An industrial ground lease converts the land under your warehouse, plant, or yard into long-term capital — we buy the dirt and lease it back on a 99-year, non-amortizing basis, and you keep the building, the operations, and all of the upside. That matters most in industrial, because the sale-leaseback market prices private and non-rated owners hardest: a 7.5–9% cap on 100% of the value, escalating forever, with the facility your business depends on surrendered at lease end. Ground rent is priced on the land, not your credit — mid-6s, covered 3–4x — and a mission-critical facility never leaves your hands.
The full comparison lives at ground lease vs. sale-leaseback — here is how it lands on a warehouse, plant, or logistics building specifically.
| Valor ground lease | Industrial sale-leaseback | |
|---|---|---|
| What you sell | Only the land — typically 15–30% of an industrial basis. The building stays yours as the leasehold. | The entire facility — land, building, and every dollar of future value. |
| Who owns the facility long-term | You do. The leasehold runs 99 years; a leasehold loan amortizes to zero and the building is yours, unencumbered. | The landlord. At the end of a 15–20 year lease, the facility your business runs on reverts to someone else — or you pay their price to stay. |
| What you pay | ~6–6.75% non-amortizing ground rent on the land only — roughly 25% of NOI, covered ~3–4x. | A 7.5–9% cap on 100% of value for private / non-investment-grade owners, escalating every year, forever. |
| What sets the price | The dirt. Land-residual pricing — your corporate credit rating is not the driver. | Your credit. Rated tenants get tight caps; private operators pay the credit premium on the whole asset. |
| Cash raised | The land value — and paired with a leasehold loan on the building you keep, commonly 65–80% of full value. | 100% of value up front — the most cash, at the price of the asset itself. |
| Operations & control | Unchanged. Your racking, your process lines, your shifts, your capital decisions. | Constrained by a tenant lease — use, alterations, and renewals are the landlord's call. |
| Expansion & capex | Your building, your call. Add a dock, a mezzanine, a line — the value you create is yours. | Improvements on the landlord's building — you fund them, they keep the residual. |
| Upside & exit | 100% stays with you — appreciation, refinancing proceeds, and the sale of the leasehold. | Surrendered. The value is realized once, on day one, and never again. |
The one-line version: a sale-leaseback raises the most cash but takes the facility your business depends on; an industrial ground lease raises the land value at the cheapest non-amortizing rate in the stack — and a mission-critical building never rides on someone else's lease. How the structure works, step by step: how a ground lease works.
Take a $12M distribution building where the land is worth about $3M — a typical 25% land share for industrial. The sale-leaseback sells all $12M; the ground-lease route sells the $3M of dirt and pairs it with an amortizing leasehold loan on the building you keep. Full detail on how the payment is set: ground rent explained.
Honest framing: land runs a lower share of value in industrial (~15–30%) than in hotels or urban mixed-use, so the ground lease alone is a partial-capital tool, not a max-cash tool. It is the cheapest first tranche of the stack — the credit-blind, non-amortizing layer — and the leasehold loan does the rest. If you genuinely need every dollar of value in cash today, a sale-leaseback raises more; it just costs you the building. What your dirt is actually worth: how much is the land worth.
Owner-occupied manufacturing and distribution: the facility is mission-critical — the racking, the lines, the permits, the workforce are all there — which is precisely why it should never sit at the end of someone else's lease. A ground lease frees the land capital for equipment, working capital, an acquisition, or a partner buyout while the plant stays yours. Industrial investors: on covered-land plays and outdoor-storage sites, the land is most of the value — so the ground lease monetizes most of the asset while you keep the income and the redevelopment option. Developers: selling the land into a ground lease at the start of a project replaces the most expensive slug of equity with mid-6s, non-amortizing capital — and it works just as well at the other end of the deal, when a loan maturity needs a recap without a sale.
Yes. If you own the warehouse fee-simple, we buy the land under it and lease it back to you on a long-term, typically 99-year, non-amortizing basis. You keep the building as the leasehold owner, keep operating exactly as before, and receive the land value in cash. The ground rent is sized off the land at roughly a mid-6s rate, about 25 percent of property income, covered around 3 to 4 times. The building, the operations, and all future upside stay with you.
For most private and non-investment-grade industrial owners, yes. Sale-leaseback rent is priced on your corporate credit and charged on 100 percent of the value, so private operators routinely pay a 7.5 to 9 percent cap, escalating forever, and the facility reverts to the landlord at lease end. A ground lease prices off the land only, in the mid-6s, non-amortizing, and you keep the building. A sale-leaseback raises more total cash because it sells everything; a ground lease paired with a leasehold loan commonly raises 65 to 80 percent of value at a lower true cost, and you still own the facility.
Yes, and it is often the strongest case for one. A manufacturing plant is mission-critical: the equipment, permits, and workforce are tied to the site, which is exactly why the building should never sit at the end of someone else's lease. A ground lease frees the land capital for equipment, working capital, expansion, or a partner buyout while you keep the plant on a 99-year leasehold. The ground rent is a covered, non-amortizing operating expense, and there is no lease-end surrender of the facility.
On most improved industrial, the land runs about 15 to 30 percent of total value, lower than hotels or urban mixed-use, though outdoor-storage and covered-land sites can run far higher because the land is most of the asset. As a cross-check, the ground rent the property can comfortably support, roughly 25 percent of income covered 3 to 4 times, capitalized at a mid-6s rate, indicates the land value we can pay. Send the address and the property's income and we return an indicative land value fast.
Yes. Selling the land into a ground lease at the start of a project converts the site cost into mid-6s, non-amortizing capital, replacing the most expensive slug of equity in the deal, while the developer keeps the leasehold, the development upside, and the promote. It works equally well on covered-land and outdoor-storage plays, where the land is most of the value, and at the back end of a deal, where a ground lease recapitalizes a maturing construction or bridge loan without selling the asset.
Warehouses, manufacturing, logistics, flex, and outdoor storage — owner-occupied or investment — especially where you want to free the land capital without selling the facility or giving up the upside. Send the address, the property income or NOI, and what you are trying to solve — we return an indicative land value fast, as principal or arranged capital.
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