Sale leaseback transactions have grown steadily since 2010 as investors seek alternative financing options. In fact, total sale leaseback deal volume reached nearly $12 billion nationwide in 2015, a leap from $8 billion in 2007.
In a sale leaseback deal, a property owner sells a real estate asset, such as land, a building or other improved property, or both, and subsequently leases it back from the buyer. In essence, the seller becomes the buyer’s tenant, and the transaction functions as a loan payed out through an agreed-upon monthly rent. The leases are often long term and fixed to account for amortization of the purchase price plus a return on investment for the buyer.
For sellers, sale leaseback transactions provide the following advantages:
Advantages that property buyers may yield in a sale leaseback include:
The intricacies of sale leasebacks create significant tax implications for which both buyers and sellers should consult with qualified real-estate professionals and experienced accountants.
The professionals with Orion Real Estate Group work with investors, developers, property owners and brokers through all phases of real estate transactions, from strategic planning and analysis to financing, negotiation, property management and disposition. For more information, call (305) 278-8400 or email firstname.lastname@example.org.