| It's not news that one of the hottest
| |
| | - Frees capital that would be paid for
|
| commodities on the market today is
| |
| | land acquisition
|
| commercial property. Developers and
| |
| | Since there's no need to finance the
|
| investors in Houston are scrambling to
| |
| | acquisition of the land, the developer
|
| acquire land that is almost guaranteed to
| |
| | lessee has more capital available for
|
| increase in value, many retailers and
| |
| | building and construction.
|
| commercial developers are overlooking the
| |
| | - Ground lease payments offer a tax
|
| advantages of developing and building on
| |
| | advantage
|
| property that they don't own.
| |
| | Lease fees can be deducted as a business
|
| Municipal ground leases have a long
| |
| | operating expense on taxes, reducing the
|
| history. It's not unusual for a city or
| |
| | tax burden on the lessee. The lease fees
|
| town to lease land to educational
| |
| | will nearly always be a greater deduction
|
| institutions, for instance, retaining
| |
| | than interest paid on a commercial
|
| ownership of the land while giving the
| |
| | mortgage, and the lessee will not be
|
| lessee the control needed to make
| |
| | responsible for tax payments on the land.
|
| improvements to the property. Those
| |
| | - Lessee is protected from downturns in
|
| leases generally run for terms of 99
| |
| | the real estate market
|
| years, and often carry nominal lease
| |
| | The real estate market is volatile. A
|
| fees. The advantage to the city is clear
| |
| | lessee's investment in a ground lease
|
| - they are home to an institution that
| |
| | commercial property is not dependent on
|
| adds value to the community, increasing
| |
| | the increasing value of the land. Rather,
|
| the value of other real estate and making
| |
| | their retail or commercial activities
|
| the community a more desirable place to
| |
| | provide added value.
|
| live. The lessee also gains an advantage
| |
| | As with any real estate transaction,
|
| - they don't need to purchase the land on
| |
| | there are both pros and cons to taking on
|
| which they sit.
| |
| | a ground lease for sale. Houston
|
| Terms tend to run for much shorter
| |
| | residents, a great deal depends on the
|
| lengths of time - as short as 5 years,
| |
| | terms of the lease and its flexibility.
|
| though 30 year terms are common for a
| |
| | It is definitely an option worth
|
| ground lease for sale. The advantages of
| |
| | considering, however, particularly in an
|
| these leases is for the landowner - the
| |
| | area where outright purchase - as in
|
| landowner retains ownership of the land
| |
| | master planned communities - may not be
|
| and ensures a steady income from the rent
| |
| | an option. The opportunity to enter into
|
| paid on the property. In addition, ground
| |
| | a long-term ground lease with the owners
|
| lease terms often specify that
| |
| | developers of a major master planned
|
| improvements to the property revert to
| |
| | community can offer the flexibility and
|
| the owner at the end of the lease term.
| |
| | benefits needed for a successful retail
|
| But what advantages are there for the
| |
| | operation with a ready market of both
|
| tenant in a ground lease arrangement?
| |
| | consumers and employees.
|
