Apartments are the cleanest asset for a ground lease. Low cap rates put large, stable value in the land, in-place rents cover the ground rent comfortably, and leasehold financing works on the smaller basis. We buy the land; you keep the building and 100% of the upside.
| With a Valor ground lease | The usual path | |
|---|---|---|
| Acquisition | Land value funds the down payment — buy the asset on a thinner check, the leasehold loan covers the rest. | Larger common equity raise, or a pricier bridge, to close the purchase. |
| Recap / refinance | Permanent, non-amortizing capital retires a maturing or over-levered senior to a refinanceable level. | Cash-in refinance, a mezzanine layer, or a partial sale to plug the gap. |
| Pref / JV takeout | Buy out the partner — land proceeds replace expensive preferred or LP equity, so you keep the promote. | Carry a 9–15% pref, or surrender promote and control to a new equity partner. |
| Equity-gap fill | Closes the gap as rent, not as a dilutive equity slug — fixed, non-amortizing. | Fill the gap with the most expensive money in the stack: fresh equity. |
| The senior loan | Leasehold financing on the smaller basis — agency-compatible leasehold execution available. | Conventional fee financing on the full basis, with more equity behind it. |
| Your upside | 100% kept — you own the building, the cash flow, and the appreciation. | Shared with whatever pref or JV equity you brought in to fill the gap. |
And: stabilized or value-add apartments fit best — in-place income covers the ground rent from day one · the land comes out as permanent capital with no balloon and no maturity wall · one principal counterparty for the land and the leasehold financing.
Apartments trade at the lowest cap rates of any major asset class, which puts a large, stable share of value in the land. That means more capital comes out of the dirt, and the durable in-place rents cover the ground rent — roughly a quarter of NOI — three to four times over. It is the cleanest fit we underwrite.
Yes. The building stays yours as a long-term leasehold, and leasehold financing — including agency-compatible execution — works on the smaller, land-free basis. Because the land is no longer your collateral, the senior loan sizes off a lower number, which is often what makes a tight deal pencil.
Acquisitions, recaps and refinances, buying out preferred or JV equity, and filling an equity gap. The land value — typically 30 to 40% of basis — comes out as permanent, non-amortizing capital at a long-term land yield, so it can replace the most expensive money in your stack while you keep the promote.
No. You keep the building, the operations, the cash flow, and 100% of the upside and promote. We buy only the land and lease it back to you on a long-term, typically 99-year, lease. The residents, the management, and the value creation all stay with you.
The land, on a 99-year lease: nothing to manage, senior to the building’s lender, low yield because the buyer is buying the right to not pay the tax. The building above it: higher yield, paid monthly, depreciable. Both are replacement property. Both close on a date we control, which is the part that matters on day 140.
1031 SolutionsWorking with an intermediary? The standby sheet for line 3 of the identification form.
Stabilized or value-add multifamily — acquisitions, recaps, pref or JV takeouts, and equity-gap fills. Send the address, the as-complete stabilized NOI, and total project cost — we return an indicative land value in fast, as principal or arranged capital.