Legal Definitions - master lease

A master lease is a primary, overarching lease agreement for a significant property or a collection of properties. Under a master lease, a tenant (often referred to as the "master tenant") leases a large asset from the owner. This master tenant then typically has the right to create separate, smaller lease agreements (subleases) with other individuals or entities for portions of the property. Essentially, it's the foundational lease that enables subsequent, more granular leasing arrangements.

• Commercial Office Building: A property management firm, "Urban Spaces Inc.," enters into a 15-year master lease agreement with the owner of a newly constructed 20-story office building. Urban Spaces Inc. pays a fixed monthly rent to the building owner for the entire property. Urban Spaces Inc. then acts as the landlord for individual businesses, subleasing floors or specific office suites to various companies. The master lease between Urban Spaces Inc. and the building owner is the primary agreement that grants Urban Spaces Inc. the authority to manage and sublease the entire building.

• Land Development for Renewable Energy: A renewable energy company, "Green Power Solutions," secures a master lease for a vast 500-acre parcel of undeveloped land from a private landowner. The agreement allows Green Power Solutions to develop the land for various energy projects. Green Power Solutions might then enter into separate sublease agreements with different contractors or specialized firms. For instance, they could sublease 100 acres to a solar farm developer and another 50 acres to a wind turbine operator. The master lease is the initial agreement that gives Green Power Solutions control over the entire 500 acres, enabling these subsequent, smaller leasing arrangements for specific energy projects.

• Hospitality Management: A hotel operating company, "Global Stays," signs a master lease with the owner of a large, established hotel property. Global Stays agrees to pay the owner a percentage of revenue or a fixed rent for the entire hotel operation, including all rooms, restaurants, and common areas. Global Stays then manages the hotel, renting out individual rooms to guests on a nightly or weekly basis. While guests have agreements to stay, the master lease is the fundamental contract between Global Stays and the property owner that permits Global Stays to operate the entire hotel business and generate revenue from individual room rentals.