Sale Leasebacks Boom During COVID-19 Pandemic by Kevin Sanz, CCIM, MSIRE

Posted on February 11, 2021

Large, well-funded chain stores and restaurants have long understood the benefits of sale leasebacks to convert their equity in real estate into cash they can use to finance renovations at existing locations, fund new property acquisitions, or to simply provide immediate liquidity. However, during the COVID-19 pandemic, a company’s ability to monetize 100 percent of the value of their fixed assets is critical to its survival. In this environment, retailers and restaurants, in particular, are increasingly using sale leasebacks to boost working capital and cash reserves. Not only can these arrangements strengthen balance sheets, they also give management the time and resources to adapt to the new normal, revive their brands and execute strategies that position themselves for long-term success. Some of the well-known brands that completed sale leasebacks in 2020 include Bed Bath & Beyond, Big Lots, Cracker Barrel Stores, Gamestop and Rite Aid.  More are expected in 2021 as businesses continue to seek out enhanced liquidity and capital to invest in their companies’ long-term growth.

With offices in Miami, Orlando, New York City and Geneva, the team at Orion works 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 info@orionmiami.com.