Land Sale vs. Ground Lease Considerations in New Mountain Community
I’m developing a new mixed-used community in an attractive region of the western North Carolina mountains.  Beautiful 140 acre site with heavy topo has provided a great learning opportunity relative to mountainside civil engineering, new road/utility design, creating usable sections of land for homes and buildings, etc.  

Hawk Ridge Landing will include a nice mix of residential, commercial, walking/biking trails, modest amenity areas.  After almost two years of planning, entitlement and initial road/utility work we’re ready to push the button and start selling the first residential project of 55-60 new homes.  

Now shifting focus to creating and improving a handful of smaller commercial sites to support/compliment the emerging residential areas and starting to research options for ground leases vs. typical land sales.  Would like to attract (or create) things like neighborhood bar/grill, family restaurant, small retail/office professional center, modest flex space, etc.  Also planning for a few multifamily projects.

Can anyone share experiences, tips, suggestions, etc. for offering ground leases for our commercial areas vs. just selling improved sites?  Due to the heavy mountain topo most sites will be smaller in size, maybe 0.5 to 3 acres.
[{"id": "j0ppb7d", "text": "Well if it\u2019s a long term hold I would lease the land vs selling because it will allow you to maintain control of the the tenants. \n\nAlso what did you proforma? If you are developing home sites already i would hope you would have this figured out at this point.", "replies": [{"id": "j0ptnl9", "text": "Thanks - that\u2019s definitely a strong upside of the land lease option.  \n\nWe acquired the land via fire sale which enables numerous attractive utilization opportunities going forward.  Setup a flexible property development / ownership / operating structure to bring individual projects forward in response to local market needs and demand over time.  \n\nLike the first residential project in one section of the overall community, each opportunity has its own development plan, investors/owners, proforma, operating plan, exit options, etc.  Thus we can be thoughtful/selective about what we choose to do ourselves vs. selling/leasing land to others.", "replies": [], "depth": 2}, {"id": "j0pvx16", "text": "The idea is described in more detail here www.hawkridgelanding.com.", "replies": [], "depth": 2}], "depth": 1}, {"id": "j0r40bx", "text": "I can tell you that only a fraction of active tenants will consider ground leases and of that fraction the vast majority only do ground leases in huge traffic and density markets. That doesn\u2019t look to be your sub market. Also the types of tenants you are talking about more often lease existing space due to the fact they do not have the capital to build their own building or any of the other relevant experience to start. Build to suit will also give you long term control that it sounds like you want and will be attractive to a wider pool of tenants. Just have to figure out if it\u2019s in the budget to do that.", "replies": [{"id": "j0r8zky", "text": "Thank you - very helpful info.  \n\nBuilding and leasing commercial space (or selling land for others to do so) was our plan from the beginning.  I\u2019m checking into ground leasing mainly to make sure we\u2019re not overlooking an adjacent opportunity.   \n\nI agree that many in this region don\u2019t have the skills and/or resources to buy/build on their own. I like to design/create new things, and capital can usually be found for projects with a solid business plan (especially when owning the land), so I suspect we\u2019ll end up building at least one professional center and one multifamily project on our own.\n\nWe\u2019re starting with a SF residential project to help address the critical housing shortage in this area.    It\u2019s so bad here that employers often cannot fill open jobs due to the lack of housing supply for new residents/employees\u2026.  On the multifamily side, the lack of availability rental housing or apartments is so bad we could probably fill multiple small buildings not long after breaking ground\u2026\n\nThanks for mentioning build-to-suit in the commercial areas - a good reminder to further evaluate that option as well.", "replies": [], "depth": 2}], "depth": 1}]