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Consolidate

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________________________

FORM 10-Q


(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30, 2025
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File No. 001-41572

_______________________________________________________________________________

Star Holdings

(Exact name of registrant as specified in its charter)


Maryland		37-6762818
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
1114 Avenue of the Americas, 39th Floor
New York , NY		10036
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (212) 930-9400

_______________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares of Beneficial Interest, $0.001 par value	STHO	Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer	Accelerated Filer	Non accelerated Filer	Smaller Reporting Company	Emerging Growth Company
☐	☒	☐	☒	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of August 5, 2025, there were 13,290,018 shares, $0.001 par value per share, of Star Holdings common stock outstanding.

Table of Contents

TABLE OF CONTENTS


		Page

PART I	Consolidated Financial Information
Item 1.	Financial Statements:
	Consolidated Balance Sheets (unaudited) as of June 30, 2025 and December 31, 2024	2
	Consolidated Statements of Operations (unaudited)—For the three and six months ended June 30, 2025 and 2024	3
	Consolidated Statements of Comprehensive Income (Loss) (unaudited)—For the three and six months ended June 30, 2025 and 2024	4
	Consolidated Statements of Changes in Equity (unaudited)—For the three and six months ended June 30, 2025 and 2024	5
	Consolidated Statements of Cash Flows (unaudited)—For the six months ended June 30, 2025 and 2024	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
PART II	Other Information	33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
SIGNATURES		35

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PART I. CONSOLIDATED FINANCIAL INFORMATION

Item 1. Financial Statements

Star Holdings

Consolidated Balance Sheets

(In thousands, except per share data)⁽¹⁾

(unaudited)


	As of
	June 30,		December 31,
	2025		2024
ASSETS
Real estate
Real estate, at cost	$	98,921	$	98,118
Less: accumulated depreciation		(26,684)		(25,273)
Real estate, net		72,237		72,845
Land and development, net		191,389		176,444
Loans receivable and other lending investments, net ($1,006 and $1,118 of allowances as of June 30, 2025 and December 31, 2024, respectively)		47,082		50,324
Other investments		210,412		249,899
Cash and cash equivalents		44,201		34,957
Accrued interest and operating lease income receivable, net		1,314		1,115
Deferred operating lease income receivable, net		565		670
Deferred expenses and other assets, net		22,720		22,401
Total assets	$	589,920	$	608,655
LIABILITIES AND EQUITY
Liabilities:
Accounts payable, accrued expenses and other liabilities⁽²⁾	$	48,575	$	46,310
Debt obligations, net		245,396		217,349
Total liabilities		293,971		263,659
Commitments and contingencies (refer to Note 10)
Equity:
Star Holdings shareholders' equity:
Common Stock, $0.001 par value, 200,000 shares authorized, 13,290 and 13,320 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively		13		13
Additional paid-in capital		607,434		607,623
Accumulated deficit		(330,108)		(283,196)
Accumulated other comprehensive income (loss)		(1,195)		(104)
Star Holdings shareholders' equity		276,144		324,336
Noncontrolling interests		19,805		20,660
Total equity		295,949		344,996
Total liabilities and equity	$	589,920	$	608,655

(1)	Refer to Note 2 for details on the Company’s consolidated variable interest entities (“VIEs”).

(2)	As of June 30, 2025 and December 31, 2024, includes $4.0 million and $4.8 million, respectively, of management fees and other payables due to Safe (refer to Note 1).

The accompanying notes are an integral part of the consolidated financial statements.

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Star Holdings

Consolidated Statements of Operations

(In thousands, except per share data)

(unaudited)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2025		2024		2025		2024
Revenues:
Operating lease income	$	1,855	$	1,701	$	3,709	$	3,581
Interest income		1,089		442		2,188		830
Other income⁽¹⁾		12,504		12,707		18,993		19,259
Land development revenue		26,606		15,701		31,788		32,316
Total revenues		42,054		30,551		56,678		55,986
Costs and expenses:
Interest expense⁽²⁾		3,956		3,833		7,719		7,629
Real estate expense		12,348		12,178		22,042		23,954
Land development cost of sales		18,505		19,007		25,332		31,353
Depreciation and amortization		952		1,178		1,929		2,361
General and administrative⁽³⁾		3,255		4,586		7,972		11,979
Provision for (recovery of) loan losses		25		(2)		(112)		15
Other expense		2		8		7		63
Total costs and expenses		39,043		40,788		64,889		77,354
Unrealized gains (losses) on equity investments		(42,732)		(17,715)		(39,486)		(55,578)
Income (loss) from operations before other items and income taxes		(39,721)		(27,952)		(47,697)		(76,946)
Loss on early extinguishment of debt, net		—		—		(70)		—
Net income (loss) from operations before income taxes		(39,721)		(27,952)		(47,767)		(76,946)
Income tax expense		—		—		—		(2)
Net income (loss)		(39,721)		(27,952)		(47,767)		(76,948)
Net (income) loss from operations attributable to noncontrolling interests		413		837		855		852
Net income (loss) allocable to common shareholders	$	(39,308)	$	(27,115)	$	(46,912)	$	(76,096)
Per common share data:
Net income (loss) allocable to common shareholders
Basic and diluted	$	(2.95)	$	(2.04)	$	(3.52)	$	(5.71)

Weighted average number of common shares:
Basic and diluted		13,311		13,320		13,315		13,320

(1)	For the three months ended June 30, 2025 and 2024, includes $6.1 million and $6.4 million, respectively, of revenues from hotel properties. For the six months ended June 30, 2025 and 2024, includes $8.0 million and $8.4 million, respectively, of revenues from hotel properties

(2)	For the three months ended June 30, 2025 and 2024, includes $2.2 million and $2.1 million, respectively, of expense to related parties. For the six months ended June 30, 2025 and 2024, includes $4.4 million and $4.2 million, respectively, of expense to related parties.

(3)

For the three months ended June 30, 2025 and 2024, includes $2.5 million and $3.8 million, respectively, of management fees incurred to related parties. For the six months ended June 30, 2025 and 2024, includes $6.3 million and $10.0 million, respectively, of management fees incurred to related parties.

The accompanying notes are an integral part of the consolidated financial statements.

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Star Holdings

Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(unaudited)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2025		2024		2025		2024
Net income (loss)	$	(39,721)	$	(27,952)	$	(47,767)	$	(76,948)
Other comprehensive income:
Unrealized gains (losses) on available-for-sale securities		(497)		10		(1,091)		(143)
Other comprehensive income (loss)		(497)		10		(1,091)		(143)
Comprehensive income (loss)		(40,218)		(27,942)		(48,858)		(77,091)
Comprehensive (income) loss attributable to noncontrolling interests		413		837		855		852
Comprehensive income (loss) attributable to common shareholders	$	(39,805)	$	(27,105)	$	(48,003)	$	(76,239)

The accompanying notes are an integral part of the consolidated financial statements.

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Star Holdings

Consolidated Statements of Changes in Equity

(In thousands)

(unaudited)



		Common		Additional			Accumulated
		Stock at		Paid-In		Accumulated	Other Comprehensive			Noncontrolling	Total
		Par		Capital		(Deficit)	Income (Loss)			Interests	Equity
Balance as of March 31, 2025	$	13	$	607,623	$	(290,800)	$	(698)	$	20,231	$	336,369
Net income (loss)		—		—		(39,308)		—		(413)		(39,721)
Change in accumulated other comprehensive income (loss)		—		—		—		(497)		—		(497)
Repurchase of stock		—		(189)		—		—		—		(189)
Change in noncontrolling interests		—		—		—		—		(13)		(13)
Balance as of June 30, 2025	$	13	$	607,434	$	(330,108)	$	(1,195)	$	19,805	$	295,949

Balance as of March 31, 2024	$	13	$	607,623	$	(245,422)	$	206	$	22,288	$	384,708
Net income (loss)		—		—		(27,115)		—		(837)		(27,952)
Change in accumulated other comprehensive income (loss)		—		—		—		10		—		10
Distributions to noncontrolling interests		—		—		—		—		(9)		(9)
Change in noncontrolling interests		—		—		—		—		(2)		(2)
Balance as of June 30, 2024	$	13	$	607,623	$	(272,537)	$	216	$	21,440	$	356,755

Balance as of December 31, 2024	$	13	$	607,623	$	(283,196)	$	(104)	$	20,660	$	344,996
Net income (loss)		—		—		(46,912)		—		(855)		(47,767)
Change in accumulated other comprehensive income (loss)		—		—		—		(1,091)		—		(1,091)
Repurchase of stock		—		(189)		—		—		—		(189)
Balance as of June 30, 2025	$	13	$	607,434	$	(330,108)	$	(1,195)	$	19,805	$	295,949

Balance as of December 31, 2023	$	13	$	607,623	$	(196,441)	$	359	$	22,286	$	433,840
Net income (loss)		—		—		(76,096)		—		(852)		(76,948)
Change in accumulated other comprehensive income (loss)		—		—		—		(143)		—		(143)
Contributions from noncontrolling interests		—		—		—		—		27		27
Distributions to noncontrolling interests		—		—		—		—		(16)		(16)
Change in noncontrolling interests		—		—		—		—		(5)		(5)
Balance as of June 30, 2024	$	13	$	607,623	$	(272,537)	$	216	$	21,440	$	356,755

The accompanying notes are an integral part of the consolidated financial statements.

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Star Holdings

Consolidated Statements of Cash Flows

(In thousands)

(unaudited)


	For the Six Months Ended June 30,
	2025		2024
Cash flows from operating activities:
Net income (loss)	$	(47,767)	$	(76,948)
Adjustments to reconcile net income (loss) to cash flows from operating activities:
Provision for (recovery of) loan losses		(112)		15
Depreciation and amortization		1,929		2,361
Amortization of discounts/premiums and deferred interest on loans, net		(526)		(492)
Amortization of premium, discount and deferred financing costs and paid-in-kind interest on debt obligations, net		3,971		3,899
Deferred operating lease income		105		68
Unrealized (gains) losses on equity investments		39,486		55,578
Loss on early extinguishment of debt		70		—
Land development revenue (in excess of) cost of sales		(6,456)		(963)
Other operating activities, net		207		(268)
Changes in assets and liabilities:
Changes in accrued interest and operating lease income receivable		(383)		168
Changes in deferred expenses and other assets, net		418		(1,764)
Changes in accounts payable, accrued expenses and other liabilities		92		(2,291)
Cash flows used in operating activities		(8,966)		(20,637)
Cash flows from investing activities:
Originations and fundings of loans receivable and other lending investments, net		—		(8,950)
Capital expenditures on real estate assets		(477)		(240)
Capital expenditures on land and development assets		(37,790)		(6,340)
Repayments of and principal collections on loans receivable and other lending investments, net		3,495		—
Net proceeds from sales of land and development assets		31,875		32,727
Other investing activities, net		(1,506)		313
Cash flows provided by (used in) investing activities		(4,403)		17,510
Cash flows from financing activities:
Borrowings from debt obligations		29,255		—
Repayments of debt obligations		(5,000)		—
Payment of deferred financing costs		(216)		—
Payments of debt prepayment or extinguishment costs		(35)		—
Repurchase of common stock		(189)		—
Other financing activities, net		(105)		—
Cash flows provided by financing activities		23,710		—
Changes in cash, cash equivalents and restricted cash		10,341		(3,127)
Cash, cash equivalents and restricted cash at beginning of period		45,546		60,714
Cash, cash equivalents and restricted cash at end of period	$	55,887	$	57,587


Reconciliation of cash and cash equivalents and restricted cash presented on the consolidated statements of cash flows
Cash and cash equivalents	$	44,201	$	48,277
Restricted cash included in deferred expenses and other assets, net		11,686		9,310
Total cash and cash equivalents and restricted cash	$	55,887	$	57,587

The accompanying notes are an integral part of the consolidated financial statements.

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Star Holdings

Notes to Consolidated Financial Statements

(unaudited)

Note 1—Business and Organization

Star Holdings is a Maryland statutory trust (the "Company," "Star Holdings," "we" or "us") that was spun-off from iStar Inc. (“iStar”) on March 31, 2023 (the Spin-Off”). The Company was formed to hold and seek to monetize iStar’s legacy non-ground lease assets. The Company operates its business as one segment that focuses on realizing value for shareholders primarily by generating cash flows through active asset management and sales of its existing loans, operating properties and land and development properties. The Company expects to make certain investments to complete its development assets, but it does not currently expect to make material new investments or acquire material new assets. The Company’s short-term and long-term liquidity requirements include capital expenditures on its development projects, debt service, management fees and expense reimbursements payable to its Manager (refer to Note 7) and operating expenses, among others. The Company expects to meet its short-term liquidity requirements through any cash flows from operations, proceeds from asset sales, borrowings on available debt facilities (refer to Note 9) and unrestricted cash. The Company expects to meet its long-term liquidity requirements through any cash flows from operations and proceeds from asset sales.

Note 2—Basis of Presentation and Principles of Consolidation

Basis of Presentation—The accompanying unaudited consolidated financial statements have been prepared in conformity with the instructions to Form 10-Q and Article 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America (“GAAP”) for complete financial statements. These unaudited consolidated financial statements and related notes should be read in conjunction with the combined and consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K (the “2024 Annual Report”) for the year ended December 31, 2024.

The preparation of these consolidated financial statements in conformity with 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. Actual results could differ from those estimates. Certain prior year amounts have been reclassified in the Company's consolidated financial statements and the related notes to conform to the current period presentation.

In the opinion of management, the accompanying consolidated financial statements contain all adjustments consisting of normal recurring adjustments necessary for a fair statement of the results for the interim periods presented. Such operating results may not be indicative of the expected results for any other interim periods or the entire year.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

Principles of Consolidation—The consolidated financial statements include the accounts and operations of the Company, its wholly-owned subsidiaries and VIEs for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

Consolidated VIEs—The Company consolidates VIEs for which it is considered the primary beneficiary. The liabilities of these VIEs are non-recourse to the Company and can only be satisfied from each VIE’s respective assets. The Company did not have any unfunded commitments related to consolidated VIEs as of June 30, 2025 and December 31, 2024. The following table presents the assets and liabilities of the Company’s consolidated VIEs as of June 30, 2025 and December 31, 2024 ($ in thousands):


	As of
	June 30, 2025		December 31, 2024
ASSETS
Real estate
Real estate, at cost	$	96,122	$	95,318
Less: accumulated depreciation		(25,705)		(24,372)
Real estate, net		70,417		70,946
Land and development, net		149,906		115,201
Cash and cash equivalents		8,015		8,324
Deferred expenses and other assets, net		7,287		7,727
Total assets	$	235,625	$	202,198
LIABILITIES
Total liabilities	$	82,319	$	47,751

Note 3—Summary of Significant Accounting Policies

The Company’s significant accounting policies have not changed materially from those described in the 2024 Annual Report. Please refer to the 2024 Annual Report for the Company’s significant accounting policies.

Note 4—Real Estate

The Company’s real estate assets were comprised of the following ($ in thousands):


	As of
	June 30, 2025		December 31, 2024
Land, at cost	$	5,570	$	5,570
Buildings and improvements, at cost		93,351		92,548
Less: accumulated depreciation		(26,684)		(25,273)
Real estate, net	$	72,237	$	72,845

Tenant Reimbursements—The Company receives reimbursements from tenants for certain facility operating expenses including common area costs, insurance, utilities and real estate taxes. Tenant reimbursements were $0.6 million and $0.4 million for the three months ended June 30, 2025 and 2024, respectively. Tenant reimbursements were $1.0 million and $0.8 million for the six months ended June 30, 2025 and 2024, respectively. These amounts are included in “Operating lease income” in the Company’s consolidated statements of operations.

Allowance for Doubtful Accounts—As of June 30, 2025 and December 31, 2024, the allowance for doubtful accounts related to real estate tenant receivables was $0.2 million and $0.1 million, respectively. These amounts are included in “Accrued interest and operating lease income receivable, net” on the Company’s consolidated balance sheets.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

Future Minimum Operating Lease Payments—Future minimum operating lease payments to be collected under non-cancelable operating leases, excluding tenant reimbursements of expenses, in effect as of June 30, 2025, are as follows by year ($ in thousands):


Year	Amount
2025 (remaining six months)	$	2,296
2026		4,542
2027		1,528
2028		—
2029		—
Thereafter		—

Note 5—Land and Development

The Company’s land and development assets were comprised of the following ($ in thousands):


	As of
	June 30,		December 31,
	2025		2024
Land and land development, at cost	$	201,626	$	186,271
Less: accumulated depreciation		(10,237)		(9,827)
Total land and development, net	$	191,389	$	176,444

Dispositions—During the three months ended June 30, 2025 and 2024, the Company sold land parcels and residential lots and units and recognized land development revenue of $26.6 million and $15.7 million, respectively, and land development cost of sales of $18.5 million and $19.0 million, respectively, from its land and development portfolio. During the six months ended June 30, 2025 and 2024, the Company sold land parcels and residential lots and units and recognized land development revenue of $31.8 million and $32.3 million, respectively, and land development cost of sales of $25.3 million and $31.4 million, respectively, from its land and development portfolio.

In December 2023, the Company transferred the ownership interests in a subsidiary land owner to a third-party venture (the “Venture”) for its development and construction of a multifamily project in Asbury Park, NJ (the “Project”). In connection with this transfer, the Company (i) provided the Venture with a $10.6 million mezzanine loan that was fully funded at closing and is secured by the ownership interests in the subsidiary land owner and matures in June 2033; and (ii) provided a completion and carry guaranty on the Venture’s $80.0 million senior construction mortgage loan (refer to Note 9) with a third-party lender in return for a fee. The Company is a non-member manager of the Venture and is entitled to certain fees, but otherwise has no expected member-related economics. Until the mezzanine loan is repaid and the guaranties are released, the Company controls all decision-making of the Venture. The Venture is responsible for the funding and performance of all development and construction activities and the Company is not obligated to provide any capital contributions to the Venture. At closing, the third-party members provided $21.0 million in cash capital contributions to the Venture, exclusive of a $3.0 million deferred profits interest, which combined represent the total equity capitalization.

The Company determined that the Venture (and its consolidated subsidiaries developing the Project) is a VIE for which the Company is the primary beneficiary and thus consolidated it under ASC 810. As a result, for accounting purposes, the Project was recorded on the Company’s consolidated financial statements and the mezzanine loan eliminates in consolidation. The $21.0 million in third-party cash capital contributions to the Venture represents noncontrolling interests in the Company’s consolidated balance sheets. The Company expects this consolidation treatment to continue until the mezzanine loan is paid in full by the Venture and the Company’s senior loan guaranties are released by the lender.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

Note 6—Loans Receivable and Other Lending Investments, net

The following is a summary of the Company’s loans receivable and other lending investments by class ($ in thousands): ⁽¹⁾


	As of
	June 30, 2025		December 31, 2024
Loans
Senior mortgages	$	18,054	$	20,800
Subordinate mortgages		15,794		15,266
Subtotal - gross carrying value of loans		33,848		36,066
Other lending investments
Available-for-sale debt securities		14,240		15,376
Subtotal - other lending investments		14,240		15,376
Total gross carrying value of loans receivable and other lending investments		48,088		51,442
Allowance for loan losses		(1,006)		(1,118)
Total loans receivable and other lending investments, net	$	47,082	$	50,324

(1)

As of June 30, 2025 and December 31, 2024, accrued interest was $0.9 million and $0.9 million, respectively, and is recorded in “Accrued interest and operating lease income receivable, net” on the Company’s consolidated balance sheets. During the three and six months ended June 30, 2025 and 2024, the Company did not reverse any accrued interest on its loan portfolio.

Allowance for Loan Losses—Changes in the Company’s general allowance for loan losses were as follows for the three months ended June 30, 2025 and 2024 ($ in thousands):


Three Months Ended June 30, 2025	Loans		Total
Allowance for loan losses at beginning of period	$	981	$	981
Provision for (recovery of) loan losses⁽¹⁾		25		25
Allowance for loan losses at end of period	$	1,006	$	1,006

Three Months Ended June 30, 2024
Allowance for loan losses at beginning of period	$	514	$	514
Provision for (recovery of) loan losses⁽¹⁾		(2)		(2)
Allowance for loan losses at end of period	$	512	$	512

(1)

During the three months ended June 30, 2025 and 2024, the Company recorded a provision for (recovery of) loan losses of $25 thousand and ($2) thousand, respectively, in its consolidated statements of operations. The provision for loan losses in 2025 was primarily the result of an additional funding on one of the Company’s loans. The recovery in 2024 was due primarily to an improving macroeconomic forecast since March 31, 2024.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

Changes in the Company’s general allowance for loan losses were as follows for the six months ended June 30, 2025 and 2024 ($ in thousands):


Six Months Ended June 30, 2025	Loans		Total
Allowance for loan losses at beginning of period	$	1,118	$	1,118
Provision for (recovery of) loan losses⁽¹⁾		(112)		(112)
Allowance for loan losses at end of period	$	1,006	$	1,006

Six Months Ended June 30, 2024
Allowance for loan losses at beginning of period	$	497	$	497
Provision for (recovery of) loan losses⁽¹⁾		15		15
Allowance for loan losses at end of period	$	512	$	512

(1)

During the six months ended June 30, 2025 and 2024, the Company recorded a (recovery of) provision for loan losses of ($0.1) million and $15 thousand, respectively, in its consolidated statements of operations. The recovery of loan losses in 2025 was primarily the result of a $3.0 million repayment on one of the Company’s loans. The provision in 2024 was due primarily to a principal addition to a loan originated in September 2023.

The Company’s investment in loans, all of which were collectively evaluated for impairment, and the associated allowance for loan losses were as follows as of June 30, 2025 and December 31, 2024 ($ in thousands):


As of June 30, 2025
Loans	$	33,848
Less: Allowance for loan losses		(1,006)
Total	$	32,842
As of December 31, 2024
Loans	$	36,066
Less: Allowance for loan losses		(1,118)
Total	$	34,948

Credit Characteristics—As part of the Company’s process for monitoring the credit quality of its loans, it performs a quarterly loan portfolio assessment and assigns risk ratings to each of its performing loans. Risk ratings, which range from 1 (lower risk) to 5 (higher risk), are based on judgments which are inherently uncertain, and there can be no assurance that actual performance will be similar to current expectation. The Company designates loans as non-performing at such time as: (1) interest payments become 90 days delinquent; (2) the loan has a maturity default; or (3) management determines it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan. All non-performing loans are placed on non-accrual status and income is only recognized in certain cases upon actual cash receipt.

Table of Contents

Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

The Company’s amortized cost basis in performing senior mortgage and subordinate mortgages, presented by year of origination and by credit quality, as indicated by risk rating, as of June 30, 2025 were as follows ($ in thousands):


	Year of Origination
	2025		2024		2023		2022		2021		Prior to 2021		Total
Senior mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		15,004		3,050		—		—		—		18,054
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	—	$	15,004	$	3,050	$	—	$	—	$	—	$	18,054
Subordinate mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		—		—		—		—		15,794		15,794
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	—	$	—	$	—	$	—	$	—	$	15,794	$	15,794
Total	$	—	$	15,004	$	3,050	$	—	$	—	$	15,794	$	33,848

The Company’s amortized cost basis in performing senior mortgages and subordinate mortgages, presented by year of origination and by credit quality, as indicated by risk rating, as of December 31, 2024 were as follows ($ in thousands):


	Year of Origination
	2024		2023		2022		2021		2020		Prior to 2020		Total
Senior mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		17,750		3,050		—		—		—		—		20,800
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal⁽¹⁾	$	17,750	$	3,050	$	—	$	—	$	—	$	—	$	20,800
Subordinate mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		—		—		—		—		15,266		15,266
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	—	$	—	$	—	$	—	$	—	$	15,266	$	15,266
Total	$	17,750	$	3,050	$	—	$	—	$	—	$	15,266	$	36,066

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

The Company’s amortized cost basis in loans, aged by payment status and presented by class, was as follows ($ in thousands):


			Less Than		Greater
			or Equal		Than		Total
	Current		to 90 Days		90 Days		Past Due		Total
As of June 30, 2025
Senior mortgages	$	18,054	$	—	$	—	$	—	$	18,054
Subordinate mortgages		15,794		—		—		—		15,794
Total	$	33,848	$	—	$	—	$	—	$	33,848
As of December 31, 2024
Senior mortgages	$	20,800	$	—	$	—	$	—	$	20,800
Subordinate mortgages		15,266		—		—		—		15,266
Total	$	36,066	$	—	$	—	$	—	$	36,066

Other lending investments—Other lending investments includes the following securities ($ in thousands):


					Net				Net
			Amortized		Unrealized		Estimated		Carrying
	Face Value		Cost Basis		Gain (Loss)		Fair Value		Value
As of June 30, 2025
Available-for-sale securities
Municipal debt securities	$	15,435	$	15,435	$	(1,195)	$	14,240	$	14,240
Total	$	15,435	$	15,435	$	(1,195)	$	14,240	$	14,240
As of December 31, 2024
Available-for-Sale Securities
Municipal debt securities	$	15,480	$	15,480	$	(104)	$	15,376	$	15,376
Total	$	15,480	$	15,480	$	(104)	$	15,376	$	15,376

As of June 30, 2025, the contractual maturities of the Company’s securities were as follows ($ in thousands):


	Amortized		Estimated
	Cost Basis		Fair Value
Maturities
Within one year	$	—	$	—
After one year through 5 years		—		—
After 5 years through 10 years		—		—
After 10 years		15,435		14,240
Total	$	15,435	$	14,240

Table of Contents

Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

Note 7—Other Investments

The Company’s “other investments” is its investment in Safehold Inc. (“Safe”). Safe is a publicly-traded company that acquires, owns, manages, finances and capitalizes ground leases. Ground leases generally represent ownership of the land underlying commercial real estate projects that is net leased by the fee owner of the land to the owners/operators of the real estate projects built thereon (“Ground Leases”). As of June 30, 2025, the Company owned approximately 13.5 million shares, or 18.9%, of Safe’s outstanding common stock.

As of June 30, 2025, the Company’s investment in Safe had a market value of $210.4 million based on the closing price of $15.56 on June 30, 2025. The Company does not have significant influence over Safe and accounts for its investment in Safe as an equity investment under ASC 321 – Investments – Equity Securities (“ASC 321”), which requires that the Company adjust its investment in Safe to fair value through income at each reporting period. As such, the Company recognized an “Unrealized gain (loss) on equity investment” of ($42.7) million and ($17.7) million, respectively, in its consolidated statements of operations for the three months ended June 30, 2025 and 2024 and ($39.5) million and ($55.6) million, respectively, for the six months ended June 30, 2025 and 2024.

On March 31, 2023, the Company entered into the following agreements with Safe:

Separation and Distribution Agreement—The Separation and Distribution Agreement provides for, among other things, the principal corporate transactions required to effect the Spin-Off and provisions governing Star Holdings' relationship with Safe with respect to and following the Spin-Off. The Separation and Distribution Agreement includes provisions allocating assets and liabilities between Star Holdings and Safe and various post-closing covenants relating to, among other things, the treatment of the parties’ insurance policies, information sharing and other operational matters. The Separation and Distribution Agreement includes a mutual release by Star Holdings, on the one hand, and Safe, on the other hand, of the other party from certain specified liabilities, as well as mutual indemnification covenants pursuant to which Star Holdings and Safe have agreed to indemnify each other from certain specified liabilities.

Management Agreement—The Company entered into the Management Agreement with Safehold Management Services Inc. (the “Manager”), a subsidiary of Safe. The Management Agreement requires the Manager to manage the Company’s assets and its and its subsidiaries’ day-to-day operations, subject to the supervision of Board of Trustees of the Company (the “Board”). Pursuant to the Management Agreement, the Manager is required to provide the Company with a management team, including a chief executive officer, a chief financial officer and a chief compliance officer, along with support personnel, to provide the management services to be provided by the Manager to the Company. The Manager does not assume any responsibility other than to render the services called for thereunder and is not responsible for any action of the Board in following or declining to follow its advice or recommendations.

The Management Agreement has an annual term that automatically renews on March 31 of each year. The Company pays a fixed cash management fee and reimburses the Manager for third party expenses incurred in connection with its services. The Company paid the Manager management fees of $25.0 million for the term ended March 31, 2024 and $15.0 million for the term ended March 31, 2025. The annual fee declines to $10.0 million and $7.5 million, respectively, in each of the following annual terms, and adjusts to 2.0% of the gross book value of the Company’s assets, excluding the Safe Shares, thereafter. During the three months ended June 30, 2025 and 2024, the Company recorded $2.5 million and $3.8 million, respectively, of management fees to the Manager. During the six months ended June 30, 2025 and 2024, the Company recorded $6.3 million and $10.0 million, respectively, of management fees to the Manager.

The Management Agreement may be terminated by the Company without cause by not less than one hundred eighty days’ written notice to the Manager upon the affirmative vote of at least two-thirds of the Company’s independent trustees, provided, however, that if the date of termination occurs prior to the fourth anniversary of the Spin-Off, the termination will be subject to payment of the applicable termination fee to the Manager. The Company may also terminate the Management Agreement at any time, including during the initial term, with 30 days’ prior written notice from the Company’s board of trustees for “cause,” as defined in the Management Agreement.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

In the event of a termination without cause by the Company prior to the fourth anniversary of the Spin-Off, the Company will pay the Manager a termination fee of $55.0 million minus the aggregate amount of management fees actually paid to the Manager prior to the termination date. However, if the Company has completed the liquidation of its 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.

In the event of a termination by the Manager based on a reduction in the amount of the Company’s consolidated assets below designated thresholds, the Company will pay the Manager a termination fee of $5.0 million if the termination occurs in the third year plus the balance of any unpaid portion of the annual management fee for the applicable year.

On March 28, 2025, the Company and certain of its subsidiaries entered into amendments to the Management Agreement, the Safe Credit Facility (refer to Note 9) and the Margin Loan Facility (refer to Note 9). The foregoing description of certain terms of the Management Agreement reflects the amendment to the Management Agreement which increased the management fee payable in year four of the contract from $5.0 million to $7.5 million and increased the termination fee payable by the Company in certain circumstances from $50.0 million to $55.0 million.

Governance Agreement—The Company and Safe entered into a governance agreement (the “Governance Agreement”) in order to establish various arrangements and restrictions with respect to the governance of the Company and certain rights and restrictions with respect to the Safe Shares owned by the Company.

The Company and its subsidiaries are prohibited from transferring at any time any Safe Shares held by the Company or its subsidiaries to any person who is known by the Company or its subsidiaries to be an “Activist” or “Company Competitor” (as such terms are defined in the Governance Agreement), or to any group that, to the knowledge of the Company or its subsidiaries, includes as “Activist” or “Company Competitor,” without first obtaining the Safe’s prior written consent.

During a “restrictive period” which lasts until the earliest to occur of (i) the effective date on which Safe terminates the Management Agreement; or (ii) the date on which the Company beneficially own less than 7.5% of Safe’s outstanding common stock and Safe is no longer the Company’s external Manager; or (iii) a Change of Control of Safe (as defined in the Governance Agreement), the Company’s or its directly or indirectly wholly owned subsidiaries are required to vote the Safe Shares in accordance with the recommendations of the board of directors of Safe. The Company has irrevocably designated and appointed the board of directors of Safe as its sole and exclusive attorney-in-fact and proxy with full power of substitution and re-substitution to exercise the voting power of the Company’s shares of Safe in accordance with these requirements. The Company will also be subject to certain standstill agreements during the restrictive period. The terms of such standstill agreements will restrict the Company from making certain acquisitions of Safe securities, seeking representation on Safe’s board of directors, participating in the solicitation of proxies or written consents of Safe shareholders, and taking other actions which could seek to influence or result in a change of control of Safe or cause or require Safe to make certain public announcements, except as permitted by the governance agreement or with the prior written consent of the independent directors of the board of directors of Safe.

Registration Rights Agreement—Under the Registration Rights Agreement, Safe has agreed to (i) register Star Holdings' shares of Safe common stock and the other registrable securities for resale by filing and maintaining a shelf registration statement; (ii) file a registration statement covering Star Holdings' shares of Safe common stock and other registrable securities pursuant to the demand right and (iii) allow Star Holdings to piggyback on certain other registration statements filed by Safe. Star Holdings may use the registration rights to sell its shares of Safe common stock in underwritten offerings, block trades and other methods of distribution. Star Holdings will be subject to certain suspension and lockup obligations. Star Holdings' registration rights will end, among other times, when it owns less than 2% of Safe's outstanding common stock and is able to sell all of the shares of Safe common stock pursuant to Rule 144(b) without restriction.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

Safe Credit Facility—Refer to Note 9 for additional information on the Safe Credit Facility.

Note 8—Other Assets and Other Liabilities

Deferred expenses and other assets, net, consist of the following items ($ in thousands):


	As of
	June 30, 2025		December 31, 2024
Other assets⁽¹⁾	$	8,128	$	8,233
Operating lease right-of-use assets⁽²⁾		692		924
Restricted cash		11,686		10,589
Other receivables		2,050		2,459
Leasing costs, net⁽³⁾		54		69
Intangible assets, net⁽⁴⁾		110		127
Deferred expenses and other assets, net	$	22,720	$	22,401

(1)	As of June 30, 2025 and December 31, 2024, other assets primarily includes prepaid expenses and dividends receivable from Safe.

(2)

Right-of use lease assets initially equal the lease liability. For operating leases, rent expense is recognized on a straight-line basis over the term of the lease and is recorded in “Real estate expense” in the Company’s consolidated statements of operations. During the three months ended June 30, 2025 and 2024, the Company recognized $0.1 million and $0.1 million, respectively, in “Real estate expense” in its consolidated statements of operations relating to operating leases. During the six months ended June 30, 2025 and 2024, the Company recognized $0.2 million and $0.2 million, respectively, in “Real estate expense” in its consolidated statements of operations relating to operating leases.

(3)	Accumulated amortization of leasing costs was $0.2 million and $0.2 million as of June 30, 2025 and December 31, 2024, respectively.

(4)

Intangible assets, net includes above market and in-place lease assets related to the acquisition of real estate assets. Accumulated amortization on intangible assets, net was $0.2 million and $0.2 million as of June 30, 2025 and December 31, 2024, respectively. These intangible lease assets are amortized over the remaining term of the lease. As of June 30, 2025, the weighted average remaining amortization period for the Company’s intangible assets was approximately 1.7 years.

Accounts payable, accrued expenses and other liabilities consist of the following items ($ in thousands):


	As of
	June 30, 2025		December 31, 2024
Other liabilities⁽¹⁾	$	33,403	$	33,300
Accrued expenses		14,307		11,917
Operating lease liabilities (see table above)		865		1,093
Accounts payable, accrued expenses and other liabilities	$	48,575	$	46,310

(1)

As of June 30, 2025, “Other liabilities” includes $20.6 million of deferred income and liabilities, $4.0 million of management fees and other payables due Safe and $7.0 million of other payables related to real estate properties. As of December 31, 2024, “Other liabilities” includes $20.6 million of deferred income and liabilities, $4.8 million of management fees due Safe and $5.7 million of other payables related to real estate properties.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

Note 9—Debt Obligations, net

The Company’s debt obligations were as follows ($ in thousands):


	Carrying Value as of				Stated		Scheduled
	June 30, 2025		December 31, 2024		Interest Rates		Maturity Date⁽¹⁾
Debt obligations:
Safe Credit Facility	$	115,000	$	115,000	8.00	%	March 2028
Margin Loan Facility⁽²⁾		87,518		89,175	SOFR plus 3.50	%	March 2028
Senior Construction Mortgage Loan		45,070		15,815	SOFR plus 6.85	%	December 2027
Total debt obligations		247,588		219,990
Debt discounts and deferred financing costs, net		(2,192)		(2,641)
Total debt obligations, net⁽³⁾	$	245,396	$	217,349

(1)	Represents the extended maturity date.

(2)

The Company has the option to pay interest in kind (“PIK”) on its quarterly interest payments and a cumulative $7.3 million has been added to the principal balance on the Margin Loan Facility as of June 30, 2025. The applicable margin on the Margin Loan Facility increases by 25 basis points for the entirety of the interest period immediately succeeding any interest period with respect to which the Company makes a PIK election.

(3)

During the three months ended June 30, 2025 and 2024, the Company capitalized interest expense on qualifying real estate assets of $1.4 million and $0.5 million, respectively. During the six months ended June 30, 2025 and 2024, the Company capitalized interest expense on qualifying real estate assets of $2.5 million and $1.0 million, respectively.

Future Scheduled Maturities—As of June 30, 2025, future scheduled maturities of outstanding debt obligations, assuming all extensions that can be exercised at the Company’s option, are as follows ($ in thousands):


2025 (remaining six months)	$	—
2026		—
2027		45,070
2028		202,518
2029		—
Thereafter		—
Total principal maturities		247,588
Unamortized discounts and deferred financing costs, net		(2,192)
Total debt obligations, net	$	245,396

Safe Credit Facility—In connection with the Spin-Off, on March 31, 2023, the Company, as borrower, entered into a credit agreement with Safe for a secured term loan with an outstanding principal amount of $115.0 million, plus up to $25.0 million in incremental borrowing capacity for specified purposes (as amended from time to time, the "Safe Credit Facility"). On March 28, 2025, the Company and Safe entered into an amendment to the Safe Credit Facility that, among other things, extended the maturity date by one year to March 31, 2028, provides that the $25.0 million in incremental borrowing capacity under the facility may be re-drawn for permitted purposes and permits the Company to repurchase up to $10.0 million of its shares pursuant to its share repurchase program (refer to Note 12).

Interest on borrowings under the Safe Credit Facility is payable in cash and accrues interest at a rate of (x) 8.00% per annum or (y) to the extent any loan remains outstanding under an incremental facility available under the Safe Credit Facility at such time, 10.00% per annum, as applicable. Amounts outstanding under the Safe Credit Facility may be prepaid at any time, in whole or in part, without premium or penalty.

During the three months ended June 30, 2025 and 2024, the Company incurred $2.4 million and $2.4 million, respectively, of interest expense gross of amounts capitalized on the Safe Credit Facility, which is included in “Interest expense” in the Company’s consolidated statements of operations. During the six months ended June 30, 2025 and 2024,

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

the Company incurred $4.7 million and $4.7 million, respectively, of interest expense gross of amounts capitalized on the Safe Credit Facility, which is included in “Interest expense” in the Company’s consolidated statements of operations.

Margin Loan Facility—On March 31, 2023, STAR Investment Holdings SPV LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company ("STAR SPV"), as borrower, entered into a margin loan agreement providing for a three-year, $140.0 million senior secured margin loan facility (as amended from time to time, the "Margin Loan Facility"), with Morgan Stanley Senior Funding, Inc., as administrative agent, Morgan Stanley & Co. LLC, as calculation agent, and Morgan Stanley Bank, N.A., as initial lender. The Margin Loan Facility is secured by a first priority pledge of the Safe Shares and has a principal balance of $87.5 million as of June 30, 2025. On March 28, 2025, the Company entered into an amendment to the Margin Loan Facility that, among other things, extended the maturity date from March 2026 to March 2028, increased the interest rate by 50 basis points, provides for an additional $15.8 million delayed-draw capital commitment from the lender (in addition to the outstanding principal balance on that date) and eased certain collateral posting and release triggers from existing levels.

Interest on the Margin Loan Facility is payable in cash; provided, that STAR SPV may, at its option, elect that the interest for any future interest period be paid-in-kind. Amounts outstanding under the Margin Loan Facility accrue interest at a rate equal to term SOFR for a three-month tenor plus a spread. Amounts outstanding under the Margin Loan Facility may be prepaid at any time upon prior notice, in whole or in part, subject to the payment of any applicable make-whole amount.

Senior Construction Mortgage Loan—In December 2023, the Venture (refer to Note 5) entered into an $80.0 million senior construction mortgage loan (the “Loan”). The Loan has a 3-year term with one 12-month extension option subject to a 1.0% fee. The Loan is interest only during the term and accrues interest at SOFR + 6.85% (with a SOFR floor of 3.65%) and features a 1.0% origination fee and a 1.85% exit fee, both on the total loan commitment. As of June 30, 2025, the Loan had an outstanding balance of $45.1 million.

Debt Covenants—The Safe Credit Facility requires that the Company comply with various covenants, including, without limitation, covenants restricting, subject to certain exceptions, indebtedness, liens, investments, mergers, asset sales and the payment of certain dividends. Additionally, the Safe Credit Facility includes customary representations and warranties as well as customary events of default, the occurrence of which, following any applicable grace period, would permit New Safe to, among other things, declare the principal, accrued interest and other obligations of the Company under the Safe Credit Facility to be immediately due and payable and foreclose on the collateral securing the Safe Credit Facility.

The Margin Loan Facility requires that STAR SPV comply with various covenants, including, without limitation, covenants restricting, subject to certain exceptions, indebtedness, liens, investments and the payment of dividends. Additionally, the Margin Loan Facility includes customary representations and warranties, events of default and other creditor protections for this type of facility. Upon the occurrence of certain events which are customary for this type of facility, STAR SPV may be required to prepay all amounts due under the Margin Loan Facility or post additional collateral in accordance with the Margin Loan Facility and related agreements.

A subsidiary of the Company provided a completion and carry guaranty on the Loan and is required to maintain a minimum net worth and a minimum liquidity amount both prior to and after the completion of the Project while the Loan is outstanding.

As of June 30, 2025, the Company was in compliance with all of its financial covenants.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

Note 10—Commitments and Contingencies

Commitments—Future minimum lease obligations under non-cancelable operating leases as of June 30, 2025 are as follows ($ in thousands):⁽¹⁾


2025 (remaining six months)	$	243
2026		486
2027		162
2028		—
2029		—
Thereafter		—
Total undiscounted cash flows		891
Present value discount⁽¹⁾		(26)
Lease liabilities	$	865

(1)

The lease liability equals the present value of the minimum rental payments due under the lease discounted at the rate implicit in the lease or the Company’s incremental secured borrowing rate for similar collateral. For operating leases, lease liabilities were discounted at inception at the Company’s weighted average incremental secured borrowing rate for similar collateral estimated to be 3.0% and the weighted average remaining lease term is 1.8 years.

Legal Proceedings—The Company and/or one or more of its subsidiaries is party to various pending litigation matters that are considered ordinary routine litigation incidental to the Company’s business as a finance and investment company focused on the commercial real estate industry, including foreclosure-related proceedings. The Company believes it is not a party to, nor are any of its properties the subject of, any pending legal proceeding that would have a material effect on the Company’s consolidated financial statements.

Note 11—Risk Management

Risk management

In the normal course of its on-going business operations, the Company encounters economic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk to the degree that its interest-bearing liabilities mature or reprice at different points in time and potentially at different bases, than its interest-earning assets. Credit risk is the risk of default on the Company’s lending investments or leases that result from a borrower’s or tenant’s inability or unwillingness to make contractually required payments. Market risk reflects changes in the value of loans and other lending investments due to changes in interest rates or other market factors, including the rate of prepayments of principal and the value of the collateral underlying loans, the valuation of real estate assets by the Company as well as changes in foreign currency exchange rates.

Risk concentrations—Concentrations of credit risks arise when a number of borrowers, tenants or investees related to the Company’s investments are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to the Company, to be similarly affected by changes in economic conditions.

All of the Company’s real estate and assets collateralizing its loans receivable are located in the United States. As of June 30, 2025, the Company’s portfolio contains concentrations in the following property types: entertainment/leisure, land and development, hotel, retail and the Safe Shares.

The Company underwrites the credit of prospective borrowers and tenants and often requires them to provide some form of credit support such as corporate guarantees, letters of credit and/or cash security deposits. Although the Company’s loans and real estate assets are geographically diverse and the borrowers and tenants operate in a

Table of Contents

Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

variety of industries, to the extent the Company has a significant concentration of interest or operating lease revenues from any single borrower or tenant, the inability of that borrower or tenant to make its payment could have a material adverse effect on the Company. In addition, declines in the market price of Safe common stock could require the Company to post additional collateral or prepay some or all of the outstanding borrowings under the Margin Loan Facility.

Note 12—Equity

Common Stock—On March 31, 2023, in connection with the Spin-Off, iStar distributed 100% of the common shares of beneficial interest in the Company to holders of common stock of iStar ("iStar Common Stock") by way of a pro rata distribution of 0.153 common shares of the Company for each outstanding share of iStar Common Stock held on the record date of the distribution. As of June 30, 2025, the Company has one class of common stock with 13,290,018 shares outstanding.

Accumulated Other Comprehensive Income (Loss)— “Accumulated other comprehensive income (loss)” reflected in the Company’s shareholders’ equity is comprised of unrealized gains or losses on the Company’s available-for-sale securities.

Share Repurchase Program—The Company has a share repurchase program that permits the Company to repurchase up to $10.0 million of its common shares in open market purchases, privately negotiated transactions or otherwise, including pursuant to one or more trading plans. Any such purchases will be subject to market and pricing conditions, applicable law and other factors deemed relevant in the Company's sole discretion. The share repurchase authorization does not obligate the Company to repurchase any dollar amount or number of shares and may be suspended or discontinued at any time. During the three months ended June 30, 2025, the Company repurchased 29,534 shares of its outstanding common stock for $0.2 million, representing an average cost of $6.41 per share. As of June 30, 2025, the Company had authorization to repurchase up to $9.8 million of common stock under the program.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

Note 13—Earnings Per Share

The following table presents a reconciliation of income from operations used in the basic and diluted earnings per share (“EPS”) calculations ($ in thousands, except for per share data):


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2025		2024		2025		2024
Net income (loss)	$	(39,721)	$	(27,952)	$	(47,767)	$	(76,948)
Net (income) loss from operations attributable to noncontrolling interests		413		837		855		852
Net income (loss) allocable to common shareholders	$	(39,308)	$	(27,115)	$	(46,912)	$	(76,096)


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2025		2024		2025		2024
Earnings allocable to common shares:
Numerator for basic and diluted earnings per share:
Net income (loss) allocable to common shareholders	$	(39,308)	$	(27,115)	$	(46,912)	$	(76,096)

Denominator for basic and diluted earnings per share:
Weighted average common shares outstanding for basic and diluted earnings per common share		13,311		13,320		13,315		13,320

Basic and diluted earnings per common share:
Net income (loss) allocable to common shareholders	$	(2.95)	$	(2.04)	$	(3.52)	$	(5.71)

Note 14—Fair Values

Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and

Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

Certain of the Company’s assets and liabilities are recorded at fair value either on a recurring or non-recurring basis. Assets required to be marked-to-market and reported at fair value every reporting period are classified as being valued on a recurring basis. Assets not required to be recorded at fair value every period may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the asset to market as of the reporting date. Such assets are classified as being valued on a non-recurring basis.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

The following fair value hierarchy table summarizes the Company’s assets recorded at fair value on a recurring or non-recurring basis by the above categories as of June 30, 2025 and December 31, 2024 ($ in thousands):


	Fair Value Using
			Quoted
			market		Significant
			prices in		other		Significant
			active		observable		unobservable
			markets		inputs		inputs
	Total		(Level 1)		(Level 2)		(Level 3)
As of June 30, 2025
Recurring basis:
Available-for-sale debt securities⁽¹⁾	$	14,240	$	—	$	—	$	14,240
Other investments (refer to Note 7)		210,412		210,412		—		—

As of December 31, 2024
Non-recurring basis:
Available-for-sale debt securities⁽¹⁾	$	15,376	$	—	$	—	$	15,376
Other investments (refer to Note 7)		249,899		249,899		—		—

(1)	The fair value of the Company’s available-for-sale debt securities are based upon unadjusted third-party broker quotes and are classified as Level 3.

The following table summarizes changes in Level 3 available-for-sale securities reported at fair value on the Company’s consolidated balance sheets for the six months ended June 30, 2025 and 2024 ($ in thousands):


	Six Months Ended June 30,
	2025		2024
Beginning balance	$	15,376	$	4,579
Repayments		(45)		—
Purchases		—		8,950
Unrealized gain (loss) recorded in other comprehensive income (loss)		(1,091)		(143)
Ending balance	$	14,240	$	13,386

Fair values of financial instruments—The following table presents the carrying value and fair value for the Company’s financial instruments ($ in millions):


	As of June 30, 2025				As of December 31, 2024
	Carrying		Fair		Carrying		Fair
	Value		Value		Value		Value
Assets
Loans receivable and other lending investments, net⁽¹⁾	$	47	$	46	$	50	$	49
Cash and cash equivalents⁽²⁾		44		44		35		35
Restricted cash⁽²⁾		12		12		11		11

Liabilities
Debt obligations, net⁽¹⁾		245		250		217		222

(1)	The fair value of the Company’s loans receivable and other lending investments, net and debt obligations are classified as Level 3 within the fair value hierarchy.

(2)

The Company determined the carrying values of its cash and cash equivalents and restricted cash approximated their fair values. Restricted cash is recorded in “Deferred expenses and other assets, net” on the Company’s balance sheet. The fair value of the Company’s cash and cash equivalents and restricted cash are classified as Level 1 within the fair value hierarchy.

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Star Holdings

Notes to Consolidated Financial Statements (Continued)

(unaudited)

Note 15—Segment Reporting

The Company operates its business through one reportable and operating segment that focuses on realizing value for shareholders primarily by generating cash flows through active asset management and sales of its existing loans, operating properties and land and development properties. The Company’s chief executive officer is the chief operating decision maker (“CODM”) and uses net income (loss), as reported on the Company’s consolidated statements of operations, to measure segment operating performance and allocate resources. All of the Company’s expenses are included in segment operating performance and are reviewed regularly. The measure of segment assets is reported on the Company’s consolidated balance sheets as total assets.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are included with respect to, among other things, Star Holdings’ (the “Company’s”) current business plan, business strategy, portfolio management, prospects and liquidity. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results or outcomes to differ materially from those contained in the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. In assessing all forward-looking statements, readers are urged to read carefully all cautionary statements contained in this Form 10-Q and the uncertainties and risks described in Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”), all of which could affect our future results of operations, financial condition and liquidity. For purposes of Management’s Discussion and Analysis of Financial Condition and Results of Operations, the terms “we,” “our” and “us” refer to Star Holdings and its consolidated subsidiaries, unless the context indicates otherwise.

The discussion below should be read in conjunction with our consolidated financial statements and related notes in this quarterly report on Form 10-Q and our 2024 Annual Report. These historical financial statements may not be indicative of our future performance.

Our Development Portfolio

Asbury Park Waterfront

We are the managing member in Asbury Partners, LLC, which is the joint venture that owns the Asbury Park Waterfront investment. The aggregate carrying value of the Asbury Park Waterfront investment was approximately $134.6 million as of June 30, 2025.

The Asbury Park Waterfront investment includes the following:

●

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 June 30, 2025, all residential condominium units have been sold.

●

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

●

Asbury Lanes: a 12,000 square foot music and entertainment venue. The venue was completed in 2018, is connected to The Asbury and managed by a third party.

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Star Holdings 10-Q