The property operates under a Master Lease structure where the Master Tenant retains net revenue after paying rent, impositions, and operating expenses. The Master Tenant is responsible for property management fees, supported by $58,810 in initial reserves.
Ongoing fee rates
$40,000
per annum
The
Master Tenant will be entitled to the net income from the Property equal to the difference, after taxes owed by the Master Tenant, between (i) the gross revenues the Master Tenant receives from the Property and (ii) the expenses it incurs in maintaining the Property and its payment and other financial obligations under the Master Lease, including its obligations to pay Rent, Impositions and Operating Costs.
The
Master Tenant will be responsible for any management fees payable to the Property Manager.
2.5%
1%
of the principal amount of the loan
Strengths
- Master lease structure insulates trust from direct day-to-day operational expenses
- Dedicated master tenant reserve of $58,810 funded upfront
Concerns
- Master Tenant retains residual operating cash flow after required lease payments
- Operational performance relies entirely on 66 residential units in one location