Some of the most desirable development sites in New York are not for sale - but that doesn’t mean that they are not on the market. Whether it’s a family with an emotional attachment to the land or a foundation or religious institution precluded by its charter from selling, a savvy developer with experienced counsel can win the right to develop these sites with a ground lease.
The attorneys in Pryor Cashman’s distinguished Real Estate Group have decades of practical experience crafting ground leases in New York City. In addition to affording the fee owner an income stream over the lease term, a ground lease enables the developer to amortize acquisition costs over a much longer term than a typical acquisition loan. We help clients make the most of these advantages, while also addressing the specific challenges such leases present.
What We Do
With the perspective gained from representing both owners and developers in ground lease transactions, we are able to balance the owner’s legitimate interest in ensuring that it gets the benefit of its bargain with the developer’s need for flexibility to redevelop and operate the premises to meet shifting market demands.
We are particularly skilled in structuring ground leases intended to culminate in a “sale-condo back” transaction. This type of arrangement enables the owner to retain title to the land until it receives the benefit of its bargain (the agreed-upon condominium unit). In working on these deals, we collaborate with our tax, land use and condominium counsel to minimize transaction costs, maximize development potential and establish the condominium regime to govern the relationship of the parties after completion.
Combining Creativity and Skill
We have completed leasing transactions throughout New York and around the country. In one record-setting transaction, our team represented the landlord in securing a long-term net lease with Porsche Cars North America for its 175,000-square-foot New York automotive showroom and service center. The Real Estate Board of New York named it one of the “Most Ingenious Deals of the Year” for the ingenuity, creativity and professional skill demonstrated in closing the transaction.
We have also represented the owners of some of New York’s most high-profile development sites in ground lease transactions. For example, we negotiated and executed Milk Studios’ ground lease to a developer of a prime site beneath the High Line at 14th Street in Manhattan. The deal included the acquisition of additional developments from the adjoining “Milk Building” and the reconfiguration of the entire block front to maximize retail activity.