In a sale-leaseback transaction, an owner/user elects to monetize its corporate real estate facility and structure a new, long-term lease on the property to an outside investor. In exchange, the company, through the sale of the facility, receives capital to grow and revitalize its business. The transaction has many benefits to the company as detailed below.
Sale-leaseback proceeds are equal to 100 percent of property value, in context to a loan, which only funds 65 percent to 75 percent of value.
By selling the real estate, the company is converting a long-term nonliquid asset into working capital. In addition, a mortgage appears on the balance sheet as a liability, while an operating lease does not.
No obligations are shown on the balance sheet, as sale-leaseback transactions receive operating lease treatment.
The real estate sale can reduce the negative impact of depreciation and interest on income statements.
The sale-leaseback capital received from the transaction can be deployed in core operations that yield higher returns than appreciation of real estate.
The proceeds also can be used to pay down existing debt and eliminate future refinancing risk.
With an improved balance sheet and income statement, a company can improve its credit status and have better access to a variety of capital sources.
By leasing its facility, a company can write off its entire rent payment, rather than only the interest portion of a mortgage payment.
The lease agreement is structured so that the tenant maintains full operating control over the space it occupies because it is designed to mirror ownership.
When considering a sale-leaseback transaction, the Ben-Moshe Brothers will begin with a complementary evaluation of your properties based on an accurate and current market research. Our professionals consider all relevant factors, including economics, demographics, market trends, financing and real estate indicators, to ensure the lowest cap rate one can get. Our brokers have years of experience and are knowledgeable in evaluating sale-leaseback transactions. We have successfully evaluated and sold hundreds of sale-leasebacks nationwide. (See Our Track Record)
Using our expertise in marketing and the Marcus & Millichap platform we will maximize the value and the exposure of the property. The Ben-Moshe Brothers of Marcus & Millichap will tailor a fully integrated marketing strategy for each property that ensures that each listing will be presented to the largest pool of buyers. Our marketing plan includes a professional and well-designed marketing package, listing on CapRates.com & MarcusMillichap.com, real time marketing using an internal active buyer’s database (MNet), advertising in prominent media outlets, brochures, direct marketing, email campaigns, internal broker network which offers direct communication with the investment community, exposure in industry events and more.
Utilizing the Marcus & Millichap’s platform the Ben-Moshe Brothers have access to a large volume of buyers and more 1031 exchange buyers than any other firm in the country. With 1,600 agents in our firm and over 85 offices nationally, we are able to access thousands of investors who are in contact with our sales force. In addition, Marcus & Millichap's national brand and relationships of over 45 years allow us to access to the industry's largest pool of qualified investors.
|Improve Earnings||Tailored Integrated Marketing Plan|
|Complimentary & Accurate Evaluation||Access to the Largest Pool of Buyers|