What is the difference between subordinated and unsubordinated ground leases?

When it comes to ground leases, you could agree to have an unsubordinated or a subordinated lease. With a subordinated lease, the owner of the property puts herself in a riskier position. With this type of lease, she allows the mortgage on the property to be in a primary position to the lender and the land to be in a subordinated position. This means that if the lender has to foreclose, it can take the land in addition to the building. With an unsubordinated lease, the landowner does not take this approach and cannot lose the property if the bank forecloses.