1. Ground lease venture formed
Anika Equities has partnered with David Eyzenberg, principal at Avison Young, to form a
subsidiary called Anika Equities GLF. The new entity will create and purchase ground leased fee
positions.
The aim is to acquire the ground under select quality-stabilised commercial real estate assets
valued at US$15m and over at a premium cap rate. The ground is then leased back to the seller
(typically for 99 years), with fixed rent increases over the term.
The team will assist the seller/leaseholder in sourcing accretive leasehold debt to complete the
capital stack and enable it to achieve greater positive leverage than is possible in the fee position
alone, through a purchase or recapitalisation. The leaseholder may also enjoy favourable tax
treatment, as 100% of the improvements can be depreciated and the full ground lease payment
expensed.
Anika Equities GLF says that most stabilised asset types are acceptable under the initiative,
providing that the anticipated cashflow and submarket conditions are not subject to extreme
volatility.
This article was published in Structured Credit Investor on 2 September 2015.