VA: Leased Fee NOT Leasehold

[Kanon18]

I am working on a VA new construction, property and is being purchased as a sub-leasehold, the ground rent is set at a set price at $24,000 for all homes, the property is on leased land and expires in 2098, then a new ground rent will be owed but I don't know what that will be. The property can be sold on the open market without any resale restrictions and does not have to sell back to the seller, but university can by if they chose to. I've performed many appraisals in the leasehold section of the community over 12 years ago and would provide a breakdown of the leasehold value, my question is that necessary or would I only provide the leased fee value? Thanks so much.

 

[Terrel L. Shields]

$24,000 per year? per month? per length of the term (73 years?) If you are only valuing the building contribution, then it is a leasehold value. So, when can the University buy and who sets the price? At the end of the term, or at any whimsey they wish?

That's a Damoclean sword if I ever heard of it then.

 

[Kanon18]

Thanks for getting back to me. The builder paid the university before the construction of these homes to build; the fee of $24,000 is a one-time fee placed on the buyer so the builder can recoup their funds. This isn't set up like the typical leasehold, the market sets the price the property can be sold to anyone, but they have to agree to the terms of the sub-lease. I wasn't sure if I need to do the cap rate breakdown, but it is a sub-lease of the leasehold. Maybe I am over thinking, any insight would be great. There is 75 years left on the lease; a new ground rent will be required.

 

[gregb]

Are these the Channel Vista leasehold residences in Camarillo?

Anacapa Canyon | New Homes For Sale In Camarillo, CA

Centered in nature, yet with modern convenience, Channel Vista & Sol Vista bring the wonder and tranquility of coastal living to life.

anacapanewhomes.com

 

[Kanon18]

Are these the Channel Vista leasehold residences in Camarillo?

Anacapa Canyon | New Homes For Sale In Camarillo, CA

Centered in nature, yet with modern convenience, Channel Vista & Sol Vista bring the wonder and tranquility of coastal living to life.

anacapanewhomes.com

Yes, I did a large amount of the original builds years back in Uni Glen , but these are set up differently.

 

[zutero771]

In most cases, the leased fee value is what’s needed, as it reflects the value of the land and any terms of the lease. However, if the buyer or lender requests more detailed information, you can share the leasehold breakdown too.

 

[Tom D]

73 year old land lease, and the mort loan max is 30 years. You are over thinking to the future. Of course you explain the terms, that's it. We have large condo high rises built on city owned piers that are leased. They all seem to get financed easily. But, i know not about VA rules.

 

[Kanon18]

In most cases, the leased fee value is what’s needed, as it reflects the value of the land and any terms of the lease. However, if the buyer or lender requests more detailed information, you can share the leasehold breakdown too.

Thank you, I was going to provide the breakdown but wasn't sure if really needed to. Thanks again.