Safehold Secures $45M Ground Lease for 256-Unit Santa Cruz Affordable Housing
SAFE•Safehold has closed a $45 million ground lease for a 256-unit affordable housing community in Soquel, Santa Cruz, with delivery slated for 2028. Wells Fargo and Citi Community Capital supplied construction financing, tax credit equity, and permanent financing for the project developed by The Pacific Companies.
1. Transaction Overview
Safehold closed a $45 million ground lease for an affordable housing development in the Soquel area of Santa Cruz, California. The lease covers a project by The Pacific Companies that will deliver 256 low-income housing units in 2028.
2. Financing Structure
Wells Fargo and Citi Community Capital provided construction financing and tax credit equity, while Citi also arranged permanent financing. The use of Low-Income Housing Tax Credits supports the capital stack and enhances project viability in a high-cost coastal market.
3. Strategic Expansion
This marks Safehold’s second affordable housing ground lease in Santa Cruz and underscores the firm’s push to expand its affordable housing platform nationwide. The company is positioning its ground lease model as a solution to elevated interest rates and construction costs.
4. Market Context and Impact
Santa Cruz faces significant unmet demand for quality affordable housing in a vibrant coastal submarket. Safehold’s involvement aims to address capital gaps and facilitate large-scale housing projects where traditional funding sources may be constrained.
