Ground Lease
Understand ground leases in Canadian real estate — what they are, how they work, and their advantages for landlords and tenants.
August 08, 2025
What is a Ground Lease?
A ground lease is a long-term lease agreement in which a tenant leases the land from a landlord but owns and is responsible for any improvements made on it.
Why Ground Leases Matter in Real Estate
In Canadian commercial real estate, ground leases allow tenants to develop property without purchasing the land.
Key points:
- Terms often range from 20 to 99 years
- Improvements typically revert to the landowner at lease end
- Provides stable, long-term income for landlords
Understanding ground leases helps tenants and landlords align long-term investment goals.
Example of a Ground Lease in Action
The retailer entered a 50-year ground lease to build a flagship store on the leased land.
Key Takeaways
- Long-term lease of land, not buildings
- Tenant owns improvements during lease term
- Often reverts improvements to landlord at lease end
- Provides landlords with steady income
- Popular for commercial and institutional projects
An overview of Hedge Road Landing. (Alliance Homes)
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Galleria III at Galleria on the Park (Hariri Pontarini Architects) 
Bisha Hotel & Residences (Lifetime Developments)
