Ground Lease Financing for Multifamily | Valor Ground Lease Ventures

Low cap rates put more value in the dirt — and the rents already cover the rent.

~30–40%

of basis is land you can monetize

3–4x

in-place rents cover the ground rent

Multifamily trades at the tightest cap rates of any asset class, so the land carries a larger, steadier share of value than a hotel or a strip center. Stabilized apartments throw off durable income, so the ground rent — roughly a quarter of NOI — is covered several times over while the freed cash goes to work.

What it solves

What a multifamily ground lease funds.

	With a Valor ground lease	The usual path
Acquisition	Land value funds the down payment — buy the asset on a thinner check, the leasehold loan covers the rest.	Larger common equity raise, or a pricier bridge, to close the purchase.
Recap / refinance	Permanent, non-amortizing capital retires a maturing or over-levered senior to a refinanceable level.	Cash-in refinance, a mezzanine layer, or a partial sale to plug the gap.
Pref / JV takeout	Buy out the partner — land proceeds replace expensive preferred or LP equity, so you keep the promote.	Carry a 9–15% pref, or surrender promote and control to a new equity partner.
Equity-gap fill	Closes the gap as rent, not as a dilutive equity slug — ~6–6.75% non-amortizing.	Fill the gap with the most expensive money in the stack: fresh equity.
The senior loan	Leasehold financing on the smaller basis — agency-compatible leasehold execution available.	Conventional fee financing on the full basis, with more equity behind it.
Your upside	100% kept — you own the building, the cash flow, and the appreciation.	Shared with whatever pref or JV equity you brought in to fill the gap.

And: stabilized or value-add apartments fit best — in-place income covers the ground rent from day one · the land comes out as permanent capital with no balloon and no maturity wall · one principal counterparty for the land and the leasehold financing.

Questions, answered

Multifamily ground lease — FAQ.

Why does a ground lease work so well for multifamily?

Apartments trade at the lowest cap rates of any major asset class, which puts a large, stable share of value in the land. That means more capital comes out of the dirt, and the durable in-place rents cover the ground rent — roughly a quarter of NOI — three to four times over. It is the cleanest fit we underwrite.

Can I still use agency financing on the leasehold?

Yes. The building stays yours as a long-term leasehold, and leasehold financing — including agency-compatible execution — works on the smaller, land-free basis. Because the land is no longer your collateral, the senior loan sizes off a lower number, which is often what makes a tight deal pencil.

What can the land proceeds fund on an apartment deal?

Acquisitions, recaps and refinances, buying out preferred or JV equity, and filling an equity gap. The land value — typically 30 to 40% of basis — comes out as permanent, non-amortizing capital at roughly 6 to 6.75%, so it can replace the most expensive money in your stack while you keep the promote.

Do I give up the apartments or the appreciation?

No. You keep the building, the operations, the cash flow, and 100% of the upside and promote. We buy only the land and lease it back to you on a long-term, typically 99-year, lease. The residents, the management, and the value creation all stay with you.

Send us the deal

We move on real numbers.

Stabilized or value-add multifamily — acquisitions, recaps, pref or JV takeouts, and equity-gap fills. Send the address, the as-complete stabilized NOI, and total project cost — we return an indicative land value in 48 hours, as principal or arranged capital.

Email us the deal