Sale-leaseback

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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
As commercial building owner-occupants consider liquidating their assets in a rising-rate environment, excellent sale-leaseback opportunities will arise, according to Marc Imrem and Andrew Watson, managing directors of capital markets with Transwestern.
Harris specializes in financing commercial assets with a focus on triple-net lease and sale-leaseback transactions and will be responsible for overseeing Meridian's recently formed Arizona office.
A useful but infrequently used tool for raising cash for a small business is the sale-leaseback transaction.
TRD: Have sale-leasebacks always happened when the economy tanks?
Jay Bastian, senior vice president of acquisitions at National Retail Properties, said that sale-leasebacks have been fairly consistent in the retail sector over past few years, also citing companies including Kmart, Walgreen, CVS, J.C.
* SALE-LEASEBACKS BETWEEN family members offer many of the same benefits and suffer many of the same IRS attacks.
A lot has changed in a year in the sale-leaseback space.
Harris said, however, that sale-leasebacks will be limited in New York because of commercial rent taxes and the fact that many New York companies do not own their own real estate because of the high cost.
* Sale-leasebacks: the sale of property by the owner and a lease of the property back to the seller.
"Sale-leasebacks are an ideal financing tool when money is tight and when stock prices are down," explains Ed Lashins, president of Lashins Development Corp.
"Like other financing alternatives, the availability of capital for sale-leasebacks is severely constrained today," said Gordon J.