More than you think, and much more than the county tax card says. For an income-producing property, the land is typically worth 30–40% of the property’s total value — because its value comes from the income the property produces, not from a comp sheet of empty lots. That value can come out as cash, without selling the building and without a loan.
Land under an income property is valued like a bond: a safe, senior slice of the property’s income, capitalized at a low rate because it is the best-protected position in the deal.
| Step | How it works | Worked example ($500K NOI property) |
|---|---|---|
| 1. Start with stabilized NOI | The property’s stabilized net operating income — what it earns, or will earn, in a normal year. | $500,000 |
| 2. Size the ground rent | 25–33% of NOI becomes ground rent — leaving the income covering the rent 3–4 times over, which is what makes the position safe. | $125,000–$165,000 per year |
| 3. Capitalize it | Divide by a ground-lease cap rate of roughly 6.25–6.75% (housing prices at the tighter end). | $1.9M–$2.6M of land value |
What moves the number: stronger NOI and durable income move it up · hotels free the most value (the spread between hotel yields and ground-lease caps is the widest) · multifamily, senior housing, storage, and medical office all work · the deal’s total value caps the answer — land above ~40% of total value gets hard to finance. And note what is absent from the math: the assessor’s opinion of your dirt.
The assessor’s land line is a bookkeeping allocation, often 8 to 15% of value. An investor buying the land under your building is buying a senior, bond-like slice of your property’s income — and prices it off that income. On income-producing property the two numbers routinely differ by multiples.
A ground lease: we buy the land and lease it back to you for 99 years. You keep the building, the operation, and 100% of the upside; the land value arrives as cash at closing with no loan, no balloon, and no personal guarantee. It funds buyouts, retires expensive debt, or completes a capital stack.
Structured to market standards, no. The building finances on a leasehold basis — a smaller loan on a smaller basis — and lenders lend on leaseholds routinely when the lease has fixed rent and full lender protections, which ours does. You also keep the depreciation: land never depreciated anyway.
Three things: the address or parcel, the stabilized NOI, and total project cost or a value estimate. We return an indicative land value, the implied ground rent, and the coverage in about 48 hours — non-binding, as principal or arranged capital.
Send the address, the stabilized NOI, and the total project cost — an indicative land value comes back in 48 hours. We focus on fee positions under $15 million, the deals below the institutional floors, and we’ve been quietly doing this for ten years.
Email us the property