Leasehold mortgage lending is well-established when the structure is right. The lender's collateral is your building and your leasehold, not the dirt — so the deal finances cleanly, often on a smaller, cheaper basis than the fee-simple version. We structure the ground lease to be financed and arrange the leasehold debt.
| What it is | Financeable leasehold (how we structure it) | Why a lender requires it |
|---|---|---|
| A long term | 99-year ground lease, running well past the loan's maturity and amortization. | The lender needs the leasehold to outlive the loan with a wide margin — a short or near-expiring term is not financeable. |
| Mortgagee protections | Notice & cure rights, the right to a new lease on default, and step-in / assignment rights written into the ground lease. | So a leasehold default doesn't wipe out the lender's collateral — the lender can cure, step in, or take a fresh lease. |
| Recognition agreement | A recognition agreement / SNDA between the ground lessor and the leasehold lender. | It binds the ground lessor directly to the lender's protections — the document agency and conduit lenders look for first. |
| Clean foreclosure mechanics | Clear assignment and foreclosure path — the lender can take and re-sell the leasehold without re-trading the ground lease. | A leasehold the lender can't cleanly foreclose and transfer isn't bankable; the exit has to be certain. |
The point: a ground lease doesn't make your building harder to finance — structured this way it finances on a smaller, cheaper basis, and is agency / CMBS compatible · we draft the ground lease to satisfy these requirements up front and arrange the leasehold debt, so it's one counterparty for the whole stack.
Yes. Leasehold mortgage lending is well-established. The lender takes the leasehold estate, your building, as collateral rather than the land. As long as the ground lease has a long term, mortgagee protections, a recognition agreement, and clean foreclosure mechanics, the leasehold finances cleanly and is often agency or CMBS compatible.
Four things: a term that runs well past the loan, which is why we write a 99-year lease; mortgagee protections such as notice and cure rights, the right to a new lease on default, and step-in or assignment rights; a recognition agreement or SNDA between the ground lessor and the lender; and clean foreclosure mechanics so the lender can take and re-sell the leasehold if it has to.
It is the agreement between the ground lessor and the leasehold lender that binds the lessor directly to the lender's protections, so the lender's collateral survives a default. It is the document agency and conduit lenders look for first. We put it in place as part of structuring the ground lease.
Not when the structure is right. Because the land is monetized separately, the leasehold loan is sized on a smaller basis, which often makes it easier to size and price than the fee-simple version. We structure the ground lease to be financed and arrange the leasehold debt, so it is one counterparty for the whole stack.
If you're financing or refinancing a building — or worried a ground lease will complicate the debt — send the address, the as-complete stabilized NOI, and total project cost. We return an indicative land value in 48 hours and structure the ground lease so the leasehold finances, as principal or arranged capital.
Email us the deal