Ground Lease and Leasehold Mortgage Financing
Ground lease financing provides capital for real estate transactions where the land is owned separately from the improvements and leased under a long-term ground lease. Leasehold mortgage financing allows borrowers to finance improvements on leased land, while fee interest ground lease financing provides capital to landowners deploying land as a yield-generating asset. Commercial Lending Solutions structures ground lease financing from $2 million through specialized lenders who understand leasehold mortgage underwriting.
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Ground Lease and Leasehold Mortgage Financing
Ground leases have become a mainstream institutional structure in commercial real estate as a mechanism to separate land value from improvement value, reducing acquisition cost for developers while providing institutional landowners with stable long-term income. Modern ground leases typically run 99 years with CPI-linked rent steps, creating an inflation-protected income stream for the landowner. Leasehold mortgages allow developers and investors to finance improvements on ground-leased land, though lenders require specific lease provisions: subordination, non-disturbance, estoppel rights, lender cure rights, and adequate lease term relative to loan term. iStar and Saul Centers are major institutional ground lease platforms. Life companies and CMBS lenders are active leasehold mortgage lenders for qualified projects. Commercial Lending Solutions has structured both sides of complex ground lease transactions.
Lender Sources
- Specialized Ground Lease Lenders (iStar, Saul Centers)
- Life Insurance Companies
- CMBS Conduits
- Banks with Leasehold Lending Programs
- Institutional Real Estate Finance Firms
Ideal For
- Developers acquiring land via ground lease to reduce upfront equity requirements
- Ground lease payoff financing when lease terms allow fee acquisition
- Leasehold mortgage refinancing on existing ground-leased properties
- University, municipal, and institutional land ground lease program financing
- Hotel, retail, and mixed-use development on ground-leased land in high-value urban cores
- Landowners monetizing fee simple land via sale-leaseback and ground lease creation
Related Property Types
Ground Lease Financing are available for all major commercial property types. Explore financing by property category.
Ground Lease Financing FAQ
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