How To Minimize Risks In Leasehold Mortgage Financing

Law360, New York (January 14, 2014, 9:33 PM ET) -- In lieu of purchasing fee simple title to a parcel of real property, a party may opt to obtain a long-term ground lease. Acquiring a leasehold interest can provide many benefits to the tenant, including the reduction of taxable income through the deduction of rent payments and the avoidance of high upfront acquisition costs and market risk associated with ownership of the land.

However, from the perspective of the tenant’s lender, the use of a leasehold estate as part of a collateral package can be more...
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