Ground Leases•7 min read•August 20, 2024
Ground Lease vs Fee Simple: Which is Right for You?
A comparison of fee simple and ground lease structures, including how risk and control shift between parties.
Fee simple provides full ownership, while ground leases split the capital stack into land and improvements. The right structure depends on goals, time horizon, and financing constraints.
A Practical Comparison
- Upfront capital: ground leases can reduce initial outlay for the tenant.
- Cash flow: landowners can create long-term income streams via ground rent.
- Control: fee simple typically offers maximum control; ground leases allocate control through covenants.
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