iStar Announces Dividend Actions
- Declares special common stock dividend payable in shares of Safehold common stock
- Declares regular quarterly cash dividends on preferred stock
- Suspends regularly quarterly common stock dividends pending completion of the merger with Safehold Inc.
NEW YORK, Nov. 21, 2022 /PRNewswire/ -- iStar Inc. (NYSE: STAR) announced several dividend actions recently approved by its Board of Directors.
On November 21, 2022, the Company's Board of Directors declared a one-time special dividend payable to the Company's common stockholders of Safehold ("SAFE") common stock valued at approximately $190 million, but subject to a maximum aggregate distribution limit of 7.6 million SAFE shares and a minimum aggregate distribution amount of 5.5 million SAFE shares. Also, the dividend rate will not exceed 0.08766 shares of SAFE for each share of iStar common stock outstanding. The dividend will be paid on a pro rata basis on shares of iStar common stock outstanding as of the close of business on the record date of December 1, 2022.
Based on the value of SAFE common stock as of November 21, 2022, we estimate that the per share rate of the special dividend would be 0.07315 shares of SAFE for each share of iStar common stock outstanding, and iStar would distribute an aggregate of approximately 6.3 million shares of SAFE common stock in the special dividend. The Company will announce the final special dividend rate and the dividend payment date prior to the November 30, 2022 ex-dividend date for the special dividend. After giving effect to the payment of the special dividend, iStar will continue to own between 32.9 million and 35.0 million shares of SAFE common stock.
The aggregate value of the special dividend is intended to approximate the Company's estimate of its undistributed REIT taxable income for 2022, which is primarily attributable to the gain from the sale of Company's net lease portfolio in the first quarter of the year, offset by certain net operating loss carry forwards. As a real estate investment trust, the Company is subject to excise tax on any undistributed net capital gains.
No fractional shares of SAFE common stock will be issued in connection with the special dividend, and instead Company stockholders will receive cash in lieu of any fractional shares. The dividend is expected to be treated primarily as a capital gain distribution and the Company will provide a more detailed declaration of its dividend treatment in January 2023.
Additionally on November 21, 2022, the Company's Board of Directors declared quarterly cash dividends on the Company's preferred stock for the fourth quarter of 2022. The dividends are all payable on December 15, 2022 to holders of record on December 1, 2022.
Series of Stock | Liquidation Preference | Dividend |
8.00% Series D Preferred Stock | $25.00 | $0.50 |
7.65% Series G Preferred Stock | $25.00 | $0.478125 |
7.50% Series I Preferred Stock | $25.00 | $0.46875 |
The Company announced that the Board has suspended the payment of regular quarterly cash dividends on the Company's common stock through the closing of the Company's pending merger with Safehold. As previously announced, the merger agreement requires the Company to repay its senior unsecured notes in connection with the merger, and the suspension of the quarterly cash dividend is intended to expedite the Company's satisfaction of this obligation.
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iStar Inc. (NYSE: STAR) is focused on reinventing the ground lease sector, unlocking value for real estate owners throughout the country by providing modern, more efficient ground leases on institutional quality properties. As the founder, investment manager and largest shareholder of Safehold Inc. (NYSE: SAFE), the creator of the modern ground lease industry, iStar is using its national investment platform and its historic strengths in finance and net lease to expand the use of modern ground leases within the $7 trillion institutional commercial real estate market. Recognized as a consistent innovator in the real estate markets, iStar specializes in identifying and scaling newly discovered opportunities and has completed more than $40 billion of transactions over the past two decades. Additional information on iStar is available on its website at www.istar.com.
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SOURCE iStar Inc.
