The Sale-Leaseback Strategy: How does it benefit my business?

admin  /   August 29, 2022

Why more business owners should be taking advantage of the sale-leaseback strategy.

This past year, Florida saw a substantial surge in capital flooding different markets across the state seeking new investment opportunities. Specifically, industrial investments ranging from massive million-square-foot warehouses fit for tenants such as Amazon, FedEx, and Tesla as well as your everyday mom-and-pop 5,000 SF spaces. One strategy these investors are taking is a tool referred to as a sale-leaseback. This can allow your company to leverage your real estate equity as a source of financing, while still occupying the space where you built your business in.

How does it work?

Essentially you sell your building to an investor, while simultaneously signing a lease in that same space. This allows you to free up your balance sheet capital that’s been invested into your asset without losing the space itself.

This capital can be used to invest further into your business, and deduct rent payments as a business expense, all while continuing your business in the space you originally built it in.

Likewise, the buyer/new landlord gains the benefit of a cash-flowing asset with a long-term lease already in place and the ability to deduct depreciation expenses for this new building on their income taxes.

Talk about a true win-win situation for both sides of the negotiation.

One thing to keep in mind before trying to utilize this strategy is to work with an experienced team of CPAs, attorneys, and commercial real estate advisors to ensure that you are structuring a deal that best meets your current and future growth requirements.

If you’re interested in learning more about how this strategy could benefit you and your business, feel free to reach out to our team for more information.

John Jackson, SIOR, CCIM. | Managing Director 

813 424 3202 | John.Jackson@cushwake.com

JT Faircloth | Director 

813 833 3242 | Jt.Faircloth@cushwake.com

Casey Perry | Associate 

813 233 6464 | Casey.Perry@cushwake.com

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