what percentage of appraised value is appropriate for ground lease to major bank (20yr) for high profile lot?

In Leasing Property - Asked by david j. - Aug 10, 2009
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Answer(s)

Sandi L.
Broker/Agent
Cartersville, GA

For many years, everyone(including buyers) were looking for a 10% return. With the current reduction in earnings on interest bearing accounts and stock returns, the number has declined. Being more specific to your question, every scenerio is different, but the average is; they want the monthly lease amount to cover the monthly payment plus taxes and insurance, or they want enough in your account to cover a year's worth of these expenses. Always depends on the Borrower's financial condition. Hope this helped.

Aug 12, 2009
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Brandi L.
Oak Brook, IL

Search Loopnet listings for the going CAP rate of your particular institution. Absolute NNN CAP rates for well located land leased to major financial institutions are still low by comparison to other asset classes. You will want to structure the rent at a rate that ADDS VALUE to your parcel without being unreasonable. The latter can break a deal as the real estate departments of major institutions are well aware of their credit ratings and how their rent relates to the overall value of your property.

Aug 14, 2009
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Gregory G.
Broker/Agent
San Francisco, CA

I hope you're not someone's agent David.

Aug 14, 2009
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