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Pad Site Ground Rent Calculator

Pad sites typically ground lease — tenant builds and maintains the building, pays land rent to the landlord. Rent escalates periodically (often 10% every 5 years). This calculator sizes year-1 rent, future-year rent after escalation, and implied pad site value at a ground lease cap rate.

Pad site SF (land area)

Ground rent / land SF / year

Annual escalation

Escalation period (years)

Ground lease cap rate

Year 1 ground rent

$70,000

After first escalation

$77,000

After second escalation

$84,700

Implied pad site value

$1,272,727

Rent per acre / year

How the math works

Pad sites (Starbucks, Chick-fil-A, banks) are typically ground leased — tenant builds their own shell, pays ground rent. Rent escalates periodically (often 10% every 5 years). Landlord retains land ownership and reversion at lease end — usually 20+ years.

Ground-leased pad sites trade at cap rates 50-150 bps above the anchor building — lower risk (no building maintenance) but also lower yield. Cap rates 4-6% on credit-tenant pad leases are common.

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 Pad Site Ground Rent Calculator is built to give a quick, browser-based estimate for pad site ground rent. Pad sites typically ground lease — tenant builds and maintains the building, pays land rent to the landlord. Rent escalates periodically (often 10% every 5 years). This calculator sizes year-1 rent, future-year rent after escalation, and implied pad site value at a ground lease cap rate. 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 pad site ground rent 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 pad site ground rent 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 pad SF (land area).
Enter ground rent per SF of land per year.
Enter escalation percent and period in years.
Enter the ground lease cap rate.
Read year 1, escalated rents, and implied value.

Frequently Asked Questions

Why ground lease vs sell?

Landlord keeps the land appreciation and reversion; tenant avoids land acquisition capital. On credit-tenant deals (Chick-fil-A 20-year NNN ground lease), ground leasing is a near-bond-like income stream with land backing.

Escalation structures?

10% every 5 years is the most common. Some use CPI-indexed (more volatile). Long leases often include a mark-to-market reset at year 15 or 20 based on appraisal.

Reversion value?

At lease end, building usually reverts to landlord (or is removed at tenant's cost). Factor 20-30 year reversion at discount rate — typically adds 5-15% to the value above the ground rent capitalized value.