Structuring Ground Leases and Leasehold Mortgages: Balancing Competing Interests Among Owners, Lessees, and Lenders
Herrick Real Estate partners Dena Cohen and Patrick J. O'Sullivan, Jr. presented a live CLE webinar, "Structuring Ground Leases and Leasehold Mortgages: Balancing Competing Interests Among Owners, Lessees and Lenders" for Strafford Publications.
A ground lease can be an attractive method to develop commercial property. However, the tenant/developer's ability to obtain financing is crucial to a development's success using a ground lease. Counsel must consider the potential lender's interests in the negotiation of a ground lease between the landlord and tenant. Counsel's primary task is to balance all the competing interests concerning each key provision, such as subordination, right to cure, and consent.
Dena and Patrick discussed the essential provisions of a ground lease, the principal benefits to the landlord and the tenant of ground leasing a property, what makes a ground lease "financeable" and the key provisions of a leasehold mortgage. The CLE also discussed lessons from the recent economy and the role of ground leases in future development.