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A sale-leaseback transaction: Is it right for your business?

Author

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  • Jegher, William

Abstract

A sale-leaseback is defined as the sale of an owner-occupied property to a real estate investor followed by leasing back space from the new owner. The goal for the vendor essentially is to raise capital while retaining use of the facility in question, while the purchaser is happy to acquire stable, long-term cash flow; however, sale-leasebacks are not this simplistic and, in fact, are not suitable for every corporation. It is key to understand, not only the company's real estate, but also its overall corporate strategy, before determining if such a transaction is suitable. Understanding whether a sale-leaseback transaction could work for a corporation requires a robust financial model, a look at the pros and cons, approach and rationale, and more.

Suggested Citation

  • Jegher, William, 2012. "A sale-leaseback transaction: Is it right for your business?," Corporate Real Estate Journal, Henry Stewart Publications, vol. 2(2), pages 144-152, March.
    • Handle: RePEc:aza:crej00:y:2012:v:2:i:2:p:144-152
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    More about this item

    Keywords

    sale-leaseback; owned versus leased; unlocking value; transactions; financial modelling; market dynamics; corporate real estate;
    All these keywords.

    JEL classification:

    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location

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