SALE-LEASEBACK?

In a sale-leaseback transaction, an owner/user elects to monetize its corporate real estate facility and structure a new, long-term lease on the property to an outside investor. In exchange, the company, through the sale of the facility, receives capital to grow and revitalize its business. The transaction has many benefits to the company, now tenant, as detailed below.

sale-leaseback considerations

The sale-leaseback strategy has become a highly sought-after tool for business owners, private equity firms, and M&A advisors as a means to maximize value and take advantage of arbitrage by monetizing corporate real estate assets within existing operating companies and potential acquisition targets. 

The M&A process can often include the business and company owned real estate. Financial sponsors, business owners, and M&A advisors turn to Northmarq to provide optionality and maximize real estate proceeds.

Northmarq is also engaged in capital raise and restructuring assignments when there is an opportunity to leverage a sale-leaseback as an alternative source of capital.

Methodology

A sale-leaseback strategy typically involves looking at the property from a multitude of directions. Each of the following must be completed in an effort to determine valuation and recommended lease terms while meeting Ownership’s objectives of: 1) Balancing net proceeds while establishing sustainable occupancy costs, 2) Ensuring the most efficient execution, and 3) Providing highest certainty of closing.