100 Percent Financing—Sale-leaseback proceeds are equal to 100 percent of property value, in contrast to a loan, which only funds 65 percent to 75 percent of value.
Access to Capital—The sale-leaseback transaction attracts a broader range of financing sources, well beyond a company’s existing credit line or bank relationships.
Equity Yield —The real estate sale results in equity deployment into higher yielding investment alternatives than what is offered via appreciation of the building.
Capital Utilization—By selling the real estate, the company is converting a long-term, non-liquid asset into working capital.
Debt Reduction—The proceeds also can be used to pay down existing debt and reduce future refinancing risk.
Maintain Control—The structure of the lease agreement provides increased operating flexibility while preserving the same control of the facility as provided by an ownership structure.
Value Creation – The real estate sale, in combination with a long-term lease, results in monetization at a higher value than a building’s value when vacant.