Tenant which is party to direct lease with the property owner which subsequently sub-leases all or a portion of the property to other occupants.
In the context of a Delaware Statutory Trust (DST), the Master Tenant is a legal entity created and controlled by the sponsor of the DST for the sole purpose of leasing the DST’s property. IRS requirements state that a DST, as utilized as a 1031 exchange-eligible replacement property, must operate as a passive investment vehicle. The passivity requirement prohibits the DST’s Trustee from leasing the property. In order to provide operating ability, a separate entity, often referred to as a Lease Co., is created to lease the entire property from the DST. This master tenant, which is typically controlled by the sponsor, then operates the property through sub-leases with the property’s tenants.
For example, if a DST acquires a 200-unit multifamily property, the master tenant will lease the entire property from the DST and is responsible for operating the property. The master tenant makes lease payments to the DST and each investor in the DST receives a share of this rental payment, based on their percentage ownership in the DST.
Realized does not make investment recommendations, and no communication through this website or in any other medium should be construed as investment advice, nor does it make any recommendations regarding the appropriateness of particular opportunities for any investor. Realized does not provide tax or legal advice and no communication through this website or in any other medium should be construed as tax or legal advice. All prospective investors must certify that they are accredited investors, suitable for this type of illiquid investment, and must acknowledge that they have received and read all investment terms and conditions. Many investment opportunities posted on this website are “private placements” of securities made pursuant to an exemption from registration and have not been registered with Securities and Exchange Commission (“SEC”) or any state securities regulator. Securities offered on this website are not publicly traded, are subject to holding period requirements, and are intended for investors who do not need a liquid investment. Securities offered on this website are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Realized, WealthForge or their respective affiliates, and MAY lose value. Realized makes no representations or warranties as to the suitability of any investment opportunity posted on this website as eligible like-kind property in connection with tax deferred exchanges under IRC §1031. Neither the SEC nor any federal or state securities commission or regulatory authority has recommended or approved any investment opportunity presented on the website or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.
Any financial projections or pro-forma returns shown on the website are illustrative examples only, and there can be no assurance that any such projections or valuations provided are accurate or in agreement with market or industry valuations. There are substantial risks associated with developing properties in an economically disadvantaged Qualified Opportunity Zone, including the possibility that government regulations regarding Opportunity Zone investments may change. Any investment representation or information contained herein has been secured from sources Realized believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor. Offers to sell, or the solicitations of offers to buy, any security can only be made through official offering documents that contain important information about risks, fees and expenses. Investors should conduct their own due diligence, not rely on the financial assumptions or estimates displayed on this website, and are encouraged to consult with a financial advisor, attorney, accountant, and any other professional that can help you to understand and assess the risks associated with any investment opportunity. Fluctuations in the value of the assets that are the subject of any investment are to be expected. Tenant vacancies, competition from similar properties, or potential environmental conditions at the property may negatively impact rents and cash flows. Additional risks exist due to a variety of factors, including, but not limited to, leverage, market risks, business risks, management, adverse tax consequences, and such other risks more particularly described in the related offering materials. There is a potential for loss of part or ALL of the investment capital, and each investor should understand that all capital invested may be lost. Investors should only consider these investments if they have no need for liquidity and can bear the risk of losing their entire investment. Check the background of this firm on FINRA's BrokerCheck.
*Past performance is not indicative of future performance.