United States securities and exchange commission logo
January 18, 2023
Jay Sugarman
Chairman and Chief Executive Officer
Star Holdings
1114 Avenue of the Americas, 39th Floor
New York, New York 10036
Re: Star Holdings
Registration
Statement on Form 10
Filed December 16,
2022
File No. 001-41572
Dear Jay Sugarman:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response and any amendment you may file in
response to these
comments, we may have additional comments.
Registration Statement on Form 10
Information Statement Summary
Our Manager and the Management Agreement, page 6
1. Please disclose the
amount of the management agreement termination fee in the
summary. Also, disclose
the exchange on which you are seeking to list the common
shares, or advise.
The Spin Off
Background, page 35
2. Please quantify the
anticipated costs in connection with the spin-off and describe how
these costs will be
allocated. Please also revise your summary disclosure to briefly
describe these
arrangements.
Jay Sugarman
FirstName LastNameJay Sugarman
Star Holdings
Comapany
January 18,NameStar
2023 Holdings
January
Page 2 18, 2023 Page 2
FirstName LastName
3. We note your disclosure on page 6 that the terms of your agreements
with iStar and Safe,
including the separation and distribution agreement, the management
agreement, the
governance agreement, the registration rights agreement and the senior
secured term loan,
were negotiated between related parties and may not be as favorable to
you as if it had
been negotiated at arm s length with an unaffiliated third party.
Please revise the
background, Certain Relationships and elsewhere as appropriate to
explain how it was
decided to explore the separation of the non-ground lease assets
business into a newly
created and separately traded public company. Include disclosures
related to how the
material terms of the spin-off were determined, including, but not
limited to the terms of
the management agreement, and the Secured Term Loan Facility.
Unaudited Pro Forma Combined and Consolidated Financial Statements, page 49
4. Please revise your filing to explain in greater detail the accounting
treatment of the spinoff
transaction. In your revisions, please name all of the entities that
are involved in this
transaction and their roles, including legal spinnor, legal spinnee,
accounting spinnor, and
accounting spinnee. Reference is made to ASC 505-60.
5. We note your disclosure in footnote (1) to the Unaudited Pro Forma
Combined and
Consolidated Balance Sheet that you will cease accounting for your
investment in Safe
using the equity method of accounting after the spin-off. Please
expand on the facts that
lead you to this accounting conclusion despite the fact that you will
own 24.3% of Safe's
outstanding common stock after the spin-off. Cite any relevant
accounting literature in
your response.
6. We note your income tax adjustments and related footnote (3) on pages
55 and 56. Please
disclose the effective tax rate and explain in greater detail how you
derived the estimated
tax impact from iStar Included Assets transaction accounting
adjustments and other pro
forma adjustments.
7. We note your disclosure that your assets will include Safe common
stock with an
aggregate value of $400 million. We also note your disclosure on page
51 that Star
Holdings is not expected to retain significant influence over Safe. We
also note that you
intend to operate your business in a manner that will permit you to
maintain an exemption
from registration under the Investment Company Act of 1940. Please
provide us with a
detailed analysis of the exemption that you and your subsidiaries
intend to rely on and
how your investment strategy will support that exemption. Please note
that we will refer
your response to the Division of Investment Management for further
review
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS, page 57
8. We note your disclosure on page 65 that the decrease in land
development revenue in the
first nine months of 2022 was primarily due to a decrease in the size
of your land and
development portfolio. Please provide expanded disclosure to address
clearly the reasons
Jay Sugarman
FirstName LastNameJay Sugarman
Star Holdings
Comapany
January 18,NameStar
2023 Holdings
January
Page 3 18, 2023 Page 3
FirstName LastName
and background for the changes in these revenues and any material
trends and
uncertainties.
Exclusive Forum, page 99
9. We note that your forum selection provision identifies the Circuit
Court for Baltimore
City, Maryland, or, if that Court does not have jurisdiction, the U.S.
District Court for the
District of Maryland, Baltimore Division as the exclusive forum for
certain litigation,
including any derivative action. Please disclose whether this
provision applies to
actions arising under the Securities Act or Exchange Act. If so,
please also state that there
is uncertainty as to whether a court would enforce such provision. If
the provision applies
to Securities Act claims, please also state that investors cannot
waive compliance with the
federal securities laws and the rules and regulations thereunder. In
that regard, we note
that Section 22 of the Securities Act creates concurrent jurisdiction
for federal and state
courts over all suits brought to enforce any duty or liability created
by the Securities Act
or the rules and regulations thereunder. If this provision does not
apply to actions arising
under the Securities Act or Exchange Act, please also ensure that the
exclusive forum
provision in the governing documents states this clearly, or tell us
how you will inform
investors in future filings that the provision does not apply to any
actions arising under the
Securities Act or Exchange Act.
Financial Statements
iStar Included Assets for the year ended December 31, 2021 and 2020
Note 7 - Other Investments, page F-26
10. Please address the following with respect to your other real estate
equity investments and
other strategic investments:
Please tell us the portion of these investments that are accounted
for using the equity
method of accounting and the portion that is carried at cost for
each investment class
as of each period presented in your annual and interim financial
statements.
Tell us how these investments are structured and whether they are
limited
partnerships or limited liability companies that maintain specific
ownership accounts
for each investor. Reference is made to ASC Topic 323-30-35-3.
To the extent these investments are structured as or similar to
limited partnerships,
tell us how you considered the guidance in ASC Topic 323-30-S99 in
determining
whether to apply the equity method of accounting.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Jay Sugarman
Star Holdings
January 18, 2023
Page 4
You may contact Jeffrey Lewis at 202-551-6216 or Robert Telewicz at
202-551-3438 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Ruairi Regan at 202-551-3269 or David Link at 202-551-3356 with any
other questions.
Sincerely,
FirstName LastNameJay Sugarman
Division of
Corporation Finance
Comapany NameStar Holdings
Office of Real Estate
& Construction
January 18, 2023 Page 4
cc: Kathleen L. Werner, Esq.
FirstName LastName