A ground lease, also known as a land lease, is a type of real estate arrangement in which a landowner (ground lessor) leases land to a tenant (ground lessee) for a specified period. Unlike a traditional lease that involves both the land and any structures on it, a ground lease typically only pertains to the land itself. The tenant, however, may have the right to construct buildings or make improvements on the leased land during the lease term.

Key features of a ground lease include:

1. **Leased Land Ownership:** The landowner retains ownership of the land, and the tenant (lessee) pays rent for the use of the land.

2. **Lease Term:** Ground leases can have long durations, often ranging from several decades to a century or more. The lease agreement specifies the lease term, and the tenant may have the option to renew the lease.

3. **Rent Payments:** The tenant pays rent to the landowner for the right to use the land. Rent may be a fixed amount, or it can be structured with periodic adjustments.

4. **Land Use Rights:** The tenant typically has the right to use the land for specific purposes outlined in the lease agreement. This may include commercial, residential, or industrial uses.

5. **Improvements and Development:** Depending on the terms of the ground lease, the tenant may have the right to construct buildings or make improvements on the leased land. At the end of the lease term, these improvements may revert to the landowner unless otherwise negotiated.

6. **Risk and Responsibility:** The tenant often bears the responsibility for maintaining and developing the leased land. This includes costs associated with construction, maintenance, and compliance with zoning regulations.

7. **Appreciation and Depreciation:** The value of the land generally appreciates over time, but the structures on it may depreciate. Ground lease agreements may address how changes in the value of the land and improvements are handled.

Ground leases are common in various real estate sectors, including commercial real estate, retail, and telecommunications. They can be advantageous for both parties: the landowner generates income from leasing the land without selling it, and the tenant gains access to a desirable location without the upfront cost of purchasing the land.

Ground leases are often complex legal agreements, and the terms can vary significantly. Parties involved in a ground lease negotiation should carefully consider the specific terms, including rent adjustments, lease duration, permitted uses, and responsibilities for maintenance and improvements. Legal counsel and thorough due diligence are crucial when entering into a ground lease arrangement.