Sale-Leaseback

A sale-leaseback is a strategic financial arrangement commonly used in commercial and industrial real estate sectors, where the owner of a property sells the asset to an investor or third party and, simultaneously, leases it back under a long-term lease agreement. This transaction enables the original owner to unlock the capital tied in the property, converting an illiquid asset into liquid funds, while retaining uninterrupted operational control and use of the property. Sale-leasebacks provide businesses with enhanced balance sheet flexibility and improved cash flow, allowing reinvestment into core business activities or debt reduction. From a contractual perspective, such agreements involve precise terms covering lease duration, rent escalation, maintenance responsibilities, and termination clauses, ensuring clear risk allocation between landlord and tenant roles within the same parties over different phases. For industrial real estate, including warehouses and logistics facilities, sale-leasebacks offer considerable advantages in securing working capital without forfeiting the strategic benefits of location or operational continuity. This financing method is particularly relevant for asset-heavy companies seeking to optimize their capital structure and for investors targeting stable long-term rental income streams from high-quality industrial properties.