Property Ownership
What is a 'ground lease' and how is it commonly used in Pennsylvania commercial real estate?
AA lease for agricultural land only, governed by the Clean and Green Act
BA long-term lease of land only, where the tenant builds and owns improvements✓ Correct
CA lease that covers only the ground floor of a multi-story building
DA short-term lease used for parking lots and surface-level commercial uses
Explanation
A ground lease is a long-term lease (typically 50–99 years) of land only. The tenant (lessee) builds improvements on the land and owns those improvements during the lease term. Ground leases are common in Pennsylvania urban commercial development, particularly in Philadelphia and Pittsburgh, where landowners may prefer long-term income to selling. At lease end, improvements typically revert to the landowner.
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