Sale Leaseback

Net leases provide a beneficial means for many corporations to free up capital for their businesses. Frequently, a corporation will sell owned property and lease it back on a long-term basis pursuant to a net lease. This process, known as a “sale-leaseback transaction,” may provide a corporation with the following benefits:

  1. Converts a non-earning asset to 100% cash, instead of 65-75% that can be achieved as owned real estate
  2. Accesses capital at a rate below the corporation’s cost of debt and equity
  3. Preserves debt capacity
  4. Improves financial ratios by eliminating depreciation and interest expense
  5. Transfers residual real estate value risk, while maintaining long-term operational control over the property