Sale Leaseback Analysis –
What is a sale leaseback? Is a sale leaseback a good fit for you?
A sale leaseback is when a business sells their real estate to an investor group and signs a long term lease to remain in the building as a tenant.
If your business has owned and occupied your building for a long time, a sale leaseback could be an excellent strategy to capture the equity from your buildings today (while capital gains taxes are still low), place into another investment (1031 Exchange), or to invest back into growing your business. The key will be understanding the spread between what you owe on your building and the value that your building (and company’s lease) will demand on the investment market.
Sale Leasebacks often occur on new projects as well. Some groups that want to control their location, design, and build-out for their business’s needs…but do not want to manage the headaches of owning real estate long term…that want to capture equity from selling their newly built project to an investor group…consider sale leasebacks as well.