Barbri Webinar: Financeable Ground Leases: Landlord, Tenant, and Lender Basics
Herrick Real Estate partner, Patrick J. O'Sullivan, Jr., will present a CLE with Barbri to examine the legal and practical ground lease fundamentals, including core provisions and the benefits and risks for both landlords and tenants. Participants will get an introductory overview of what makes a ground lease "financeable," with a focus on financing structures (including leasehold and fee mortgages), lender protections, and key negotiation and drafting considerations.
A ground lease can be an attractive method to develop commercial property. Ground leases offer long-term income and certainty for landlords, as well as flexibility and stability for tenants. In a ground lease, the landlord retains the fee interest in the land while the tenant retains a leasehold interest in the improvements they make.
This separation of interests impacts financing and the loans the parties can secure related to their project. So, making sure a ground lease is financeable is critical for landlords and tenants considering a ground lease, as well as for lenders who underwrite them. This introductory course will outline what makes ground leases attractive; the necessary agreement provisions needed to ensure a ground lease is financeable; a tenant's leasehold mortgage and its key terms; and special considerations for a landlord's fee mortgage, including when to consider and negotiate a subordinated ground lease.