Is the Master Lease Option Still Relevant in 2025—Especially for Overpriced Small-Mid

[Jimmy Hilaire]

I'm interested in hearing how others are navigating the current market. As a Property Manager, we're encountering many sellers of 12- to 30-unit properties who are holding onto stabilized but overpriced assets. While rents are strong, the numbers simply don’t make sense at their asking prices, especially with interest rates where they are.

When approaching sellers directly, I've been proposing master lease structures to meet their desired price without overpaying upfront. This strategy used to work well with tired landlords or those looking to exit gradually. However, I’m curious if the master lease option is still a viable strategy today, or if sellers are too focused on their equity to consider it anymore.

How are you structuring leases (or hybrids) for sellers? I would love to hear how other investors are tackling this, especially those in the 12 to 50-unit space. Let's share insights!