A GROUND LEASE REVOLUTION

Better capital and returns for owners, developers and acquirers of high quality commercial real estate.


Learn More

(NYSE: SAFE)

What Is A Ground Lease?

A ground lease is a safe part of a commercial real estate capital structure, generally representing ownership of the underlying land. The land is typically net leased on a long-term basis by the landlord (SAFE) to a tenant that owns and operates the property.

Key points of ground lease structure:

  1. Tenant leases the land on a triple net lease basis and operates the building for the duration of the lease.
  2. Landlord (SAFE) collects ground rent payments, typically including contractual escalations and/or percentage rent payments during the lease term.
  3. At lease expiration, or upon a tenant default, SAFE continues to own the land, and the title to all improvements thereon reverts to the landlord (SAFE). Ground leases are often extended throughout the duration of the lease term.

Typical Ground Lease Structure

Lease Term Base term up to 99 years
Rent Escalators Fixed bumps, CPI-based increases, revenue participation
Property Expenses No Landlord obligations
Capital Expenditures No Landlord obligations
Tenant Repair and Maintenance Tenant obligated to maintain the underlying property in the same condition as it was as the start of the lease
Remedies Upon Tenant Default Landlord (SAFE) entitled to terminate the lease, regain control of the land and take ownership of the improvements
Reversion Right at Lease Expiration Control of the land and ownership of the buildings and improvements on the land revert to Landlord (SAFE)
Onyx

Why Ground Leases?

By utilizing a ground lease, our clients can lower their costs of capital to generate higher returns relative to traditional forms of commercial real estate financing.

For our investors, a SAFE Ground Lease™ generates attractive risk-adjusted returns, combining safety, growing inflation protected income and the potential for considerable capital appreciation.

Market Opportunity

SAFE is reinventing how ground leases are utilized in today’s commercial real estate market. SAFE’s modern, custom ground leases are designed to capitalize on a significant opportunity within the ~$7 Trillion commercial real estate industry.

7 Trillion Chart

(company estimates)

Ground Leases Haven’t Evolved In Decades – Until Now

While debt products have become increasingly efficient over the years, ground leases haven’t experienced the same innovation.

We’re here to change that.

Evolution Chart

SAFE Is The Future

SAFE Ground Leases™ provide better capital to our clients, reducing the equity need and delivering increased cash-on-cash returns and overall IRRs.

As we reinvent the ground lease industry, our investors will benefit from an unprecedented combination of safety over a long duration of time, contractual escalators that should outpace inflation and capital appreciation at the conclusion of our lease terms.

Safe is Future