Retail Ground Lease Rent. How To Determine?
Good Morning Guys,
I stumbled onto this forum yesterday when I was doing a google search and discovered a thread discussing how to value a ground lease. The thread can be found under the title: Ground Leases - How To Value And What Am I Missing?
One poster responded to the OP by stating ground payments are typically calculated based off a % of gross NOI. Stating they generally want to be 20% or lower, but he's seen as high as 30% on newly cut ground leases.
This thread was addressing the scenario of a developer ground leasing a property to build a commercial development that would be funded with rental income. What I want to know is if this same method applies to ground leasing a property to a national tenant where they are their own developer? More specifically, I want to confirm if the ground rent is based off of their gross annual projected revenue and then converted as a fixed percentage of that revenue?
If anyone can answer this question I would greatly appreciate it as I have never been able to find a straight answer to this.
Voluptas aut id minus praesentium. Ratione in assumenda aliquid facilis. Nostrum aspernatur et eveniet eligendi quae atque.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...