Star Holdings (STHO) risk factors, FY2024 10-K

Risks Related to Our Properties and Business

1. 01If global or local market and economic conditions deteriorate, our business, financial condition and results of operations could be materially and adversely affected
2. 02Our performance is subject to risks inherent in owning real estate investments
3. 03We will be materially dependent on sales of assets to generate cash flows
4. 04Our 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
5. 05The residential market has experienced significant downturns that could recur and adversely affect us
6. 06We 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
7. 07Demand for homes and apartment rentals may be adversely affected by a variety of macroeconomic factors beyond our control
8. 08A downturn in the residential market could adversely affect our ability to sell our assets
9. 09We are subject to the risk of our manager losing key personnel, and we may be unable to retain key asset-level consultants
10. 10Future sales of parcels at Asbury Park Waterfront and Magnolia Green will be subject to receipt of approvals from local municipalities
11. 11We may experience losses if the creditworthiness of our tenants deteriorates and they are unable to meet their lease obligations
12. 12Lease and sublease expirations, defaults and terminations may adversely affect our revenue
13. 13Our 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
14. 14Our property taxes could increase due to a change in property tax rates or a reassessment, which could impact our cash flows
15. 15The lodging industry is highly sensitive to trends in business and personal travel
16. 16We are subject to various operating risks common to the lodging industry
17. 17The cyclical nature of the lodging industry may cause fluctuations in our operating performance
18. 18We are subject to general risks associated with the employment of hotel personnel, including competition for labor
19. 19We depend on the ability of the independent hotel operators to operate and manage our hotels
20. 20Our hotel management agreements limit operating flexibility
21. 21We 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
22. 22Compliance or failure to comply with the Americans with Disabilities Act could result in substantial costs
23. 23Our assets may be subject to impairment charges
24. 24We may be subject to litigation, which could have a material adverse effect on our financial condition
25. 25Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer
26. 26The loss of our Investment Company Act exemption would materially adversely affect us
27. 27We have a significant amount of indebtedness, some of which matures in 2026. Our governing documents do not limit the amount of indebtedness we may incur and we may become more highly leveraged
28. 28We are subject to risks associated with secured debt
29. 29Financial covenants could materially adversely affect our ability to conduct our business
30. 30We may change our business strategy and business policies without shareholder approval
31. 31We may sell all or substantially all of our assets and dissolve without shareholder approval

Risks Related to Our Relationship with Our Manager and its Affiliates

1. 32Termination of the Management Agreement would be costly
2. 33The loss of our Manager or its key personnel could threaten our ability to operate successfully
3. 34Our Manager’s liability is limited under the management agreement, and we could experience poor performance or losses for which our Manager would not be liable
4. 35There are various potential conflicts of interest in our relationship with our Manager and its affiliates, which could result in decisions that are not in the best interest of our shareholders
5. 36The management fee payable to our Manager may not provide sufficient incentive to our Manager to maximize cashflows from assets
6. 37Our board of trustees will not approve each decision made by our Manager with regard to our legacy real estate assets, which may result in our Manager making riskier decisions on our behalf than would be specifically approved by our board of trustees
7. 38Safe may fail to perform under various transaction agreements that were 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
8. 39Potential indemnification liabilities owed to Safe (formerly iStar) pursuant to the Separation and Distribution Agreement may have a material adverse effect on our business, financial condition and results of operations
9. 40The Spin-Off may expose us to potential liabilities arising out of state and federal fraudulent conveyance laws
10. 41Our agreements with iStar and Safe in connection with the Spin-Off involved conflicts of interest, and we may have received better terms from unaffiliated third parties than the terms we received in these agreements

Risks Related to an Investment in Our Common Shares

1. 42An active trading market for our common shares may not be sustained
2. 43We are taxed as a corporation and have not elected to qualify as a real estate investment trust
3. 44Certain provisions of our organizational documents limit shareholder recourse and access to judicial fora
4. 45We do not expect to pay regular dividends
5. 46If we continue to qualify as 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