The mechanics, start to close.
A plain-spoken walkthrough of what a sale-leaseback is, how the transaction runs, what each side gains, and what to weigh before you start.
A sale, not a loan.
A sale-leaseback is a single transaction with two parts. You sell the commercial property your business owns and occupies, and at the same moment you sign a long-term lease to stay in it. You get the full value of the building in cash, and you keep running operations exactly as before.
Because it is a sale rather than a loan, there is nothing to repay and no covenants. The capital that was locked in your real estate becomes capital you can use.
Four steps, no disruption.
You sell the property
You sell the real estate your business owns and occupies to CRE Demand at a price set by the rent and an agreed cap rate, typically around 8%.
You sign a long-term lease
At closing you become the tenant on a long-term lease, commonly 15 years or more, usually triple-net (NNN) and built around how you operate.
You receive the proceeds
You walk away with up to 100% of the property's value in cash, versus the 60 to 70% a lender would advance against it.
You keep operating
Nothing about your day to day changes. You run the business in the same building, with renewal options and rights that protect your tenancy.
What you gain as the seller and tenant.
Unlock trapped equity
Convert the full value of your building into working capital you can redeploy, without taking on debt.
Attractive cost of capital
Proceeds at around an 8% cap rate often beat the all-in cost of traditional financing, with no covenants.
Full operational control
Long, tenant-friendly lease terms keep you in the building on terms structured around your operations.
Portfolio optimization
Move real estate off the balance sheet and focus capital on the business itself.
Tax and accounting
Rent is generally deductible, and the structure can be cleaner than carrying the asset. Confirm specifics with your advisors.
What the buyer is acquiring.
Stable long-term income
An established operating tenant on a long lease means dependable, predictable rent.
Inflation protection
Rent escalation clauses lift income over the life of the lease.
Diversification
Net-leased property backed by a business that depends on the building it occupies.
What both sides should keep in view.
Tenant credit quality
Income is only as dependable as the tenant. Underwrite the operating business, not just the building.
Over-market rent
Rent set above market lifts the price today but can pressure renewal and resale later. Keep it realistic.
Residual value
What the asset is worth at lease end depends on location, condition, and alternative uses.
Interest rate volatility
Cap rates move with rates. Timing and structure matter on both sides of the deal.
From readiness to closing.
Readiness assessment
Confirm the property is owned and occupied, and that a sale-leaseback fits your goals.
Financial modeling & lease structuring
Model proceeds at a target cap rate and structure the lease term, escalations, and options.
Finding an investment partner
We are the investor, so you deal directly with the party writing the check and skip months of searching.
LOI & due diligence
Agree a letter of intent, then work through diligence on the property and the tenant.
Purchase agreement & closing
Sign the purchase agreement and the lease, and close, with proceeds to you.
Where pricing comes from.
Pricing is dependent upon the rent, the tenant, and the market. Cap rates vary across markets, and the strength of the operating business shapes both the price today and the value at lease end. We work nationwide and structure each deal around the specific property and tenant rather than a fixed return bucket.
The vocabulary, in plain terms.
Ready to see the numbers for your property?
Book a free consultation and we will model exactly what a sale-leaseback could unlock.
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