Grounded for Life Where Home is in a Land-Leased Building

 Most cooperatives and condominiums in New York City traditionally own both the  building and the land around it. There is, however, a real estate scenario  where the cooperative (and in rare instances, the condominium) owns the  building, but not the land on which it sits.  

 This situation is what’s called in real estate parlance “a ground lease,” where the co-op typically has a long-term lease on the property, from 30 or 50  to more than 100 years in many cases. In this instance, the building sponsor  leases the land, sometimes from the City of New York, or sometimes from an  adjacent business, third party developer or even a religious institution. This  ground lease sets the terms of the lease; the length of the lease, the renewal  terms and the rent payable under the lease.  

 Real estate lawyers often shy away from this scenario and buyers sometimes are  caught unaware or are wary about committing to such an arrangement, according  to Jacky Teplitzky, a real estate broker with Prudential Douglas Elliman.  

 Some notable buildings with ground leases include Battery Park City, the  Excelsior at 303 East 57th, the Trump Plaza at 167 East 61st Street, the Sovereign at 420 East 59th Street, One Carnegie Hill, a condop at 215 East 95th Street, 385 East 67th Street, and  150 East 61st Street, to name a few. There are roughly 100 ground lease co-ops  in the city and Battery Park City may be one of the only neighborhoods in  Manhattan where the majority of buildings have them.  

 Teplitzky is a broker familiar with several buildings in this situation, namely  the Azure, a new construction at 333 East 91st Street, the Excelsior, One  Carnegie Hill and several residences at Battery Park City, for instance. She  recently held a standing-room-only seminar explaining the advantages and/or  potential drawbacks of buying into a land leased building.  


Related Articles

Securing Air Quality in the COVID-19 Era

HVAC, HEPA Filters, & UV Disinfection

Multifamily Energy Saving Solutions

Part 1: Incremental Upgrades

Pre-Winter Maintenance

Roof, Boiler, and a Few Points in Between



  • Great insight by Mr. Aldad - thank you.
  • Land lease arrangements go against the very idea of buying property. You are actually locking up a large amount of capital just so that you can pay rent at a high premium on the underlying land. The outgoing cash flow goes nothing towards your equity in the land. You go through uncertainty on the rental increases and at the end of the lease period. As the article says, you can end up being a renter of your own apartment for which you paid a dear price. I would rather either just pay rent for an apartment and keep my capital for other investments, or buy a condo and the underlying land and get all the benefits of asset appreciation, tax deductibility of interest expenses and potential income from renting it out.