trading prices of iStar common stock (or Safe common stock after the merger) and our common shares after the spin-off will be equal to or greater than the trading price of iStar common stock prior to the spin-off. Until the market has fully evaluated iStar or Safe without the Star Holdings business and assets, the price at which iStar common stock (or Safe common stock after the merger) trades may fluctuate more significantly than might otherwise be typical, even with other market conditions, including general volatility, held constant. Similarly, until the market has fully evaluated our business as a separate entity, the prices at which our common shares trade may fluctuate more significantly than might otherwise be typical, even with other market conditions, including general volatility, held constant. The increased volatility of our share price following the spin-off may have a material adverse effect on our business, financial condition and results of operations.

Risks Related to an Investment in Our Common Shares

An active trading market for our common shares may not develop.

An active trading market for our common shares may not develop or be sustained. We expect that the trading volume for our common shares may be limited and sporadic due to a number of factors, including the fact that we are a relatively small company, the ultimate resolution of many of our assets is uncertain and we are concentrated in certain assets. As a consequence, there may be periods when trading activity in our common shares is minimal, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give any assurance that a broader or more active public trading market for our common shares will develop or be sustained.

We will be taxed as a corporation and will not elect to qualify as a real estate investment trust.

Star Holdings will be treated as a C corporation for U.S. federal income tax purposes, and unlike iStar will not elect to qualify as a real estate investment trust. As a general matter, Star Holdings will subject to U.S. federal income tax in the same manner as other U.S. corporations at corporate rates (currently 21%), plus additional state and local taxes. Shareholders of Star Holdings generally will be subject to tax on dividends paid by Star Holdings, if any, to the extent of Star Holdings’ current and accumulated earnings and profits. Moreover, to the extent that Star Holdings sells Safe Shares, it will be a taxable event for Star Holdings and could materially and adversely affect its results of operations, financial position and cash flows, including its ability to service debt and make distributions to its shareholders.

Our organizational documents have certain provisions that could inhibit changes in control, which may discourage third parties from conducting a tender offer or seeking other change of control transactions that could involve a premium price for Star Holdings common shares or that our shareholders otherwise believe to be in their best interest.

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

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be considered at a meeting of shareholders and containing the information required in our bylaws. 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. See “Certain Provisions of Maryland Law and our Declaration of Trust and Bylaws — Subtitle 8.”

Certain provisions of our organizational documents limit shareholder recourse and access to judicial fora.

Our declaration of trust limits the liability of our trustees and officers to our shareholders for money damages to the maximum extent permitted under Maryland law. Additionally, our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf, other than actions arising under federal securities laws; (b) any action asserting a claim of breach of any duty owed by any of our trustees, executive officers or other employees to us or our shareholders; (c) any action asserting a claim against us or any of our trustees or executive officers or other employees arising pursuant to any provision of the Maryland Statutory Trust Act or our declaration of trust or bylaws; or (d) any action asserting a claim against us or any of our trustees, executive officers or other employee that is governed by the internal affairs doctrine shall be the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Northern Division. These provisions of our organizational documents may limit shareholder recourse for actions of our trustees and executive officers and limit their ability to obtain a judicial forum that they find favorable for disputes with us or our trustees, officers, employees, if any, or other shareholders.

The number of our common shares available for future issuance or sale could adversely affect the per share trading price of our common shares and may be dilutive to current shareholders.

Our declaration of trust authorizes our board of trustees to, among other things, issue a certain amount of additional common shares without shareholder approval. We cannot predict whether future issuances or sales of our common shares, or the availability of shares for resale in the open market, will decrease the per share trading price our common shares. In addition, any such issuance could dilute our existing shareholders’ interests in our company. In addition, prior to the completion of the spin-off, we intend to adopt an equity compensation plan, and we may issue our common shares or grant equity incentive awards exercisable for or convertible or exchangeable into of our common shares under the plan. Future issuances of our common shares may be dilutive to existing shareholders, which may have a material adverse effect on our business, financial condition and results of operations.

We do not expect to pay regular dividends.

Future dividends will be declared and paid at the discretion of our board of trustees, and the amount and timing of dividends will primarily depend upon cash generated by operating activities and asset sales. We do not expect to pay regular dividends. We expect to make distributions of cash to the extent we generate excess cash from asset sales that are not needed for expenses, reserves, corporate and other purposes. Our board of trustees may change our dividend policy at any time, and there can be no assurance as to the manner in which future dividends will be paid. Our failure to pay dividends may cause investors to seek alternative investments, which would result in selling pressure on, and a decrease in the market price of, our common shares. As a result, the price of our common shares may decrease, which may have a material adverse effect on our business, financial condition and results of operations.

If we qualify to be an “emerging growth company,” we will not be required to comply with certain reporting requirements, including those relating to accounting standards and disclosure about our executive compensation, that apply to other public companies.

The JOBS Act contains provisions that, among other things, relax certain reporting requirements for “emerging growth companies,” including certain requirements relating to accounting standards and compensation disclosure. We expect to be classified as an emerging growth company. For as long as we are an emerging growth company, which may be up to five full fiscal years, we are not required to (1) provide an

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auditor’s attestation report on management’s assessment of the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act, (2) comply with any new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies under Section 102(b)(1) of the JOBS Act, (3) comply with any new requirements adopted by the Public Company Accounting Oversight Board (the “PCAOB”), requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer, (4) comply with any new audit rules adopted by the PCAOB after April 5, 2012 unless the SEC determines otherwise, (5) provide certain disclosure regarding executive compensation required of larger public companies or (6) hold shareholder advisory votes on executive compensation. 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.

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. We do not intend to take advantage of such extended transition period.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

This information statement and other materials we and iStar have filed or will file with the SEC contain, or will contain, forward-looking statements. Certain statements that are not in the present or past tense or that discuss our expectations (including any use of the words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “forecast,” “guidance,” “intend,” “may,” “might,” “outlook,” “project,” “should” or similar expressions) are intended to identify such forward-looking statements, which generally are not historical in nature. The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements.

Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and it is possible that our actual results may differ materially from those indicated by these forward-looking statements due to a variety of risks and uncertainties. Such factors include, but are not limited to:

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iStar’s or Safe’s inability or failure to perform under the various transaction agreements relating to the spin-off;

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our lack of operating history as a separate company;

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that certain of our properties represent a significant portion of our revenues, cash flows and costs;

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that the spin-off will not qualify for tax-free treatment;

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risks associated with the ownership and development of real property;

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our ability to sell assets at attractive prices;

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our ability to generate cash flows from asset sales when needed in order to meet our obligations under indebtedness, to pay management fees and to pay expenses;

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changes in the real estate industry and in performance of the financial markets and interest rates and our ability to effectively hedge against interest rate changes;

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the actual or perceived impact of global and economic conditions;

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we will be entirely reliant on our manager’s performance under the management agreement;

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conflicts of interest with our manager;

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the amount, growth and relative inelasticity of our expenses;

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the outcome of claims and litigation involving or affecting the company;

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applicable regulatory changes;

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risks associated with the fact that our historical and pro forma financial information may not be a reliable indicator of our future results;

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risks associated with the potential volatility of our common shares; and

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other risks and uncertainties detailed from time to time in the section captioned “Risk Factors” and in our SEC filings.

Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes.

Other factors that could cause actual results or events to differ materially from those anticipated include the matters described under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In particular, information included under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business and Properties,” and “The Spin-Off” contain forward-looking statements.

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THE SPIN-OFF

Background

On August 11, 2022, iStar announced its plans to (i) merge with Safe to form a self-managed, pure-play ground lease company and (ii) prior to closing the merger, separate iStar’s legacy assets by completing the spin-off.

We were formed on October 7, 2022 in Maryland as a wholly owned subsidiary of iStar. Following the spin-off, we will operate as an externally managed independent company.

iStar will accomplish the spin-off by transferring to us the equity of entities that own our portfolio including any legacy assets that are unsold as of the date of the spin-off, in addition to the Safe Shares, at least $50.0 million of cash and certain other assets. We will assume all liabilities and obligations of iStar, other than those relating to the ground lease business that iStar is retaining. In consideration for these assets we will issue common shares of Star Holdings to iStar, that iStar will distribute to its stockholders on a pro rata basis and the net proceeds of our margin loan financing. iStar will retain all of its assets and liabilities relating to its retained ground lease business. We estimate that the expenses of completing the spin-off will be approximately $1.5 million, and these expenses will be paid either directly by iStar prior to the spin-off or by us using the cash contributed to us by iStar. These expenses are comprised primarily of non-recurring business separation expenses and stand-up costs related to operating as a new public company.

The spin-off is expected to occur on March 31, 2023 (the “distribution date”), by way of a distribution to iStar stockholders. In the distribution, each iStar common stockholder will be entitled to receive, on a pro rata basis, 0.153 common shares of Star Holdings for each share of iStar common stock held at the close of business on the spin-off record date. iStar stockholders will not be required to make any payment to surrender or exchange their iStar common stock, or to take any other action to receive their common shares of Star Holdings in the spin-off. The spin-off of Star Holdings common shares as described in this information statement is subject to the satisfaction or waiver of certain conditions. In addition, iStar’s board of directors has reserved the right, in its sole discretion, to amend, modify or abandon the spin-off or any related transaction at any time prior to the distribution date; provided that, any waiver, amendment, supplement or modification of any provisions of the separation and distribution agreement prior to the closing of the merger may only be made with the prior written consent of the Safe special committee.

Following completion of the spin-off, each iStar common stockholder immediately prior to the spin-off record date will continue to hold the shares of iStar common stock held immediately prior to the spin-off record date and 0.153 common shares of Star Holdings for each share of iStar common stock held immediately prior to the spin-off record date. The foregoing assumes that the holder does not transfer any shares prior to the effectiveness of the spin-off. For more information, see “The Spin-Off — Trading Before the Spin-Off Date.”

iStar and Star Holdings will separate their respective liabilities as set forth in the separation and distribution agreement. In addition to the separation and distribution agreement, we and iStar will enter into a management agreement and we and Safe will enter into a governance agreement and a registration rights agreement. We have signed commitment letters for a senior secured term loan facility having a principal amount of up to $115 million (which principal amount may be increased or decreased from time to time with the approval of both parties, including prior to the spin-off) plus an additional commitment amount of up to $25.0 million at Star Holdings’ election (the proceeds of which may only be used to satisfy Star Holdings’ “soft call” obligations under the margin loan) and an up to $140 million margin loan facility that we expect to enter into on or about the date of completion of the spin-off. For more information, see “Description of Material Indebtedness.”

Reasons for the Separation and the Spin-Off

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In 2019, iStar announced its plans to increase materially its investment in Safe and expand the relationship between the two companies because iStar believed that the ground lease business offered greater opportunities for attractive risk-adjusted returns when compared to iStar’s traditional lending and net lease businesses, which faced greater competition and more commoditized pricing. Since 2019, iStar’s strategy has been to monetize the assets from its legacy businesses, strengthen its balance sheet and reinvest available proceeds into the ground lease ecosystem, both by making additional investments in Safe, and by creating ground lease financing programs and new ground lease-adjacent investment opportunities.

With the sale of its net lease portfolio in March 2022, iStar largely completed its transition to being primarily focused on the ground lease ecosystem. In March 2022, iStar’s board of directors formed the iStar special committee and delegated to the iStar special committee the exclusive power and authority of the full board of directors to review, consider and take actions with respect to possible internalization, business combination and other strategic transactions involving iStar and Safe. Between April 2022 and August 2022, the iStar special committee, together with its advisors, engaged in discussions and negotiations with the Safe special committee and its advisors regarding a potential transaction. Through this process, the parties agreed that it was in the best interests of their respective stockholders to combine iStar and Safe into a self-managed, pure play ground lease REIT that will focus on driving growth as a market leader. In order to accomplish this result, the parties agreed that iStar would contribute its remaining legacy non-ground lease assets to Star Holdings and complete the spin-off of Star Holdings to iStar's stockholders prior to the closing of the merger. As part of the negotiation process, the iStar special committee and its advisors and the Safe special committee and its advisors discussed and negotiated the terms of several agreements to be entered into between iStar and/or the combined company, on the one hand, and Star Holdings, on the other hand, including the separation and distribution agreement, the management agreement, the governance agreement, the registration rights agreement and the secured term loan.

The material terms of the agreements were determined through the negotiation process between the iStar special committee and its advisors, on the one hand, and the Safe special committee and its advisors, on the other hand, in the context of the overall discussions and negotiations of the merger, the spin-off and related transactions. With respect to the separation and distribution agreement, the discussions and negotiations primarily focused on achieving a separation of the assets and liabilities of iStar’s historical non-ground lease business from iStar so that following the spin-off and merger, the non-ground lease assets and liabilities would reside with Star Holdings and the merged company would be a pure play ground lease company. With respect to the management agreement, the parties negotiated an annual management fee that is “gross” of most manager personnel and overhead expenses, other than the costs of two financial reporting personnel, and scales down annually to account for anticipated monetizations of assets. With respect to the governance agreement and registration rights agreement, the negotiations focused on Star Holdings’ ownership interest in Safe common stock and Safe’s desire that Star Holdings agree to certain standstill covenants, voting covenants and transfer restrictions on the shares, while Star Holdings desired Safe’s cooperation in certain future distributions of the Safe shares owned by Star Holdings. With respect to the secured term loan, the parties negotiated the interest rate and other material terms based on their respective views of then-current market conditions for companies of a similar credit quality to Star Holdings and Star Holdings’ business plan.

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combined company by way of a reverse stock split. Upon completing the merger and the spin-off, the combined company, which will keep the name of Safehold Inc. and NYSE ticker symbol of “SAFE,” will be internally-managed and will be solely focused on growth in the new (for public REITs) and dynamic asset class of ground leases.

•

Creates a company with value-realization opportunity. Several of our assets present uncertain future cash flows because they are still in varying stages of development. We believe the separation creates a value realization opportunity through maximizing cash flows from active asset management and sales of the legacy portfolio, the proceeds of which are expected to be used for repayment of indebtedness, payment of management fees, payment of capital expenditures and distributions to holders of common shares of Star Holdings.

•

The iStar board of directors also considered a number of potentially negative factors in evaluating the spin-off, including the following:

•

Ongoing costs. We will separately bear the costs of fees and expenses payable under the management agreement and other costs, such as the costs associated with being a public company.

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One-time costs of the separation. Each of iStar and we will incur costs in connection with our transition to being a separate public company that may include accounting, tax, legal and other professional services costs, insurance costs and costs to separate information systems.

•

Inability to realize anticipated benefits of the spin-off. We may not achieve the anticipated benefits of the spin-off for a variety of reasons, including: (i) following the spin-off, we will be more susceptible to adverse events relating to our assets than if we were still a part of iStar; (ii) following the spin-off, Star Holdings’ businesses will be less diversified than iStar’s businesses prior to the separation; (iii) we will be largely dependent on asset sales to generate cash flows to pay our debt obligations, pay management fees and pay ongoing expenses; and (iv) market conditions may make it difficult for us to sell our assets at attractive prices.

•

Taxability of the Spin-Off. The spin-off is expected to be treated as a taxable distribution to iStar common stockholders for U.S. federal income tax purposes.

The iStar board of directors concluded that the potential benefits of the spin-off outweighed these factors. For more information, see “Risk Factors” beginning on page 17.

The Separation and Distribution Agreement

The following discussion summarizes the material provisions of the separation and distribution agreement. The separation and distribution agreement sets forth, among other things, our agreements with iStar (and Safe after the merger) regarding the principal transactions necessary to separate us from iStar. It also sets forth other agreements that govern certain aspects of our relationship with iStar after the spin-off date.

Transfer of Assets and Assumption of Liabilities

The separation and distribution agreement identifies the assets to be transferred, the liabilities to be assumed and the contracts to be assigned to each of us and iStar as part of the separation of our two companies, and it provides for when and how these transfers, assumptions and assignments will occur. In particular, the separation and distribution agreement provides, among other things, that subject to the terms and conditions contained therein:

•

certain assets related to our businesses (the “Star Holdings Assets”) will be retained by Star Holdings or one of Star Holdings’ subsidiaries or transferred to Star Holdings or one of Star Holdings’ subsidiaries, including:

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all issued capital stock or other equity interests owned by iStar or a subsidiary thereof in each of our subsidiaries and entities agreed to in the separation and distribution agreement (the “Transferred Entities”);

•

all right, title and interest (whether as owner, mortgagee or holder of a security interest) in our portfolio of properties;

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the Safe Shares;

•

all of the trademark rights of iStar or its subsidiaries in the name and logo of Star Holdings, the names and logos of the subsidiaries of Star Holdings, the names and logos of the real estate-related assets and development projects held by Star Holdings and its subsidiaries and the know-how used to conduct the business of Star Holdings, subject to certain exceptions;

•

certain computing peripherals (monitors, keyboards, webcams, etc.), tablets, conference room cameras/computers/display units, and server room equipment;

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all contracts entered into in the name of, or expressly on behalf of, Star Holdings, any subsidiary of Star Holdings, or any of the Transferred Entities or a subsidiary thereof;

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all other assets primarily related to the properties owned by the Transferred Entities, including all furniture, buildings, fixtures, equipment, easements and other appurtenances located at the real properties;

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all Shared Contracts (as defined in the separation and distribution agreement) to the extent allocated to Star Holdings or its subsidiaries pursuant to the separation and distribution agreement;

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all permits of iStar or its subsidiaries used primarily in our business;

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all books and records, wherever located, of iStar or its subsidiaries primarily related to our business (and subject to certain access rights retained by iStar and its subsidiaries pursuant to the separation and distribution agreement);

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all accounts receivable, rights, claims, demands, causes of action, judgments, decrees, property tax appeals and rights to indemnify or contribution in favor of iStar or its subsidiaries that are primarily related to our business; and

•

other assets mutually agreed by the parties prior to the spin-off;

•

certain liabilities related to Star Holdings’ businesses or the Star Holdings Assets (collectively, the “Star Holdings Liabilities”) will be retained by or transferred to Star Holdings or one of Star Holdings’ subsidiaries, including:

•

all liabilities under contracts or agreements assumed in connection with our businesses;

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all liabilities (including environmental liabilities) of iStar relating to underlying circumstances, facts existing or events occurring, prior to the spin-off, whether related to Star Holdings or not, other than ground lease related liabilities;

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all guarantees and indemnitees in respect of any of the Star Holdings Assets or Star Holdings Liabilities;

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all third-party claims to the extent relating to our business and the Star Holdings Assets; and

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all insurance charges related to our business and the Star Holdings Assets;

•

all of the assets and liabilities (including whether accrued, contingent, or otherwise) other than the Star Holdings Assets and Star Holdings Liabilities, including such assets other than the Star Holdings Assets (the “iStar Assets”) and such liabilities other than the Star Holdings Liabilities (the “iStar Liabilities”), will be retained by or transferred to iStar or one of its subsidiaries.

Information in this information statement with respect to the assets and liabilities of the parties following the spin-off is presented based on the allocation of such assets and liabilities pursuant to the separation and distribution agreement unless the context otherwise indicates.

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Cash Assets

The separation and distribution agreement provides that, at or prior to the spin-off, iStar will contribute at least $50.0 million in cash to Star Holdings, and will also pay to Star Holdings any cash proceeds in respect of asset sales occurring prior to the spin-off date that generate proceeds in excess of amounts needed for iStar to retire its unsecured senior notes, cash out its preferred stock in connection with the merger and pay other liabilities.

Commercially Reasonable Efforts

The separation and distribution agreement provides that the parties will use commercially reasonable efforts to take or cause to be taken all actions, and to do or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary to consummate and make effective the spin-off, including causing the conditions precedent to the spin-off to be satisfied, obtaining and making all necessary approvals and filings, obtaining third party consents, and executing any other necessary instruments.

The Spin-Off

The separation and distribution agreement governs the rights and obligations of the parties regarding the spin-off. On the spin-off date, iStar will distribute to its common stockholders that held shares of iStar common stock as of the record date all of the issued and outstanding Star Holdings common shares based on the spin-off ratio of 0.153 common shares of Star Holdings for one share of iStar common stock, subject to any adjustment in the event of iStar undertaking a stock dividend, stock split or similar change in its common stock prior to the spin-off.

Conditions to the Spin-Off

The separation and distribution agreement provides that the spin-off is subject to the satisfaction (or waiver by iStar) of certain conditions, including:

•

the mailing of this information statement;

•

the Star Holdings common shares to be distributed have been approved for listing on a designated exchange, subject to official notice of distribution;

•

the execution of ancillary agreements by us and iStar, including the management agreement.

Release of Claims

We agree to release and discharge iStar, its subsidiaries and all persons who at any time prior to the distribution were stockholders, directors, officers, agents or employees thereof or of any transferred entity from the Star Holdings Liabilities, all liabilities arising from or in connection with the transactions and activities to implement the spin-off and all liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the distribution, in each case, relating to, arising out of or resulting from the transferred business, the Star Holdings Assets and Star

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Holdings Liabilities. iStar agrees to release and discharge Star Holdings, our subsidiaries, and all persons who at any time prior to the distribution were stockholders, directors, officers, agents or employees thereof from all iStar Liabilities and all liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the distribution, in each case, relating to, arising out of or resulting from iStar’s business, iStar Assets and iStar Liabilities. The release described above will not include certain specified liabilities, including without limitation liabilities arising out of the agreements among the parties with respect to the spin-off, liabilities allocated pursuant to such agreements and liabilities in connection with any untrue or alleged untrue statement of material fact from disclosure documents, among others.

Indemnification

In the separation and distribution agreement, we agree to indemnify, defend and hold harmless iStar, each of its affiliates and each of their respective directors, officers, employees and agents, from and against all liabilities relating to, arising out of or resulting from:

•

the Star Holdings Liabilities and our failure to pay any Star Holdings Liabilities in accordance with their terms;

•

third-party claims relating to our business or the Star Holdings Assets;

•

our breach of the separation and distribution agreement or any ancillary agreement;

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the use by Star Holdings or any subsidiary of any know-how licensed to Star Holdings pursuant to the separation and distribution agreement;

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any untrue statement or alleged untrue statement of material fact or omission or alleged omission in the registration statement to which this information statement is a part or any other disclosure document filed by Star Holdings; and

•

any untrue statement of material fact or omission with respect to certain specified statements made in Star Holdings’ name in any disclosure document filed by iStar, including the Joint Proxy Statement / Prospectus filed by iStar.

iStar agrees to indemnify, defend and hold harmless, us and each of our affiliates and each of our and our affiliates’ respective directors, officers, employees and agents from and against all liabilities relating to, arising out of or resulting from:

•

all iStar Liabilities and the failure of iStar to pay any iStar Liabilities in accordance with their terms;

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third-party claims relating to the iStar Assets;

•

the breach by iStar of the separation and distribution agreement or any ancillary agreement;

•

any untrue statement of material fact or omission in any disclosure document filed by iStar which describes the spin-off or Star Holdings and its subsidiaries, including the Joint Proxy Statement / Prospectus filed by iStar other than the specified statements of Star Holdings referred to above.

Neither we nor iStar will be liable to the other for special, punitive or exemplary damages, except, in each case, to the extent such damages are finally awarded and actually paid by a party to a third party in connection with a third-party claim.

Insurance

The separation and distribution agreement provides that, at or after the effective time of the spin-off, iStar will be entitled to terminate coverage under its existing insurance policies with respect to the Star Holdings Assets that it previously owned and the Star Holdings Liabilities to which it previously was subject. The separation and distribution agreement further provides that Star Holdings will cause the Star Holdings Assets and Star Holdings Liabilities to be covered by existing or new insurance policies of Star Holdings.

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The separation and distribution agreement also contains procedures for asserting claims for losses arising prior to the separation and the spin-off under the policies that covered the property in question at the applicable time.

Non-Solicitation

Pursuant to the separation and distribution agreement, for a period of two years after the closing of the spin-off, neither we nor any of our subsidiaries may, directly or indirectly, solicit for employment or employ or cause to leave the employ of iStar or any of its subsidiaries any employee of iStar or any of its subsidiaries with a title of Vice President or higher, subject to customary exceptions.

Segregation of Accounts

We and iStar will use commercially reasonable efforts to separate and de-link any common bank or brokerage accounts between us, and any outstanding checks issued or payments initiated prior to the effective time of the spin-off will be honored after the effective time of the spin-off by the party then owning the account on which the check is drawn or the payment was initiated.

Information Sharing

We and iStar will use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the other party, at any time before, on or after the spin-off, any information (or a copy thereof) in the possession or under the control of such party which the requesting party reasonably requests to the extent that such information relates to the requesting party’s assets and liabilities, such information is reasonably required by the requesting party to comply with the obligations of the separation and distribution agreement or such information is reasonably required by the requesting party to comply with any obligation imposed by any governmental authority. The separation and distribution agreement will include customary confidentiality covenants with respect to such information.

Amendments

No provision of the separation and distribution agreement may be amended or modified except by a written instrument signed by the authorized representative of the party against whom it is sought to enforce such amendment or modification; provided that, any waiver, amendment, supplement or modification of any provisions of the separation and distribution agreement prior to the closing of the merger may only be made with the prior written consent of the Safe special committee.

When and How You Will Receive Star Holdings Shares in the Spin-Off

With the assistance of Computershare, iStar expects to distribute Star Holdings common shares on March 31, 2023 to all holders of shares of outstanding iStar common stock as of the close of business on March 27, 2023, the record date. Computershare currently serves as the transfer agent and registrar for iStar common stock and will serve as the settlement and distribution agent in connection with the spin-off. Thereafter, Computershare will serve as the transfer agent and registrar for Star Holdings common shares. If you own shares of iStar common stock as of the close of business on the record date, the common shares of Star Holdings that you are entitled to receive in the spin-off will be issued electronically, as of the spin-off date, to you in book-entry form or to your bank or brokerage firm on your behalf. If you are a registered holder, Computershare will then mail you a direct registration account statement that reflects your common shares of Star Holdings. If you hold your shares through a bank or brokerage firm, your bank or brokerage firm will credit your account for the shares. Book-entry form refers to a method of recording share ownership when no physical share certificates are issued to stockholders, as is the case in this spin-off. If you sell shares of iStar common stock in the “regular-way” market up to and including the spin-off date, you will be selling your right to receive common shares of Star Holdings on such shares of iStar common stock in the spin-off.

Commencing on or shortly after the spin-off date, if you hold physical share certificates that represent your iStar common stock and you are the registered holder of the shares represented by those certificates,

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the distribution agent will mail to you an account statement that indicates the number of common shares of Star Holdings that have been registered in book-entry form in your name.

Most iStar stockholders hold their shares of iStar common stock through a bank or brokerage firm. In such cases, the bank or brokerage firm would be said to hold the shares in “street name” and ownership would be recorded on the bank or brokerage firm’s books. If you hold shares of iStar common stock through a bank or brokerage firm, your bank or brokerage firm will credit your account for the common shares of Star Holdings that you are entitled to receive in the spin-off. If you have any questions concerning the mechanics of having shares held in “street name,” please contact your bank or brokerage firm.

Transferability of Shares You Receive

Common shares of Star Holdings distributed in connection with the spin-off will be transferable without registration under the Securities Act, except for shares received by persons who may be deemed to be our affiliates. Persons who may be deemed to be our affiliates after the spin-off generally include individuals or entities that control, are controlled by, or are under common control with us, which may include certain of our executive officers, trustees or principal shareholders. Securities held by our affiliates will be subject to resale restrictions under the Securities Act. Our affiliates will be permitted to sell our common shares only pursuant to an effective registration statement or an exemption from the registration requirements of the Securities Act, such as the exemption afforded by Rule 144 under the Securities Act.

The Number of Common Shares of Star Holdings You Will Receive

For each share of iStar common stock that you own as of the close of business on the record date for the spin-off, you will receive 0.153 common shares of Star Holdings.

iStar will not distribute any fractional common shares of Star Holdings to its stockholders. Instead, if you are a registered holder, Computershare will aggregate fractional shares into whole shares, sell the whole shares in the open market on the spin-off date and distribute the aggregate cash proceeds (net of discounts and commissions) of the sales based on the closing price on the spin-off date, pro rata to each holder based on the fractional share such holder would otherwise be entitled to receive in the spin-off. Computershare, in its sole discretion, without any influence by iStar or Star Holdings, will determine when, how, through which broker-dealer and at what price to sell the whole shares. Any broker-dealer used by Computershare will not be an affiliate of either iStar or Star Holdings. Neither Star Holdings nor iStar will be able to guarantee any minimum sale price in connection with the sale of these shares. Recipients of cash in lieu of fractional shares will not be entitled to any interest on any payments made in lieu of fractional shares.

The aggregate net cash proceeds of these sales will be taxable for U.S. federal income tax purposes. See “Certain Material U.S. Federal Income Tax Consequences — Certain Material U.S. Federal Income Tax Consequences of the Spin-Off to U.S. Stockholders” for an explanation of the material U.S. federal income tax consequences of the distribution.

Results of the Spin-Off

After the spin-off, we will be an independent, externally managed publicly traded company. The actual aggregate number of Star Holdings shares to be distributed to iStar stockholders will be determined at the close of business on March 27, 2023, the record date for the spin-off. The spin-off will not affect the number of outstanding shares of iStar common stock or any rights of iStar stockholders.

As of or prior to the effective time of the spin-off, we will enter into the separation and distribution agreement with iStar and will enter into other agreements with iStar to effect the spin-off. These agreements will provide a framework for our relationship with iStar after the spin-off. Additionally, these agreements will allocate between us and iStar the assets, liabilities and obligations of iStar (including intellectual property, and tax-related assets and liabilities) that are attributable to periods prior to the spin-off. For a more detailed description of these agreements, see “Certain Relationships and Related Person Transactions.”

Market for Star Holdings Common Shares

There is currently no public trading market for Star Holdings common shares. Our common shares have been approved for listing on the NASDAQ under the symbol “STHO”, subject only to official notice

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of the issuance thereof. We have not and will not set the initial price of our common shares. The initial price will be established by the public markets.

We cannot predict the price at which our common shares will trade after the spin-off. In fact, the combined trading prices, after the spin-off, of the common shares of Star Holdings that each iStar stockholder will receive in the spin-off and the iStar common stock held at the record date may not equal the “regular-way” trading price of a share of iStar stock immediately prior to the spin-off. The price at which Star Holdings common shares trade may fluctuate significantly, particularly until an orderly public market develops. Trading prices for Star Holdings common shares will be determined in the public markets and may be influenced by many factors.

Trading Before the Spin-Off Date

Beginning as early as two trading days before the record date and continuing up to and including the spin-off date, iStar expects that there will be two markets for shares of iStar common stock: a “regular-way” market and an “ex-distribution” market. Shares of iStar common stock that trade on the “regular-way” market will trade with an entitlement to common shares of Star Holdings distributed in the spin-off. Shares of iStar common stock that trade on the “ex-distribution” market will trade without an entitlement to common shares of Star Holdings distributed pursuant to the spin-off. Therefore, if you sell your shares of iStar common stock in the “regular-way” market up to and including through the spin-off date, you will be selling your right to receive common shares of Star Holdings in the spin-off. If you own shares of iStar common stock at the close of business on the record date and sell those shares on the “ex-distribution” market up to and including through the spin-off date, you will receive the common shares of Star Holdings that you are entitled to receive pursuant to your ownership of shares of iStar common stock as of the record date.

Furthermore, beginning on or shortly before the record date and continuing up to and including the spin-off date, Star Holdings expects that there will be a “when-issued” market for its common shares. “When-issued” trading refers to a sale or purchase made conditionally, because the security has been authorized but not yet issued. The “when-issued” trading market will be a market for Star Holdings common shares that will be distributed to holders of iStar common stock on the spin-off date. If you owned shares of iStar common stock at the close of business on the record date, you would be entitled to Star Holdings common shares distributed pursuant to the spin-off. With respect to iStar stockholders, you may trade this entitlement to Star Holdings common shares, without the iStar common stock you own, on the “when-issued” market. On the first trading day following the spin-off date, “when-issued” trading with respect to Star Holdings common shares will end, and “regular-way” trading will begin.

You should consult your bank, broker, nominee or other advisor before selling your shares to be sure you understand the effects of the trading procedures described above.

Conditions to the Spin-Off

iStar has announced that the spin-off will be effective at 12:02 a.m., Eastern time, on March 31, 2023, which is the spin-off date, provided that certain conditions have been satisfied (or waived by iStar in its sole discretion), including:

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the mailing of this information statement;

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the Star Holdings common shares to be distributed have been approved for listing on a designated exchange, subject to official notice of distribution;

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the execution of ancillary agreements by us and iStar, including the management agreement.

iStar does not intend to notify its stockholders of any modifications to the terms of the spin-off that, in the judgment of its board of directors, are not material. For example, the iStar board of directors might consider material such matters as significant changes to the spin-off ratio, the assets to be contributed or the liabilities to be assumed in the spin-off. To the extent that the iStar board of directors determines that any modifications by iStar materially change the terms of the spin-off, iStar will notify iStar stockholders in a manner reasonably calculated to inform them about the modification as may be required by law, by, for example, publishing a press release, filing a current report on Form 8-K, or circulating a supplement to this information statement.

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CAPITALIZATION

The following table sets forth Star Holdings’ capitalization as of December 31, 2022 on a historical basis and on a pro forma basis to give effect to the pro forma adjustments included in Star Holdings’ pro forma financial information, assuming a spin-off ratio of 0.153 common shares of Star Holdings for each share of iStar common stock. The information below is not necessarily indicative of what Star Holdings’ capitalization would have been had the spin-off and related transactions been completed as of December 31, 2022. In addition, it is not indicative of Star Holdings’ future capitalization. This table should be read in conjunction with “Selected Historical Combined and Consolidated Financial Data — iStar Included Assets,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Star Holdings’ unaudited combined and consolidated financial statements and notes included elsewhere in this information statement.

	As of December 31, 2022
	Historical			Pro Forma Adjustments			Pro Forma
	(in thousands)
Cash and cash equivalents		$	4,227		$	53,131		$	57,358
Debt
Senior Secured Term Loan			—			114,325			114,325
Margin loan			—			138,736			138,736
Total debt(1)			—			253,061			253,061
iStar Included Assets
Net Parent Investment			971,543			(971,543)			—
Common stock			—			13			13
Additional paid in capital(2)			—			613,736			613,736
Noncontrolling interests			726			3,131			3,857
Total equity			972,269			(354,663)			617,606
Total capitalization		$	976,496		$	(48,471)		$	928,025

(1)

Represents Star Holdings’ up to $115 million secured term loan payable to iStar, net of fees and Star Holdings’ up to $140 million margin loan, net of fees, the proceeds of which will be distributed to iStar.

(2)

Net carrying value of equity distributed, net of the par value of common stock.

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SELECTED HISTORICAL COMBINED AND CONSOLIDATED FINANCIAL DATA — iSTAR INCLUDED ASSETS

In connection with the spin-off, Star Holdings will succeed to the assets owned by iStar immediately prior to the completion of the spin-off that remain from its historical non-ground lease related businesses, including real estate finance, operating properties and land and development (the “iStar Included Assets”). The following tables set forth selected historical combined and consolidated financial data of the iStar Included Assets, which was carved out from the financial information of iStar. The summary historical financial data set forth below as of and for the years ended December 31, 2022, 2021 and 2020 has been derived from the iStar Included Assets’ audited combined and consolidated financial statements, which are included elsewhere in this information statement.

	For the Years Ended December 31,
	2022			2021			2020
	(in thousands)
Revenues:
Operating lease income		$	12,859		$	16,824		$	21,571
Interest income			12,340			29,522			56,676
Other income			37,125			36,726			28,189
Land development revenue			61,753			189,103			164,702
Total revenues			124,077			272,175			271,138
Costs and expenses:
Interest expense			42,042			51,369			62,176
Real estate expense			49,902			45,126			45,616
Land development cost of sales			63,441			171,961			177,727
Depreciation and amortization			4,910			6,487			6,095
General and administrative			10,937			46,340			40,140
Provision for (recovery of) loan losses			44,998			(8,085)			8,866
Impairment of assets			14,476			679			5,790
Other expense			494			515			271
Total costs and expenses			231,200			314,392			346,681
Gain on equity investment			—			17,642			23,916
Income from sales of real estate			25,186			26,319			263
Income (loss) from operations before earnings from equity method investments and other items			(81,937)			1,744			(51,364)
Earnings from equity method investments			45,626			83,458			5,903
Net income (loss) from operations before income taxes			(36,311)			85,202			(45,461)
Income tax benefit (expense)			—			(22,531)			17,483
Net income (loss)			(36,311)			62,671			(27,978)
Net (income) loss from operations attributable to noncontrolling interests			(37)			74			196
Net income (loss) attributable to iStar Included Assets		$	(36,348)		$	62,745		$	(27,782)

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	For the Years Ended December 31,
	2022			2021			2020
	(in thousands)
Cash Flow Data
Cash flows from operating activities		$	(27,358)		$	8,534		$	(26,073)
Cash flows from investing activities			236,063			673,119			164,531
Cash flows from financing activities			(218,305)			(676,434)			(139,561)

	As of December 31,
	2022			2021			2020
	(in thousands)
ASSETS
Total real estate		$	76,497		$	92,451		$	197,590
Land and development, net			232,014			286,810			430,663
Loans receivable and other lending investments, net			48,655			332,844			686,931
Loans receivable held for sale			37,650			—			—
Other investments			587,138			500,410			511,443
Total assets			1,005,371			1,256,763			1,885,763
LIABILITIES AND EQUITY
Liabilities:
Accounts payable, accrued expenses and other liabilities		$	33,102		$	32,379		$	46,094
Loan participations payable, net			—			—			42,501
Total liabilities			33,102			32,379			88,595
Equity:
Net Parent Investment			971,543			1,223,695			1,796,625
Noncontrolling interests			726			689			543
Total equity			972,269			1,224,384			1,797,168
Total liabilities and equity		$	1,005,371		$	1,256,763		$	1,885,763

Summary of Legacy Portfolio as of December 31, 2022

	Asbury Park			Magnolia Green			Coney Island Bath Site			Other			Total
Total real estate		$	72,552		$	—		$	—		$	3,945		$	76,497
Land and development, net			102,417			89,758			26,300			13,539			232,014
Loans receivable and other lending investments, net			—			—			—			48,655			48,655
Loans receivable held for sale												37,650			37,650
Other investments			—			—			—			32,405			32,405
Total portfolio			174,969			89,758			26,300			136,194			427,221
Other assets(1)			—			—			—			—			23,417
Total legacy assets			174,969			89,758			26,300			136,194			450,638
Investment in Safe at book value			—			—			—			554,733			554,733
Star Holdings total assets		$	174,969		$	89,758		$	26,300		$	690,927		$	1,005,371

(1)

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UNAUDITED PRO FORMA COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS

In connection with the spin-off, iStar Included Assets will be separated from iStar’s ground lease businesses. Upon closing of the Merger, subject to the satisfaction or waiver of the conditions to the spin-off, each iStar common stockholder will be entitled to receive 0.153 Star Holdings common shares for each share of iStar common stock held at the close of business on the spin-off record date. The following unaudited pro forma combined and consolidated financial statements use the spin-off ratio of 0.153 shares of Star Holdings for every one share of iStar common stock issued and outstanding. The applicable accounting guidance states that a presumption shall exist that a spin-off transaction will be accounted for based on its legal form, and therefore; the legal spinnor will also be considered the accounting spinnor. That presumption may be overcome. However, based on our evaluation of several qualitative and quantitative indicators in accordance with the accounting guidance, including the relative sizes of the legal spinnor and the legal spinnee (iStar and Star Holdings, respectively), their relative fair values, the external management structure of Star Holdings and Star Holdings’ business plan, we have determined that the presumption is not overcome. Accordingly, iStar will be treated as both the legal spinnor and the accounting spinnor and Star Holdings will be treated as both the legal spinnee and accounting spinnee, as this provides the most accurate depiction of the transaction to shareholders and other users of the financial statements.

The following unaudited pro forma combined and consolidated financial statements have been derived from the historical combined and consolidated financial statements of iStar Included Assets included elsewhere in this information statement. The unaudited pro forma combined and consolidated financial statements give effect to the following: (i) transaction accounting adjustments including the spin-off; and (ii) other pro forma adjustments including Star Holdings’ management agreement with iStar and Star Holdings entering into a senior secured term loan facility with iStar having a principal amount of up to $115 million (which principal amount may be increased from time to time with the approval of both parties, including prior to the spin-off) and entering into an up to $140 million margin loan with Morgan Stanley Bank, N.A., the proceeds of which will be distributed to iStar as consideration for the legacy assets contributed to Star Holdings.

The unaudited pro forma combined and consolidated balance sheet assumes the spin-off and the related transactions occurred on December 31, 2022. The unaudited pro forma combined and consolidated statements of operations presented for the year ended December 31, 2022 assumes the spin-off and the related transactions occurred on January 1, 2022. Our unaudited pro forma combined and consolidated financial statements and explanatory notes present how our financial statements may have appeared had we completed the above transactions as of the dates noted above.

The separation of the assets and liabilities related to iStar Included Assets from iStar’s ground lease businesses will be at iStar’s carryover basis, representing a combination of entities under common control that have been “carved out” from iStar’s historical consolidated financial statements. iStar historically accounted for its investment in shares of Safe common stock as an equity method investment in accordance with Accounting Standards Codification (“ASC”) 323 — Investments — Equity Method and Joint Ventures due to its ability to exercise significant influence over Safe. On a prospective basis, Star Holdings expects to account for its investment in shares of Safe common stock pursuant to ASC 321 — Investments — Equity Securities due to its lack of significant influence over Safe. As a result, except for Star Holdings’ investment in shares of Safe common stock, the future financial statements of Star Holdings will initially reflect the carryover basis from iStar.

At the time of the spin-off, iStar will contribute to Star Holdings shares of Safe common stock with an aggregate market value of at least $400 million. For purposes of the unaudited combined and consolidated balance sheet as of December 31, 2022, iStar Included Assets is assuming it receives 13,976,240 shares of Safe common stock from iStar at a price of $28.62 per share, the closing price of Safe common stock on December 31, 2022. The actual number of shares of Safe common stock Star Holdings receives from iStar will depend on the price per share of Safe common stock at the time of the spin-off. The table below presents

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the number of shares of Safe common stock Star Holdings will receive if the price per share of Safe common stock should increase or decrease by $5 from the price used for the combined and consolidated financial statements:

Aggregate market value of Safe common stock	$	400,000,000	$	400,000,000	$	400,000,000
Price per share of Safe common stock	$	23.62	$	28.62	$	33.62
Number of shares of Safe common stock received by Star Holdings		16,934,801		13,976,240		11,897,680

The following unaudited pro forma combined and consolidated financial statements were prepared in accordance with Article 11 of Regulation S-X, using the assumptions set forth in our unaudited pro forma combined and consolidated financial statements. The unaudited pro forma combined and consolidated financial statements are presented for illustrative purposes only and do not purport to reflect the results we may achieve in future periods or the historical results that would have been obtained had the above transactions been completed on the dates indicated above. The unaudited pro forma combined and consolidated financial statements also do not give effect to the potential impact of current financial conditions, any anticipated synergies, operating efficiencies or cost savings that may result from the transactions described above.

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Star Holdings

Unaudited Pro Forma Combined and Consolidated Balance Sheet as of December 31, 2022
(Unaudited)
($ in thousands)

	Historical iStar Included Assets			Transaction Accounting Adjustments			Other Pro Forma Adjustments			Star Holdings Pro Forma
ASSETS
Real estate
Real estate, at cost		$	94,593		$	—		$	—		$	94,593
Less: accumulated depreciation			(18,096)			—			—			(18,096)
Real estate, net			76,497			—			—			76,497
Land and development, net			232,014			—			—			232,014
Loans receivable and other lending investments, net			48,655			—			—			48,655
Loans receivable held for sale			37,650			—			—			37,650
Other investments			587,138			(154,733)(1)			—			432,405
Cash and cash equivalents			4,227			50,000(2)			3,131(6)			57,358
Accrued interest and operating lease income receivable, net			1,132			—			—			1,132
Deferred operating lease income receivable, net			1,137			—			—			1,137
Deferred expenses and other assets, net			16,921			—			—			16,921
Total assets		$	1,005,371		$	(104,733)		$	3,131		$	903,769
LIABILITIES AND EQUITY
Liabilities:
Accounts payable, accrued expenses and other liabilities		$	33,102		$	—		$	—		$	33,102
Debt obligations, net			—			—			253,061(7)			253,061
Total liabilities			33,102			—			253,061			286,163
Commitments and contingencies
Equity:
Net Parent Investment			971,543			(971,543)(3)			—			—
Common Stock, $0.001 par value			—			13(4)			—			13
Additional paid-in capital			—			866,797(5)			(253,061)(8)			613,736
Noncontrolling interests			726			—			3,131(6)			3,857
Total equity			972,269			(104,733)			(249,930)			617,606
Total liabilities and equity		$	1,005,371		$	(104,733)		$	3,131		$	903,769

(1)

Following the spin-off, Star Holdings’ ownership of Safe is evaluated independently of iStar’s influence over Safe. iStar accounted for its investment in Safe as an equity method investment under ASC 323 due to its ability to exercise significant influence over Safe. Star Holdings is not expected to retain significant influence over Safe due to the voting and standstill restrictions that will be in place under the governance agreement between Star Holdings and Safe. Among other things, the governance agreement provides that until the expiration of a restrictive period, Star Holdings will be required to vote its shares of Safe common stock in accordance with the recommendations of the board of directors of Safe, including for directors nominated by Safe to its board. In addition, Star Holdings will be subject to customary standstill arrangements during the same restrictive period. See “Certain Relationships and Related Person Transactions — Agreements with Safe — Governance Agreement” for more information. Members of Star Holdings’ board of trustees will not hold seats on the Safe board of

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directors and Star Holdings will be prohibited by the standstill provisions of the governance agreement from seeking representation on Safe's board of directors. Safe will serve as external manager of Star Holdings. Star Holdings is expected to account for its investment in Safe as an equity investment under ASC 321, which requires that Star Holdings adjust its investment in Safe to fair value through income at each reporting period. This adjustment presents Star Holdings’ investment of at least $400.0 million, the fair value of the shares of common stock that iStar intends to contribute to iStar Holdings at the date of the spin-off.

(2)

Represents incremental cash to be received from iStar to satisfy iStar’s contribution of at least $50.0 million to Star Holdings.

(3)

Represents the elimination of Net Parent Investment in connection with the spin-off and issuances of common stock.

(4)

Represents the par value for the issuance of 13,333,000 shares, or one common share of Star Holdings, $0.001 par value, for each share of iStar stock outstanding on the date of the spin-off, after giving effect to the reverse stock-split.

(5)

Represents the net carrying value of equity distributed, net of the par value of common stock.

(6)

Represents noncontrolling interests primarily attributable to a consolidated venture that holds cash reserves for potential post-closing expenses related to the sale of iStar’s net lease portfolio of which a portion is allocable to noncontrolling interest holders. Any cash from the reserves from the venture distributed prior to the spin-off will be distributed to iStar and noncontrolling interest holders, and any remaining cash distributed following the spin-off will be distributed to Star Holdings, net of the noncontrolling interest holders.

(7)

Represents Star Holdings’ $115 million secured term loan payable to iStar, net of fees and Star Holdings’ $140 million margin loan, net of fees, the proceeds of which will be distributed to iStar.

(8)

Represents the net equity distributed to iStar.

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Star Holdings

Unaudited Pro Forma Combined and Consolidated Statements of Operations
for the Year Ended December 31, 2022
($ in thousands)

	iStar Included Assets			Transaction Accounting Adjustments			Other Pro Forma Adjustments			Star Holdings Pro Forma
Revenues:
Operating lease income		$	12,859		$	—		$	—		$	12,859
Interest income			12,340			—			—			12,340
Other income			37,125			9,489(1)			—			46,614
Land development revenue			61,753			—			—			61,753
Total revenues			124,077			9,489			—			133,566
Costs and expenses:
Interest expense			42,042			—			19,957(4)			61,999
Real estate expense			49,902			—			—			49,902
Land development cost of sales			63,441			—			—			63,441
Depreciation and amortization			4,910			—			—			4,910
General and administrative			10,937			—			25,000(5)			35,937
Provision for loan losses			44,998			—			—			44,998
Impairment of assets			14,476			—			—			14,476
Other expense			494			—			—			494
Total costs and expenses			231,200			—			44,957			276,157
Income from sales of real estate			25,186			—			—			25,186
Income (loss) from operations before earnings from equity method investments and other items			(81,937)			9,489			(44,957)			(117,405)
Earnings (losses) from equity method investments			45,626			(33,261)(2)			—			12,365
Loss on equity investment			—			(700,478)(2)			—			(700,478)
Net loss from operations before income taxes			(36,311)			(724,250)			(44,957)			(805,518)
Income tax expense			—			—(3)			—(3)			—
Net loss from operations attributable to noncontrolling interests			(36,311)			(724,250)			(44,957)			(805,518)
Net loss from operations attributable to noncontrolling interests			(37)			—			—			(37)
Net loss allocable to iStar Included Assets		$	(36,348)		$	(724,250)		$	(44,957)		$	(805,555)
Earnings (loss) per share											$	(65.22)
Weighted average number of common shares – basic and diluted(6)												12,350

(1)

Represents dividends Star Holdings received on its shares of Safe common stock for the year ended December 31, 2022, presented in other income pursuant to ASC 321.

(2)

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at each reporting period. For this purpose, Star Holdings calculated its unrealized loss on equity investment assuming ownership of an approximated weighted average number of shares of Safe common stock of 13,673,201 shares for the year ended December 31, 2022 and a price per share of Safe common stock of $79.85 as of December 31, 2021 and $28.62 as of December 31, 2022. The table below provides a sensitivity analysis of the impact of the price per share of Safe common stock at the time of the spin-off and consequently the number of shares contributed to Star Holdings and the loss on equity investment:

Price per share of Safe common stock	Weighted average number of shares outstanding	Loss on equity investment (in 000’s)
$23.62	16,567,613	$931,597
$28.62	13,673,201	$700,478
$33.62	11,639,709	$538,104

(3)

Represents the estimated tax impact from iStar Included Assets transaction accounting adjustments and other pro forma adjustments using the same effective tax rate as Historical iStar Included Assets. For the year ended December 31, 2022, sales of properties, including sales through equity method investments, produced net income under generally accepted accounting principles and for which basis differences under tax principles reduced such gains. In addition, operating expenses reduced taxable income and no cash taxes would have been payable. A full valuation allowance was recorded to reduce net deferred tax assets to their more likely than not realizable value. An effective tax rate of 0.00% was computed for the year ended December 31, 2022. The effective tax rate was computed by reconciling the federal statutory rate with the computed provision for income taxes. The differences between the statutory rate and the effective tax rate are state income taxes, net of the federal benefit (4.73%), effect of changes in state apportionment on state net operating loss deductions (2.88%), equity method for U.S. corporations (9.02%), and an increase in the valuation allowance (-37.64%). The loss on equity investment shown in transaction accounting adjustments was identified as a permanent difference resulting in no federal or state income tax benefit. The computed effective tax rate was applied to the transaction accounting adjustments and other pro forma adjustments to derive a provision for income taxes associated with Star Holdings’ pro forma amounts.

(4)

Adjustment represents $9.3 million of interest expense (including the amortization of fees) attributable to Star Holdings’ $115 million secured term loan which accrues interest at a fixed rate of 8.00% per annum and $10.7 million of interest expense (including the amortization of fees) on Star Holdings’ $140 million margin loan which accrues interest at a floating rate of 3-month SOFR plus 3.00% per annum. For this purpose, Star Holdings used a SOFR rate of 4.30%, which represented the SOFR rate as of December 31, 2022. A 0.125% change in SOFR would increase or decrease interest expense by $0.2 million.

(5)

Represents incremental costs under the management agreement between iStar and Star Holdings. Star Holdings expects that its general and administrative expense will change from historical general and administrative expense amounts allocated as a result of becoming a stand-alone publicly-traded company, including but not limited to expenses relating to legal, insurance, accounting and other compliance matters. An adjustment to general and administrative expenses has not been made in the pro forma statement of operations as such expenses are not currently factually supportable. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

(6)

Weighted average shares outstanding is shown after giving effect to the spin-off ratio.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion of the historical results of operations and liquidity and capital resources of the iStar Included Assets. iStar Included Assets was not operated by iStar as a stand-alone business. You should read the following discussion and analysis in conjunction with “Selected Historical Combined and Consolidated Financial Data — iStar Included Assets,” “Unaudited Pro Forma Combined And Consolidated Financial Statements” and the financial statements beginning on page F-1 included elsewhere in this information statement. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Please refer to “Risk Factors,” beginning on page 17 and “Cautionary Statement Concerning Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

The Spin-Off

The spin-off is expected to occur on March 31, 2023, by way of a distribution to iStar stockholders. In the distribution, each iStar common stockholder will be entitled to receive, on a pro rata basis, common shares of Star Holdings for each share of iStar common stock held at the close of business on the spin-off record date. iStar stockholders will not be required to make any payment to surrender or exchange their iStar common stock, or to take any other action to receive their Star Holdings common shares in the spin-off. The spin-off as described in this information statement is subject to the satisfaction or waiver of certain conditions. In addition, iStar has reserved the right, in its sole discretion, to amend, modify or abandon the spin-off or any related transaction at any time prior to the distribution date; provided that, any waiver, amendment, supplement or modification of any provisions of the separation and distribution agreement prior to the closing of the merger may only be made with the prior written consent of the Safe special committee. The completion of the spin-off is a condition to the closing of the merger of iStar and Safe. We estimate that the expenses of completing the spin-off will be approximately $1.5 million, and these expenses will be paid either directly by iStar prior to the spin-off or by us using the cash contributed to us by iStar. These expenses are comprised primarily of non-recurring business separation expenses and stand-up costs related to operating as a new public company.

iStar and Star Holdings will separate their respective liabilities as set forth in the separation and distribution agreement. In addition to the separation and distribution agreement, we and iStar will enter into the management agreement and we and Safe will enter into the governance agreement and the registration rights agreement. We have signed commitment letters for a senior secured term loan facility having a principal amount of up to $115 million (which principal amount may be increased or decreased from time to time with the approval of both parties, including prior to the spin-off) plus an additional commitment amount of up to $25.0 million at Star Holdings’ election (the proceeds of which may only be used to satisfy Star Holdings’ “soft call” obligations under the margin loan) and an up to $140.0 million margin loan facility that we expect to enter into on or about the date of completion of the spin-off. Additional information about the secured term loan and the margin loan referenced above may be found under “Description of Material Indebtedness.”

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Basis of Presentation

The accompanying combined and consolidated financial statements of iStar Included Assets do not represent the financial position and results of operations of one legal entity, but rather a combination of entities under common control that have been “carved out” from iStar’s consolidated financial statements. Historically, financial statements of iStar Included Assets have not been prepared as it has not operated separately from iStar. These combined and consolidated financial statements reflect the revenues and expenses of iStar Included Assets and include certain material assets and liabilities of iStar that are specifically identifiable and generated through, or associated with, certain legacy assets of iStar’s real estate finance, operating properties and land and development business segments, which have been reflected at iStar’s historical basis given the contribution of the predecessor’s business to Star Holdings is a transaction under common control.

The preparation of these combined and consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. These combined and consolidated financial statements include an allocation of general and administrative expenses and interest expense to Star Holdings from iStar consistent with the methodology used by iStar to allocate expenses to its real estate finance, operating properties and land and development business segments. General and administrative expenses that are directly attributable to the assets from the real estate finance, operating properties and land and development business segments have been allocated to Star Holdings.

In addition, certain other general and administrative expenses from iStar corporate functions, including executive oversight, treasury, finance, human resources, tax compliance and planning, internal audit, financial reporting, information technology and investor relations have been allocated to Star Holdings. These general and administrative expenses, including stock-based compensation, represent a pro rata allocation of costs from iStar’s corporate business segment based on Star Holdings’ average net assets as a percentage of iStar’s average net assets. Interest expense was allocated to Star Holdings by assigning a leverage factor to Star Holdings’ assets and allocating iStar’s corporate level debt and interest expense based on that leverage factor.

Star Holdings believes the allocation methodology for general and administrative expenses and interest expense is reasonable. Accordingly, the general and administrative expense allocation presented in our combined and consolidated statements of operations for historical periods does not necessarily reflect what our general and administrative expenses will be as a standalone public company for future reporting periods.

Critical Accounting Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments in certain circumstances that affect amounts reported as assets, liabilities, revenues and expenses. We have established detailed policies and control procedures intended to ensure that valuation methods, including any judgments made as part of such methods, are well controlled, reviewed and applied consistently from period to period. We base our estimates on historical corporate and industry experience and various other assumptions that we believe to be appropriate under the circumstances. For all of these estimates, we caution that future events rarely develop exactly as forecasted, and therefore, routinely require adjustment.

During 2022, management reviewed and evaluated these critical accounting estimates and believes they are appropriate. Our significant accounting policies are described in our audited combined and consolidated financial statements for the year ended December 31, 2022. The following is a summary of accounting policies that require more significant management estimates and judgments:

Allowance for loan losses — We perform a quarterly comprehensive analysis of our loan portfolio and assign risk ratings that incorporate management’s current judgments about credit quality based on all known and relevant internal and external factors that may affect collectability. We consider, among other things,

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payment status, lien position, borrower or tenant financial resources and investment collateral, collateral type, project economics and geographical location as well as national and regional economic factors. 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. The estimate of our Expected Loss requires significant judgment and we analyze our loan portfolio based upon our different categories of financial assets, which includes: (i) loans and held-to-maturity debt securities and (ii) construction loans.

For our loans, held-to-maturity debt securities and construction loans, we analyzed our historical realized loss experience to estimate our Expected Loss. We adjusted our Expected Loss through the use of third-party market data that provided current and future economic conditions that may impact the performance of the commercial real estate assets securing our investments.

We consider a loan to be non-performing and place it on non-accrual status at such time as: (1) interest payments become 90 days delinquent; (2) it has a maturity default; or (3) management determines it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan. Non-accrual loans are returned to accrual status when they have become contractually current and management believes all amounts contractually owed will be received. We will record a specific allowance on a non-performing loan if we determine that the collateral fair value less costs to sell is less than the carrying value of the collateral-dependent asset. The specific allowance is increased (decreased) through “Provision for (recovery of) loan losses” in our combined and consolidated statements of operations and is decreased by charge-offs. During delinquency and the foreclosure process, there are typically numerous points of negotiation with the borrower or tenant as we work toward a settlement or other alternative resolution, which can impact the potential for repayment or receipt of collateral. Our policy is to charge off a loan when we determine, based on a variety of factors, that all commercially reasonable means of recovering the loan balance have been exhausted. This may occur at different times, including when we receive cash or other assets in a pre-foreclosure sale or take control of the underlying collateral in full satisfaction of the loan upon foreclosure or deed-in-lieu, or when we have otherwise ceased significant collection efforts. 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.

The provision for (recovery of) loan losses for the years ended December 31, 2022, 2021 and 2020 were $45.0 million, ($8.1) million and $8.9 million, respectively.

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 asset’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the asset (taking into account the anticipated holding period of the asset) is less than the carrying value. Such estimate of cash flows considers factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other economic factors. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the fair value of the asset and reflected as an adjustment to the basis of the asset. Impairments of real estate and land and development assets are recorded in “Impairment of assets” in our combined and consolidated statements of operations. Estimating future cash flows and fair values is highly subjective and such estimates could differ materially from actual results.

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 balance sheets. The difference between the estimated fair value less costs to sell and the carrying value will be recorded as an impairment charge. Impairment for real estate assets is included in “Impairment of assets”

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in our combined and consolidated statements of operations. Once the asset is classified as held for sale, depreciation expense is no longer recorded.

During the year ended December 31, 2022, we recorded aggregate impairments on real estate and land and development assets of $14.5 million. 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, 2020, we recorded an aggregate impairment of $5.8 million on a real estate asset held for sale and land and development assets.

Results of Operations for the Year Ended December 31, 2022 compared to the Year Ended December 31, 2021

	For the Year Ended December 31,
	2022			2021			$ Change
	(in thousands)
Operating lease income		$	12,859		$	16,824		(3,965)
Interest income			12,340			29,522		(17,182)
Other income			37,125			36,726		399
Land development revenue			61,753			189,103		(127,350)
Total revenue			124,077			272,175		(148,098)
Interest expense			42,042			51,369		(9,327)
Real estate expense			49,902			45,126		4,776
Land development cost of sales			63,441			171,961		(108,520)
Depreciation and amortization			4,910			6,487		(1,577)
General and administrative			10,937			46,340		(35,403)
Provision for (recovery of) loan losses			44,998			(8,085)		53,083
Impairment of assets			14,476			679		13,797
Other expense			494			515		(21)
Total costs and expenses			231,200			314,392		(83,192)
Gain on equity investment			—			17,642		(17,642)
Income from sales of real estate			25,186			26,319		(1,133)
Earnings from equity method investments			45,626			83,458		(37,832)
Income tax expense			—			(22,531)		22,531
Net income (loss)		$	(36,311)		$	62,671		(98,982)

Revenue — Operating lease income, which primarily includes income from commercial operating properties, decreased to $12.9 million in 2022 from $16.8 million in 2021. The decrease was primarily due to the sale of assets, partially offset by an increase in rent of $1.2 million at certain of our properties.

Interest income decreased to $12.3 million in 2022 from $29.5 million in 2021. 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 2022.

Other income increased to $37.1 million in 2022 from $36.7 million in 2021. Other income in 2022 and 2021 consisted primarily of income from our hotel properties, lease termination fees and other ancillary income from our land and development projects and loan portfolio. The increase in 2022 was primarily the result of increased operations at our hotel properties, which generated $22.0 million of other income in 2022 compared to $16.3 million in 2021, which was partially offset by a decrease in other ancillary income from our operating properties portfolio.

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Land development revenue and cost of sales — 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. In 2021, we sold residential lots and units and recognized land development revenue of $189.1 million which had associated cost of sales of $172.0 million. The decrease in land development revenue in 2022 was due primarily to five bulk parcel sales in 2021 which contributed $96.9 million to our revenues for the period and a decrease of $30.4 million in revenues from our Naples Reserve (fully sold out in 2022), Magnolia Green and Asbury Park properties. As we execute future sales and have fewer remaining residential and development assets, we expect our land development revenue will further decline. The timing and amount of such sales cannot be predicted with certainty. See “Risk Factors — Risks Related to Our Properties and Business” for a discussion of factors that may affect our ability to sell our residential and development assets.

Costs and expenses — Interest expense represents an allocation to us from iStar. Interest expense was allocated to us by calculating our average net assets by property type as a percentage of the average net assets of iStar's segments and multiplying that percentage by the interest expense allocated to each of iStar's segments included in our financial statements (refer to Note 2 to the combined and consolidated financial statements). For the years ended December 31, 2022 and 2021, we were allocated $42.0 million and $51.4 million, respectively, of interest expense. The decrease in 2022 was due primarily to a decrease in our average net assets and a decrease in iStar’s average outstanding debt and average cost of debt as compared to 2021.

Real estate expense increased to $49.9 million in 2022 from $45.1 million in 2021. The increase was primarily due to an increase in expenses at certain of our hotel and retail operating properties that have increased operations from the prior year as the effects of COVID-19 on operations began to subside, which was partially offset by asset sales.

Depreciation and amortization was $4.9 million in 2022 and $6.5 million in 2021 and relates primarily to our operating properties portfolio. The decrease in 2022 was due primarily to a $1.3 million decrease in expense at one of our properties due to a lease termination in 2021.

General and administrative expense represents an allocation of costs, including performance-based compensation, to us from iStar. General and administrative expenses, including stock-based compensation, represents a pro rata allocation of costs from iStar's real estate finance, operating properties, land and development and corporate business segments based on our average net assets for those property types as a percentage of iStar's average net assets for those segments (refer to Note 2 to the combined and consolidated financial statements). During the years ended December 31, 2022 and 2021, we were allocated $10.9 million and $46.3 million, respectively, of general and administrative expense from iStar. The decrease in 2022 from 2021 was due primarily to a decrease in general and administrative expense at iStar resulting from a decrease in performance-based compensation.

The provision for loan losses was $45.0 million in 2022 as compared to a recovery of loan losses of $8.1 million in 2021. 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. The recovery of loan losses for the year ended December 31, 2021 resulted from the reversal of Expected Loss allowances on loans that repaid in full during the year ended December 31, 2021 and from an improving macroeconomic forecast on commercial real estate markets since December 31, 2020.

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. During the year ended December 31, 2021, we recorded an aggregate impairment of $0.7 million in connection with the sale of residential condominiums.

Other expense was $0.5 million in both 2022 and 2021.

Gain on equity investment — During the year ended December 31, 2021, we remeasured an equity investment at fair value and recognized aggregate mark-to-market gains of $17.6 million.

Income from sales of real estate — Income from sales of real estate was $25.2 million in 2022 and $26.3 million in 2021. During the year ended December 31, 2022, we recorded $25.2 million income from sales of

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real estate from the sale of an operating property. During the year ended December 31, 2021, we recorded $26.3 million of income from the sale of an operating property and residential condominiums.

Earnings from equity method investments — Earnings from equity method investments decreased to $45.6 million in 2022 from $83.5 million in 2021. 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. In 2021, we recognized $40.7 million of income from our equity method investment in Safe, including dilution gains of $22.7 million (refer to 7 to the combined and consolidated financial statements), and $42.8 million of net aggregate income from our remaining equity method investments, which included $18.6 attributable to income from one equity method investment and a gain on the sale of our interest and $17.3 million from another of our equity method investments resulting from our share of income from land sales at the venture.

Income tax expense — During the year ended December 31, 2022, we did not record a provision for income taxes. During the year ended December 31, 2021, we recorded an income tax expense of $22.5 million. The income tax expense in 2021 resulted primarily from tax at statutory rates on our net taxable income.

Results of Operations for the Year Ended December 31, 2021 compared to the Year Ended December 31, 2020

	For the Year Ended December 31,
	2021			2020			$ Change
	(in thousands)
Operating lease income		$	16,824		$	21,571		$	(4,747)
Interest income			29,522			56,676			(27,154)
Other income			36,726			28,189			8,537
Land development revenue			189,103			164,702			24,401
Total revenue			272,175			271,138			1,037
Interest expense			51,369			62,176			(10,807)
Real estate expense			45,126			45,616			(490)
Land development cost of sales			171,961			177,727			(5,766)
Depreciation and amortization			6,487			6,095			392
General and administrative			46,340			40,140			6,200
(Recovery of) provision for loan losses			(8,085)

	Page
INFORMATION STATEMENT SUMMARY		1
QUESTIONS AND ANSWERS ABOUT THE DISTRIBUTION		10
RISK FACTORS		17
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS		36
THE SPIN-OFF		37
DIVIDEND POLICY		47
CAPITALIZATION		48
SELECTED HISTORICAL COMBINED AND CONSOLIDATED FINANCIAL DATA − iSTAR INCLUDED ASSETS		49
UNAUDITED PRO FORMA COMBINED AND CONSOLIDATED FINANCIAL STATEMENTS		51
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		57
BUSINESS AND PROPERTIES		67
OUR MANAGER AND THE MANAGEMENT AGREEMENT		74
MANAGEMENT		81
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS		86
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		88
DESCRIPTION OF MATERIAL INDEBTEDNESS		90
DESCRIPTION OF OUR SHARES OF BENEFICIAL INTEREST		92
CERTAIN PROVISIONS OF MARYLAND LAW AND OUR DECLARATION OF TRUST AND BYLAWS		94
CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES		99
SHARES ELIGIBLE FOR FUTURE SALE		103
WHERE YOU CAN FIND MORE INFORMATION		104