Master Lease

A master lease is a contractual agreement between a landlord and a tenant in which the tenant assumes responsibility for leasing and managing multiple properties within a specified portfolio. The tenant, also known as the master tenant, has the authority to sublease individual units within the portfolio to subtenants, while retaining ultimate control over the entire property portfolio. This arrangement allows the master tenant to generate income from subleasing the properties while also assuming the risks and responsibilities associated with property management. Master leases are commonly used in commercial real estate transactions to streamline leasing and management processes for multiple properties under a single agreement.

Master Lease is a key concept that affects property valuation, financing decisions, and investment returns in the triple net lease market. Understanding Master Lease helps investors make informed acquisition and management decisions.

Master Lease directly influences how commercial properties are valued, financed, and traded. Changes in Master Lease can impact cap rates, NOI calculations, and overall investment performance for net lease properties.

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