Ground Leases
How does one price and market ground leases?
[{"id": "fskg7fp", "text": "I\u2019ve seen two versions, \n\n1. Randomly pull a number out of their ass. \n\n2. Development analysis of hard and soft costs plus a developer margin above the projected market/exit cap for that tenant. \n\nI\u2019ve found the second approach to work better.\n\nEDIT: To answer the second part of your question about marketing - it's the same as any other transaction type just your pool of potential suitors shrinks significantly. In my experience, primary drivers are usually A+ real estate in tight markets. Also varies by end user as not all will GL. I typically see a lot of long term lease BTS deals instead. Basically functions like a GL, but more developer risk.", "replies": [{"id": "fspp179", "text": "Would second what baronti says on the marketing piece. It is an automatic no for many buyers. Really depends on the market and property type. \n\nClass A office in a popular submarket in a Tier 2 city for example will get hammered on price. Think well below replacement value.", "replies": [], "depth": 2}], "depth": 1}]