Merbain

What is a Sale and Leaseback?

The sale-leaseback transaction allows a company to sell corporately owned real estate and simultaneously lease it back under a long-term lease with the buyer of the real estate.

 

 

 

The company can utilize the net proceeds from a sale-lease- back to reinvest them in a corporate purpose that will produce a higher yield. The company can receive a higher return from allocating its capital to such uses as:

 

 

 

» Acquiring another company

 

» Buying another building

 

» Expanding the company

 

» Reducing debt

 

» Stock repurchases

 

» Replenish working capital