disregarded the provisions of the statutes for determining the valuation of the property." Specifically, Walgreen argued that the trial court improperly valued the
leased fee interest, rather than the fee simple interest, and used too narrow a highest and best use for the property given its pharmacy nature.
In addition, three loans in the pool (10.2%) are secured by
leased fee properties located in New York City and Portland, OR.
SL Green agreed to sell the
leased fee interest for the building, located in 885 Third Avenue, for a gross sale price of $453 million.
A USD120m debt, backed by
leased fee interest in the Dream Hotel Downtown at 346 W.
Lessor's appraiser considered the terms of lease and estimated the value of the
leased fee interest in the property at $6,880,000.
Cushman & Wakefield represented L&L Holding Company and BlackRock in the $145 million sale of the
leased fee at 635 Madison Avenue.
The appraiser used a
leased fee analysis to value the subject property.
In valuing the fee interest of property subject to a long-term, build-to-suit lease, an appraiser properly considered the value of the
leased fee, according to the New York Supreme Court, Appellate Division.
"The availability of this financing structure provides owners of
leased fee estates a tremendous opportunity to leverage their fee positions and create substantial liquidity," said Michaels.
Even if the lease is at market rent, the fee does not necessarily equal the
leased fee.
Leased fee sales data should include percent leased at time of sale (which can be different from percent occupied), a general understanding of prior leased occupancy history, meaningful remaining lease terms at time of sale, general escalations for remaining lease terms, and presence or absence of shadow anchors in addition to the rent information.
