Some loans are not secured by a building at all. They are secured by a fee parcel and the landlord’s position under a lease — sometimes a lease held by an affiliate of the borrower. That is a leased fee, and buying leased fees is the whole business here.
A lender has filed on a fee parcel. The complaint names the dirt and the landlord's interest, not the operating asset. The borrower's own affiliate often holds the leasehold. A sale to us pays the lender and leaves the operation untouched.
An owner bifurcated years ago and now wants out of the land. The leased fee is a passive holding; converting it to cash costs the operating side nothing.
A family or estate holds ground under a long lease. Illiquid, low-yielding, hard to divide among heirs, and a permanent management obligation. A sale solves all four at once.
A public entity or institution is exiting a program. See our page on public and P3 structures — same trade, different seller.
A leased fee is priced off the contract rent and the quality of the lease. We capitalize in the roughly 6.00–6.25% range on a lease re-papered to our form — 99 years, 2% fixed annual escalations, CPI tested every ten years capped at 3% annualized, no fair-market-value resets. Coverage matters: rent that the property comfortably covers 3–4× prices materially better than rent that barely clears. Where the existing lease is short, has FMV reset language, or lacks mortgagee protections, we will usually want it restructured as a condition, and that restructuring is frequently what creates the value in the trade.
Send the lease and the payoff letter and the number goes exact inside a week.
If the claim exceeds what the leased fee is worth, that is a discounted payoff conversation with committed cash on the table — a materially different negotiation than one conducted through a foreclosure docket, and a faster one. We are a principal, funding from our own balance sheet, with no syndicate to assemble and no outside investment committee to schedule. We fund at closing rather than after it.
For a straight purchase of the landlord's interest, generally no beyond whatever the lease requires on transfer, and the tenant's rights are unaffected. Where we want the lease re-papered to our form, the tenant is a party to that and usually a willing one, because our form is longer, has no FMV resets and improves their leasehold financeability.
It reduces what we will pay, sometimes sharply, because an FMV reset transfers unbounded risk to the leasehold and depresses its financeability. We would rather restructure it to fixed escalations with a capped CPI test and price the improved lease than pay for a term that will damage the asset later.
Yes. Long-dated ground leases created by someone else, decades ago, are a normal part of what we buy, provided the lease terms are sound or can be made sound.
The lease and payoff letter get you an exact number inside a week. Closings run two to four weeks when the documents move, which is generally faster than a foreclosure calendar.
Send the ground lease and the payoff letter. You will get an exact number inside a week, from a principal buying with its own capital.
Email us the property