Star Holdings extended its term loan maturity with Safehold Inc. to March 31, 2029, and voluntarily reduced its margin loan balance by nearly half on September 30, 2026. The moves, detailed in a Form 8-K filed with the Securities and Exchange Commission, restructure the company's debt obligations and tighten its management fee arrangements with Safehold.
Under the Third Amendment to the Amended and Restated Credit Agreement, signed on September 29, 2026, the maturity date for the term loan facilities was pushed back by one year. Star Holdings holds an option to extend the maturity further to September 30, 2029, provided it satisfies specific conditions. These include paying an extension fee equal to 0.5% of the outstanding loans and accepting a 1.0% per annum increase in the interest rate on outstanding borrowings during that extension period. As of September 29, 2026, the principal balance on the outstanding term loan stood at $115.0 million, with no outstanding borrowings on the incremental facility.
The amendment also altered prepayment and repurchase terms. Star Holdings can now make voluntary prepayments of up to $50.0 million in the aggregate, along with any restricted cash held by the margin loan lender that is secured by Safehold common stock. A new restricted payments basket allows the company to repurchase up to $10.0 million of its common shares for cash, but only after it has prepaid its margin loan facility by at least $40.0 million, excluding prepayments made with restricted cash held by the lender. The company agreed not to make additional borrowings under the margin loan facility. In connection with the amendment, Star Holdings paid Safehold a maturity extension fee of $2.4 million.
Simultaneously, Star Holdings entered into a Second Amendment to its Management Agreement with Safehold Management Services Inc., a wholly-owned subsidiary of Safehold. This amendment sets minimum quarterly management fees of $1.25 million for the term running from April 1, 2027, through March 31, 2028, and $625,000 for the term from April 1, 2028, through March 31, 2029. The Termination Fee payable to the Manager in certain circumstances was increased from $55.0 million to $62.5 million, in each case less the aggregate amount of management fees paid prior to termination. The period during which a termination by Star Holdings without cause requires payment of this fee was extended to March 31, 2029.
The debt restructuring was followed immediately by a significant paydown of secured debt. On September 30, 2026, Star Holdings voluntarily paid down its margin loan facility from $94.5 million to $46.5 million. The company primarily used approximately $30.0 million in asset sale proceeds and $18.0 million in restricted cash held by the margin loan lender for this transaction.
Brett Asnas, Chief Financial Officer of Star Holdings, signed the report on October 2, 2026. The filing describes Star Holdings as an emerging growth company and notes that its common shares trade on the Nasdaq Global Market under the symbol STHO.