What is a Commercial Sale & Leaseback property transaction?
A sale and leaseback transaction is an alternative way of releasing capital that has previously been tied up in the value of commercial real estate. The released capital can go directly back into business operations, be held as capital or invested.
Through a sale and leaseback, the owner of a property sells the asset to an investor who immediately leases the premises back to the vendor. In simple terms, the asset owner sells the property to a property investor, who immediately becomes their landlord.
The lease agreement is negotiated to suit the organisational needs of the company and the transaction enables a business to receive 100% of the property’s value.
Currently, availability of commercial credit is low and mortgage-backed financing only unlocks typically 60% of the asset’s value.
Benefits of Sale & Leaseback:
• Release capital to increase liquidity
• Provide access to alternative capital sources
• Free up capital to fund other lucrative business investments such as machinery or new technology
• Capitalise on attractive property market sale conditions
What we do - sale & leaseback consultants
A sale and leaseback can be beneficial for both the buyer and seller but it is crucial that your adviser fully undertands market condition and can help you to determine whether this type of transaction will work for you and your business.
Knight Frank's dedicated and experienced sale & leaseback team can help extract maximum benefit from this type of transaction, navigating clients through what can be a complex process and helping them become more flexible, agile and generate liquidity.
We use our extensive sector-wide market knowledge and experience to work towards the best outcome for both our investor and occupier clients using financial analysis and modelling.
We offer seamless support throughout the process, from working with financing experts and lawyers to drawing up a lease to running a wide-ranging marketing process for our clients.
If you would like further information on sale and leasebacks, do not hesitate to get in touch with our experts.