Like the title says, if there is a situation where an owner of a fee simple interest in real estate wants to generate further liquidity through selling off the leased fee during their hold (and structuring a ground lease), how would their existing debt be treated? Would the newly-created leasehold be allowed to pay down their loan through a ground lease bifurcation? Would a lender even allow a bifurcation mid-hold?
This is a very specific situation, but I've been coming up short when researching.
Most lenders wouldn’t permit the bifurcation mid loan. I have seen this occur on a refinance where that structure is created in conjunction with that financing
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