Simple Sale Leaseback Arbitrage Math

In an M&A deal that includes a real estate component – the real estate will typically be undervalued, reason being is that the seller of the business is generally valuing their real estate on an appraisal/ PPSF basis and not on a cap rate multiple.
Say you’re buying this business at a 4x multiple on the EBIDTA – on the commercial real estate spectrum that same EBIDTA that you acquired at a 4x multiple you can immediately turn around and monetize by attributing it to rent it at a 12x multiple therefore unlocking significant capital tied up in a non-earning asset like corporate real estate.

Please feel free to reach out with any deals that your looking at with a real estate component and I would be happy to give you some quick feedback on whether it would be a good candidate for a sale leaseback - redacted