Spectrus Real Estate – Master Lease Benefits
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- Monthly Rental Payments
- Under the master lease, the lessee pays a monthly rental payment to the 1031 owner for the entire 20-year lease period. Our properties are well suited for the 1031 property exchanger seeking monthly income, and have uncapped appreciation potential.
- Potential Property Appreciation Stays with the Owner
- The master lease ends at the option of the owner or upon sale of the entire property. This means that the value of the property is derived from the market and the underlying gross rents of the property, and is not limited by the rents paid under the master lease.
- Strong Alignment of Interests
- The lessee keeps the difference, if any, between the master lease payments and property operations and is also responsible for any deficit. Thus, the lessee is motivated to increase the operating results by improving the gross rent potential of the property. When the property is sold the potential appreciation derived from this improved gross rent potential belongs to the property owner.
- Management of a Single Tenant
- Under the master lease, the owner leases the entire building to a lessee. Under the lease, DBSI Housing, on its account, takes on responsibility for the day-to-day operations of the building. DBSI Housing pays the operating expenses of the building, the real estate taxes, insurance, and maintenance expenses, and the tenant improvements and leasing commissions. In addition, DBSI Housing also pays the debt carrying cost on the property on behalf of the property owner , and is responsible for the refinancing of the property. However, owner retains the power to make all significant business decisions relating to the property, and have access to all accounting and property management information about the property.
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