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Freehold-to-Leasehold Ratio
The balance of the two primary types of property ownership within a portfolio.

For example, the optimum ratio may be identified as 35:65.

The number of assets and interests (or their value) that are owned versus leased within a given portfolio. See also: Relativity Rate.

The ratio can be expressed as value of the interests.

The optimum ratio has been the subject of study and is considered to fall in the range of 35:65 (freehold:leasehold).

Reinvestment vs. Redevelopment

Freehold pros
  • Accruing the benefit of the appreciation of the land
  • Indefinite interests
Freehold cons

Leasehold pros
  • Cash flow
Leasehold Cons
  • Lease negotiations
  • Shorter term interests

See also:

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