What type of lease should a landowner use when leasing land to a developer for mall construction?

A ground lease is the most suitable type of lease for a landowner leasing land to a developer for mall construction because it allows the landowner to lease out the land while the developer is responsible for the construction and operation of the buildings on the leased property. In a ground lease, the developer typically leases the land for a long term, often 99 years, allowing them to develop the property and capitalize on its use without purchasing the land outright.

This arrangement is beneficial for both parties: the landowner receives a steady income from the lease payments, while the developer has the freedom to develop the land according to their vision and operational goals. Additionally, at the end of the lease term, ownership of the constructed building typically reverts to the landowner, increasing their asset value.

The other types of leases, such as net leases or percentage leases, do not provide the same structure and intent necessary for significant development projects like a mall. A net lease typically involves the tenant covering additional costs such as property taxes and maintenance but does not emphasize land development. A percentage lease is often used in retail settings where the rent is based on a percentage of sales revenue, aligning more with operational leases rather than long-term land improvements. A modified gross lease similarly does not fit