Ground leases are one of the rarer types of contracts in commercial real estate. Many investors ignore them for the simple fact that they represent ownership of the ground on which a property stands, even though many consider it the safest type of leased investment you can have.
The problem here is that, according to the IRS, the ground cannot be depreciated for taxes because land doesn’t lose value over time. Everything on the land loses value over time and can thus be depreciated, but the land itself cannot.
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