Field Guide to Sale Leasebacks & Synthetic Leases
(Updated January 2008)
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 below. (M. Martinez, Library Manager)
Contents:
Synthetic Leases... After Enron | Advantages of Sale-Leasebacks | Hotel & Restaurant Property Leasebacks | Retail Property Leasebacks | Books, eBooks & Other Resources
Advantages of a Sale-Leaseback
1. Utilizes fixed assets
2. Free up capital tied up in real estate and equipment
3. Improved financial image.
4. Lease payments are deductible for income tax purposes
Source: Advantages to sale-leaseback financing, (Emory & Co.2006).
Synthetic Leases...after Enron
Awaiting a financial windfall, (National Real Estate Investor, Dec. 2003). Q
Real estate leasing: a new chapter on synthetic and other leases post-Enron, (Real Estate Finance, Dec. 2003). Q
Special purpose entities in a post-Enron world, (ABA Bank Compliance, Jul./Aug. 2003). Q
Accounting scandals result in fewer synthetic leases, (Facilities Design & Management, Oct. 2002). Q
Advantages of Sale-Leasebacks
Sale-leasebacks gaining ground among small firms, (REALTOR® Magazine Daily Real Estate News, Dec. 13, 2007).
Sell to rent. Sales-leaseback real-estate deals are helping small business owners make the most of their capital, (CNNMoney.com, Dec. 4, 2007).
Bundling sale-leaseback sales, (National Real Estate Investor, June 2007). Q
CoreNet: 'Surge' of corporate SLBs, (www.globest.com, Jan. 16, 2007).
An ideal climate for sale-leasebacks, (National Real Estate Investor, Aug. 2003). Q
When it's smarter to rent, tough times in most capital markets prompt more companies to do sale-leaseback deals, (Institutional Investor, May 1, 2003). Q
Hotel & Restaurant Property Leasebacks
Accor signs $255 mln U.S. hotel sale, leaseback deal, (MarketWatch,Jan. 8, 2007).
Max & Erma's embraces sale-leasebacks, (National Real Estate Investor, Oct. 2006). Q
Think flexibility first in franchise financing, (Franchising World, Oct. 2003). Q
The move to sale lease-backs, (National Real Estate Investor, July 2002). Q
Value approach, (National Real Estate Investor, May 2000). Q
Retail Properties & Leasebacks
$166M sale-leaseback on tap for Pep Boys, (www.cpnonline.com, Nov. 2, 2007).
Sale-leasebacks heat up in '03: a solid option for the real estate rich like Wal-Mart, lesser lights as well, (The Investment Dealer's Digest, May 19, 2003). Q
Own or lease?, (National Petroleum News, Mar. 2002). Q
Net-lease industry prepares to capitalize on 'soft landing', (National Real Estate Investor, Dec. 2000). Q
eBooks & Other Resources
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.
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. 4
Real estate investors deskbook, (Boston, MA: West Group, 2002). HG 4521 Ar6Re Ed. 3
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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