Simple Fee Ground Lease Purchase

[Wala Habiby]

I have had couple of opportunities to purchase a simple fee land lease where I will be purchasing the land only, and the commercial building on top is paying me a simple fee each month. At the end of the lease, the building will be mine as well.
Has anyone personally been though this? did you enjoy the experience? what kind of return do you expect?

[Greg Dickerson]

Originally posted by @Wala Habiby:

I was wondering what kind of a CAP should I expect on this type of investment. The options I saw had shopping centers on top of them in good areas. Zero expense for the land owner, just collect rent every month.

CAP rates will vary depending on the market, the asset and credit rating of the tenant. The only real expense you will have are taxes and insurance. Generally the tenant takes care of everything else but this all depends on the lease. You need to review the lease thoroughly.