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How many land lease buildings in NYC?

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  • How many land lease buildings in NYC?

    I've heard that there are over 100 buildings that are built on land leases in NYC. Does anyone have a list of all the buildings that are on land leases in New York City?

    And I now that ground leases and land leases are the same idea, but are they exactly the same?

    Lastly, as a fun fact land leases are 99 years traditionally. Why? Because in old England the assumption was that the life of a man is 100 years, so land leases shouldn't be over 100 years. Remember that property law goes back to the year 1066, when the Normans invaded and conquered England and established English Common Law.

    Land leases are actually very common in London and Japan. And in NYC there are some famous buildings that are even on land leases, such as the Empire State Building and the Chrysler Building. The latter is owned by Cooper Union, which is a tax exempt entity.

    The Weave House at 399 Park Avenue is also on a 99 year ground lease. They have a rental reset in 23 years or so. Currently it's $4mm a year in rent, but it will reset to $20 million a year. Interesting to see what will happen when the land lease expires.

  • #2
    You've definitely got to be careful if you're buying a co-op apartment in a land lease building, especially if the landlord is a private, for profit entity. I remember a building which will go unnamed which made an offer to the landlord to purchase the underlying land, and the landlord passed. The building ended up having to levy an assessment of $800,000 to each individual shareholder/owner in the building in order to finally pay enough to satisfy the landlord (an attractive enough purchase offer). It's nuts.

    Keep in mind though that almost always a land lease renewal gets worked out with some sort of extension usually. And if you're an owner in Battery Park City, then you don't have much to worry about because the landowner is a government entity whose sole purpose is to maintain and improve the neighborhood. in BPC, you pay PILOT .. essentially payments in lieu of property taxes. It's a way for the buildings in BPC to recover from individual owners.

    Lastly, it's not always a bad thing if a land lease doesn't get renewed. For example, I recall on 125th and Lenox Ave in 2014, a 99 year land lease expired. The landlord tore down the existing structures and I think it's now leased to the Harlem location Whole Foods. However, the existing tenants might not have cared as they got to fully depreciate the building (remember for commercial it's over 39 years to fully depreciate).

    P.S. 70 Remsen, I think they have less than 30 years left. It's a building in Brooklyn.

    P.P.S. Land lease agreements are no joke, I've been told that they're usually 120 to 150 pages at a minimum

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