(Updated October 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
The Past, Present and Future of Sale-Leaseback Accounting, (Equipment Leasing & Finance, Oct. 2012). Q
Evidence of Motives and Market Reactions to Sale and Leasebacks, (Journal of Applied Finance, 2012). Q
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).
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
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.
Commercial Real Estate 2013 Lending Survey, (National Association of REALTORS®, 2013).
The Commercial Real Estate Lending Survey is conducted annually and provides an overview of lending conditions that impact commercial transactions nationally, based on responses from commercial real estate members.
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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