A sponsor with a $15 million project in a mid-size city sends it to the names everyone knows in ground leases. The answer is polite and fast: not for us. Nothing was wrong with the deal. The large platforms moved their minimums, and they published it.
Platforms quote size in two different units. Some quote the total fee-simple value of the property before it is split into land and leasehold. Others quote their own check for the land. At a ground lease that is 30 to 45 percent of value, those two numbers differ by about three times.
So a $35 million floor on total value is a land check of roughly $10 to $15 million. Anything under about $12 to $14 million of land is effectively out of institutional reach, whatever the headline says.
| Illustrative | Inside the institutional box | Below or outside it |
|---|---|---|
| Total capitalization | $35M and up | Under about $35M |
| Land check at 30–40% of value | Roughly $12M and up | Roughly $2M to $14M |
| Metro | Top 30 | Any, including metros ranked 31 and below |
| Who bids | Several large platforms | A scattered set of private buyers |
Size gets the attention. Geography is the stricter filter. A $40 million multifamily project in a metro ranked 45th clears the size floor and still gets declined. Mid-size cities with real job growth, a university, a hospital system or a port are often outside the top 30, and the large platforms will not go there at any size.
One more nuance. The large platforms are built around multifamily, office, industrial, hotel and mixed-use. Retail, net lease and outdoor storage sit mostly outside their product at any size. On those, the floor is not the reason. The product is.
A platform that has raised a large fund has to put it to work. Underwriting a $4 million land position takes nearly the same legal, appraisal and diligence work as a $40 million one. Their lease forms, their counsel and their investment committees are built for the larger deal. Raising the minimum is the rational response.
The same logic pulls them toward the largest metros, where deal flow is deepest and comparable sales are easiest to defend to their own investors. None of that says a $15 million project in a mid-size city is a bad deal. It says it is the wrong size for that capital.
For a sponsor, the useful takeaway is to stop waiting. A decline on size or market is not a signal to fix the deal. It is a signal to send it somewhere the box fits.
In a secondary market, fewer local banks have closed a loan behind an unsubordinated ground lease. Some have never seen one. That is solvable, but only if the lease is drafted to the standard leasehold lenders already know and someone puts the lender math in front of them early. The lease has to let a lender say yes without rewriting it.
We arrange that loan with an independent lender. We bring the lender a one-page read of the leasehold: NOI after ground rent, coverage, debt yield, and the mortgagee protections in the lease. A local bank that knows the market and the sponsor is often the best lender for the deal once it sees that page.
Below the line the bid is real, but scattered: private buyers, family offices, local investors, the occasional syndicator. Terms vary much more than at the top of the market. Before you sign anything, check four things:
Is it unsubordinated? A fee that subordinates to your loan is a different, riskier product for you.
Are the escalators fixed? Fixed bumps, or CPI with a cap. No reset to fair market value, ever. Agency lenders will not accept reappraisal resets, and private lenders mostly will not either.
Is the lease drafted for a leasehold lender? Notice and cure, new-lease rights, no termination for incurable defaults, free right to mortgage. See what leasehold lenders require.
Does the buyer also want to be your lender? That is a conflict at default. We explain why in should your ground lessor be your lender.
That is our box. We buy the land under commercial projects and lease it back for 99 years, unsubordinated. You keep the building, the operation and the upside. We do not care where your metro ranks. We care whether the building covers the rent three to four times at stabilized NOI and whether a leasehold lender can lend behind the lease.
Rent is sized at 20–30% of stabilized NOI. The price stays at or below 35% of appraised real-estate value. The rent is fixed, non-amortizing and priced on the land, and we quote it on your property in writing. We never lend on the leasehold. We arrange that loan with an independent lender, for a 1% fee paid only if that loan closes.
Not sure the structure fits at all? Start with is a ground lease right for my deal.
The land, on a 99-year lease: nothing to manage, senior to the building’s lender, low yield because the buyer is buying the right to not pay the tax. The building above it: higher yield, paid monthly, depreciable. Both are replacement property. Both close on a date we control, which is the part that matters on day 140.
1031 SolutionsWorking with an intermediary? The standby sheet for line 3 of the identification form.
Measured from published criteria in 2026, roughly $35 million of total capitalization and the top 30 metros. A few years earlier the same firms printed $10 to $20 million and the top 50.
Usually the whole property before the split. At a ground lease of 30 to 45 percent of value, that implies a land check of roughly $10 to $15 million. Read each buyer's criteria for which unit they mean.
Yes. Metro rank is a separate screen and for many sponsors the stricter one. The large platforms decline outside their target metros regardless of size.
Not by definition, but terms vary more. Check that the lease is unsubordinated, has fixed or capped escalators with no fair market value reset, carries full leasehold mortgagee protections, and that the buyer is not also trying to be your lender.
Land checks from roughly $2 million to $14 million, in any metro, with rent at 20 to 30 percent of stabilized NOI and the price at or below 35 percent of appraised real-estate value.
Address, total cost, stabilized NOI and the debt on the table. If it fits, we will tell you what the land is worth to us and what it does to your stack.