Posted on March 23, 2021 by fordadmin -
Master Lease – Southern California Lease Purchase
Description – A university in Southern California owns the land on which a 500+ unit apartment building was built. There is a 99 year lease on the land and upon the end of the term, the improvements will revert back to the Lessor. Rutherford (Lessee) is responsible for the improvements and all associated liability.
The Lessor’s goals:
- Create durable income, cash flow plan
- Eliminate ongoing management
- Eliminate liability and financial risk of the improvements
- Receive the improvements back in the future upon the term of the lease
There were several steps for this lease:
- Step 1: Rutherford purchased the improvements subject to a 99 year lease
- Step 2: Rutherford asset manages the property and provides ongoing lease payments to the Lessor
- Step 3: Lessor to receive back the improvements upon the lease term
|
BEFORE |
AFTER |
Ownership Responsibility: |
Daily property and asset management |
No management responsibility |
Liability: |
Full responsibility for asset and liability |
Rutherford takes full responsibility for the asset and pays property insurance |
Income Durability: |
Based on market fluctuation |
Provides ground lease payments regardless of the market changes |
Cashflow: |
$600,000 |
$800,000 |
Lease Term: |
– |
34.5 Years |
Ownership Structure: |
Fee ownership |
Fee ownership |
Management: |
3rd Party Management |
In-house management |
Property Taxes: |
Current property tax basis |
Current property tax basis |
Posted on March 12, 2021 by fordadmin -
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Lorem Ipsum is simply dummy text of the printing
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.
Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry’s standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.
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