sale leaseback

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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

The simultaneous purchase of a piece of property and the lease of the same property back to the former owner.This practice is common with professional associations, such as doctors and lawyers,who wish for a core group of senior partners to own the real estate despite the entrance and exit of other partners in the business. Other times, banks or other owners with long-term plans will sell their property to investor groups and sign long-term leases.

References in periodicals archive ?
com) is a boutique net lease and sale leaseback advisory group.
Wolfe added that he "Thinks more and more franchisees will continue executing sale leasebacks," but, he noted, "it's important for buyers to think about their exit strategy on the front end and to structure the lease(s) with this in mind.
A well-structured sale leaseback can, however, still leave the franchisee in control of the property's physical condition by requiring certain standards of maintenance, rights of ways, easements and so on; all while accomplishing the franchisee's main objective of raising capital needed to grow when opportunities present themselves.
The ECP management team approached us with clearly outlined objectives and a firm deadline under which to complete a sale leaseback.
They also pointed out that these assets were appreciating, therefore, the sale leaseback transaction gave them short-term benefits with a long term downside (giving up the residual).
After giving effect to the sale leaseback transaction and loan, the balance of the purchase price for LTA was funded using cash on hand, by assuming HUD insured long-term mortgage debt and by assuming a lease for four communities from Health Care Property Investors (NYSE: HCP).
The proceeds from the sale of UI's interests in the plant will be used to terminate the lease and redeem the sale leaseback obligation bonds.
CNL provides securitized debt financing, turnkey development services, venture capital, sale leaseback and equipment financing to the restaurant industry.
DenAmerica will finance the acquisition via a $50 million sale leaseback transaction.
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.
We've purchased some single-tenant sale leasebacks for all of our REITs.