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Sale Leaseback Transactions: Price Premiums and Market Efficiency

Author

Listed:
  • C.F. Sirmans

    (Florida State University)

  • Barrett A. Slade

    (Brigham Young University)

Abstract

Sale-leaseback transactions are ubiquitous in real estate markets in the United States with annual volume estimated to be greater than $7 billion. However, there is no evidence concerning the price impact of such transactional arrangements. Using a data set of sale-leaseback transactions, this study examines the price impact on commercial property transactions across seven markets. The findings reveal that transactions structured as saleleasebacks occur at significantly higher prices than market transactions. In addition, after accounting for income differentials, buyers and sellers are appropriately pricing the transactions resulting in no undue advantage to either party, that is, the expected price premium is accounted for in the saleleaseback prices.

Suggested Citation

  • C.F. Sirmans & Barrett A. Slade, 2010. "Sale Leaseback Transactions: Price Premiums and Market Efficiency," Journal of Real Estate Research, American Real Estate Society, vol. 32(2), pages 221-242.
    • Handle: RePEc:jre:issued:v:32:n:2:2010:p:221-242
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    Citations

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    Cited by:

    1. S. Akin & Val Lambson & Grant McQueen & Brennan Platt & Barrett Slade & Justin Wood, 2013. "Rushing to Overpay: Modeling and Measuring the REIT Premium," The Journal of Real Estate Finance and Economics, Springer, vol. 47(3), pages 506-537, October.
    2. Noriko Ashiya, 2015. "Determinants of Potential Seller/Lessee Benefits in Sale¡VLeaseback Transactions," International Real Estate Review, Global Social Science Institute, vol. 18(1), pages 89-112.
    3. Elizabeth Devos & Erik Devos & He Li & Desmond Tsang, 2022. "Operating Lease as Alternative Financing for REITs: a Viable Strategy or a Sign of Trouble?," The Journal of Real Estate Finance and Economics, Springer, vol. 65(2), pages 153-180, August.

    More about this item

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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