In the context of real estate, what is a Ground Lease?

A Ground Lease refers to a long-term leasing arrangement for vacant land, where the tenant may have the right to develop and improve the property during the term of the lease. This type of lease typically lasts for a significant duration, often ranging from 30 to 99 years, allowing the tenant to construct buildings or make substantial improvements on the leased property while the ownership of the land remains with the lessor.

Ground Leases are commonly utilized in commercial real estate, particularly in scenarios where a developer or business seeks to build on land without purchasing it outright. At the end of the lease term, any improvements made by the tenant usually revert to the landowner, which can be advantageous for both parties in terms of investment and development.

This distinguishes Ground Leases from other types of real estate leases, such as those for office space or residential properties, which are generally more short-term and pertain to already developed structures rather than undeveloped land.