Buying a Building on a Ground Lease?

searcher profile

January 18, 2025

by a searcher from Columbia University - Columbia Business School in Leesburg, VA, USA

I'm under NDA on a building/business for sale that provides a specialized retail/light commercial service. Owner filed bankruptcy on the business and building is now for sale. Newly built a few years ago. Poorly operated and variable rate mortgage got the better of owner forcing the bankruptcy. Building can't be retrofit for a different purpose other than the specialized service it provides. It's not a franchise. Of course the easy math is "what's the max capacity of customers the building can handle and how profitable can I make the service?" Obviously if that math doesn't work then it's a no go, but beyond that I'm looking for insight/guidance/expertise to help me think through this.

A) school me on ground lease considerations...

B) real estate financing considerations here...this is being presented as a building sale. It includes the machinery/capital equipment for the business services but it's not clear that those are quantified in the price.

C) a non-national bank holds existing mortgage and local company owns ground lease. Both have just approved lower pmts to current owner to keep operational while they work out a sale.

D) Eventual exit considerations of specialty service business/building on a ground lease.

E) what else should I be thinking about here?

Thank you!

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commentor profile
Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA
Happy to have a conversation to go through this with you. There is a lot to unpack and hard to do in a post, and some of the answers might change slightly if I do not fully understand the situation. You can reach me here or directly at redacted if you would like to discuss.
commentor profile
Reply by a professional
from Northwestern University in Chicago, IL, USA
I’d be happy to help out and walk you through it - feel free to reach me out at redacted
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