PAD USERS:
Why Go Ground Lease If You Can't Purchase An Outparcel?
Joseph Gulino - Associate, Southwest Florida
Ground leases offer a strategic way for businesses to secure top commercial sites without the steep upfront costs of buying land.
Instead of purchasing, the tenant leases the land long-term (often 50 – 99 years), builds and owns the improvements, and pays rent to the landowner.
In Florida’s high-value markets, this structure is especially compelling.
WHY IT WORKS
• Preserve Capital:
Funds stay available for core operations, store improvements, inventory, and expansion.
• Tax Advantages:
Lease payments are often fully deductible.
• Better Balance Sheet Optics:
Compared to holding land debt, lease obligations can improve financial ratios.
• Prime Access:
Businesses can secure high-traffic, affluent locations without tying up millions in land costs.
For landlords, it’s equally appealing by providing stable income streams and future upside as land continues to appreciate in high-demand nodes like Southwest Florida’s Naples and emerging ‘Eastern Collier’ corridor.
REAL WORLD EXAMPLES
Think about your local Starbucks, Chick-fil-A, or Walgreens. Chances are, they’re built on ground leases. The tenant owns and runs the building while paying ground rent, which keeps capital focused on what drives their business.
A ground lease lets businesses (1) lock in premier real estate, (2) keep capital working where it matters most, and (3) enjoy long-term site control. All without the burden of a land purchase.
It’s a smart approach for growth-focused retailers in Florida’s competitive commercial markets.
