Sale-Leaseback Services

Unlock the value in your real estate.

Over the past decade, commercial real estate values have appreciated handsomely, leaving many companies with assets on their balance sheet that do not represent the full value of their holdings. If your business owns the real estate in which you operate, there is a chance that you’re carrying equity that could be better invested in your operations. This equity might help you invest in growth, sustain operations during hard times, or help meet other financial obligations.
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Why is a sale-leaseback
What is a Sale-Leaseback?
A sale-leaseback involves selling the real estate you own and agreeing to lease it back from the new owner.

The ownership in the operating business does not change; the original owner sells the property and at the same time, signs a lease agreement with the new property owner. The proceeds of the property sale are then available for the business owner to use in their core business.

This approach allows you to monetize the value of your property and redeploy it where needed, while maintaining ownership of the operating business.
Benefits

Step-by-Step Approach to Completing a Sale-Leaseback

Find out what your real estate is worth today.
Identify opportunities to improve the property to make it more attractive to an investor.
Develop a full understanding of tax, financing in place and other operational implications.
Update your business plan and financials to present your company as a desirable tenant.
Identify and list out your preferred lease rate, duration and terms.
Define and execute a go-to-market strategy.
Close and execute documentation.
Thinking of Selling Your Entire Business?

Business owners often ask us about how they should handle the separate sale of their business and their real estate when they decide it’s time to sell their company. Every situation is unique, but in general, we recommend one of the following strategies:
If the party acquiring the business is larger and financially stronger than the original owner, it can be effective to sell the business first and subsequently sell the real estate. The new business owner adds value to the property due to their financial strength, which provides a stable tenancy and secure cash flow, making the property more attractive to investors.
If the acquiring business is similar or smaller in size than the original owner, it is prudent to have the real estate valued separately from the operating business to ensure that the property sells at full market value to either the acquiring business or a third party. Often, when the property and operating business are bundled, it is difficult to ascertain if full value has been realized for both assets.

Reach out to us to get started.
Before going too far down the road, it is important to perform a full review of the opportunity. You should consider the current market for the real estate together with the strength your financial covenant and the operating business can provide on a lease.

Like all major financial and legal transactions, these strategies should be reviewed with tax and legal experts, as well as real estate advisors, to ensure your best interests are being served.
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