Safehold (SAFE) faces slower origination growth amid higher funding costs and rising interest rates, RBC Capital Markets said in a note emailed Friday.
Market volatility could further weigh on near-term activity ahead of Q3 earnings, the analysts said, adding that ongoing litigation related to the Park Hotels portfolio also remains a concern.
The analysts said their 2026 earnings per share estimate remains unchanged at $1.60, while the 2027 EPS estimate decreases slightly to $1.58 from $1.59.
The 30-year Treasury yield has climbed to 5.7% from around 5.0% in early July, pressuring Safehold given its 90-year average lease duration versus 25 to 30 years for its debt, the analysts said.
Higher borrowing costs could also slow commercial real estate activity, leading to more muted origination growth in 2027, they added.
RBC lowered its price target on Safehold to $13 from $16 and maintained its sector perform rating.
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