Anika Equities seeks to purchase land under commercial properties through ground leases. This allows the existing owner to monetize the land value while maintaining ownership of the building through a leasehold. A ground lease provides the owner permanent low-cost capital without balloon payments while allowing tax advantages. Case studies show ground leases and leasehold financing can increase property value, cash flow, returns, and equity value compared to traditional financing. Anika aims to provide up to 95% combined leverage of the land value and building.

1. Structured Capital, Ground Sale
& Leasehold Financing

2. 1177 Sixth Avenue, 5th Floor, New York, NY 10036 | T 212.776.4058 | F 212.881.9650 | dedrei@anikaequities.com | www.anikaequities.com
Structured Capital, Ground Sale & Leasehold Financing
Anika Equities is seeking opportunities to create and purchase ground leases on cash-flowing com-
mercial real estate in primary and strong secondary markets. Anika will purchase the land under most
asset types, with a minimum investment of $10 million and no maximum.
1. In a refinance/recapitalization scenario, the seller/leaseholder repays existing debt and repatri-
ates equity while continuing to benefit from the future upside of the operating asset
2. In an acquisition scenario, the seller/leaseholder achieves higher “all-in” leverage utilizing a
ground lease/leasehold financing combo at a lower blended cost than a senior/mezzanine loan
option
3. Unlike a traditional senior/mezzanine stack where all debt usually expires conterminously, a
ground lease provides low cost permanent capital with no immediate balloon risk
4. Tax advantaged execution allows the seller/leaseholder to depreciate 100% of the leasehold
improvements and deduct 100% of the ground lease rent
1. Anika Equities buys the ground – taking an unsubordinated fee position. The property is then
bifurcated into:
• Leased Fee ownership of the ground (owned by Anika Equities)
• Leasehold ownership of the improvements (owned by the Seller)
2. Purchase price of leased fee position –is approximately 30% - 40% of the property value
3. The ground rent – is fixed at a significant discount to the cap rate of the overall asset with fixed
annual increases of approximately 2% - 3%
4. Buy-back options – deals can be structured with imbedded options at very favorable terms
6. Leasehold financing – Avison Young can assist the Seller in securing senior secured leasehold
financing (up to 75% LTV)
7. Structured capital may be available – Avison Young may arrange or the Institution may fund
additional capital over the senior secured leasehold financing allowing Seller to achieve as much
as 95% leverage on the asset
GENERAL BENEFITS:
STRUCTURE AND TERMS:

3. 1177 Sixth Avenue, 5th Floor, New York, NY 10036 | T 212.776.4058 | F 212.881.9650 | dedrei@anikaequities.com | www.anikaequities.com
Structured Capital, Ground Sale & Leasehold Financing
CASE STUDY: GROUND LEASE VS. TRADITIONAL FINANCE IN A REFINANCE SCENARIO
DEAL SPECIFIC BENEFITS:
• The Property – A $100 million asset, valued at a 6% cap rate, with a $6 million NOI.
• Fee Simple Financing – 70% LTV, 10 year term, 30 year amortization at 4.25% interest.
• The Ground Lease – A $40 million ground sale and the creation of a 99-year lease. Ground rent
is fixed at 4.75%, with 3% annual escalations.
• Leasehold Financing – 70% LTV, 10 year term, 30 year amortization at 4.3% interest.
• Leasehold & Mezzanine Financing – 90%LTV, 10 year I/O Mezzanine at 12% interest.
The results over a 6-year hold:
1. As a result of the positive arbitrage of the ground sale, on the day of closing the value of the
leasehold at $65.6M is $3.4M more than the allocated cost ($62.2M).
2. The going in cap rate has improved by 72 bps and the exit year cap rate has improved 84 bps.
3. 1st year cash-on-cash is increased by 294 bps and the average cas8h-on-cash over a six-year
period has improved by 426 bps.
4. At disposition in year 6, the IRR has gone from 13.2% to 20.8% and the equity multiple has
gone from 1.95x to 2.71x. This is further increased with the addition of mezzanine debt, if de-
sired.
Asset Value 100,000,000$ @6.00%Cap 65,600,000$ @6.25%Cap 65,600,000$ @6.25%Cap
Cost Basis 102,215,509$ 62,215,509$ 62,215,509$
Senior Debt Financing 71,550,856$ @4.25% 47,406,848$ @4.30% 47,406,848$ @4.30%
Ground Lease 40,000,000$ 40,000,000$
MezzanineFinancing 8,542,159$ @12.00%
Equity 30,664,653$ 14,717,221$ 6,231,080$
NOI Amount Cap Rate Amount Cap Rate Amount Cap Rate
Year 1 6,000,000$ 5.87% 4,100,000$ 6.59% 4,100,000$ 6.59%
Year 6 6,955,644$ 6.80% 4,753,024$ 7.64% 4,753,024$ 7.64%
If Held Until Year 10 7,828,639$ 7.66% 5,349,570$ 8.60% 5,349,570$ 8.60%
NCF(LEVERAGED) Amount C-on-CYield Amount C-on-CYield Amount C-on-CYield
Year 1 1,776,154$ 5.79% 1,284,765$ 8.73% 245,469$ 3.94%
Year 6 2,731,798$ 8.91% 1,937,788$ 13.17% 895,645$ 14.37%
Year 6 Average 2,244,563$ 7.32% 1,604,845$ 10.90% 564,599$ 9.06%
If Held Until Year 10 Average 2,654,481$ 8.66% 1,884,955$ 12.81% 844,805$ 13.56%
Total Leverage 71,550,856$ 70.00% 87,406,848$ 85.59% 95,949,007$ 93.90%
Total Cash Flow (Holding Period) 13,467,381$ 9,629,068$ 3,387,597$
Residual Equity 46,450,330$ @6.50%Cap 30,233,762$ @6.75%Cap 21,560,893$ @6.75%Cap
IRR 13.2% 20.8% 27.9%
EquityMultiple 1.95x 2.71x 4.00x
FEESIMPLE LEASEHOLD LEASEHOLD & MEZZ

4. Daniel Edrei Managing Director/Partner
Anika Equities, LLC
TEL 212 776-4058 x101 | MOBILE 917 224-8931
FAX 212 881-9650 | dedrei@anikaequities.com
www.anikaequities.com | 1177 Sixth Avenue, 5th Floor, New York, NY 10036
ANIKA EQUITIES GROUND SALE/LEASEHOLD FINANCING PROGRAM
Leverage Ownership Cash-on-Cash Returns
85% 100% 200%
Anika will assist the seller
in obtaining competitive
leasehold financing for
total leverage of as much
as 85-95%
Retain Full Ownership. Boosting cash-on-cash
return of as much as 2x or
greater than that attain-
able through conventional
financing.