CREATING & PURCHASING
GROUND LEASED FEE POSITIONS
ON STABILIZED COMMERCIAL
REAL ESTATE

INNOVATIVE
EQUITY SOLUTIONS
FOR NEW DEVELOPMENTS
& VALUE-ADD OPPORTUNITIES

Innovative Equity solutions for new ground leased fee positions on stabilized commercial real estate.

Anika Equities, LLC

 

Anika Equities creates and acquires ground leased fee positions under stabilized commercial real estate assets valued in excess of $25 million and invests equity in new developments and value-add opportunities in select markets nationwide.

CREATING & PURCHASING
GROUND LEASED FEE POSITIONS
ON STABILIZED COMMERCIAL
REAL ESTATE

INNOVATIVE
EQUITY SOLUTIONS

FOR NEW DEVELOPMENTS
AND VALUE-ADD OPPORTUNITIES

Finance your fee position with record low rates or sell the asset in the current 'Seller's Market'

Why sell the ground when you can easily finance your fee position with record low rates or sell the asset in the current 'Seller's Market'?

 

By selling the ground, the investor can reduce equity and greatly increase returns. In a purchase or recapitalization, a ground lease, in concert with leasehold financing can result in leverage as high as 90%, while boosting cash-on-cash returns 2x or even more!

Ground Leased Fee Positions

Anika Equities GLF, LLC (Anika) is aggressively seeking opportunities to create and purchase ground leases on cash-flowing Commercial Real Estate in primary markets, and strong secondary markets. Anika will purchase the land under most types of Commercial Real Estate, with a minimum investment of $6 million and no maximum. Additionally, Anika will assist the seller in obtaining competitive leasehold financing and perhaps even loan additional funds in a mezzanine position for total leverage of as much as 95% while continuing to earn a cash-on-cash return of as much as 2x or greater than that attainable through conventional financing.

 

Download the PDF: Ground Lease Overview

Anika buys the ground under the asset

And takes an unsubordinated fee position. The Property is then 'divided' into:

  • Fee ownership of the ground (owned by Anika)
  • Leasehold ownership of the asset (owned by the Seller)
  • The Seller maintains full legal ownership

    Along with all of the associated benefits and encumbrances, of a long leasehold asset.

    The Seller is granted a long-term lease

    99 years, with an option to extend further.

    The Seller is granted a long-term source of capital

    Typically 99 years.

    The Seller enjoys fixed ground rent with multiple advantages:

    Ground rent is set at a significant discount to the cap rate of the overall asset

    fixed annual increases of between 2% and 3%.

    No CPI increases or fair market value resets based on appraisals.

    Purchase price as a percentage of total value is between 35% and 50%
    Assignment

    The leasehold interest in the asset can be sold with the full benefits being assigned to any future leaseholders.

    Leasehold financing is secured

    Anika will assist the Seller in securing additional leasehold financing on the asset typically achieving more than 85% leverage overall with low cost capital.

    Tax efficiencies

    The ground is removed from the balance sheet allowing for the 100% depreciation of the remaining leasehold asset. Additionally, ground lease payments are fully deductible as expenses unlike mortgage payments where only the interest portion is deductible.

    Our innovative structure increases the leaseholder's ability to leverage while substantially boosting the cash-on-cash returns.

    How Does It Work and What are the Benefits?

     

    Our innovative structure increases the leaseholder's ability to leverage while substantially boosting the cash-on-cash return. There is no loss of security or any benefits of ownership and the facility can be transferred, along with all of the associated benefits, to future owners.

    Anika Equities Ground Sale/Leasehold Financing Program

    0%

    Leverage

    Anika will assist the seller in obtaining competitive leasehold financing for total leverage of as much as 85-95%.

    0%

    Ownership

    Retain Full Ownership.

    0%

    Cash-on-Cash Returns

    Boosting cash-on-cash return of as much as 2x or greater than that attainable through conventional financing.

    JV Equity

    Anika Equities, LLC invests in preferred Equity JV's for new developments and value-add opportunities. The following are bullet points to our appetite for this product:

    Download the PDF: New Development Overview

    Up to 97% of the capital stack over conventional construction debt.
    Up to 90% of the equity required.
    Minimum investment is $10 million nationwide or $3 million in NYC metro area.
    Top US markets only.
    Top developers.
    Anika will take a priority position in the waterfall and a preferred return, and then a portion of equity after sponsor capital is returned.
    Normally equates to 60% - 65% of the deal economics to the Investor.
    Improved economics to developer as a result of preferred return and priority positioning in the waterfall.

    Daniel Edrei's Publications

    Ground Lease vs. Traditional Finance
    GROUND LEASE vs. TRADITIONAL FINANCE

    In this current environment of low cost money, why sell the ground when you can easily finance your fee position with record low rates or sell the asset in the current 'Seller's Market'?

    Ground Lease vs. Traditional Finance
    MEZZANINE FINANCING ON CONDO BUILDING || SCOTSMAN GUIDE

    First, the bad news: Condominium construction financing has become more restrictive and, in some instances, scarce. Many lenders have reached their threshold for these deals and have stopped lending. Others have initiated stricter underwriting guidelines.

    HOW TO SOLVE THE CONDO CONUNDRUM || SCOTSMAN GUIDE
    HOW TO SOLVE THE CONDO CONUNDRUM || SCOTSMAN GUIDE

    With the condominium market in flux, private bridge and mezzanine lenders are seeing a rapid increase in the business of financing prudently structured projects. Brokers seeking funding for condo projects should seek bridge and mezzanine lenders with the know-how and patience to be comfortable taking on additional risk.

    NAVIGATING NEGOTIATIONS || SCOTSMAN GUIDE
    NAVIGATING NEGOTIATIONS || SCOTSMAN GUIDE

    For a long time, mezzanine financing was more of an industry buzz-term than an actual employed product. Many senior debt lenders shied away from it and viewed it simply as the incurring of additional debt. They also worried that trigger-happy mezzanine lenders would push reasonable transactions into foreclosure and mar an otherwise appealing securitization.

    LAND A LOAN FOR LAND ALONE || SCOTSMAN GUIDE
    LAND A LOAN FOR LAND ALONE || SCOTSMAN GUIDE

    With existing home prices stabilizing, new residential construction prolific and the cost of money rising, many traditional commercial lenders have become gun-shy about financing land subdivisions and development transactions.

    Anika Equities

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    1177 Sixth Avenue, 5th Floor
    New York, NY 10036

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