If a loan is maturing and the refi is stuck, a bridge loan buys you 12–24 months at roughly 9–12% plus 1–2% in fees — and ends exactly where you started: a balloon, a maturity date, and a personal-guaranty negotiation. A ground lease takes a different route: we buy the land under your building — typically 30–40% of basis — and that capital permanently retires part of the debt at ~6–6.75%, non-amortizing, with no balloon and no maturity wall. You keep the building, the operations, and all of the upside. One postpones the problem; the other makes it smaller, for good.
| Valor ground lease | Bridge loan | |
|---|---|---|
| What it is | A sale of the land only — permanent capital in the stack. You keep the building as the leasehold owner. How a ground lease works. | Short-term debt on the whole asset — a 12–24 month loan whose entire purpose is to be replaced by something else. |
| Cost | ~6–6.75% ground rent on the land value only — about 25% of NOI, covered ~3–4x. | ~9–12% interest on the full loan balance, plus 1–2% in origination and exit fees — often again at extension. |
| Term | 99 years. There is no maturity date to refinance against. | 12–24 months. The clock starts the day you close. |
| Amortization & balloon | Non-amortizing, no balloon. The ground rent is an operating payment, not principal coming due. | Usually interest-only with a full balloon at maturity — the entire balance, all at once. |
| What happens at the end | Nothing comes due. The land capital is permanent; the smaller leasehold loan refinances conventionally. | The same problem, again: refinance, extend at a price, sell, or default. The maturity wall moved; it didn't fall. |
| Personal guaranty | None. A ground lease is a property sale, not a loan — there is no recourse negotiation. | Commonly requires recourse or carve-out guaranties — a personal negotiation on top of an expensive loan. |
| What it solves | The debt itself gets smaller — the retired piece never returns, and the remaining leasehold loan is one a conventional lender will make. Leasehold financing. | Timing only. The balance is unchanged — larger, after fees — and the exit still has to be found. |
| When it wins | When the problem is structural — too much debt against today's value, a stuck refi, a lender who wants out. | When the problem is genuinely short-term — a sale closing, an entitlement landing, a lease-up months from stabilized. |
The trade in one line: a bridge loan pays 9–12% plus fees to move the maturity wall 12–24 months down the road; a ground lease pays mid-6s, non-amortizing, to tear part of the wall down permanently — while you keep the building and every dollar of upside. Facing a maturity specifically? See using a ground lease at loan maturity, or start with how much your land is worth.
Say the building is worth $10M and a $6.5M loan is maturing. The bridge route refinances all $6.5M at ~10% plus ~1.5% in fees. The ground-lease route sells the land — call it $3.25M at a ~6.5% ground cap (about 25% of NOI in ground rent, covered 3–4x) — and pairs it with a smaller ~$3.25M conventional refinance on the leasehold, a loan sized at roughly 50% of asset value that mainstream lenders will actually make. Same $6.5M payoff. Very different bill — and very different position 18 months from now.
Bridge debt exists for a reason, and the reason is a true short-term event with a dated, credible exit: a sale already under contract and closing in a few months; an entitlement or approval about to land that resets the asset's value; a lease-up six months from stabilized, after which a conventional refi underwrites itself. In those cases you are renting time you can actually see the end of, and 12–24 months of expensive money is a fair price for it. The trouble starts when a bridge is used on a structural problem — too much debt against today's value, a refi market that won't take the deal out — because then the exit at month 18 looks exactly like the entry, minus a year and a half of double-digit interest. If you cannot name the specific event that pays the bridge off, you don't have a bridge deal — you have a debt-size problem, and the fix is to make the debt smaller. That is the ground lease's job. The two can also work together: a ground lease is a clean takeout for a bridge already in place, and on a genuine short-term deal a small bridge can carry the asset to a ground-lease closing. It's a different trade from a sale-leaseback, too — you sell only the dirt, never the building.
Yes, materially. Bridge debt today runs roughly 9 to 12 percent plus 1 to 2 percent in origination and exit fees, on a 12 to 24 month term. Ground rent runs roughly 6 to 6.75 percent on the land value, non-amortizing, with no fees recurring at a maturity because there is no maturity. The bigger difference is duration: the bridge's cost repeats every time you re-bridge or extend, while the ground-lease capital is permanent and its cost is a stable operating payment covered about 3 to 4 times by property income.
Yes, that is one of its best uses. Selling the land typically raises 30 to 40 percent of the asset's basis, which permanently retires that slice of the maturing balance. The remainder is refinanced with a smaller conventional loan on the leasehold, sized at a level mainstream lenders will actually make. Instead of replacing one full-size loan with another, you shrink the debt for good and refinance only what is left.
A bridge lender is built for speed and often closes faster on a pure timeline. A ground lease involves negotiating the lease and arranging the leasehold financing, so it deserves a head start; the right move is to begin the conversation months before the maturity date rather than weeks. We return an indicative land value fast, which tells you early whether the ground-lease route pencils. And if the clock is genuinely too short, a bridge can carry the asset to a ground-lease closing that then retires it.
Yes, in either order. A ground lease is a natural takeout for a bridge already in place: the land sale plus a smaller conventional leasehold refinance repays the bridge and ends the cycle of re-bridging. Running the other direction, a short bridge can hold a deal together long enough for the ground lease and leasehold financing to close. What we would not recommend is bridging a structural debt problem repeatedly, because each round costs another 1 to 2 percent in fees plus double-digit interest and changes nothing about the balance.
The standard menu is an extension at a price, a forced sale, a discounted payoff negotiation, or default, and the guaranty conversation gets harder at each step. This is exactly the position a ground lease is designed to prevent or fix: selling the land raises permanent capital that pays the bridge down to a balance a conventional leasehold lender will refinance. If you can see that wall coming, the time to start is before the maturity, not after; if you are already at it, a land sale is often the fastest real deleveraging available that does not require selling the building.
A maturity coming, a bridge you want out of, or a refi that won't clear — land-heavy, hotel, or mixed-use deals are where the math works hardest. Send the address, the as-complete stabilized NOI, and the payoff number — we return an indicative land value fast, as principal or arranged capital.
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