Sale-leasebacks offer an alternative to conventional financing as a means of raising capital. Sale-leasebacks allow business owners the opportunity to unlock capital currently allocated to an illiquid asset. We can assist owners in the sale of their real estate, while simultaneously structuring a long-term net lease with the purchaser, allowing the owner to retain operational control of their asset.
A real estate sale-leaseback is a transaction in which the owner-occupant sells the land and building used in its business operations to an investor and then simultaneously leases the property back from the investor on lease terms agreed upon. Typically, this will be a long-term investment for the investor so the seller is able to negotiate directly with the investor a mutually agreeable and clear set of lease terms.
Sale-leasebacks have become more popular in recent years as an alternative to mezzanine financing so companies can avoid the high mezzanine interest rates and dilution (ownership) requirements typically found in these types of debt structures. In a sale-leaseback you have the ability to set your own lease terms, retain control of the real estate, tax savings, greater value to the real estate, no financial covenants, and attractive implied financing rates.