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Practice Group Chair: Terri Adler 


We at the Firm have handled an enormous amount of work with ground leases for our clients.  The Firm is proud to have an exceptional ground lease practice.  This includes:

(i) negotiating ground leases from the point of view of both the lessor and the lessee;

(ii) representing owners and investors who seek to unlock value from their property and/or increase their internal rates of return through ground lease transactions;

(iii) financing various interests within ground lease structures – whether on behalf of fee owners, holders of ground lease interests or subtenants – and advising as to the complex relationships among all interest holders and their lenders;

(iv) advising as to complex issues arising under ground leases, such as the reset of ground rents, purchase options, insurance and restoration obligations, construction matters, ground leasing over condominium unit interests, lessor improvement allowances, income tax structuring (including the use of Section 467 Loans, depreciation and rent characterization), transfer tax considerations, bankruptcy risk, and subleasing restrictions;(v) the acquisition and development of properties through ground lease structures; and

(vi) representing parties who team up to purchase properties through a ground lease structure.

Representative Transactions
  • We represented Tribeca Investment Group, LLC in the acquisition of a ground leasehold interest in 295 Fifth Avenue in the Garment District in Manhattan.  The transactions involved the negotiation of two tiers of joint ventures, among our client and affiliates of Meadow Partners and PGIM Real estate, as well as the negotiation of a complex ground lease with the family that has owned the building since it was built in 1921. The partners have committed to invest more than $300M into the renovation and re-tenanting of the building as a leading commercial and real estate asset in Midtown South. 
  • We represented our client, Montgomery Street Partners, as the ground lessor, in various sale-leaseback transactions, including (i) the acquisition and ground lease of a hotel property in Frisco, Texas for $45M, (ii) a $75M ground lease to affiliates of the Rabsky Group for the development of multifamily apartments at 240 Willoughby Street, Brooklyn, and (iii) the acquisition and ground lease of the Hudson Hotel located in Columbus Circle, Manhattan, for a $400M redevelopment of the site.  We represented our client, Montgomery Street Partners, in the $75M ground lease for 240 Willoughby Street, Brooklyn.
  • We represented our client, an east coast based developer, in connection with the creation of a ground lease with an institutional ground lease financer, and concurrent leasehold and mezzanine financing from a leading, privately-held commercial real estate finance institution in connection with an approximately $100M development of a mixed-use office and retail property located on the east coast. 
  • We represented our client, a joint venture of Angelo, Gordon & Co. and Extell Development, in connection with the acquisition and redevelopment of a ground leasehold interest in the then-operating hotel known as the Carlton House.  In addition, in order to permit the monetization of the retail separate from the residential, a synthetic bifurcation of the ground lease was created pursuant to which the residential cooperative would be a subtenant but have certain direct protections from the ground lessor – thereby permitting the ownership to sell the retail mid-construction while still developing and selling the residential.  
  • We represented our client, Angelo, Gordon & Co., in connection with the acquisition of 21 ground leasehold interests in a 21-office property portfolio in Long Island.  In connection therewith, our client stepped into the existing debt on each of the fee properties with 7 different lenders, as well as the existing IDA financing on several of the fee properties. The consideration was approximately $545M.  
  • We represented our client, a major life insurance company, in the acquisition of the fee interest of a property located in New York City’s Garment District.  A major New York City REIT separately acquired the ground lease interest in the fully leased, approximately 600,000 square foot building.  


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