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Ground Lease Calculator

Ground leases produce contractual rent annuities — usually long term (50-99 years) with periodic escalation. Value equals PV of the rent stream at the investor's target yield. This calculator rolls escalations through remaining term and computes PV plus current yield if acquired at PV.

Current ground rent (annual)

Escalation / period

Escalation period (years)

Remaining term (years)

Discount / cap rate

Present value of ground rent stream

$3,371,652

Total rent over remaining term

$10,292,299

Average annual rent

$257,307

Final-period rent

$350,769

Current yield if acquired at PV

0.05%

How the math works

Ground leases produce a rent annuity escalating at fixed steps (e.g., 10% every 5 years). PV of the rent stream — discounted at the investor's target yield — is what ground leases trade for. Credit-tenant ground leases (NNN pad sites) are nearly bond-like and trade at tight yields.

Some ground leases are re-appraised at mid-term (year 15 or 20) to reset rent to then-current market. Unadjusted fixed escalations can under- or over-pay over a 50+ year term.

Editorial noteMaintained by EveryCalc - Reviewed June 2026

EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.

Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.

Learn more about our review process on the EveryCalc methodology page.

How this calculator works

What this page estimates

This Ground Lease Calculator is built to give a quick, browser-based estimate for ground lease. Ground leases produce contractual rent annuities — usually long term (50-99 years) with periodic escalation. Value equals PV of the rent stream at the investor's target yield. This calculator rolls escalations through remaining term and computes PV plus current yield if acquired at PV. The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.

Calculation approach

The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.

Example workflow

For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.

Practical checks

Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
Run a low, base, and high case when the inputs are estimates.
Check the related calculators below when the next decision depends on a different assumption.

How to interpret the ground lease result

Best use

Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.

Cross-check

Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.

Watch for

Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.

This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.

Before relying on this ground lease estimate

Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.

Confirm source numbers

Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.

Separate cash flow from total cost

A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.

Run conservative cases

Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.

Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.

How to Use

Enter current annual ground rent.
Enter escalation percent per period and period length in years.
Enter remaining term in years and your target yield.
Read PV and average annual rent.

Frequently Asked Questions

Credit-tenant vs non-credit?

Investment-grade credit (McDonald's, CVS, Walgreens) ground leases trade 4-6% cap. Non-credit or local tenants: 6-8%. Unrated or risky tenants can be 8-10%. Credit is the single largest yield driver.

Fee simple vs leasehold?

Fee simple ground lease ownership is what trades. The leasehold (the tenant's position) is a wasting asset — gets less valuable as lease approaches end. Building owners aim to renew or extend.

Appraisal reset clauses?

Mid-term resets (year 20 of a 50-year lease) protect the landlord from a 30+ year fixed rent that falls behind market. Resets are typically 'fair market ground rent' determined by appraisal.