Ground lease + improvements + operating analysis + depreciation modeling help
I am trying to model a scenario to illustrate a situation to my employer, who is trying to do a ground lease to a private investor in order to recapitalize the property, as my employer--who resides in the building on the property--doesn't have the cash or borrowing capability to do it themselves. All of my experience is from the bank's viewpoint, so I am having some difficulty seeing the complete story here.
I am working on the property operating analysis, and have arrived at an NOI. Can someone please confirm that the investor can depreciate all their investments in the building over a 39 year period? And that this, and the interest they would pay on the commercial loan, is a non-cash expense that can be added to the NOI for DSCR purposes? AND, if the depreciation were high enough, would significantly reduce the income tax burden?
Thank you.