Overview

Often used as a financing alternative, sale-leasebacks offer financially struggling companies access to cash to pay down debt and improve the bottom line. Find out how sale-leaseback transactions have helped the balance sheets of hotel, restaurant, retail, and other businesses.

What is a Sale-Leaseback

References

NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require a password.


Seller Benefits:

  • Converts equity into cash
  • Offers alternatives to conventional financing
  • Possibility of better financing
  • Improves balance sheet and credit standing
  • Avoids debt restrictions
  • Deterrent to corporate takeovers
  • Avoids usury limitation

Buyer Benefits:

  • Higher return rate
  • Predictable and secure return rate
  • Greater ease in handling a seller default
  • Avoid usury problems
  • Ownership of the reversion
  • Built-in tenant

Tax Considerations:

  • Deduction of rental payments
  • Timing gain and loss recognition
  • Capital gain-ordinary loss treatment

Source: Sale-Leaseback Solutions: Examine the Business and Tax Considerations of These Transactions (CCIM Institute)

About Sale-Leasebacks & Synthetic Leases 

Asia Pacific Sale-Leaseback Deals to Surge in 2020 (APAC Real Estate, May 3, 2020)

What is a Sale-Leaseback Transaction? (Motley Fool, Mar. 12, 2020)

Finding the Right Investor for a Sale-Leaseback Transaction (Globe St., Feb. 13, 2020)

Why Sale-Leasebacks are Coming Back Strong (Globe St., Feb. 8, 2019)

An Analysis of the New Sale and Leaseback Guidance (CPA Journal, Sep. 2018) E

Synthetic Leases: An Old New Leasing Approach (Connect Commercial Real Estate, Jul. 20, 2018)

Renewed Interest in Synthetic Leases (King & Spalding Law, Jun. 6, 2018)

Mutually Beneficial: How to Negotiate a Sale-Leaseback So That Both Parties Benefit (Smart Business Cleveland, Jan. 2018) E

Sale-Leaseback Strategies: Maximizing Value (Calkain Companies)

Advantages of Sale-Leasebacks

Real Estate Investors See Leasebacks as a Liquidity Lifeline for Biz (Crain’s Chicago Business, Apr. 24, 2020)

The Sale-Leaseback Path to Growth (CSP Daily News, Oct. 25, 2019)

The Resurgence of the Sale-Leaseback (HBRE, Mar. 13, 2019)

Sale-Leaseback: Weighing the Risks and Rewards for Your Business (JLL, Jan. 17, 2019)

The Many Benefits of Sale-Leasebacks for Middle Market and Private Equity Owned Businesses (ETF Trends, Oct. 29, 2018)

Watch Out for These Sale-Leaseback Challenges (Globe St., Mar. 29, 2018)

Synthetic Leases: Benefit or Burden? (CCIM Institute)

Real Estate Sale-Leasebacks: What's the Attraction of the Net Lease Arrangement? (CIRE Magazine)

Sale-Leasebacks Provide Capital for Core Business Investment (CCIM Institute)

Hotel & Restaurant Property Leasebacks

 

Sale-Leaseback Deals Continue to be Popular with Retailers (Commerical Property Executive, Jan. 8, 2020)

Check, Please: Restaurant Chains Jump on Leaseback Deals to Raise Capital (CoStar News, Feb. 13, 2019)

Sale-Leaseback Deals Help Unlock ‘Untapped Value’ (Hotel News Now, Nov. 2, 2018)

Are Sale/Leasebacks Beneficial? (Convenience Store Decisions, Sep. 2017) E

Government Property Leasebacks

Fixing the Government Pension Problem for Fun and Profit (Chicago Crain’s Business, Apr. 23, 2018) E

Making the Most of Public Assets (National Real Estate Investor, Nov. 3, 2017)

Sale/Lease-Back Deals Attract Smaller Firms (Wall Street Journal, Aug. 12, 2015) E

Healthcare Property Leasebacks

Private Equity Buyouts in Healthcare: Who Wins, Who Loses? (Institute for New Economic Thinking, Mar. 15, 2020)

Healthcare Providers Use Sale-Leasebacks to Help Fuel Growth (Lexology, Nov. 28, 2018)

The Sale-Leaseback: An Option for Your MOB? (HBRE, Feb. 25, 2018)

Understanding the Medical Office Building (MOB) Sale-Leaseback and its Advantages (UCR Properties, Nov. 16, 2017)

Medical Real Estate: Sale-Leaseback Advantage (Ploutus Advisors)

Articles, Surveys & More From NAR

Find all of NAR's Commercial Real Estate Research here

Find an index to all NAR Research here

Expectations & Market Realities in Real Estate 2020 (National Association of REALTORS®)

Commerical Real Estate Market Trends and Outlook (National Association of REALTORS®)

Commercial Real Estate Lending Trends 2019 (National Association of REALTORS®)

The Commercial Real Estate Outlook is NAR's flagship commercial research publication. It is produced quarterly and includes the latest market information on five major commercial real estate sectors — industrial, office, multi-family, retail and hospitality real estate.

eBooks & Other Resources

eBooks.realtor.org

The following eBooks and digital audiobooks are available to NAR members:

The Art of Commercial Real Estate Leasing (Kindle, Audiobook, eBook)

Complete Book of Real Estate Leases (eBook)

Investing in Real Estate with Lease Options and "Subject-to" Deals (Kindle, eBook)

The Leasing Process: Landlord and Tenant Perspectives (eBook)

Leasing Administration Simplified (Kindle, eBook)

Negotiate the Best Lease for Your Business (eBook)

Books, Videos, Research Reports & More

The resources below are available for loan through Member Support. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Member Support at 800-874-6500 for assistance.

Real Estate Investors Deskbook (Boston, MA: West Group, 2011) HG 4521 Ar6Re

Commercial Lease Law Answer Book (New York, NY: Vendome Group, 2008) KF 593 C6

Managing and Leasing Commercial Properties (New York, NY: Wiley, 2007) HD 1394 AL2ma

Real Estate Finance: Theory and Practice (Mason, OH: Thomson Southwestern, 2003) HG 4029 C57 Ed. 6

Real Estate Sale/Leaseback: A Review of the Advantages and Disadvantages (Washington, D.C.: Society of Office and Industrial REALTORS®, 1993) HD 1384 So1


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