From the buyer's perspective, a sale leaseback
can be an attractive investment in the real estate category as it requires less maintenance and administration than many multi-tenant real estate investments.
They're doing sale and leasebacks
in a controlled manner on their terms," he explains.
The investment market is becoming more sophisticated, and structured sale and leaseback
opportunities are becoming more popular with both businesses looking to release poor performing capital for reinvestment, and investors with an appetite for investment opportunities.
In addition, the constant rental accrual method must be utilized for certain section 467 rental agreements, specifically a "disqualified" leaseback
or a long-term agreement.
467-3(c), the Service's determination of whether tax avoidance is a principal purpose for increasing or decreasing rental payments in a leaseback
or long-term agreement is to be based on all the facts and circumstances.
That is, the seller-lessee records the sale, removes the asset from its balance sheet, classifies the leaseback
in accordance with paragraph 6 of Statement no.
Some recent example of sale leaseback
transactions include Time Equities Inc.
Market conditions are very favorable for tenants looking to sublease their space and those owners who are looking to raise capital through a sale and leaseback
of their facilities.
We know of two British companies that have completed sale leasebacks
recently with subsidiaries in the United States and due to British Gap Accounting have recognized the gain in the year of the sale.
We've purchased some single-tenant sale leasebacks
for all of our REITs.
Since 1995, Klaff and Lubert-Adler have been partners in the business of acquiring designation rights of bankrupt retailers and completing sale leasebacks
with retail tenants in need of capital.
NYSE:WYN) and executed long-term leasebacks
on both properties with Wyndham.