- You have to think into the future on these properties and understand the ramifications of the current terms of the contract. Don’t assume you can extend the lease.
- Look for low rents. Ground lease rents that are below market provide properties with higher cash flow for your portfolio.
- Consider depreciating the assets faster to match up with the lease term.
- Time tenant leases to rollover as potential ground rent increases come through in the master lease.
- Pass your ground rent increases to tenants. This needs to be put in the lease up front.
- Older ground leases are typically more flexible. The fee owner may also be more motivated to make changes like increase the rent and modernize the terms of the lease.
- If you are a ground lessor, consider buying the leasehold interest, and do not merge them.
- Run a title report to see which of any ground lease amendments are recorded.
