Ground Lease Financing Structure in Florida
A ground lease separates land and building ownership. The landowner leases land long-term (50-99 years) while the tenant builds improvements and uses the leasehold as financing collateral. Common in Florida for downtown, hotel, and institutional developments.
Financing Mechanics
- Lessee obtains leasehold mortgage (secured by lease + improvements)
- Non-disturbance agreement protects lender from lease termination
- Lender gets notice and cure rights for lease defaults
- New lease right if ground lease is terminated
- Rates typically 0.25-0.75% higher than fee simple mortgages
Landowner Advantages
- Retain long-term ownership of appreciating land
- Steady lease income with CPI escalations
- Improvements revert at lease expiration
- Estate planning flexibility
Tenant Advantages
Lower acquisition cost, potentially lower property taxes, access to premium land, and tax-deductible ground rent.
Related Terms
- Estate for Years — Long-term leasehold
- Encumbrance — Leasehold mortgage
- Equity — Leasehold vs. fee simple equity
Barnes Walker Commercial Real Estate
Barnes Walker's attorneys structure ground leases and leasehold financing for Florida commercial developments. Request a legal inquiry for assistance.
Florida Law Reference
Fla. Stat. Ch. 83, Part II
The Florida Residential Landlord and Tenant Act governs lease agreements, security deposits, maintenance obligations, and the eviction process.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC