A sale-leaseback transaction is a financial arrangement in which a business sells its owned property to a third-party buyer and simultaneously leases back that property from the buyer. In exchange for cash proceeds, the business becomes the tenant, paying rent to occupy the property it previously owned. This transaction allows the business to unlock the capital tied up in the property while retaining its operational use.
By selling their owned property, businesses can release the equity tied up in real estate assets. This infusion of capital can be reinvested into core business operations, such as expansion initiatives, debt reduction, profit-taking, or funding strategic acquisitions. Also, sale-leasebacks can occur in connection with a business acquisition, often providing critical funds to the overall capital stack.
Sale-leasebacks provide businesses with immediate cash liquidity, which can help improve cash flow and provide financial flexibility. This liquidity can be particularly valuable during times of economic uncertainty or when additional capital is needed for growth.
Despite selling the property, businesses retain operational control by leasing it back from the buyer. This allows them to continue using the property for their day-to-day operations without disruption.
In addition to the benefits of the initial sale-leaseback transaction, a strong landlord partner can prove a valuable asset for a company’s growth by providing additional capital commitments (for renovation, expansion, acquisition) and lease flexibility (during economic distress). For a real estate-intensive business, a well-capitalized landlord partner can be a vital resource for growth.
Sale-leasebacks are commonly used for commercial and industrial properties, including retail centers, warehouses, and manufacturing facilities. Find out more about who we work with.
Sellers in sale-leaseback transactions are often businesses or property owners looking to monetize their real estate holdings. Buyers can include institutional investors, real estate investment trusts (REITs), private equity firms, and high-net-worth individuals.
Sale-leasebacks offer sellers the ability to free up capital, improve liquidity, maintain operational control of their properties, and potentially achieve favorable lease terms.
Buyers benefit from stable, long-term income streams generated by lease payments, potential tax advantages, and the opportunity to acquire high-quality real estate assets with established tenants.
Lease terms in sale-leaseback transactions are negotiated between the seller and buyer and typically include details such as lease duration, rental rate, renewal options, and maintenance responsibilities.
Risks for sellers include rent obligations and loss of property ownership. Buyers may face risks related to tenant creditworthiness and market fluctuations.
Sale-leaseback agreements commonly have long-term lease durations, often ranging from 10 to 20 years or more, depending on the preferences of the parties involved. That is why it is important to ensure you are choosing the right buyer and landlord for your business.
At the end of the lease term, the property typically reverts fully to the buyer, unless there are renewal options specified in the lease agreement. Sellers may have the opportunity to negotiate lease extensions or other arrangements at that time.
Haven Capital Partners are comprised of a team of experts who have a proven track record of completing successful sale-leaseback transactions. Our previous roles include real estate attorney, real estate buyer, real estate broker, real estate lender, real estate syndicator, private equity sponsor, and executive at public and private REITs. Learn more about who we are.
Senior Vice President, Acquisitions / Chicago, IL
As Senior Vice President of Acquisitions and head of Haven’s Chicago office, Matt is responsible for originating new sale-leaseback opportunities for the company, bringing over 9 years of real estate advisory experience to the firm. Prior to joining Haven, Matt served as Vice President in the Net Lease Investment group at Mid-America Real Estate, a Midwest advisory firm specializing in the acquisition and disposition of retail properties throughout the United States. Throughout his career, Matt has facilitated more than $400 million in total real estate transaction volume.
Matt received a B.S. from The University of Iowa and is a licensed real estate broker in the State of Illinois.
partner / Franklin, tn
As Partner of Haven, John is head of originations for the company. He is also a member of Haven’s Executive Committee.
Prior to Haven, Mr. Bradley led various real estate syndications, completing over $100 million in sale-leaseback transactions throughout the U.S. & Canada, as well as participating in several multi-family acquisitions totaling 1,000+ units. Prior to that, John spent a decade in credit risk, where he facilitated the purchase and sale of residential and commercial assets to institutional investors. John’s experience across the real estate spectrum, on both the advisor and principal sides, brings unique insight and perspective to Haven’s clients.
Mr. Bradley has a B.S. from Niagara University.
