Originally Posted by
Expressflight
Normally a commercial lease cannot be used as security against bank finance as it will have been entered into without a premium at an open market rental and thus has no intrinsic value. If a premium had been paid to obtain the lease from the freeholder it could have some value as security.
Think through it logically. Would a bank take security over buildings only, knowing that if the company they were lending to went bust, the land on which the buildings were built, reverted to a third party?
The answer is no. I've seen similar deals on UK airport land/property subject to long term underlying leases.