Housing authorities, land banks, universities, hospital systems, PFCs and HFCs all run structures where a public or institutional entity holds the fee and a developer holds a long leasehold. The mechanics are familiar and well-precedented. The question is only who should own the fee — and increasingly, the public answer is unavailable.
A public exemption disappears. Texas HB 21 is the clearest recent example: deals built on a traveling HFC exemption suddenly carry a full tax line and a prepayment covenant. The 99-year lease and the leasehold mortgage already exist; the fee needs a new owner.
The project cannot reach a public structure at all. Mixed-income deals that do not qualify for a PFC, land bank conveyance or authority partnership still have the same equity gap, and the land is still worth what it is worth.
An institution wants the land off its balance sheet. Universities and hospital systems sitting on valuable ground next to a development they do not want to fund themselves.
A public partner needs the timeline a public partner cannot give. Board cycles and procurement calendars are real. Private ground lease capital funds on a closing date rather than a meeting agenda.
We buy the fee with our own capital and lease it back for 99 years, unsubordinated. Rent runs roughly 25–30% of stabilized NOI in the mid-6s, fixed, escalating 2% annually with a CPI test every ten years capped at 3% annualized — never a fair-market-value reset, which is the term that has destroyed more leasehold value than any other. Because nothing about the pricing depends on a tax benefit, nothing about it can be legislated away.
What we do not do: we do not take an equity position, we do not require a promote, we do not hold the leasehold debt, and we do not subordinate the fee to a construction lender. Those constraints are what keep the capital cheap and what keep it stable across a workout.
A public entity or institution holding fee under an existing lease sometimes wants out — the program ended, the mandate changed, the asset no longer fits. We buy leased-fee positions directly, which converts a passive land holding into cash without disturbing the tenant, the operations or the leasehold financing. The building keeps running exactly as it does today; only the landlord changes.
If your project qualifies for a genuine, durable tax exemption through a public partner, that exemption is almost certainly worth more than anything private capital can offer. Take it. Private ground lease capital is the answer when the exemption is unavailable, has expired, or has been legislated away — not a competitor to a working public structure.
It depends on the documents. Many structures include a right of first refusal or purchase option that returns the fee to the developer if the public entity declines to keep it, and that path is what we buy through. Some vest fee permanently with no reacquisition route. Read who holds fee and what the option says before anything else.
Regulatory agreements and affordability restrictions run with the property and survive a change in fee ownership. We are buying the land subject to what is recorded. What does not survive is a tax exemption tied to public ownership, which is usually the thing that has already been lost.
No. That is the point of the structure. There is no issuer, no board approval and no procurement cycle in the path, which is what lets it close in weeks.
The lease is where control lives. Use restrictions, transfer consents, maintenance standards and reversion terms are all negotiable at the front end. Institutions frequently care more about the covenants than about the fee itself, and covenants are cheaper to keep than dirt.
Send the ground lease, the regulatory agreement and a trailing twelve. We will tell you whether the fee can move, what it is worth, and how fast.
Email us the property