(Updated April 2013)
Often used as a financing alternative, sale-leasebacks offer financially struggling companies access to cash to pay down debt and improve the bottom line. And in a post-Enron environment, sale-leasebacks provide an alternative to the less favorable option of synthetic leases. Find out how sale-leaseback transactions have helped the balance sheets of hotel, restaurant, retail, and other businesses, in the articles and books in this guide. (S. Hogan, Information and Web Content Specialist)
sale-leaseback: A technique in which a seller deed property to a buyer for a consideration, and the buyer simultaneously leases the property back to the seller.
Source: Glossary of Housing Terms, National Association of REALTORS®.
Image Source: Barron's Educational Series, Inc. via allBusiness.com.
Benefits of Sale-Leasebacks
- Reinvest in the company
- Retire debt
- Improve credit rating
- Increase productivity
- Make an acquisition
- Get a better return on capital investment
- Avoid negative impact from depreciation on the financial statement
Source: Right now sale/leaseback may be the only option to obtain cash and a healthier balance sheet, (ITRA Global, Oct. 12, 2009).
About Sale-Leasebacks & Synthetic Leases
Brokers Explore Short Sale Lease Back Programs, (REALTOR® Magazine Online, Apr. 29, 2013).
Short Sale Lease Back Alternative to Foreclosure Available, (Realty Times, Apr. 26, 2013).
Changes to Lease Accounting: Will Sale/Leasebacks Still Make Sense?, (Site Selection, May 2011).
Sale-Leaseback Solutions: Examine the Business and Tax Considerations of These Transactions, (CCIM Institute, n.d.).
Advantages of Sale-Leasebacks
Making the Most of Sales and Leasebacks, (Franchising World, July 2012). Q
Signs of Life in Sale-Leasebacks, (REALTOR® Magazine, June 2011).
Sale-Leasebacks: A Smart Real Estate Strategy in Tough Times, (Area Development Online, Nov. 2010).
Sale-Leasebacks Provide Capital for Core Business Investment, (CCIM Institute, n.d.).
The Corporate Sale/Leaseback Strategy, (Society of Industrial and Office REALTORS® Educational Foundation, n.d.).
Hotel & Restaurant Property Leasebacks
Nevistas Offers Hotel Sale Leaseback Financing Program for Flagged Hotels, (Hotel News Resource, Mar. 11, 2010).
Restauranteurs Turn to Sale-Leaseback Deals to Convert Assets into Capital for Expansion, (Nation's Restaurant News, Apr. 14, 2008). Q
Sale-Leaseback Transactions for Mid-Size Banks a Timely Way to Realize Off-Balance Sheet Value, (Western Independent Bankers, Feb.-Mar. 2007).
Government Property Leasebacks
Evaluating the Sale-Leaseback Proposal: Should the State Sell Its Office Buildings?, (Legislative Analyst's Office, Apr. 27, 2010).
Government Sale-Leasebacks, (NAI Alliance, Feb. 25, 2010).
States Turn to Commercial Properties for Cash, (The Seattle Times, Feb. 12, 2010).
Healthcare Property Leasebacks
Not a Deal-Breaker: Sale-leasebacks Still Attractive to Skilled-Nursing Operators despite Rate Cuts, (Modern Healthcare, Nov 7, 2011). Q
The Hartford's Deep Embrace, (Hartford Business Journal, Mar. 2, 2010).
Healthy Prognosis for Medical Buildings Market, (NuWire Investor, Nov. 17, 2008).
Articles, Surveys & More from NAR
Find all of NAR's Commercial Real Estate Research here.
Find an index to all NAR Research here.
2012 Commercial Real Estate Lending Survey, (National Association of REALTORS®, 2012).
In 2012, the National Association of REALTORS® conducted a survey of commercial real estate members focused on assessing how lending conditions impacted commercial transactions.
Commercial Real Estate Market Outlook (National Association of REALTORS®)
The Commercial Real Estate Outlook is NAR's flagship commercial research publication. It is produced quarterly and includes the latest market information on five major commercial real estate sectors — industrial, office, multi-family, retail and hospitality real estate.
eBooks & Other Resources
The following eBooks and digital audiobooks are available to NAR members:
Books, Videos, Research Reports & More
The resources below are available for loan through Information Central. Up to three books, tapes, CDs and/or DVDs can be borrowed for 30 days from the Library for a nominal fee of $10. Call Information Central at 800-874-6500 for assistance.
Real estate investors deskbook, (Boston, MA: West Group, 2011). HG 4521 Ar6Re
Commercial lease law answer book, (New York, NY: Vendome Group, 2008). KF 593 C6
Managing and leasing commercial properties, (New York, NY: Wiley, 2007). HD 1394 AL2ma
Real estate finance: theory and practice, (Mason, OH: Thomson Southwestern, 2003). HG 4029 C57 Ed. 6
Real estate sale/leaseback: a review of the advantages and disadvantages, (Washington, D.C.: Society of Office and Industrial REALTORS®, 1993). HD 1384 So1
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