Appreciation of Leasehold Interest”

Just some examples of appreciation of leasehold properties form first-hand experience.

  1. Our family developed Casitas East and Casitas Tempe subdivisions in the late 1970’s We built and sold 122 Town homes all of them on 99-year ground leases. The average price of a town home that we sold was $48,000- the average price of a townhome in the Casitas today is $280,000
  2. In March 2020 we sold a property with a Ground lease at 1809 N 74th place for $311,000 with a $314 a month ground lease. The buyer resold the property in April 2022 for $650,000

All residential including leased fee real estate appreciates with time. The downside of leased fee comes near the end of the lease – but only if the lease is not going to be renewed – with single family residential outside of HOA communities they are almost always renewed because their usage is already “highest and Best”