leaseback

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Leaseback

A transaction that involves the sales of some property, and an agreement by the seller to lease the property back from the buyer after the sale.

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.

leaseback

leaseback

an arrangement which involves the selling of an ASSET by the owner to another person or company on condition that the asset is then LEASED (rented back) to the original owner for a specified period of time at an agreed rental. Leaseback is used primarily as a means of raising finance from the sale of surplus properties while allowing the firm to continue its existing business operations. See LEASING.

leaseback

an arrangement whereby the owner of an ASSET agrees to sell it to another person or company on condition that the asset can be leased to its original owner for a fixed term at a prearranged RENT. Leaseback is normally undertaken to enable companies with large assets such as property to realize cash for use elsewhere in their business.

See LEASE, LEASING.

References in periodicals archive ?
Our sale and leaseback of the Denver Tech and Billerica properties enables us to further strengthen our balance sheet, while maintaining management of these outstanding properties," said Fred J.
The seller-lessee retains substantial risks of ownership in the property through the temrs of the leaseback.
Retailers anticipating a future sale/ leaseback should consider meeting this standard at the time of acquisition to avoid the costs and potential risks of having to fill in gaps in the environmental report later.
In the case of disqualified leasebacks and long-term agreements, which are presumed in some respects to be "abusive," rent is accounted for using the constant rental accrual method.
If the rental agreement is a disqualified leaseback or long-term agreement that has increasing or decreasing rents, a principal purpose of which is tax avoidance, the fixed rent for each rental period is redefined as the constant rental amount.
Some recent example of sale leaseback transactions include Time Equities Inc.
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.
Larger companies that execute sale leasebacks might do so to avoid the cost and expense of having internal facilities management staffs.
As corporate sale leasebacks are now considered a legitimate source of capital, they are being considered with the same weight as any other source of equity or debt.
With more owner-occupiers changing their attitude towards freehold property, sale and leasebacks are playing an increasingly important role in the property investment market.
This press release and statements made by or on behalf of the Company relating hereto, including all statements concerning the Company's recapitalization efforts, proposed equity financings, proposed sale and leaseback transactions, potential payments pursuant to earn-out arrangements, and results of operations for future periods, may be deemed to constitute forward-looking information made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.