MASTER_LEASE_OPTION · MLO_STRUCTURE · B2B_SYSTEMS

Lease for control.
Option for equity.
Spread for cash flow.

Control a commercial asset without bank debt. Generate spread income from day one. Lock in a purchase price at signing. Acquire when DSCR supports it. Walk cleanly if conditions shift. The structure works for all three parties.

STRUCTURE_SUMMARY · ALL_THREE_PARTIES

Operator: $0 debt, Day 1 income, locked price · Seller: Guaranteed rent, option premium, no vacancy · Capital Partner: Preferred return, no operations

MLO_TERM_SHEET · PREVIEW

STRUCTURE

STANDARD

Legal Structure

Master Lease + Purchase Option

DEBT_REQUIRED

ADVANTAGE

Bank Debt to Enter

$0 required

INCOME_START

VERIFIED

Spread Income Begins

Day 1 of occupancy

OPTION_LOCK

PROTECTED

Purchase Price Lock

Fixed at signing, not at market

MOAT_FLOOR

STANDARD

Property Score Minimum

85 / 100 on 441-unit framework

EXIT_OPTION

PROTECTED

Exit Without Penalty

Walk with spread income retained

NDA_PROTECTED · NO_UPFRONT_FEES · ACCREDITED_ONLY

WHICH_PARTY_ARE_YOU · SELECT_TO_FILTER

OPERATOR_BRIEF · YOUR_ADVANTAGE

You gain operational control of the asset on day one. No bank required. No down payment. No underwriting delays. Your master lease payment is fixed. Every dollar above it is yours. The purchase option locks your price now — before the corridor premium is priced in. Use the spread calculator below to model your specific scenario.

$0

Debt to enter

Day 1

Income starts

Locked

Purchase price

Clean

Exit if conditions shift

DEAL_FLOW_DIAGRAM · WHO_PAYS_WHOM · WHEN

How money flows through the structure.

Three parties. Three cash flow directions. Every arrow is a contractual obligation.

MLO DEAL FLOW  ·  THREE PARTIES  ·  THREE CASH FLOWS

SELLER

Property Owner

✓ Guaranteed rent

+ option premium at signing

Zero vacancy. Zero management.

FIXED PRICE AT SIGNING

① Master Lease

Operator → Seller

OPERATOR

Controls Property

Pays master lease to seller

Subleases to tenants above cost

NET SPREAD = PROFIT

Sublease − Lease

Starts Day 1. No bank required.

Exercise option when

DSCR threshold is met

— or walk with spread kept —

$0 BANK DEBT TO ENTER

② Sublease Income

Tenants → Operator

TENANTS

Sublessees

Pay sublease rate

above master lease cost

Direct to operator monthly

FUNDS THE SPREAD

③ Optional: Fund lease → earn preferred return

CAPITAL PARTNER

Optional  ·  Funds lease  ·  Earns preferred return

No operations required  ·  Accredited investors only

SPREAD_INCOME_CALC · OPERATOR_TOOL

Model your spread before you sign.

Enter your property parameters. The calculator shows your monthly spread income, annual yield on the master lease cost, and how that compares to a conventional acquisition.

Total leasable area of property

Annual rate you pay the seller

Annual rate you charge tenants

Target occupancy of subleased space

MASTER_LEASE_COST

$6,667

Master Lease / Mo

SUBLEASE_INCOME

$8,750

Sublease Income / Mo

NET_SPREAD_MONTHLY

$2,083

Net Spread / Mo

ANNUAL_SPREAD

$25,000

Annual Spread

YIELD_ON_COST

31.2%

Yield on Lease Cost

VS_CONV_PURCHASE

2.1%

vs. Conv. Acquisition

At these parameters your MLO generates $25,000/yr in spread income vs. $1,200,000 required for a conventional acquisition. The MLO requires $0 to begin generating returns.

MLO_MECHANICS · 4 STEPS · $0 DEBT TO BEGIN

How the structure works step by step.

The Master Lease Option is a legitimate, negotiated structure used by institutional operators to enter high-value assets before committing acquisition capital.

01

$0

Bank debt required

MASTER_LEASE_SIGN

Execute the Master Lease

You sign a master lease at a negotiated monthly rate. You gain full operational control immediately. No bank required, no down payment, no mortgage underwriting. The seller receives guaranteed income.

02

Day 1

Income generation

SUBLEASE_INCOME

Generate Spread Income

You sublease individual units or suites at market rates above your master lease cost. The spread is your yield. This income begins from the first occupied sublease and continues throughout the lease term.

03

Locked

Purchase price

OPTION_EXERCISE

Exercise Your Purchase Option

When DSCR supports favorable financing or corridor appreciation creates the right entry point, you exercise the option at the price locked in at signing. Not market price. Your price. The seller cannot raise it.

04

100%

Spread retained

EXIT_OR_HOLD

Exit or Build Equity

If conditions shift, you retain every dollar of spread income and exit cleanly per the agreement. If conditions are favorable, you acquire a verified asset at a below-market basis. The structure is asymmetric by design.

DSCR_TRIGGER_CALC · OPTION_EXERCISE_THRESHOLD

Know exactly when your sublease income unlocks the purchase option.

Model your purchase financing scenario. The calculator shows the exact monthly NOI your subleases must reach before exercising the option makes financial sense.

Price locked at MLO signing

Loan-to-value at exercise

Estimated mortgage rate at exercise

Loan amortization period

Lender DSCR threshold at exercise

LOAN_AMOUNT

$1,050,000

Loan Amount

MONTHLY_PI

$7,421

Monthly P&I

ANNUAL_DEBT_SVC

$89,054

Annual Debt Service

REQUIRED_NOI

$111,318

Required Annual NOI

REQUIRED_NOI_MO

$9,276

Required Monthly NOI

Exercise trigger: sublease NOI must reach $9,276/month before this option makes financing sense at 1.25× DSCR. Build toward this in your spread income model above.

THREE_WAY_COMPARISON · MLO vs CONVENTIONAL vs NOTHING

MLO vs. conventional purchase vs. doing nothing.

Doing nothing is a decision with real costs. The corridor premium is being priced in now. Every month without a position is a month of appreciation you will never recover.

DIMENSION

MLO STRUCTURE

CONVENTIONAL PURCHASE

DOING NOTHING

Bank Debt Required

$0 to enter

10-20% down + underwriting

$0 (no action)

Income Start

Day 1 spread income

After close (60-90 days)

$0 (no income)

Purchase Price

Locked at signing

Current market at offer

Market at future sale

Exit Flexibility

Walk with spread retained

Sell only (market dependent)

Full flexibility, no progress

DSCR Risk

None until option exercise

Required at underwriting

None (no deal)

Time to Control

Days (lease execution)

60-90 days to close

N/A

Downside Floor

Spread income earned

Market value at time of sale

Zero improvement

Upside Capture

Full via option exercise

Full at ownership

Missed corridor premium

BUILT_IN_OPTIONALITY · ALL_THREE_INCLUDED

Every MLO includes built-in optionality.

Maximum upside. Defined floor. The worst case is that you earned spread income and exited clean.

OPTION_A

Upside Without Debt

Control now. Debt later. On your terms.

Exercise the purchase option when conditions are favorable. Until then, you hold full operational control without a mortgage on your balance sheet. The option price is locked. The timeline is yours.

BEST_FOR

Operators who want asset control before committing bank capital. Data center operators evaluating corridor timing.

NO_BANK_DEBTOPTION_LOCKEDTIMING_FLEXIBLE

OPTION_B

Own When DSCR Supports It

Structure the trigger around cash flow, not a calendar.

The purchase option triggers at a pre-agreed DSCR threshold, not an arbitrary date. When your sublease income produces the coverage ratio required for favorable financing, you execute. Not before.

BEST_FOR

Investors building toward a specific debt-service coverage before acquiring.

DSCR_TRIGGEREDCASH_FLOW_VERIFIEDLENDER_READY

OPTION_C

Keep the Spread or Walk

Worst case: you earned spread income and exited clean.

If the market shifts or the option economics no longer work, you retain every dollar of spread income earned during the lease period and exit per agreement terms. No penalties. No obligations.

BEST_FOR

Risk-conscious investors who want asymmetric upside with a defined floor.

ASYMMETRIC_UPSIDEDEFINED_FLOORCLEAN_EXIT

OPERATOR · SUBMIT_BUY_BOX

Submit your buy-box criteria.

We match against our current MLO-ready pipeline within 48 hours. Every matched property is pre-scored at 85+ MOAT. NDA signed before any property details are shared. No upfront fees.

Submit Buy-Box

SELLER · SUBMIT_PROPERTY

Submit your property for review.

We run the 441-unit triage in 72 hours and return a pass or pass-conditional recommendation. You receive a guaranteed monthly income structure and zero vacancy risk if the property qualifies.

Submit Property

CAPITAL_PARTNER · TERM_SHEET

Request the capital partner term sheet.

Fund the structure, earn a preferred return, no operations required. Available to verified accredited investors. NDA required before disclosure.

Request Term Sheet

NDA-protected. No upfront fees. Available to accredited investors and qualified operators only. This is not a public securities offering. Master Lease Option structures are subject to individual property terms, seller agreement, and legal review. Past performance does not guarantee future results. All calculator outputs are estimates for illustrative purposes only and do not constitute financial advice. B2B Systems does not accept commission from lenders or sellers.

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