Legal Question in Real Estate Law in California

Re: Over priced ground lease

One way to fix this is through a "pre-packaged" chapter 11 bankruptcy. You can break and restructure the ground lease. Is the building owned through a corporation? feel free to email me directly to discuss confidentially: [email protected]

Re: Over priced ground lease

This is in large part a business decision rather than a legal issue. Analysis would start with a careful review of the ground lease, to see what the default, rental-setting and similar provisions have to say, and thoughtful review of the longer-term prospects of the business. Long-term leases have the built-in characteristic of looking good when the economy is strong and inflationary, and looking bad in recessions and deflation.

Part of the analysis has to be default and/or bankruptcy and its effects on the owner. Is the business separately owned, e.g. in a corporation or LLC? Does the owner have personal liability? Other assets that can be attacked? There are homestead and antideficiency laws that protect (to some degree) defaulting homeowners, but it's highly doubtful these would be much if any help in a default on a lease of commercial property.

Maybe you can get a medium-term rent concession by giving the lessor a future benefit, like higher rent if the property appraises higher in the future.