I had a buyer very recently interested in purchasing a particular co-op in Brooklyn Heights that is on land lease. I consulted the attorney I use for many of my sales and she advised against it, which I conveyed to my buyer. The reason was that this particular building has a land lease that is only a little over 30 years left. If my buyer bought it and held it for a few years and the sponsor who still holds the landlease does not re-negotiate anything in the next few years, she would have trouble re-selling it to anyone who hopes to get a 30-year fixed mortgage. No bank would be willing to give that second buyer a 30 year mortgage on a building with less than 30 years on the land lease. And the sponsor is using this land lease like an annuity to put his kids through school. He has no desire to re-negotiate it any time soon and no one knows what the terms will be when he does.
Battery Park City is another story. It was built on landfill from the excavating of the World Trade Center and is owned by the Port Authority. There are many years left, longer than anyone who buys now would be holding it, and clearly it will be renewed, as the Port Authority will not make thousands of families homeless. I would say to check out the individual situation very carefully. Most importantly have a rough idea how long you intend to keep the property and see how many years remain on the land lease.
Hope this helps.