Frequently Asked Questions
Many of the landowners who sell to Renewa take advantage of the current long-term capital gains rates. They pay 15%-20% of the lump sum in taxes and reinvest the remainder into an asset class that outpaces inflation. Others use the lump sum to purchase more land, a second home or commercial property through a 1031 tax-free exchange. Both options can achieve a potential greater return than simply holding on to your annual lease payments.
In some cases, the ground lease contains a confidentiality provision. However, most confidentiality provisions allow you to share the information with a potential purchaser. If you are interested in Renewa’s offer but are concerned about potential confidentiality issues, Renewa will work with you and your current operator to help alleviate any concerns.
Renewa is not interested in purchasing the wind rights associated with your property and is not offering to sever your wind rights. Renewa works with renewable operators to ensure your interests are transferred properly.
On paper, Renewa’s offer looks to be less than what you could make over the term of your lease by holding on to your annual payments. However, your lease gives the operator the right to shut down the project at any time. Another important factor to consider, inflation is currently at a 40-year high. Royalty escalation rates in renewable energy ground leases typically do not outpace the expected rate of inflation. Over the life of the lease, taxes and inflation can reduce the purchasing power of your rental payments by over 50%.
Renewa can present a firm offer within five business days of reviewing the executed ground lease and most recent rent statement. Renewa can close within 30-45 days of reaching an agreement.