Brokerage Services Sale Leaseback
WHAT IS A SALE-LEASEBACK?
A sale-leaseback transaction is a mechanism for creating a liquidity event through the sale of a real property asset with a simultaneous execution of a lease for a specified length of time with a predetermined formula for rental payments. Typically, but not always, the longer a user/owner commits to leasing back a property, the more attractive of an investment the market perceives it to be. The creditworthiness of the owner (seller), who will later become the user (tenant), is a vital factor that will affect the pricing and marketability of the sale-leaseback investment.
Sale-leasebacks have been in existence for over 40 years and today over $6 billion of sale-leaseback transactions occur on an annual basis. They are an excellent source of alternative financing for companies that own real estate and are looking to create cash or enhance the value of their company.
HOW CAN PODOLSKY|CIRCLE HELP WITH YOUR SALE-LEASEBACK TRANSACTION?
Understanding the goals of the property owner is the most important factor to determine whether a sale-leaseback is a strategically sound decision. This involves asking difficult questions and requesting physical and financial information to determine if the structure is a viable fit. Podolsky|Circle will work with decision-makers to candidly assess whether a sale-leaseback has merit for the company, and its balance sheet. If a consensus exists to move forward, Podolsky|Circle will establish a market value for the asset given the host of factors that exist on a case-by-case basis. From that point forward, Podolsky|Circle will work tirelessly to identify the highest qualified bidder for the asset, keeping in mind that the buyer will become the occupant’s new landlord.
DOES A SALE-LEASEBACK MAKE SENSE FOR EVERY USER/OWNER?
No. Every business and its owner has specific desires and goals. A sale-leaseback is not a one size fits all alternative. Many factors must be carefully examined prior to attempting a sale-leaseback transaction. In some cases, a sale-leaseback does not align with the user/owner’s interest. Other times, it accomplishes the user/owner’s goals perfectly and can free up capital to inject back in the business, pay down other obligations, or elevate a firm’s credit.
HOW DOES PODOLSKY|CIRCLE IDENTIFY THE CORRECT BUYER FOR A SALE-LEASEBACK?
Podolsky|Circle maintains a propriety database that is updated constantly based on the specific investment criteria of investors. Long-term sale-leaseback transactions have a tendency to appeal to investors on a national, and sometimes, international level. Our affiliations with national and international organizations such as CORFAC, FIABCI, CCIM, SIOR and many others allow us to reach buyers and real estate agents suited for each sale. We remain at the forefront of technology to ensure our exposure is overarching.
Regardless of the size of the assignment, it is our mission to accomplish our clients’ specified objectives. In most cases this means filling space vacancies with minimal downtime and expense, but it can also include property positioning, existing tenant retention, vetting of prospective tenants and asset protection services.”