What is a Sale-Leaseback and Why Hire Sale Leaseback Broker?

On top of an established reputation in the single-tenant net lease (STNL) market, our Net Lease Group offers sale leaseback broker services. As a boutique commercial real estate firm, we have grown into one of the largest STNL focused firms in the country. Whether you are a private or institutional investor, we are a sale leaseback broker firm that prides itself on delivering real estate solutions that maximize value while building wealth for all of our clients.

Hiring a sale leaseback broker will help you navigate the entire process with ease. Our brokers will work with you to find out your needs to unleash your desired capital and grow your business. Hiring a sale leaseback broker will give you peace of mind knowing that your needs are their first priority and they will communicate on your behalf to sell your property and leaseback your business.

Why a Sale Leaseback?

Companies do SLBs for a variety of reasons, but generally there are three main advantages:

  • Generate Cash – Quickly liquidate your real estate and get 100% of market value versus a typical 70% loan to value (LTV) loan which may require refinancing as soon as 3-5 years.
  • Reduce Taxes – Deduct 100% of your rent expense versus only the interest portion of your debt.
  • Redeploy Capital – Use the net proceeds from your transaction in order to reinvest in your infrastructure that produces higher yields.

So how do you know if your business/asset is right for a SLB?  For a successful transaction, investors will be looking at the following:

  • Quality of Asset – Your real estate should be well-located and in good physical condition.
  • Credit Worthiness – You must have a solid business generating $5M – $100M in revenue.
  • Lease Structure – Your firm must be willing to commit to a long-term lease with fair market rents.

The Right Time Is Now

Gaining in popularity, SLBs have increased to over $12 billion in transaction volume according to Real Capital Analytics.  The US economy has slowly but steadily recovered from the recession, and now under the new administration, there is a push for continued growth.  Companies need cash to grow and are turning to SLBs.

The net lease sector in commercial real estate has remained strong as there has been an influx in domestic and foreign capital, all looking for attractive, stable investments contrary to the volatile capital markets.  As interests rates begin to climb, we expect to see tenants wanting to take advantage of locking into long-term leases in efforts to control operating expenses for years to come.

No doubt, there are a lot of reasons to consider a sale-leaseback right now.  Let us walk you through the process to determine the right strategy that will allow you to maximize the benefits of selling your real estate and entering into an advantageous lease.  We will thoroughly explore the right balance of financial returns and operational flexibility, diligently set up the appropriate lease structure and outline the tax implications resulting from the SLB, all to maximize your capital.

Traci BidingerWhat is a Sale-Leaseback and Why Hire Sale Leaseback Broker?