Sale-Leaseback

Category: finance

A financial transaction where an owner sells an asset and then immediately leases it back from the new buyer.

Sale-leasebacks are the "cash unlockers." If a corporation owns its $50M headquarters, that cash is trapped. By selling it to a REIT and signing a 20-year lease, the corporation gets $50M in liquid cash to expand its core business, while securing its long-term physical location.

Common Examples

• The hospital system executed a massive sale-leaseback of their medical office buildings to fund the acquisition of a rival network.
• A sale-leaseback transaction provides the buyer with a guaranteed, long-term, credit-worthy tenant from the moment the ink dries.