leasing
ground lease
A ground lease is a long-term lease of land only, under which the tenant typically builds and owns improvements on the land during the lease term. Terms often run 50 to 99 years. At the end of the lease, the improvements usually revert to the landowner unless the lease says otherwise. Ground leases are common for commercial development and are generally net leases.
- Exam tip
- Exams test that in a ground lease the tenant owns the building while the landlord owns the land, and that the leases are long-term and usually net.
- Example
- A restaurant chain leases a vacant lot for 60 years and builds its own restaurant there, paying $4,000 per month in land rent plus taxes.
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Last verified: 2026-10-23