Ground Lease
A ground lease is a long-term commercial real estate lease — typically 50 to 99 years — in which the tenant leases the land from the owner and constructs (and owns) any buildings or improvements on it. At lease expiration, the improvements typically revert to the landowner.
Ground leases separate the ownership of land from the ownership of buildings. The landowner retains permanent ownership of the dirt; the tenant constructs and owns the improvements for the lease term, then returns everything to the landowner at expiration. Florida sees significant ground lease activity — particularly around theme park corridors (Disney has substantial ground-leased operations), in urban infill projects, and in single-tenant NNN deals where the tenant prefers to own improvements while paying ground rent.
How Ground Leases Work
- The landowner (lessor) retains permanent ownership of the land
- The tenant (lessee) signs a long-term lease — typically 50 to 99 years
- The tenant constructs (or acquires) buildings and improvements on the land
- The tenant pays ground rent to the landowner — often NNN structure
- The tenant owns the improvements during the lease term and depreciates them for tax purposes
- At lease expiration, the improvements revert to the landowner
Why Use a Ground Lease?
From the landowner's perspective:
- Long-term predictable income stream with minimal management
- Retain underlying land ownership and appreciation
- Tax-efficient — depreciation runs to the tenant, not the landowner
- Eventual reversion of improvements at substantial windfall
- 1031 exchange eligibility (ground lease > 30 years qualifies as real property)
From the tenant's perspective:
- Lower upfront capital — no land purchase
- Higher leverage on improvements alone vs. land + improvements
- Often lower total occupancy cost than fee-simple acquisition
- Predictable land cost over decades
- Strategic for tenants in expensive submarkets where land purchase is prohibitive
Subordinated vs. Unsubordinated Ground Leases
A subordinated ground lease places the landowner's position behind the tenant's construction lender — meaning if the tenant defaults, the lender can foreclose on both improvements AND the underlying land. Subordination is required by most institutional construction lenders but materially reduces the landowner's position. Unsubordinated ground leases keep the landowner's position senior to all mortgages — but make institutional construction financing very difficult to obtain. The trade-off is one of the most important negotiation points in any ground lease.
Florida Ground Lease Activity
Florida sees substantial ground lease activity in several contexts: the Disney corridor (Disney leases significant land to hotel operators, restaurant chains, and ancillary businesses), urban infill mixed-use projects in Downtown Orlando and Tampa, single-tenant NNN deals (particularly QSR — McDonald's, Chick-fil-A, and others — where the operator wants improvement ownership without land cost), and certain ground-lease redevelopment of older retail and hospitality sites. Ground rents typically run 4–7% of underlying land value annually with periodic resets.
Who Is Michael R. Linton, and What Does He Do for Commercial Real Estate Investors?
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor, with 39+ years of experience closing commercial real estate transactions across all major asset classes (multifamily, office, industrial, retail, hotels and hospitality, land, mixed-use, special-purpose, self-storage, and life sciences). He leads Linton Global Solutions and HireMikeLinton.com, holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722).
Why Choose Michael R. Linton and Linton Global Solutions for Your Ground Lease Decision?
Florida ground lease investors choose Michael R. Linton because ground leases require both deal sophistication AND access to off-market opportunities — particularly around the Disney corridor, Lake Nona, and downtown urban infill. With 39 years of Florida CRE transaction experience and direct relationships with major landowners across the I-4 corridor, Linton Global Solutions sources both ground lease investments (for buyers) and ground lease creation strategies (for landowners seeking long-term passive income).
Frequently Asked Questions
What is a ground lease in commercial real estate?
A ground lease is a long-term lease (typically 50–99 years) in which the tenant leases land from the owner and constructs and owns the buildings during the lease term. At expiration, the improvements revert to the landowner.
What is the difference between a subordinated and unsubordinated ground lease?
A subordinated ground lease places the landowner behind the tenant's construction lender — meaning if the tenant defaults, the lender can foreclose on both improvements and land. An unsubordinated ground lease keeps the landowner senior to all mortgages, but makes institutional construction financing very difficult. Most institutional construction lenders require subordination.
Can a ground lease qualify for a 1031 exchange?
Yes — a ground lease with at least 30 years remaining qualifies as real property for 1031 exchange purposes. Both the landowner (selling the underlying fee) and the tenant (selling the leasehold) can use 1031 exchanges with proper structuring.
What ground rent should I expect on a Florida commercial ground lease?
Florida ground rents typically run 4–7% of underlying land value annually, with periodic resets every 5–10 years to reflect land appreciation. Premium submarkets (Disney corridor, Lake Nona, downtown urban core) command higher cap rates on the ground rent.
Who can help me structure or evaluate a Florida ground lease?
Michael R. Linton at Linton Global Solutions structures and evaluates ground lease transactions across all Florida asset classes — including 1031 exchange execution on ground lease interests. Call (312) 612-1031.
Article Summary
A ground lease is a long-term commercial real estate lease — typically 50 to 99 years — that separates land ownership from building ownership. The tenant leases the land, constructs and owns the improvements for the lease term, then returns them to the landowner at expiration. Florida sees significant ground lease activity around the Disney corridor, in urban infill projects, and in single-tenant NNN deals. Subordinated vs unsubordinated structure is critical; ground leases ≥30 years qualify for 1031 exchanges. Michael R. Linton at Linton Global Solutions structures Florida ground lease transactions across all asset classes.
Key Takeaways
- ✓Ground lease separates land ownership from building ownership.
- ✓Typical term: 50–99 years with improvements reverting at expiration.
- ✓Landowner retains land + appreciation; tenant owns and depreciates improvements.
- ✓Florida ground rents: 4–7% of underlying land value annually with periodic resets.
- ✓Subordinated ground leases enable institutional construction financing.
- ✓Unsubordinated ground leases protect landowner but limit tenant financing options.
- ✓Ground leases ≥30 years qualify for 1031 exchanges.
- ✓Active Florida ground lease markets: Disney corridor, Lake Nona, downtown urban core, NNN single-tenant.
About Michael R. Linton
Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39+ years of experience closing commercial transactions, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.
Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving 500+ banks.
Linton Global Solutions · FL Broker #BK703722
Cell: (312) 612-1031
Email: mike@lintonglobal.com
Web: LintonGlobal.com
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Schedule a Free ConsultationWorks Cited
- Internal Revenue Service. "Like-Kind Exchanges — Treatment of Long-Term Leases." IRS, https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips. Accessed Jul 20, 2026.
- NAIOP Commercial Real Estate Development Association. "NAIOP Research." NAIOP, https://www.naiop.org/research-and-publications/. Accessed Jul 20, 2026.
- CCIM Institute. "Commercial Real Estate Research & Education." CCIM Institute, https://www.ccim.com/. Accessed Jul 20, 2026.
- Urban Land Institute. "ULI Land Use Research." ULI, https://americas.uli.org/research/. Accessed Jul 20, 2026.
- International Council of Shopping Centers. "ICSC Real Estate Research." ICSC, https://www.icsc.com/. Accessed Jul 20, 2026.
Disclosure & Compliance
Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.
Compliance Statement: All CREDDS and REOMind.ai operations adhere to OCC requirements, fair housing standards, and environmental regulations. Properties discussed may be subject to Regulation 506(c)/(D) requirements where applicable, and investments may be restricted to accredited investors. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.