Benefits of a Sale Leaseback

A real estate sale-leaseback is a financial arrangement where an owner sells a property and then leases it back from the buyer at the close of escrow. This allows the seller to continue occupying and using the property while freeing up capital locked up in the real estate. Here are some key benefits:

1. Improved Cash Flow The seller receives an immediate lump sum of cash from the sale, which can be used for reinvestment, debt reduction, or operational expenses.

2. Retain Operational Control The business can continue using the property without disruption, ensuring operational continuity.

3. Off-Balance-Sheet Financing By removing real estate assets from the balance sheet, companies can improve financial ratios and attract investors.

4. Tax Advantages Lease payments may be tax-deductible, reducing taxable income compared to depreciation deductions from ownership.

5. Avoid Debt and Improve Credit Standing Instead of taking on more debt, a sale-leaseback provides liquidity without increasing liabilities.

6. Unlock Hidden Equity Many businesses own valuable real estate but have capital tied up in it. A sale-leaseback unlocks this equity for higher-return investments.

7. Potentially Favorable Lease Terms The seller can negotiate long-term lease terms that align with their business needs, potentially with renewal options.

Would you like insights on how this might work for a specific property your business owns or an acquisition your under LOI with - Please Email redacted or call###-###-#### to discuss. Thank you

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