BH Properties Enters Leased Fee Market

Steve Gozini

BH Properties is targeting the leased fee market, a niche real estate investment with potential for upside. According to the firm, land fee real estate is made up of mostly mom-and-pop ownership. The firm has made its foray into the space with the $30 million purchase of a ground lease in Fort Myers, Florida, but the firm has other deals in the works, including a property in the Southwest.

“We see this market as ripe for growth,” Steve Gozini, founder and president of BH Properties, tells GlobeSt.com “Real estate ownership is still relatively unsophisticated with most investors owning both the ground and the building but not the mineral rights. Mineral rights ownership was stripped out of many properties long ago as the value was recognized, typically for oil production. The remaining “property” contains the ground and the building itself. These two elements can be separated, typically resulting in the higher yielding improvements and the lower yielding dirt.”