In this session, we will discuss sale leaseback transactions – what they are, why businesses use them, and what the advantages are. We will also discuss the role of real estate in M&A transactions, and how the real estate can be leveraged by either the buyer or seller to facilitate an M&A deal. Many businesses use real estate that is essential to their operations, however they are not in the business of investing in real estate and are often better off deploying that capital elsewhere. Sale leasebacks allow companies to monetize their real estate by selling to a real estate investor, while retaining full operational control. Many family owned and founder owned businesses have owned their real estate for a long time and have experienced significant appreciation. At the same time, the market value of the real estate to an investor is often significantly more than the appraised value. As a result, real estate tends to be overlooked and undervalued in M&A transactions.
Learning Objectives:
- What is a Sale Leaseback?
- Reasons for Sale Leasebacks and Use of Proceeds
- Sale Leaseback Arbitrage and Value Creation
- Sale Leasebacks in M&A Transactions
- Commercial Real Estate Market Trends
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