Net lease glossary
Ground Lease
A long-term lease of land only, where the tenant builds and owns the improvements during the term.
A ground lease is a long-term lease of land alone. The tenant constructs or owns the building and pays rent for the dirt, usually under a net structure. Ground leases commonly run 20 to 99 years with scheduled increases. When the lease ends, the improvements typically revert to the landowner. For investors, ground leases are viewed as lower-risk because the tenant's building investment sits behind the land position, though cap rates and depreciation benefits are usually lower.