Property Ownership
What is a 'ground lease' and how is it used in Illinois commercial real estate?
AA lease for parking lots and open ground without buildings
BA long-term lease of land only where the tenant builds and owns improvements; the landlord retains ownership of the land✓ Correct
CA lease for subsurface rights for utility installation
DA short-term lease for agricultural use in Illinois
Explanation
A ground lease is a long-term lease (typically 50-99 years) of the land only. The tenant builds improvements on the land at their own expense and owns those improvements during the lease term. At lease expiration, improvements typically revert to the landlord (fee owner). Ground leases are common in commercial development where the land owner prefers lease income over sale, and in high-value areas where land is too expensive to purchase (e.g., downtown Chicago).
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