ground lease

Ground lease

A lease of land, as opposed to a lease of a building.

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Ground Lease

A lease of real estate. A ground lease differs from other types of leases, such as those where one rents an apartment or a factory. Generally speaking, one may use a ground lease to occupy a piece of land and make improvements to it. For example, one may build an office on the land. Ground leases are important to some investment vehicles in Islamic finance, notably sukuk al-ijara.

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ground lease

A long-term lease of land in which the tenant will erect improvements at its own expense. Not a desirable arrangement from the tenant's point of view, but sometimes the only way to gain access to extremely valuable real estate in an excellent location.The owner may be unwilling to sell,or the owner may have received the property by gift or deed (such as a church or university) and be prohibited from selling for some period of time. At the end of the lease term, the improvements become the property of the landowner.