When a ground lease takes the land out of the basis, the loan above it gets smaller against the same income. On deals we structure, the leasehold loan is deliberately capped so its debt yield stays where credit committees say yes fast — mid-teens and up, against whole-loan alternatives penciling near ten.
Recognition: we acknowledge your lien and deal with you directly. Notice-and-cure: you get independent notice of any rent default and your own cure window, always longer than the tenant's. New-lease rights: if the lease ever terminates, you receive a fresh ground lease on identical terms — your collateral survives the borrower. Every lease we originate carries all three, because our paper only works if your loan does. And to be precise about roles: we own land and arrange leasehold debt. We never compete with you for the loan.
The land came out of the basis. The income net of ground rent supports a loan a fraction of the whole-property size, so income divided by loan amount jumps — often from around ten to the high teens on the same asset.
You get your own notice and cure period, independent of the borrower's, and if the lease were ever terminated you hold a new-lease right. The design intent is that a leasehold lender can always keep its collateral alive.
No, ever. We buy land and we arrange leasehold debt for our counterparties. The lending seat is yours.
Send us the structure and we will walk your credit team through the lease, the coverage, and the debt yield math on a live model.
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