Master Leases to Build Lease Income Stream
A recent article by D. P. Snyder, JD in Commercial Investment Rea Estate suggested ways to use a master lease or leases to build the lease income stream in investment property. The primary purpose of the Master Lease is to provide the necessary income stream to support financing of the property. Some of the common Master Lease structures include: --the master tenant leases the entire project and subleases space to occupying tenants; --the master tenant leases specific vacant space only, and the master lease terminates when space is later lesaed to occupying tenants; --the master lease covers only the vacant space in the project from time to time, floating to coincide with actual vacant space; --the master lease applies to specific space covered by a lease with an upcoming expiration and takes effect only if that lease is not renewed or the space re-leased: and, --the master lease only covers space duringt a recent abatement period when the occupying tenant pays no rent. Creative financing leverage for investment targets that may appear difficult to finance.