The Sale-Leaseback Opportunity: why there may be more value in being a tenant, instead of an owner of commercial property.
Unlock the hidden equity in real estate assets with JDM Capital.
For years, many Fortune 500 companies have been using Sale-Leaseback financing to free up the cash locked up in their real estate holdings. Recently, this opportunity has become available to mid-size and larger businesses. This trend has been driven by institutional buyers such as pension funds, institutional investors, family offices and private entities seeking to expand their investment portfolios as well as more stable current cash yields as part of their investment strategy.
Consider the following potential advantages:
Convert real estate assets into capital for business expansion, succession planning, ownership consolidation, acquisitions and other major business needs.
By monetizing illiquid real estate assets, the sale-leaseback option offers companies the opportunity to possibly increase shareholder value and focus on their core competencies, as opposed to managing real estate.
Increase company cash flow without changing how the business operates.
We believe a prime advantage of a sale-leaseback for both sellers and buyers is the predictability it provides. The buyer will have a long-term lessee, and the selling company keeps its operations in place, while also receiving the cash it needs to advance the business.
Obtain a more advantageous market value versus debt financing.
Typically, sale-leaseback arrangements may generate far more cash than debt financing, largely because most banks and other lenders tend to evaluate properties as if they were vacant, In contrast, sale-leaseback financing uses the greater value that results from being assured of an ongoing occupant. Terms are usually for 15 to 20 years, substantially longer than most debt financing.
Increase shareholder value.
Not only does a sale lease-back deliver investment capital that business owners can use to grow their business, it can potentially improve the overall health of the balance sheet by eliminating any associated real estate debt. In addition, the arrangement is structured as an operating lease, rather than a capital lease, resulting in improved balance sheet ratios.
Available for businesses of all types.
Sale-leaseback arrangements have been structured for the full array of business enterprises, including corporate office, retail, industrial, warehouse, manufacturing or property planned for commercial development, in either individual building or portfolio form.
Strategic Planning Opportunities for 1031 Exchange Sales
By basing its program on triple net lease property, JDM Capital seeks to provide the strategic benefits of corporate assurance and financeability.
JDM Capital: Experience in Acquisitions and Advisory Services.
With almost 25 years in real estate investment and broad experience in a vast variety and value of real estate transactions, JDM Capital has unique and deep access to a nationwide market of institutional investors, REITS, partnerships, family offices, corporations and high net worth investors.