How to get fair deal on property with expiring ground lease?
I've come across an interesting offer.  In short, the building is currently a household fast food franchise on a ground lease expiring within few months.  Location is excellent; a major artery dense population etc so I'm not worried about land losing value.  Assuming the lease won't renew, am I right in understanding that new owner will be stuck with property tax that includes building structure?  What are fair concession to ask from seller.  I'm not much experienced in ground lease so will appreciate any expert thoughts.
[{"id": "htvp6j4", "text": "Whoever owns the ground will own the property. Not enough detail to give you a full rundown but I\u2019ve financed many ground leases and leaseholds.", "replies": [], "depth": 1}, {"id": "htw3tnn", "text": "i'd price on land value + whatever the residual of the structure would be after they vacate in accordance with their lease terms (ie what rights to demo do they have?).  \n\nYou are talking about a pretty complex event.  Its really impossible to answer this without understanding a ton more about the deal and the in place lease.  Just going off what you said though it sounds like the owner doesn't think it would be renewed so they are bailing and making it someone elses problem.  Otherwise they'd not take the giant value hit here and would get it renewed then sell.\n\nBut yes to answer your question you will be responsible for the property taxes and any other costs associated with the property (landscaping etc) until you find a new tenant.  Depending on the age of the structure if its that high value of a location  you might have to pay to demo it too and you are basically down to land value (or when offering land value - demo costs -leasing costs -lost rent -whatever you think is a fair profit for dealing with that chain of events).\n\nI'm not really sure what a fair concession is in this context, it sounds like they are being up front with you the lease is expiring and asking you to offer with that knowledge in play.  \n\nYou could offer current fee simple value (ie value without tenant in place) with a provision to pay an additional fee after closing if the tenant renews if you want to bridge the two values which kinda shares some risk between you and seller.  Essentially no one gets a windfall there if the tenant renews the lease and no one gets totally screwed if they dont.\n\nAlso I don't mean this to sound mean but what you are talking about can be rather complex even for cre standards.  I really really suggest meeting with a lawyer to review their lease and explain in detail what is going on here, and if they vacate the timelines for that and their obligations as far as what state the building will be left in.  The taxes on the building are like concern #100 on the list of shit you need to figure out here, frankly you should hope the building has lots of value and be glad to pay them as that would generally indicate it will be easy to release.  If they leave you a gutted shell you will have to demo you can add asking your attorney how long and difficult it will be to get the property reassessed to your list of questions", "replies": [{"id": "ibd2oma", "text": "The part I'm not following about this response is how it's worth anything at all, if the ground lease is not renewed. You buy it, and then a few months later you don't own it.", "replies": [], "depth": 2}], "depth": 1}]