Traditional Office
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Global presence
Haven Capital, founded in 2021 by Regis Group and Ares Management, provides low cost, flexible and highly accretive long-term funding through a prepayable ground lease structure. Haven is currently investing with more than $2.0bn funding available for new, modern ground lease positions across all real estate asset classes.
The combination of a ground lease and leasehold financing maximizes proceeds and reduces equity by as much as 55%.
Multiple options throughout the lease term to unwind the structure with a purchase option.
A ground lease aims to increase overall asset value by separating the low risk / low return land from the higher risk / higher return building component.
Fixed increases and capped inflation exposure make Haven ground leases easy to underwrite (no FMV resets) and don’t negatively impact leasehold value.
Ground leases result in a lower blended cost of capital, increasing sponsors’ yields and IRRs.
Long term ground lease eliminates interest rate and refinancing risk.
Banks, CMBS, debt funds and agencies are all comfortable lending behind a Haven ground lease. Haven’s ground lease is Freddie Mac approved and Haven is a repeat partner with Freddie Mac.
Separating the fee and leasehold interest can be a more efficient form of financing and helps unlock asset value and liquidity. The below provides an example of potential capital stacks with and without the application of a ground lease.
CUM. LTV
$ CUM.
100.0%
$100.0m
65.5%
$65.5m
Blended Day 1
Cost of Debt:
6.40%
Fee Simple Asset with
Traditional Financing
Fee / Leasehold Bifurcation
Fee / Leasehold Bifurcation
CUM. LTV
$ CUM.
100.0%
$100.0m
81.5%
$81.5m
40.0%
$40.0m
Blended Day 1
Cost of Debt:
5.96%
1. Mortgage is sized to the lesser of 75% LTV and 1.25x DSCR. Assumes 5-Yr Treasury of 4.95% + 145 bps.
2. Mortgage is sized to the lesser of 75% leasehold LTV and 1.30x DSCR. Assumes 5-Yr Treasury of 4.95% + 155 bps.
3. Pricing assumes 30-Yr Treasury of 5.40% + 0 bps. Pricing dependent on asset quality and location.
4. Analysis assumes NOI growth of 3.0% annually.
Based on current treasury rates.
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