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ARTICLE · 07 OCTOBER 2004

Leasehold Finance: A Powerful Tool

Holland & Knight LLP
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Leasehold mortgages have traditionally secured ground leases, but can also secure space leases of all types, and can add value to a wide variety of deals. However, there are pitfalls for the unwary: only when all parties to a deal fully understand the functioning of a leasehold mortgage is it possible to safely take advantage of this powerful and valuable mechanism.

United StatesFinance and Banking

By Daniel M. Pomerantz (Chicago)

Originally published Fall 2004

Part I of a Two-part Series

Leasehold mortgages have traditionally secured ground leases, but can also secure space leases of all types, and can add value to a wide variety of deals. However, there are pitfalls for the unwary: only when all parties to a deal fully understand the functioning of a leasehold mortgage is it possible to safely take advantage of this powerful and valuable mechanism.

Part I of this two-part series addresses the following three topics that are important to understand when putting together a leasehold finance arrangement:

(i) What is a “leasehold mortgage?”

(ii) What makes a lease “marketable?”

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