The state of sale‐leasebacks: What corporations can and should expect today

Aimed at senior corporate real estate decision makers and members of the corporate finance teams responsible for real estate portfolio strategy, this paper helps these professionals to identify opportunities for different types of lease finance. Readers will go through a brief history of the sale‐leaseback market and learn the factors which determine sale‐leaseback pricing. In addition, they will ascertain how recent changes in the debt markets impact their rental rates, as well as how changes in the equity markets have added a new supply of funds and lowered finance costs. Tenants will obtain a better understanding of the concerns, interests and motivations from a lessor’s perspective, as well as the factors they should consider when deciding whether to own or lease their real estate. This understanding of the lessor should enhance the corporate professional’s negotiating skills. Overall, the contents of this paper should help improve communication between the corporate finance team and the corporate real estate team as each understands better the other’s concerns and perspective on real estate.