A recent negotiation with a client and land owner involved a ground lease or oftentimes called a land lease. I was reminded of the many different facets involved especially when development on the land was to take place. A tenant can quickly learn how many "partners" become involved in your business. I found an informative article on the the ground lease that I though I would share with you. You can download the complete article by selecting "A Ground Lease Primer.pdf" in the download dialogue box below.
Burt
A Ground Lease Primer: "Dealing" with the Intimidating Ground Lease by Pamela V. Rothenberg
Nearly all real estate developers would agree that ground leases are among the most intimidating transaction documents that they face in pursing land acquisition and development deals for their portfolios. Simply stated, a ground lease is a long-term lease of unimproved land. This risk of loss of the improvements goes to the heart of why ground lease transactions are so complex and why consideration of issues relating to the ability to finance the ground lease from a lender's perspective is so essential. The developer's ultimate goal should be ground lease terms that give the developer and its lender substantially similar rights and protections to those the developer and lender would have achieved had the developer owned the land outright.
Copyright Aspen Publishers, Inc.
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