Compare · lease structure
Master lease vs individual leases
A master lease is one contract over several roofs. Individual leases are one contract per roof. The trade is simplicity and pricing against the right to sell or close a single unit without asking the whole portfolio's permission.
Written by Dwaine Clarke , Founder & Principal Broker, American Net Lease, LLC Reviewed
On this page: The honest answer · Side by side · When each wins · Together · FAQ
The honest answer
One paragraph, then the table
Use a master lease when you want one credit story, a simpler close, and you are unlikely to sell or shutter a single unit during the term. Use individual leases when you need the right to dispose of or close one box without cross-defaulting the rest — even if that costs you a wider buyer conversation.
Operators most often weigh this in Restaurants & QSR franchisees , Car wash , and Auto service & collision . It pairs most often with expansion capital without new debt and paying off a maturing loan . Run the sale-leaseback calculator for a first pass, then request a Portfolio Capital Analysis.
Side by side
Flexibility and cross-default are the rows that decide it
| Topic | Master lease | Individual leases |
|---|---|---|
| Proceeds | Often a cleaner portfolio bid — one credit, several roofs | Priced roof by roof; weaker boxes cannot hide in the average |
| Balance sheet | One occupancy obligation across the portfolio | One occupancy obligation per roof |
| Personal guarantee | None on the real estate — the master is the credit story | None on the real estate — each lease is its own credit story |
| Control of the site | Portfolio rules live in one contract | Each roof has its own term, options, and escalations |
| Cost of capital | One cap conversation on the whole book | A cap conversation per roof — and a wider range |
| Timeline | One lease to engineer; one story to market | More paper; more room to leave a roof out of the first tranche |
| Upside in the dirt | Given up on every roof in the master | Given up only on the roofs you actually sell |
| Flexibility to sell or close a unit | Hard — the unit is tied to the master | The point of the structure |
| Cross-default | A problem at one roof can threaten the whole book | A problem at one roof stays at that roof |
| Pricing | Buyers pay for simplicity and one credit | Buyers pay for optionality — and they underwrite the weak box |
| Buyer pool | Portfolio buyers who want one tenant, several roofs | Portfolio buyers plus buyers who only want a single roof |
When Master lease wins
When a master lease is the cleaner structure
The book is one credit you intend to keep together. You are not planning to sell or close a single unit during the primary term, and you want one story in the offering memorandum.
A buyer who wants several roofs under one tenant will often pay for that simplicity. That is a pricing conversation, not a promise of a tighter cap on this page.
When Individual leases wins
When individual leases are the cleaner structure
You want the right to sell, refinance-by-sale, or close one unit without asking the rest of the portfolio for permission. Franchisees with a development schedule and operators who prune weak boxes need that right.
You also want the option to leave a roof out of the first tranche. Individual leases make that a paperwork choice instead of a master-lease amendment.
Both together
Master the core, individualize the edges — only if the paper allows it
Some portfolios put the core boxes on a master and leave outliers on individual leases. That only helps if a buyer will accept the split and if cross-default cannot leak from the master into the outliers.
Lease structure is the product. The sale-leaseback calculator will not choose it for you. The Portfolio Capital Analysis is where master versus individual gets written against how you actually operate.
Questions
Master lease vs individual-lease FAQ
Does a master lease always price tighter?
It can, because the buyer is purchasing one credit and less paper. It does not always, because the buyer is also purchasing cross-default and less flexibility. We will not paste a spread onto this page.
Can I convert a master to individual leases later?
Only if the contract you already signed says so. Converting after a sale is a buyer conversation, not an operator right you can assume. Write the flexibility in before marketing.
What happens if I close one unit under a master?
The rent on that unit usually still sits on the master unless the lease gives you a release. That is the cross-default and release conversation — have it before you sign, not after a store goes dark.
How do I start?
Request a confidential Portfolio Capital Analysis. Location count, which roofs you might sell or close, and last year's unit-level earnings are enough to start. Call (239) 236-2626.
Get a confidential read on master versus individual.
Location count, which roofs you might sell or close, and last year's earnings are enough to start.