What is a Ground Lease?

A ground lease is a long-term net lease (usually 49 or 99 years) of land including any improvements. It can apply to vacant land, office buildings, and large residential buildings.

Who should consider a ground lease?

Long-term property owners who can't make capital improvements, those with significant air rights, or those wanting to ensure generational income should consider ground leases.

How do owners benefit from ground leases?

Owners retain property title, generate income, potentially avoid capital gains tax, and create a hassle-free income stream for generations.

How do tenants benefit from a ground lease?

Tenants reduce upfront capital investment and gain long-term access to prime locations, even when owners are unwilling to sell outright.

Are ground leases complicated?

Ground leases are complex but can be tax-efficient if structured correctly. Expert knowledge and relationships in the real estate market are crucial for smooth transactions.

What asset classes can be ground leased?

Any asset class can be ground leased, but it's most common for vacant land, industrial properties, office buildings, residential buildings, and hotels.

Is the owner stuck once the ground lease is in place?

No, owners retain the right to mortgage or sell the property, and can often borrow more due to increased net income.

What flexibility does the tenant have in a ground lease?

Tenants can mortgage their lease or assign it to a new tenant. They're responsible for their own debts, protecting the landlord from liability.

What makes an appropriate ground lease tenant?

Ideal tenants are knowledgeable about ground leases, financially capable of improvements, willing to provide personal guarantees, and have a strong financial history.

Where can I learn more about ground leases?

Visit groundlease.nyc for comprehensive information on ground leasing.

The Clock Is Ticking: Secure NYC’s 35-Year Tax Abatement Before It’s Too Late

BY ROBERT KHODADADIAN, SKYLINE PROPERTIES - MAY 28, 2025 2:13 PM

If you're considering converting your office property to residential use, the window to take advantage of one of New York City’s most valuable real estate incentives is closing fast. The 35-year real estate tax abatement under Program 467-m offers a major financial opportunity—but only if your project is approved by June 2026. To put it plainly: a delay could cost you millions.

This long-term tax abatement was designed to encourage the conversion of underutilized commercial buildings into much-needed housing. For owners and investors, it can mean a significant boost in property value and long-term returns. But the opportunity comes with a strict timeline and it’s already narrowing.

The Real Timeline: Plan Backwards from June 2026

To qualify, you must hit several critical milestones before the deadline:

ALTCO Filing (6–9 months): Filing the Application for Tax Credit for Office-to-Residential Conversion is a complex process that can take up to nine months.
Planning & Approval (3–4 months): Finalizing architectural plans, ensuring zoning compliance, and obtaining permits also requires time and coordination.
Sales Contracts (9–12 months before): To fully realize the abatement’s benefits and maximize your property’s value, contracts should ideally be signed at least a year before the June 2026 deadline.

The Cost of Waiting

Missing the deadline could reduce your abatement by five full years—a loss that can significantly impact your property’s valuation. Today’s buyers use Net Present Value (NPV) models that factor in long-term tax savings. Without those five years, your asset could be perceived as less attractive, leading to a lower sale price.

To illustrate the impact, here’s a hypothetical breakdown of projected tax savings over time based on current market assumptions:

As the figures suggest, missing out on the full 35-year abatement can result in millions of dollars in lost net present value. These unrealized savings directly affect your property’s appraised value—especially as buyers become more sophisticated in their financial modeling.

How to Get Started

Navigating an office-to-residential conversion in NYC requires careful planning and expert guidance. Here’s how to move forward strategically:

Assess Your Property: Work with experienced professionals to evaluate zoning, infrastructure, and overall financial viability.
Engage ALTCO Specialists: Experts in the filing process can streamline your application and help avoid costly delays.
Create a Clear Timeline: Develop a detailed roadmap with milestones to keep your project on track.
Communicate with Stakeholders: Keep architects, city agencies, legal advisors, and financial teams aligned throughout the process.

Why This Matters Now

NYC’s real estate market is evolving rapidly. Residential demand is rising up 15% year over year in many neighborhoods. Office-to-residential conversions are helping meet this need while offering property owners a smart, future-focused investment path. The 35-year tax abatement makes these projects significantly more attractive—but only if you act in time. Don’t let this opportunity pass. The June 2026 deadline is approaching—let’s make sure you’re ahead of it.