Our lawyers have been representing participants in ground lease projects for more than 30 years. We recently helped a property owner complete a prominent development in Chicago’s northern suburbs after a rocky start to the project.
The initial ground lessee was a developer who planned to build a mixed-use project on the site. The lender for the project was a builder that was to be hired by the ground lessee to construct the site improvements. The loan was secured by a leasehold mortgage.
The developer was unable to obtain leasing commitments for the project and stopped paying ground rent. Following that default, the lender-builder invoked its mortgagee protection under the ground lease to enter into a new ground lease for the site.
Representing the property owner, we negotiated an amended and restated lease with the lender-builder, who then assigned the lessee’s interest to a new developer. In the end, the builder was hired to construct the project and the new developer opened a hotel and various retail spaces on the site. Our client enjoys a steady income stream from the project, which serves as an anchor development in the community.