Sale-leaseback


Also found in: Dictionary, Legal, Encyclopedia, Wikipedia.

Sale-Leaseback

The sale of a property in which the seller immediately begins to rent the property from the buyer. That is, the seller no longer has ownership of the property, but maintains residence and/or use for the duration of the rental agreement. A sale-leaseback gives the seller profit from the sale while the buyer is guaranteed income from the rental agreement in the medium or long-term. Sometimes, a sale-leaseback occurs in order to grant the seller access to capital to make improvement on the property; for example, the seller may use the proceeds from the sale to build a factory. A form of sale-leaseback, known as sukuk al-ijara, is a common structure for sukuk, or the equivalent of a bond, in Islamic finance. Sale-leaseback is also called simply leaseback.

Sale-leaseback.

In a sale-leaseback arrangement -- also known as a leaseback -- an owner sells his or her property, and then immediately leases it back from the buyer as part of the same transaction.

This way, the seller gets the profits from the sale while keeping possession and use of the property, while the buyer is assured immediate long-term income on the property.

Sale-leaseback transactions are most commonly used in commercial real estate, but can also apply to commercial vehicles and other types of property.

References in periodicals archive ?
Watson said the sale-leaseback arena remains a seller's market, as demonstrated by "considerable" investor interest in the Flagler deal.
A Seller that has been occupying its property prior to a sale-leaseback transaction has been accustomed to maintaining insurance coverage that it felt was reasonable and necessary in connection with its business operations at the properly.
Sellers on the other hand might use a sale-leaseback strategy to clean up balance sheets, enhance financing options or manage tax considerations related to their core businesses.
For companies that need to improve their balance sheets and credit standing, the sale-leaseback allows them to get the real estate off their books and remove the debt connected with it.
One of Sovereign's more notable home furnishings retail sale-leaseback deals was the $75.
3 /PRNewswire/ -- Sale-leasebacks are increasingly taking a new shape as corporations look to reduce ownership of property and increase flexibility.
Although interest rates have begun to creep upwards, initiating a sale-leaseback now can help secure long-term capital at historically low rates.
But there are other differences from sale-leaseback.
If the parties adhere to the understanding the transfer is not a bona fide sale, the sale-leaseback lacks substance.
Through these sale-leasebacks, GE Capital helped us free up capital to reinvest in our business," says Lewis Topper, principal, WendPartners.
I am proud to join the dynamic team at Meridian and I look forward to leveraging my extensive triple-net lease and sale-leaseback expertise to enhance Meridian's longstanding tradition of excellence and drive market share," he added.
Cash-strapped health-care providers can address new and increased equipment needs while minimizing their debt through the sale-leaseback deal structure, said Poe Corn, executive vice president in JLL's Capital Markets Healthcare practice.