Industry Best Practice



Information relating to real estate ground lease values of transit-orientated companies’ public land is not readily available in the public domain. The data relating to numbers employed in FTE real estate similarly is not readily available in the public domain. While several online sources estimate the number of people working at different companies, including LinkedIn, the data was not sufficiently detailed to determine the number of people working within a specific department, such as real estate. However, there was information and data available. This is presented in the form of additional case studies and insights. Three case studies Massachusetts Port Authority, Washington Metropolitan Area Transit Authority, and the New York City Economic Development Corporation, are presented focusing on the details relating to their ground leases and the resulting developments. Finally, in an attempt to provide relevant data, a fourth case study details the costs and issues from the perspective of the tenant.

Ground Lease Defined

A ground or land lease is an agreement whereby a tenant is permitted to use and develop another’s property, in exchange for rent, over an agreed period of time. No beneficial interest in the land is created, and the tenant has no claim over any improvements made to the property over the lease term. An exception to this principle can be stipulated in the lease agreements, if agreed on by the parties.

The Massachusetts Port Authority


  • The Massachusetts Port Authority (Massport) is responsible for the following public land: Boston Logan International Airport (Logan Airport), L. G. Hanscom Field (Hanscom Field), Worcester Regional Airport (Worcester Airport), Conley Terminal, Raymond L. Flynn Cruiseport Boston at Black Falcon Terminal (Flynn Cruiseport Boston) and various other maritime properties.”
  • As a self-sustaining entity, Massport does not derive any income from taxation. Its revenue sources include “airline fees, parking fees, terminal, ground and other rents, concessions, and other fees to fund operating expenses. The Authority’s operating revenues along with federal grants, passenger facility charges (PFCs), and customer facility charges.” To fund various capital expenditures, Massport issues revenue bonds that are secured by their revenues.
  • The information provided in Massport’s 2019 Annual Report relating to the organizational structure does not go into sufficient detail to determine the number of staff employed within the real estate area.


  • In 2019, Massport advanced three key development projects:
    • Boston Global Investments is developing a 1.1-acre parcel of land in South Boston near the Boston World Trade Center. The company plans to construct a 600,000 square foot office tower on the site. The project is similar to the Omni Hotel development that broke ground in 2018. BGI has addressed diversity and inclusivity within its proposal in light of the current political environment, with 25% of the development earmarked for minority-owned and women-owned businesses. The proposed businesses range from equity investment to architecture and construction.
    • Boston Sword and Tuna is developing a 50,000 square foot seafood processing facility at the Massport Marine Terminal in South Boston. The facility will create 150 new industrial jobs at the location.
    • A Request for Proposals (RFP) has been made for Parcel H in South Boston. The RFP calls for a mixed-use commercial development, similar to BGI´s development and the Omni Hotel. The evaluation criteria and model of operation are designed to encourage diversity in any RFP presented to Massport.


  • Although, the evaluation criteria relating to each RFP vary depending on the type of development, Massport uses several evaluation criteria for most developments. These evaluation criteria include:
    • A demonstrated ability to execute the project, which is evaluated based on the successful execution of comparable projects, organization, qualifications, and experience of the design team, design quality and execution plan, and the ability to meet project delivery date;
    • An exceptional design, program, and public realm contribution which is assessed by the project design and vision, record of design excellence, contribution to public realm improvements, and adherence to the design guidelines;
    • A comprehensive diversity and inclusion program illustrating the extent of participation in development, design, financing, construction, and ownership; and
    • The developer’s ground rent proposal, financial plan viability, equity, debt, and capital sources.


  • Massport´s revenue from its real estate was $46 million in 2019, representing a $16 million or 51.8% increase from the previous year. The real estate revenue is made up of transaction rent revenue and ground rent revenue from land surplus to the port operational requirements. Rent Revenue
  • The 2019 ground rent revenue represented a $13.1 million increase on 2018. Real estate maintenance and operations accounted for $16.9 million in 2019. Unfortunately, the annual report does not separate the real estate revenue streams, so the total ground rent revenue could not be determined.
  • The real estate revenue is derived from the 107 acres between the Boston Convention and Exhibition Center and harbor.

Pappa´s Commercial Center and Massport

  • The following case study provides an overview of a ground lease, the terms of the lease and the rental payments required. It also drills a level deeper, and considers uses to which the property can be put, revenue earned, and ongoing upgrades and repairs. It is a good example of how public land is used when subject to a ground lease.
  • The ground lease between Massport and Pappa´s Commercial Center, covers a 720,464 square-foot property, sitting on neatly 37 acres of public land owned by Massport in Boston´s seaport district. It consists of a mixture of traditional warehouse, office and retail space.
  • Pappa Enterprises, who signed a 75-year lease over the land in 2010, own the commercial complex. For the first 19 years, annual payments from $1 million to $2 million are required, with the payments to be reassessed after that time and a new market rental determined.
  • Eight multi-storied buildings built between 1965 and 1990, that were last renovated in 2001 contribute to Pappa´s Commercial Center. The nine tenants, who include W.B. Mason (352,000 square feet), Boston Athletic Club (103,761 square feet), Fine Arts Enterprises (76,785 square feet), Verizon (65,841 square feet), and UPS (63,000 square feet), pay an average annual rent of $11.38 per square foot. The rental payments are set out in the following chart. Poppa´s Commercial Center
    • This means from the six biggest tenants, Poppa´s Commercial Center receives $7,754,184. In addition to the annual rental payment to Massport, Pappa´s Enterprise has to finance a five-year $78.9 million interest-only loan secured by the property. They had just completed $400,000 worth of upgrades to the HD space. Tenant, W.B. Mason has also completed $500,000 worth of upgrades to the area it leases.
    • Based on its 92% occupancy rate, net operating income on the property is expected to be $6.4 million annually.

New York City Economic Development Corporation


  • The New York City Economic Development Corporation (NYCEDC) is a non-profit organization that “invests in the jobs, industries, and communities that will drive New York’s economic future and make the -city stronger, safer, and more equitable.” In 2019, NYCEDC was responsible for “469 projects receiving Financial Assistance in the form of loans, grants, and tax or energy benefits, and 55 sales and 96 leases of City-owned land.” Although NYCEDC has many aspects to its operation, this case study focuses on its operation’s real estate development aspect.
  • The 96 properties that NYCEDC leases are set out in the attached spreadsheet, including the annual rent derived from each of the properties. The properties cover locations across the five NYC boroughs and represent a range of different developments, including retail, sports facilities, markets, healthcare facilities, parking, port facilities, and community facilities. Unfortunately, the properties that are subject to ground leases.


  • NYCEDC has 196 active industrial developments, 18 commercial developments, and 17 manufacturing developments are currently housed on public land. The majority of these developments are on land subject to ground lease agreements.
  • In addition, NYEDC has two real estate developments currently open to RFPs, the Coney Island Creek development, and several civil engineering projects based on a singular RFP.


  • The range of different ground lease development options currently available are listed on the NYCEDC website along with links to the RFP, which includes the evaluation criteria. Unfortunately, a login is required to access this information. Only broad criteria are available in the public domain,
  • The “36-acre Made in NY Campus at Bush Terminal offers best-in-class industrial spaces for garment manufacturing, film/tv/media production, and related light industrial and creative uses.” It also provides an excellent illustration of the range of different lease options, including ground leases,


  • The sale of 55 parcels of public land owned by NYCEDC in 2019 raised $673.7 million, while leased land rentals of 96 properties raised a further $156.7 million. The Real Estate Transaction Services, Asset Management, and Capital Departments are responsible for the sale and management of City-owned land and property and capital construction project management. In addition, NYCEDC oversees industrial, commercial, and manufacturing projects on public land.
  • Included among the properties that NYCEDC overseas are “industrial parks, wholesale and retail markets, cruise terminals, rail lines, and waterfront development.” The other responsibilities of the NYCEDC include “design, planning, and construction capabilities on various projects. NYCEDC also supports small businesses through a loan guarantee program for private lenders and catalyzes the development and preservation of industrial real estate through direct lending.”
  • The asset management division is mostly responsible for developing and managing the public land falling within its organizational sphere. There is currently 66 million square feet of property in NYC that the asset management division manages.
  • The asset management division has four key responsibilities:
  • Managing and maintaining properties;
  • Leasing and redeveloping through ground leases and operator contracts;
  • Value capture; and
  • Development of assets to provide annual cash flow while remaining in sync with the broader organizational goals of job creation, strengthening neighborhoods, and working with families.
  • NYCEDC does not provide the number of staff that works in this area. The revenue that is derived from the property leases is set out in the attached spreadsheet. Unfortunately, NYCEDC does not differentiate the leases’ revenue, so the ground lease revenue cannot be determined.

Washington Metropolitan Area Transit Authority


  • The Washington Metropolitan Area Transit Authority (WMATA) owns or controls real estate assets in the Greater Washington area, the revenue from which is used to “support transit operations, promote transit ridership and enhance local communities. These assets also contribute to the ongoing financial viability of the transit system.”
  • WMATA has a policy of promoting high quality, more intensive development on public land that it owns. The company has found the flow-on effects “can increase ridership, support long-term system capacity, and generate new revenues for transit. Also, such development creates attractive investment opportunities for the private sector and facilitates local economic development goals.”


  • Ground leases have resulted in several developments in the Washington and Virginia area. Between 2002 and 2016, WMATA offered five ground lease development opportunities. The developments that resulted include Dunn Loring (Avenir Place), Fort Totten (East), Prince George’s Plaza (Mosaic and Metro Shops), Rhode Island Ave., and Twinbrook (The Alaire and The Terano).
  • These developments were all successful. Prince George´s Plaza, for example, is a 259 apartment unit, with 160,623 square feet of retail space and a further 300,000 square feet of office space.
  • The capital and development program currently underway is the largest sine the Metro was built in the late 60s and 70s.
  • Details of the current RFPs and potential development projects are not included in the annual report. Interested parties are provided with a phone number and address and directed to make contact if they require additional details regarding RFPs.


  • A broad overview of evaluation criteria in respect of project development is provided in the 2019 annual report. A checklist ensures that the project specifications are complied with, designs, drawings, and calculation are provided in the RFP, and the design can be verified in the pre-construction phase,
  • Evaluation is also based on past performance. When submitting a RFP consideration should be given to a range of different practices in various company handbooks. These practices should be complied with to maximize the prospects of success.
  • WMATA has one of the most active development programs in the country. Its programs have contributed more than $235 billion in economic activity in the areas around its stations and terminals.


  • WMATA receives $30.3 million annually in the form of rental revenue. Unfortunately, the way the income is recorded in the accounts means that a breakdown relative to the various types of rent and how much each contributes to the overall pot is not possible.
  • Unfortunately, WMATA does not disclose the number of employees working in the real estate division.

Research Strategy

To determine the real estate ground lease revenues and the number of employees in the real estate division, we reviewed information precompiled on company websites, the annual financial reports, and LinkedIn information. While all of the companies had rental revenues available, they did not distinguish between the different rent types, so there was no way of determining the ground lease revenue. We were able to locate several sources that provided information on the number of employees at each company; however, the information was very broad and not refined to a level that would enable us to triangulate or estimate the real estate employees.
We extensively reviewed a range of precompiled information, media articles, and industry publications to identify information relating to the case studies. The amount of information available varied considerably. For example, Hong Kong Transit provides almost no information relating to its rental operation, and the use it puts public land too. There was also surprisingly little information available about the developments themselves.

Glenn is the Lead Operations Research Analyst at Simple Manifestation with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.


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