Ground leases are an important component of many commercial real estate deal structures yet for a lot commercial real estate professionals ground leases are rarely encountered and are poorly understood in this article well shed some light on how ground leases work explain what typical ground lease structures look like and well also clear up some common misconceptions about the ground . A ground lease is an agreement in which a tenant can develop property during the lease period after which it is turned over to the property owner ground leases commonly take place between. Typically a ground lease lasts from 35 to 99 years normally the lessee takes a lease on some raw or prepared land and constructs a building on it sometimes the land has a structure already on it that the lessee must demolish the gl specifies who owns the land and the improvements ie property that the lessee constructs. There are two key differences between a ground lease and a traditional commercial real estate lease they are the leased premises and the term as described above the leased premises in a ground lease is usually a piece of vacant land the leased premises in a traditional commercial lease is an existing building or space within a building
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