LAND LEASES
I see big businesses leasing lad and building upon;Is it harder to get financing for this and doyou gain the same type of value in the bldg as you would if you bought the land?CAN THIS BE DONE ON SMALL SCALE?
I see big businesses leasing lad and building upon;Is it harder to get financing for this and doyou gain the same type of value in the bldg as you would if you bought the land?CAN THIS BE DONE ON SMALL SCALE?
The main benefits are liability and Tax write offs. It keeps the business from being asset heavy and tax advantages can be used. Also any C-Corporation can get those benefits. As far as financing it will be harder and Higher interest unless the land is attached to the loan.
Kyle
Try turning the question around. If you were to purchase/hold the land in fee simple and the ground lease was not subordinated to the financing/lease on the building, yes the ground would be financeable.
However, if you are discussing leasing the land to do a build-to-suit, then financing for the build-to-suit would be more difficult.
I am a commercial mortgage banker with institutional lenders and have done many land lease transactions. If you can get a big enough tract of land tied up and stick to your guns, you could get a Lowe's/Wal-Mart/Home Depot to sign a 20-25 year lease and then finance 100% of the deal out or close to it.
If you can tie the land up with a long term option. If you can find a national creditworthy tenant who wants your site. The all kinds of deals and ventures are possible. Financing will be readily available to you.