What investment structure is considered equivalent to an annuity by an owner?

A long-term ground lease is considered equivalent to an annuity by an owner because it provides a predictable and stable income stream over an extended period. In a ground lease, the landowner leases the land to a tenant for a long duration, often between 30 to 99 years, in exchange for regular, typically fixed rental payments. This arrangement allows the property owner to receive steady cash flow, similar to how an annuity pays out a predetermined amount at regular intervals.

This structure is appealing to owners because it can provide a secure financial return without the need to manage the property directly. The long-term nature of the lease mimics the steady, reliable investment returns that annuities offer to their holders, making it an attractive option for property owners seeking to generate income over time while retaining ownership of the land.

Other investment structures, such as short-term leases, purchase money mortgages, and partnership interests, typically do not provide the same level of consistent income over an extended period, which is why they are not considered equivalent to an annuity in this context.