All Discussions Tagged 'Land Leasing' - Real Estate Finance2024-03-28T15:46:47Zhttps://realestatefinance.ning.com/forum/topic/listForTag?tag=Land+Leasing&feed=yes&xn_auth=noLand Lease Hold Purchases from under Real Estate/ Great Opportuntytag:realestatefinance.ning.com,2015-02-25:6517464:Topic:2189072015-02-25T04:36:25.771ZSandra Brownhttps://realestatefinance.ning.com/profile/SandraBrown
<p align="center">Land Lease Hold Purchases from under Real Estate</p>
<p> I’m currently working directly with a lending group that has a new program that might be of interest to many of you cash strapped investors. This year the group is looking to buy $1 Billion in ground leased fee positions and they are well capitalized to do so.</p>
<p>The group just bought the ground under the NE regional headquarters of a major insurance company in the Hartford, CT sub-market. On that transaction we…</p>
<p align="center">Land Lease Hold Purchases from under Real Estate</p>
<p> I’m currently working directly with a lending group that has a new program that might be of interest to many of you cash strapped investors. This year the group is looking to buy $1 Billion in ground leased fee positions and they are well capitalized to do so.</p>
<p>The group just bought the ground under the NE regional headquarters of a major insurance company in the Hartford, CT sub-market. On that transaction we bought the ground for $22.8 million, got the seller leasehold financing for $25.6 million, and are now doing a $3.2 million mezzanine loan on the property. The result: at $51.6 million in total capitalization the seller got 99% of the price he would have received in a sale while continuing to get an average of $687,000 in net cash flow over the next 10 years, boosting his cash-on-cash return almost 3X from an average of 12.82% to 34.26%, and he can keep the leasehold in his estate for the next 99 years and depreciate the asset 100% as the result of no longer owning the land.</p>
<p>So you can see how this would be an attractive structure for sellers as opposed to a traditional recapitalization or sale!</p>
<p align="center"><b>This is how it works</b></p>
<p>• The lender will buy the ground under any high quality commercial real estate asset with a value of $50 million + (or possibly a portfolio of them) for typically 40%-50% of the overall value of the asset at a cap rate well below the cap rate for the overall asset,</p>
<p>• We will lease it back to the seller over a 99-year term,</p>
<p>• Assist the seller in obtaining leasehold debt,</p>
<p>• Perhaps even provide a mezzanine on top of the capital stack.</p>
<p><b>The result of which will be the seller/leaseholder:</b></p>
<p> • Receiving 90-99% of the proceeds at closing that they would have received in a sale,</p>
<p>• Retaining and continuing to operate the real estate,</p>
<p>• Doubling to tripling their cash-on-cash return over more traditional financing.</p>
<p> We may be interested in major international markets as well, depending on the quality of the real estate, size, location, ect. </p>
<p> </p>
<p>For more information please contact Sandra Brown @ <a href="mailto:smithbrown59@gmail.com">smithbrown59@gmail.com</a> or Skype: Deebrown59</p>