Both unlock long-term capital from real estate you own — but a sale-leaseback sells the whole asset and surrenders 100% of the upside, while a ground lease monetizes only the land. We buy the land; you keep the building, the operations, and all of the appreciation and promote. And if you need more than the land is worth, a ground lease paired with a leasehold loan on the building you keep gets surprisingly close to sale-leaseback proceeds — at a lower true cost.
| Valor ground lease | Sale-leaseback | |
|---|---|---|
| What you sell | Only the land — roughly 30–40% of basis. You keep the building (the leasehold). | The entire asset — land and building together. You own nothing afterward. |
| Who owns the improvements | You do. You hold the leasehold estate, operate it, and control it. | The buyer. You hold only a tenant lease on space you used to own. |
| Future upside & appreciation | 100% stays with you — appreciation, refinancing upside, and the developer promote. | Surrendered. Appreciation and residual value go to the new owner, not to you. |
| What you pay | ~6–6.75% non-amortizing ground rent on the land only — about 25% of NOI, covered ~3–4x. | Rent on the full asset value — a larger annual obligation on a much larger base. |
| Cash raised | The land value — usually enough to recap, fund the equity gap, or take chips off the table. | More total cash up front — because you're selling everything, not just the dirt. |
| Control of the business | Unchanged. You run the operations and make the capital decisions. | Constrained by a tenant lease — use, alterations, and renewals are the landlord's call. |
| Balance sheet | Can be structured off-balance-sheet; ground rent is deductible operating rent. | Also commonly off-balance-sheet — but the asset is gone from it entirely. |
| Amortization / maturity | Non-amortizing, no balloon — the ground rent doesn't mature against you. | No debt to amortize — but no residual asset either; the value is realized once, at sale. |
The trade in one line: a sale-leaseback gives you the most cash but you surrender the asset and its appreciation; a ground lease keeps control and 100% of the upside while monetizing the single most overlooked line on your balance sheet — the land · one principal counterparty for the land and the leasehold financing.
A sale-leaseback buyer sets your rent by capitalizing the whole property at a rate that is mostly a bet on your company's credit. Large rated tenants get tight pricing; a private owner or sponsor pays a credit premium — often a 7.5–9% cap on 100% of the value, escalating every year, forever. Ground rent works differently: it is sized off the land only and protected by 3–4x income coverage, so it prices in the mid-6s whether you are rated or not. The land does not care about your credit rating — which means the weaker your credit, the more a sale-leaseback punishes you and the better the ground lease compares.
A sale-leaseback sells the entire asset, land and building, and you stay on as a tenant. A ground lease sells only the land, which is typically about 30 to 40 percent of basis, and you keep the building as the leasehold owner. With a ground lease you keep control and 100 percent of the future upside; with a sale-leaseback you surrender both.
A sale-leaseback usually raises more total cash up front, because you are selling everything rather than just the land. The trade is that you give up ownership of the building and 100 percent of its future appreciation and promote. A ground lease raises less, but you keep the asset and all of the upside.
Yes. You hold the leasehold estate, so the building, the operations, the refinancing upside, and the developer promote all stay with you. We buy only the land and lease it back on a long-term, typically 99-year, basis. In a sale-leaseback that appreciation belongs to the new owner.
The ground rent is charged on the land only, at a non-amortizing rate of roughly 6 to 6.75 percent and about 25 percent of NOI, covered around 3 to 4 times. Sale-leaseback rent is charged on the full asset value, so it is a larger obligation on a much larger base. The ground rent is also non-amortizing, with no balloon and no maturity wall.
Because it is priced on your credit and charged on the whole value. A sale-leaseback buyer capitalizes the entire property at a rate driven mostly by tenant credit; private and non-investment-grade owners routinely pay a 7.5 to 9 percent cap, escalating, on 100 percent of the value. Ground rent is sized off the land only and covered 3 to 4 times by property income, so it prices around the mid 6s regardless of the owner's rating. The weaker the credit, the wider that gap gets.
It can get close, and it costs less per dollar raised. Selling the land and placing an amortizing leasehold loan on the building you keep commonly raises 65 to 80 percent of full value. The loan amortizes to zero and the building comes back to you free and clear, while the sale-leaseback payment never ends and the building is gone at lease end. If you truly need every dollar of value in cash today, a sale-leaseback is the tool for that; if you need most of the money and want to keep the real estate, the ground lease route usually wins.
Land-heavy, hotel, or mixed-use deals — especially where you want to recap or fund an equity gap without selling the asset or giving up the upside. Send the address, the as-complete stabilized NOI, and total project cost — we return an indicative land value fast, as principal or arranged capital.
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